City of El Paso, Tx v. El Paso Entertainment, Inc.

• Decision Date: 29 February 2008
• Docket Number: Civil Action No. 07-CV-00380-KC.
• Citation: 535 F.Supp.2d 813
• Parties: The CITY OF EL PASO, TEXAS, Plaintiff, v. EL PASO ENTERTAINMENT, INC., et al., Defendants.
• Court: U.S. District Court — Western District of Texas

535 F.Supp.2d 813

The CITY OF EL PASO, TEXAS, Plaintiff, v. EL PASO ENTERTAINMENT, INC., et al., Defendants.

Civil Action No. 07-CV-00380-KC.

United States District Court, W.D. Texas, El Paso Division.

February 29, 2008.

Hadley A. Huchton, City Attorney's Office, El Paso, TX, for Plaintiff.

Thomas Sanders Hughes, Attorney at Law, El Paso, TX, Gilbert H. Levy, Attorney at Law, Seattle, WA, for Defendants.

ORDER

KATHLEEN CARDONE, District Judge.

On this day, the Court considered Defendants' Motion to Dismiss ("Motion"). For the reasons set forth herein, the Motion is DENIED.

I. BACKGROUND

In April 1995, this Court entered an "Agreed Judgment and Permanent Injunction" ("Judgment and Injunction") in the case of El Paso Entertainment, Inc. v. The City of El Paso, Texas, No. EP-94-cv-322. See generally El Paso Entertainment, Inc. v. The City of El Paso, Texas, No. EP-94-cv-322, Agreed Judgment and Permanent Injunction of April 17, 1995. That case involved a dispute over the application of certain provisions of the El Paso Municipal Code which regulated the operation of "Adult Businesses" in the City of El Paso ("City"). Id. at 1. The Plaintiff in that case, El Paso Entertainment, Inc., one of the Defendants in the instant case, filed suit seeking injunctive and declaratory relief and damages, maintaining that the City's adult business zoning restrictions violated its rights under the First and Fourteenth Amendments of the United States as well as Article 1, § 8 of the Texas Constitution. Id.

The Court granted Plaintiff's motion for partial summary judgment based upon the case of Woodall & Coutta v. City of El Paso, No. EP-88-CA-127.¹ Id. at 1-2. The Court entered an Order permanently enjoining the City from enforcing the sections of the City's adult business zoning ordinances against the El Paso Entertainment to the extent the enforcement is based upon "a contention that [El Paso Entertainment's] current business location does not meet the location requirements of the ordinances." Id. at 2. The Court also left for the jury the issue of damages. Id.

After the Court granted partial summary judgment, the parties settled the case and sought to enter, into an agreed judgment. Id. In the resulting Judgment and Injunction, the Court set forth the terms of that settlement as well as the terms of the permanent injunction. Id. at 2-4. According to the Judgment and Injunction, the parties agreed that the Court should award Plaintiff El Paso Entertainment $15,000 in damages with each party to bear their costs and attorneys fees. Id. The parties also agreed to the entry of the Permanent Injunction against the City of El Paso preventing the City from enforcing any adult business ordinances against two clubs, Foxy's Nightclub and the Lamplighter Lounge, so long as their continue their operation at their then current locations and operated by their then current owners. Id. at 2-3. The terms of the Permanent Injunction such as the zoning ordinances at issue, the locations of the clubs, the ownership of the clubs, certain definitional terms, and certain exceptions were included in the text of the Judgment and Injunction. Id. at 3-4.

According to Plaintiff's Complaint, on May 8, 2007, the El Paso City Council enacted Ordinance 016624 ("Ordinance") to license and regulate sexually oriented businesses in El Paso. Pl.'s Compl. ¶ 15. On November 1, 2007, the City of El Paso, filed the instant lawsuit, seeking a declaratory judgment that the 1995 Judgment and Injunction does not bar the City from enforcing the Ordinance against Defendants. Id. ¶ 32. On January 8, 2008, Defendant El Paso Entertainment filed this Motion to Dismiss for lack of subject matter jurisdiction.

II. DISCUSSION

A. Standard

Federal courts are courts of limited jurisdiction. Peoples Nat'l Bank v. Office of the Comptroller of the Currency of the United States, 362 F.3d 333, 336 (5th Cir. 2004). Without jurisdiction conferred by statute, federal courts lack the power to adjudicate claims. Id. A party may challenge a district court's subject matter jurisdiction by filing a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1). FED.R.CIV.P. 12(b)(1).

A motion to dismiss pursuant to Rule 12(b)(1) must be considered before any other challenge, because a court must have jurisdiction before determining the validity of a claim. Moran v. Kingdom of Saudi Arabia, 27 F.3d 169, 172 (5th Cir.1994). In ruling upon such motion, a district court is free to weigh the evidence and satisfy itself as to its power over the case. MDPhysicians & Assoc., Inc. v. State Bd. of Ins., 957 F.2d 178, 181 (5th Cir.1992). In making this ruling, the district court may rely upon: (1) the complaint alone, (2) the complaint supplemented by undisputed facts in the record, or (3) the complaint supplemented by undisputed facts in addition to the court's resolution of disputed facts. Barrera-Montenegro v. United States, 74 F.3d 657, 659 (5th Cir.1996).

The standard of reviewing a motion to dismiss pursuant to 12(b)(1) depends upon whether the defendant makes a facial or factual challenge to the plaintiffs complaint. Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir.1981). When the defendant makes a facial attack by the mere filing of a Rule 12(b)(1) motion, the trial court looks to the sufficiency of the plaintiff s allegations, which are presumed to be true. Id. When the defendant makes a factual attack by providing affidavits, testimony, and other evidence challenging the court's jurisdiction, the plaintiff must submit facts in support of the court's jurisdiction and thereafter bear the burden of proving that the trial court has subject matter jurisdiction. Middle S. Energy, Inc. v. City of New Orleans, 800 F.2d 488, 490 (5th Cir.1986).

B. Analysis

In their Motion to Dismiss, Defendants make two arguments in support of their contention that the Court lacks subject matter jurisdiction. The Court will address each in turn.

1. Federal Rule of Civil Procedure 60(b) as the exclusive means to obtain relief from a prior judgment

First, Defendants argue that Federal Rule of Civil Procedure 60(b) sets forth the exclusive method by which a party may seek relief from a judgment, and, that the City has failed to seek such Rule 60(b) relief in this case. Defs.' Mot. to Dismiss 2-3. The City responds that Rule 60(b) does not apply because it is not seeking relief from a judgment; rather, it seeks clarification from the Court whether enforcement of the Ordinance against Defendant would comply with the terms of the 1995 Judgment and Injunction. Pl.'s Resp. 4.

Federal Rule of Civil Procedure 60(b) provides a means by which a party may be relieved of a final judgment.² FED.R.CIV.P 60(b); Liljeberg v. Health Svcs. Acquisition Corp., 486 U.S. 847, 863, 108 S.Ct. 2194, 100 L.Ed.2d 855 (1988). "By its very nature, the rule seeks to strike a delicate balance between two countervailing impulses: the desire to preserve the finality of judgments and the `incessant command of the court's conscience that justice be done in light of all the facts.'" Seven Elves, Inc. v. Eskenazi, 635. F.2d 396, 401 (5th Cir.1981) (quoting Bankers Mortgage Co. v. United States, 423 F.2d 73, 77 (5th Cir.1970)).

The City brings this action under the Declaratory Judgment Act, which provides that, "Din a case of actual controversy within its jurisdiction ... any court of the United States ... may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is, or could be sought." 28 U.S.C. 2201(4). Under the Declaratory Judgement Act, a court may afford a plaintiff with equitable relief when legal relief is not yet available, in order to avoid unfairness which might result from a delay in assessing the parties' legal obligations. Venator Group Specialty, Inc. v. Matthew/Muniot Family, LLC, 322 F.3d 835, 839-40 (5th Cir.2003) (citing 28 U.S.C. § 2201); Texas Employers' Ins. Ass'n v. Jackson, 862 F.2d 491, 505 (5th Cir.1988).³

The Court need not delve into the particulars of Rule 60(b) because it is inapplicable to the instant case. If the City had sought to modify or vacate the April 1995 Judgment and Injunction, then Rule 60(b) might be implicated. But the City does not seek such relief. Rather, the City brings a declaratory judgment action, asking whether the Judgment and Injunction bars the enforcement of the Ordinance against Defendants. The City believes that it does not and asks the Court to confirm its position. The City's case is not built upon the presumption that the Judgment and Injunction applies to the enforcement of the Ordinance. Nor does the relief that it seeks encompass a challenge to the terms, the fairness, or the ongoing validity of the Judgment and Injunction. In fact, the City does not seek relief from the Judgment and Injunction at all; it seeks, relief from the legal uncertainty that has resulted from the intersection of the new Ordinance and the terms of the existing Judgment and Injunction. See Jackson, 862 F.2d at 505. This action does not seek to alter, the Judgment and Injunction; it asks the Court to set forth the rights and obligations of the parties under the Judgment and Injunction as it already exists.

Defendants argue that the Fifth Circuit's holding in Cook v. Birmingham News, 618 F.2d 1149 (5th Cir.1980), requires that Rule 60(b) be the only procedural remedy available to allow reconsideration of a previously entered judgment once the time for appealing the judgment has passed. Def.'s Reply 4. The Court disagrees, finding Cook inapposite to this case.

In Cook, the plaintiffs, African — American employees of the Birmingham News Company, brought a Title VII action in federal district court against the News Company and seven historically all-white newspaper worker's unions. Cook, 618 F.2d at 1150. Their complaint alleged that the defendants violated Title VII by engaging in a number of racially discriminatory...