O'Grady v. Village of Libertyville, 01-2334.

• Decision Date: 13 September 2002
• Docket Number: No. 01-2334.,01-2334.
• Parties: Robin O'GRADY, David Jakes, and De Tendevous, Incorporated, an Illinois Corporation, Plaintiffs-Appellants, v. VILLAGE OF LIBERTYVILLE, an Illinois Municipal Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

304 F.3d 719

Robin O'GRADY, David Jakes, and De Tendevous, Incorporated, an Illinois Corporation, Plaintiffs-Appellants, v. VILLAGE OF LIBERTYVILLE, an Illinois Municipal Corporation, Defendant-Appellee.

No. 01-2334.

United States Court of Appeals, Seventh Circuit.

Argued January 8, 2002.

Decided September 13, 2002.

Bernard Wiczer (argued), Northbrook, IL, for Plaintiffs-Appellants.

John Francis O'Reilly (argued), Wheaton, IL, for Defendant-Appellee.

Before POSNER, COFFEY, and DIANE P. WOOD, Circuit Judges.

DIANE P. WOOD, Circuit Judge.

Robin O'Grady and David Jakes opened De Tendevous, Inc., a personal services salon, in Libertyville, Illinois in April 1999. (For convenience, we refer to all three as "De Tendevous" in this opinion). De Tendevous's problems began shortly thereafter, when a sting operation by the Libertyville police discovered evidence of prostitution at the salon. Shortly before the bust, the Village of Libertyville had passed Village Ordinance 99-0-56 (the Ordinance), regulating the operation of massage parlors and requiring that they be licensed. Rather than applying immediately for a license under the new ordinance, De Tendevous turned to the federal court with this suit challenging the Ordinance and requesting a temporary restraining order from enforcement of the licensing requirement. The complaint also alleged that a violation of the plaintiffs' Fourth Amendment rights occurred when building inspectors conducted a search of the salon's premises. Later, after De Tendevous had unsuccessfully applied for a license, it also attempted to contend that the denial was unlawful. The district court construed De Tendevous's claims as (1) a claim that the ordinance was unconstitutional because it violated the Ex Post Facto Clause of the Constitution; (2) an allegation of a § 1983 violation by the Village for the search of the premises at the time of the sting operation; and, (3) a contention that the denial of a license was unlawful under state law. It then granted summary judgment in favor of the Village on all counts. This appeal followed. Finding De Tendevous's arguments to be totally without merit, we affirm the judgment of the district court.

I

While De Tendevous ostensibly offered nail, tanning, waxing, and massage services, as it declared in a zoning application filed in April 1999, it apparently also provided sexual services.

On July 22, 1999, Village police conducted their sting operation. During the sting, Meloni Goodson, a De Tendevous masseuse, was arrested for performing sexual acts on a police officer. She was later convicted on prostitution charges based on this occurrence. The officers searched the premises incident to Goodson's arrest after obtaining consent from De Tendevous's receptionist; neither O'Grady nor Jakes was present at the time. The search uncovered evidence of prostitution and alerted the officers to possible building code violations. This led them to call in a building inspector, who searched the premises, again with the receptionist's consent, and took note of several violations. When he was finished, the inspector "red-taped," or shut down, the massage parlor. De Tendevous reopened several days later, apparently in compliance with the building code (but still unlicensed).

On July 13, 1999, prior to the sting operation, De Tendevous received a copy of a letter from Libertyville's Chief of Police, advising all massage establishments that a new Village ordinance, Ordinance 99-0-56, had been passed on June 22 to regulate the operation of massage parlors. Among other things, the Ordinance required massage establishments to be licensed, to be run by a certified massage therapist, and to be in compliance with certain standards of decency and hygiene. Every masseur or masseuse employed had to be licensed by the Village after obtaining certification from an accredited massage institution that required at least 500 hours of classroom study and another 100 hours of clinical experience. The July 13 letter estimated that the effective date of the Ordinance would be July 23, 1999.

Aside from the July bust, nothing happened for a few months after the effective date of the Ordinance, even though De Tendevous had not applied for a license. On October 4, the Chief of Police requested that De Tendevous cease offering massage services immediately because it was operating without a massage license in violation of the Ordinance. That finally prompted De Tendevous to apply for the license, but the Village Administrator denied the application on April 3, 2000. A hearing to challenge the denial took place on June 7, 2000, before Village President Duane Lusaka. President Lusaka affirmed the denial of the license on the grounds that Jakes, considered a manager of De Tendevous, did not qualify as a certified massage therapist as required by the Ordinance, and that the prostitution conviction of one of the employees would have been grounds for revoking the license under the Ordinance and was, a fortiori, a ground for refusing to issue a license in the first place.

A month after receiving notification of the newly passed Ordinance (and six and a half months before applying for a license) De Tendevous filed this lawsuit against the Village. In March 2000, both parties filed motions for summary judgment and cross-responses. The Village's motion argued that the Ordinance was not properly subject to this dispute because the Village never attempted to enforce it against De Tendevous, and that in any event its enforcement (subsequent to the filing of the complaint) was in accordance with all the process due. As to the Fourth Amendment claim, the Village argued that municipal liability for an unconstitutional policy or custom needed to be proved but was not alleged by De Tendevous. De Tendevous's motion for summary judgment focused on entirely different issues. For the first time, De Tendevous argued that the Ordinance should be invalidated as an ex post facto law under article I, § 10, clause 1, of the United States Constitution, a claim that it asserted was encompassed within Count I of its complaint. The principal reason it gave in support of this argument was the brief period of notice the Village gave De Tendevous to come into compliance with its new obligations: "only" 14 days. It also argued that it was impermissible to deny De Tendevous a license because of Goodson's prostitution conviction and Jakes's lack of a massage therapy certificate.

The district court entered summary judgment for the Village on all counts and denied De Tendevous's motion. On the Fourth Amendment claim, it found for the Village because of De Tendevous's failure to present evidence that the Village had a policy or custom of performing unreasonable searches — evidence that was necessary to establish municipal liability under Monell v. Department of Soc. Servs., 436 U.S. 658, 690-91, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). As to the compatibility of the Ordinance with the Ex Post Facto Clause, the district court (construing the complaint liberally to encompass this kind of claim) found that De Tendevous had standing to bring the challenge, but that on the merits the allegation was frivolous, because the Ordinance was not a penal statute nor did it purport to render illegal any operation of a massage establishment before its effective date. With respect to the alleged violation stemming from the use of the prostitution conviction as grounds to deny the license application, the court found that the issue was not properly before it, as there was no mention of it in the complaint. Finally, the district court dismissed the claim based on the denial of the application because it was not pleaded in any amended complaint and because there was no reason to exercise supplemental jurisdiction over it once the court disposed of the federal claims.

II

On appeal, De Tendevous presents two issues: that the Ordinance is an ex post facto law (principally because it did not allow De Tendevous sufficient time to comply) and that the decision to deny the license was not justified. We review a district court's grant of summary judgment de novo, examining the facts in a light most favorable to the nonmoving party, and drawing all reasonable inferences in its favor. Lesch v. Crown Cork & Seal Co., 282 F.3d 467, 471 (7th Cir.2002).

A. Ex Post Facto Argument

While De Tendevous did not advance a theory of an ex post facto violation until the summary judgment stage, we agree with the district court that the complaint was adequate to put the Village on notice of such a claim. A plaintiff is not required to set forth a legal theory to match the facts, so long as some legal theory can be sustained on the facts pleaded in the complaint. See, e.g., Wudtke v. Davel, 128 F.3d 1057, 1061-62 (7th Cir. 1997) (no particular legal theory needs to be specified, so long as the facts put the defendant on notice). While the theory that De Tendevous originally put forth was a due process/takings claim, the facts alleged are sufficient to support a claim that the Ordinance would have violated their constitutional rights if it were found to be an ex post facto law.

A law violates the Ex Post Facto Clause, see U.S. CONST. art. I, § 10, cl. 1, if it punishes as criminal conduct an act that was innocent when done, or makes more burdensome the punishment for a crime after its commission. Collins v. Youngblood, 497 U.S....