Michael Woods, Ramona Woods, & BNT Ad Agency, LLC v. City of Greensboro
| Decision Date | 11 December 2015 |
| Docket Number | 1:14CV767 |
| Court | U.S. District Court — Middle District of North Carolina |
| Parties | MICHAEL WOODS, RAMONA WOODS, and BNT AD AGENCY, LLC, Plaintiffs, v. CITY OF GREENSBORO, TONY WILKINS, NANCY HOFFMAN, NANCY VAUGHAN, ZACK MATHENY, MARIKAY ABUZUAITER, and T. DIANNE BELLAMY-SMALL, Defendants. |
Presently before this court are Motions to Dismiss filed by Defendant City of Greensboro ("the City") (Doc. 10), and several current and former members of the Greensboro City Council Tony Wilkins, Nancy Hoffman, Nancy Vaughan, Zack Matheny, Marikay Abuzuaiter, and T. Dianne Bellamy-Small ("City Council Defendants") (collectively "Defendants"). (Doc. 12.) Plaintiffs Michael Woods, Ramona Woods, and BNT Ad Agency, LLC ("Plaintiffs") have filed responses (Docs. 22, 23) to Defendants' motions, and Defendants have replied (Docs. 25, 26). These matters are now ripe for resolution, and for the reasons stated herein, Defendants' Motions to Dismiss will be granted.
Sometime in April of 2013, Plaintiffs entered into discussions with various officials for Defendant City of Greensboro regarding the creation of a minority-owned television network, and the benefits that such a network would bring to the City. (Amended Complaint ("Am. Compl.") (Doc. 5) ¶ 15.)1 At some point in the discussions, the City recommended that Plaintiffs submit an application for a ten-year, $300,000.00 economic development loan to help fund the project. (Id. ¶ 18.) Plaintiffs' loan was to be secured by a lien on the personal residence of Plaintiffs Michael and Ramona Woods, which was appraised on May 28, 2013, at a value of $975,000.00, "resulting in equity well over the $300,000.00 loan, after consideration ofall existing loans on the residence."2 (Id. ¶¶ 20-21.) On June 18, 2013, the City Council voted 7 to 2 in favor of authorizing the City to enter into a loan agreement with Plaintiffs. (Id. ¶ 22.) This Resolution ("the June 18 Resolution") was drafted with a condition stating that theCity's loan would be secured by "no more than a second lien" on the property. (Id. ¶ 26.) At some point after it was approved, Plaintiffs allege that they were informed that the June 18 Resolution would have to be amended to reflect that the City's interest would be a third lien, rather than a second, as there were in fact already two liens on the home. (Id. ¶ 25.) Plaintiffs allege that they were under the impression that the amendment would be no more than perfunctory, but on July 16, 2013, the City Council rejected the proposed amendment based on its unwillingness to take a third-place interest to secure the loan, which Plaintiffs allege was pretext. (Id. ¶ 29.)
Plaintiffs filed suit alleging violations of sections 1981, 1983, and 1986 of the Civil Rights Act of 1866 as they relate to the Equal Protection and Due Process clauses of the 14th amendment as well as the North Carolina Constitution, and claims for breach of contract, civil conspiracy, and unfair and deceptive trade practices.3 (Am. Compl. (Doc. 5) at 6-15.) Plaintiffs allege that Defendants denied the proposed loan termmodification based on Plaintiffs' race and breached the contract allegedly entered into, in violation of the 14th amendment and North Carolina Constitution, as well as state law.
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible provided the plaintiff provides enough factual content to enable the court to reasonably infer that the defendant is liable for the misconduct alleged. Id. The pleading setting forth the claim must be "liberally construed" in the light most favorable to the nonmoving party, and allegations made therein are taken as true. Jenkins v. McKeithen, 395 U.S. 411, 421 (1969). However, the requirement of liberal construction does not mean that the court can ignore a clear failure in the pleadings to allege any facts [that] set forth a claim." Estate of Williams-Moore v. Alliance One Receivables Mgmt., Inc., 335 F. Supp. 2d 636, 646 (M.D.N.C. 2004).
Rule 12(b)(6) protects against meritless litigation by requiring sufficient factual allegations "to raise a right torelief above the speculative level" so as to "nudge[] the[] claims across the line from conceivable to plausible." Twombly, 500 U.S. at 555, 570; see Iqbal, 556 U.S. at 680. Under Iqbal, the court performs a two-step analysis. First, it separates factual allegations from allegations not entitled to the assumption of truth (i.e., conclusory allegations, bare assertions amounting to nothing more than a "formulaic recitation of the elements"). Iqbal, 556 U.S. at 681. Second, it determines whether the factual allegations, which are accepted as true, "plausibly suggest an entitlement to relief." Id. "At this stage of the litigation, a plaintiff's well-pleaded allegations are taken as true and the complaint, including all reasonable inferences therefrom, are liberally construed in the plaintiff's favor." Estate of Williams-Moore, 335 F. Supp. 2d at 646.
As an initial matter, the City Council Defendants contend that Plaintiffs' allegations should be dismissed as to them individually on all counts because, under the doctrine of legislative immunity, they are absolutely immune from suit.(See City Council Defs.' Br. in Supp. of Mot. to Dismiss (Doc. 13) at 6-12.) This court agrees.
The principle of legislative immunity "has long been recognized . . . and was 'taken as a matter of course by those who severed the Colonies from the Crown and founded our Nation.'" See Bogan v. Scott-Harris, 523 U.S. 44, 48-49 (1998) (citing Tenney v. Brandhove, 341 U.S. 367, 372 (1951)). Under this principle, absolute immunity from suit will attach to "all actions taken in the sphere of legitimate legislative activity." Bogan, 523 U.S. at 54 (internal quotations marks omitted). Whether or not an act is considered "legislative" for purposes of immunity turns on the act itself, not the motive or intent of the official performing it. Id.
The Fourth Circuit, following the First and Fifth Circuits, has adopted a test to determine whether or not an act is considered "legislative." See Alexander v. Holden, 66 F.3d 62, 66 (4th Cir. 1995). This test focuses on the "'nature of the facts used to reach the . . . decision'" and the "'particularity of the impact of the state of action.'" Id. (citing Acevedo-Cordero v. Cordero-Santiago, 958 F.2d 20, 23 (1st Cir. 1992); Hughes v. Tarrant Cty. Tex., 948 F.2d 918, 921 (5th Cir. 1991)). Under this test, if the underlying facts relate to particularindividuals or situations, and the decision impacts specific individuals or singles out specific individuals, the decision is administrative, and not entitled to legislative immunity. Alexander, 66 F.3d at 66 (internal quotations and citations omitted). However, if the facts involve generalizations concerning a policy or state of affairs, and the establishment of a general policy affecting the larger population, then the action is legislative, and entitled to absolute immunity. Id.4 Notably, an act can still be legislative if it affects only an individual, and the inquiry turns on the nature of that act.
Compare Roberson v. Mullins, 29 F.3d 132 (4th Cir. 1994) (), with Whitener v. McWatters, 112 F.3d 740 (4th Cir. 1997) ().
Here, the Amended Complaint alleges that the City Council passed a Resolution authorizing the City to loan money and refused to pass another modifying the terms originally authorized. City Council Resolutions must be passed by majority vote and are a quintessentially legislative action that implements city policy. See Bogan, 523 U.S. at 55-56 (1998) (). Further, as reflected in the City CouncilMeeting Minutes from June 18, 2013,5 in initially adopting the Resolution approving the loan terms, the City Council considered both that there was "a limited amount of city funding [available] for loans," and "expressed concerns about establishing a precedent of loaning public funds to businesses." (City's Br., Ex. A (Doc. 11-1) at 11.) According to the Meeting Minutes from July 16, 2013, which contain discussion of the decision to reject the Resolution amending the closing conditions for the loan, the City Council discussed "three previous loans where the City had been in the third position," "concerns [] about the City going from second to the third position in loan repayment," and "the desire to support minority owned small businesses." (Id., Ex. C (Doc. 11-3) at 36.)
Plaintiffs' Amended Complaint alleges no facts regarding the nature of either meeting, other than that Plaintiffs were "under the reasonable impression and led to believe that the purpose of the special meeting by the City Council was perfunctory in nature and solely for the purpose of correcting language in the Resolution." (Am. Compl. (Doc. 5) ¶ 28.)
Applying the test laid out by the Fourth Circuit, it seems clear to this court that the City Council was concerned with general public policy surrounding the use of funds in passing the Resolution which rejected amending the closing terms of the loan. The City Council's discussion encompassed both the desire to support minority owned small businesses in Greensboro, the limited amount of public funds available for loans, and the concern over establishing a precedent of loans of public funds to private businesses, all of which are broad policy concerns. Given the Council's...
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