Movers Warehouse, Inc. v. City of Little Canada

• Decision Date: 18 January 1996
• Docket Number: No. 95-1380,95-1380
• Citation: 71 F.3d 716
• Parties: MOVERS WAREHOUSE, INC., a Minnesota corporation, Appellant, v. CITY OF LITTLE CANADA, a municipal corporation; M.K.P., Inc., a Minnesota corporation, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 716

71 F.3d 716

MOVERS WAREHOUSE, INC., a Minnesota corporation, Appellant, v. CITY OF LITTLE CANADA, a municipal corporation; M.K.P Inc., a Minnesota corporation, Appellees.

No. 95-1380.

United States Court of Appeals,

Eighth Circuit.

Submitted Oct. 20, 1995.

Decided Dec. 7, 1995.

Rehearing and Suggestion for Rehearing

En Banc Denied Jan. 18, 1996.

Pierre N. Regnier, St. Paul, Minnesota, argued (Thomas M. Countryman and Thomas M. Sweeney, on the brief), for appellee, The City of Little Canada.

Alan Silver, Minneapolis, Minnesota, argued (Todd J. Thun, on the brief), for appellee, M.K.P., Inc.

Before McMILLIAN, ROSS, and BOWMAN, Circuit Judges.

BOWMAN, Circuit Judge.

This case requires us to decide whether, under Minnesota law, a bingo hall operator has a protected property interest in the renewal of its bingo hall license. We conclude that Minnesota law creates no such interest.

From 1986 to 1993 Movers Warehouse, Inc., operated the lone bingo hall in Little Canada, Minnesota. When Movers Warehouse began its bingo hall operation in 1986, Little Canada issued a conditional use permit for the bingo hall. As a result of the adoption of a city ordinance at the same time, only one bingo hall may operate within the city limits. In 1988, the state of Minnesota began regulating bingo halls, and Movers Warehouse was thereafter required to obtain a state license as well as the city's conditional use permit. In 1989, state law was amended to require applicants for bingo hall licenses to submit with their applications a resolution from the municipal authority approving the application. From 1989 to 1992, Movers Warehouse obtained Little Canada's approval of the application for renewal of its state bingo hall license. In 1993, however, the city council did not approve Movers Warehouse's renewal application and instead approved the application of M.K.P., Inc. Movers Warehouse claims that this action of the council deprived it of property without due process of law in violation of the Fourteenth Amendment. Movers Warehouse filed this action under 42 U.S.C. Sec. 1983 (1988) seeking damages and injunctive relief. Little Canada moved for summary judgment, and the District Court ¹ granted the motion. ² We affirm.

"We review de novo the granting of a summary judgment motion. We will affirm the judgment if the record shows there is no genuine issue of material fact and that the prevailing party is entitled to judgment as a matter of law." Maitland v. University of Minnesota, 43 F.3d 357, 360 (8th Cir.1994) (citations omitted); see also Fed.R.Civ.P. 56(c).

Movers Warehouse argues that summary judgment was improper because there is a factual dispute between the parties as to whether the mayor or city council of Little Canada in 1986 promised Movers Warehouse that (1) it would be able to operate its bingo hall for an "indeterminate" length of time and (2) its conditional use permit would not be terminated unless it engaged in unlawful or improper conduct. We conclude that the alleged factual dispute over what the city promised Movers Warehouse is neither genuine nor material.

First, even if the city promised Movers Warehouse that it could operate its bingo hall for an indeterminate length of time, nothing in the complaint alleges, nor does the record indicate, that the city failed to live up to this promise. "Indeterminate" means "not clearly established" or "not fixed." Webster's Third New Int'l Dictionary 1148 (1981). As the District Court noted, "Warehouse does not provide facts even suggesting the City knew in 1986, when the alleged promise was made, that it then determined it would pass a resolution denying Warehouse's renewal application seven years later." Mem. & Order at 9-10, Movers Warehouse, Inc. v. City of Little Canada, No. 3-93-809 (D.Minn. Jan. 17, 1995) (emphasis in original).

Second, Movers Warehouse presented insufficient evidence of the alleged promise to create a triable issue of fact. Thomas Short, co-owner and chief executive officer of Movers Warehouse and the primary manager of its bingo hall, testified at his deposition that Movers Warehouse's understanding of its alleged agreement with the city is reflected in the minutes of the Little Canada City Council. Deposition of Short at 145-46, reprinted in Appellant's Appendix at 972-73. Movers Warehouse, however, never introduced any city council minutes that reflect Movers Warehouse's understanding of the alleged agreement.

We thus conclude that no genuine disputes of material fact exist that would prevent the entry of summary judgment. Resolution of this appeal requires us to determine only whether, as a matter of law, Movers Warehouse had a property interest in the renewal of its license to operate a bingo hall.

The Fourteenth Amendment prohibits state action that deprives "any person of life, liberty or property, without due process of law." U.S. Const. amend. XIV, Sec. 1. The possession of a protected life, liberty, or property interest is thus a condition precedent to the government's obligation to provide due process of law. In this case, no such interest exists. There is therefore no due process violation.

Movers Warehouse has alleged that it has a protected property interest in the renewal of its bingo hall license. To show the existence of a property interest in the renewal of a license, a person "must have more than a unilateral expectation of it. He [or she] must, instead, have a legitimate claim of entitlement to it." Craft v. Wipf, 836 F.2d 412, 416 (8th Cir.1987) (alteration in original) (quoting Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972)). Moreover, property interests "are created and their dimensions are defined" not by the Constitution but by an independent source such as state law. Id. Thus the property interest in a license must derive from such an independent source. ³

State law can create a property interest in a number of different ways. State law can explicitly create a property right. Id. Movers Warehouse, however, does not allege that state law explicitly creates a property interest in the renewal of a bingo hall license. A state may also "create a constitutionally protected interest by establishing statutory or regulatory measures that impose substantive limitations on the exercise of official discretion." Id. at 417. Finally, a state may create a protected property interest by "understandings between the state and the other party." Id. We have already concluded that Movers Warehouse has not offered sufficient proof to make even a triable issue of the alleged understanding between Movers Warehouse and Little Canada. Thus the property interest in the renewal of Movers Warehouse's bingo hall license, if one exists, must be derived from "substantive limitations on the exercise of official discretion."

The state-issued 1992 bingo hall license expired by its terms on June 30, 1993. Minnesota law provides that the Minnesota Gambling Control Board cannot grant or renew a bingo hall license without approval from the municipality within which the hall operated. Minn.Stat. Secs. 349.164, 349.213 (1994). Under Little Canada's ordinances, the city can issue only one bingo hall license. Little Canada, Minn., Mun.Code Sec. 815.015(A) (adopted Nov. 27, 1991). City ordinances also provided that

No license or permit approved by the City, including any bingo hall license, grants the licensee a property right or entitlement to a license or permit. The City may refuse to issue, renew or may revoke the license or permit for any reason and will not incur liability for damages including, but not limited to, direct, consequential or incidental damages, deprivation of property, loss of income, loss of profits, or loss of livelihood.

Id. Sec. 815.025(G). Movers Warehouse obtained its 1992 license subject to this ordinance. Pursuant to this ordinance, Little Canada decided not to approve Movers Warehouse's application for renewal of its license in 1993.

Despite the clear language of section 815.025(G), Movers Warehouse argues that section 815.025(I) of the municipal code creates a property right in the renewal of a bingo hall license. Section 815.025(I) reads as follows:

On or before the one (1) year anniversary of the issuance of a premises permit or bingo hall license, the City Council shall hold a formal review of the licensee's or permit holder's compliance with this Chapter or State Statutes. Upon a finding of noncompliance, the City Council may revoke or suspend a bingo hall license or premises permit.

Little Canada, Minn., Mun.Code Sec. 815.025(I). We note, however, that Little Canada did not "revoke" or "suspend" Movers Warehouse's bingo hall...