Patel v. City of Sauk Centre, Case No. 05-CV-2866 (PJS/RLE).
| Citation | 631 F.Supp.2d 1139 |
| Decision Date | 03 August 2007 |
| Docket Number | Case No. 05-CV-2866 (PJS/RLE). |
| Parties | Sudha PATEL and Bholae, Inc., Plaintiffs, v. CITY OF SAUK CENTRE; Dennis Rykken, Interim Mayor of the City of Sauk Centre; Paul Theisen, former Mayor of the City of Sauk Centre; Sauk Centre City Council and Council Members 1-4; Rose Ann Inderrieden, Sauk Centre City Administrator; Stephen Bloom, former Sauk Centre City Administrator; Coralee Fox, former Sauk Centre City Administrator; and Traci Ryan, Sauk Centre Economic Development Director, Defendants. |
| Court | U.S. District Court — District of Minnesota |
Jesse H. Kibort, Koepke & Daniels, P.A.; Richard A. Diamond, Richard I. Diamond, PA, for plaintiffs.
Ryan M. Zipf, League of Minnesota Cities, for defendants.
This matter is before the Court on the objection of plaintiffs Sudha Patel and Bholae, Inc., to the April 20, 2007 Report and Recommendation ("R & R") of Chief Magistrate Judge Raymond L. Erickson. The Court has reviewed de novo those portions of the R & R to which plaintiffs have objected, as required by 28 U.S.C. § 636(b)(1) and Fed.R.Civ.P. 72(b), has considered carefully all of plaintiffs' objections, and adopts Judge Erickson's thorough and well-reasoned R & R [Docket No. 42].
Based on the foregoing and on all of the files, records, and proceedings herein, the Court OVERRULES plaintiffs' objection [Docket No. 43] and ADOPTS Judge Erickson's April 20, 2007 Report and Recommendation [Docket No. 42]. Accordingly, IT IS HEREBY ORDERED THAT:
1. Defendants' motion for summary judgment [Docket No. 20] is GRANTED IN PART as follows:
a. Plaintiffs' claims for violations of their rights under the U.S. Constitution to equal protection and procedural and substantive due process
are DISMISSED WITH PREJUDICE AND ON THE MERITS.
2. Plaintiffs' state-law claims are DISMISSED WITHOUT PREJUDICE pursuant to 28 U.S.C. § 1367(c)(3).
LET JUDGMENT BE ENTERED ACCORDINGLY.
REPORT AND RECOMMENDATION
RAYMOND L. ERICKSON, United States Chief Magistrate Judge.
This matter came before the undersigned United States Magistrate Judge pursuant to a special assignment, made in accordance with the provisions of Title 28 U.S.C. § 636(b)(1)(B), upon the Defendants' Motion for Summary Judgment. A Hearing on the Motion was conducted on December 7, 2006, at which time, the Plaintiffs Sudha Patel ("Patel"), and Bholae, Inc. ("Bholae"), appeared by Richard I. Diamond, Esq., and the Defendants appeared by Ryan M. Zipf, Esq.
For reasons which follow, we recommend that the Defendants' Motion for Summary Judgment be granted.
This action arises from the Plaintiffs' application for a liquor license ("the License") from the Defendants City of Sauk Centre ("the City"), and the Sauk Centre City Council ("the Council"). The license application was submitted by Bholae, which is a Minnesota corporation that is solely owned by Patel, who is a Hindu woman, and was originally from India. During the relevant period of time, Patel lived with her husband, Paresh Patel ("Paresh"), in the Super 8 Motel ("the Motel") that was owned by Paresh, through the corporate entity Sauk Centre Lodging.1 See, Complaint, at ¶¶ 1.1 and 1.2; Plaintiffs' Memorandum in Opposition, Docket No. 32, at p. 2. Patel was not employed by Paresh in his operation of the Motel, and worked two (2) separate jobs with other employers. See, Deposition of Sudha Patel ("Patel Dep."), Affidavit of Ryan M. Zipf ("Zipf Aff."), Docket No. 23-2, Exh. B, at pp. 16-17.
In 1996, the lower level of the Motel was converted into a banquet hall known as the Hayloft ("the Hayloft"). See, Deposition of Paresh Patel ("Paresh Dep."), Zipf. Aff., Exh. A, at p. 14. In 1998, Patel successfully applied for a License for the Hayloft, after passing a criminal background check by the City, which spanned over the preceding seven (7) years. See, Complaint, at ¶ 4.1; Defendants' Motion in Support of Summary Judgment, supra at 3 n. 2. In 1999, Patel transferred the License to Margaret Lindhorst ("Lindhorst"), who allegedly is a Caucasian woman, and who operated a catering business in the Hayloft, pursuant to the License, without incident until 2004. See, Complaint, at ¶¶ 4.3-4.5.
In 2004, the City mailed Lindhorst an annual renewal notice for the License, and Lindhorst informed Patel that she was not interested in renewing the License. Id. at ¶¶ 4.6-4.7. Patel, as well as Paresh, brought the renewal form, which had been submitted to Lindhorst, to the City Clerk's Office, and met with City Clerk Karen Jennissen ("Jennissen"). Jennissen directed Patel to cross out Lindhorst's name on the form, insert her own name, and provide the City a check for the renewal amount. See, Paresh Dep., at pp. 24-25.
Patel complied with Jennissen's instructions, and submitted the renewal form, along with a check—which was signed by Paresh—for $1,950.00, and drawn on the account of "Sauk Center Lodging, Inc d/b/a/ Super 8 Motel," which the City subsequently cashed. Id. at ¶ 4.8; Paresh Dep., at pp. 23-26. Patel actually sought to have the License for the Hayloft transferred to her. Id.
On June 2, 2004, the Council voted unanimously to approve the renewal of the License, contingent on the submission of the appropriate insurance paperwork, and published the License approval in the newspaper. See, Complaint, at ¶¶ 4.8, 5.1-5.2; Zipf Aff., Exh. E, at p. 3.
In a letter dated June 18, 2004, the City notified Patel that it had mistakenly approved the License as a renewal, and that she had not filed the proper paperwork, because her request was actually a transferral of the License. The letter further advised her that an advertisement in the newspaper, on June 22, 2004, would inform the public that a Hearing would be held on July 7, 2004, so as to consider the applications of both Patel, and Bruce Rohde ("Rohde"), who assertedly is a Caucasian male. See, Plaintiffs' Memorandum in Opposition, supra at 4; Zipf. Aff., Docket No. 23-2, at p. 17.
Under the applicable City Ordinances, a liquor license transfer follows the same procedures as a new license application. See, City of Sauk Centre Ordinance Section 701.06, Subdivision 2; Section 702.13, Zipf Aff., Ex. D. A liquor license transfer requires the applicant to fill out the paperwork for a new liquor license application, and submit to a criminal background investigation. See, Affidavit of Coralee Fox ("Fox Aff."), Docket No. 22, Att. 1, at ¶ 4. The City must also provide ten (10) days published notice to the public before a Hearing can be conducted on a transfer, or a new liquor license application. See, City Ordinance Section 701.06, Subdivision 1, Zipf Aff., Ex. D. The City Council is required to investigate all of the facts provided in the application and, in its discretion, it may grant, or refuse, the application. Id.
In addition, Minnesota Statutes Section 340A.402 prohibits municipalities from issuing liquor licenses to a person who is "not of good moral character or repute," and requires that a background investigation be conducted. The relevant statute also provides as follows:
In addition, no new retail license may be issued to, and the governing body of a municipality may refuse to renew the license of, a person who, within five years of the license application, has been convicted of a felony or a willful violation of a federal or state law or local ordinance governing the manufacture, sale, distribution, or possession for sale or distribution of an alcoholic beverage. The alcohol and gambling enforcement division or licensing authority may require that fingerprints be taken and forwarded to the Federal Bureau of Investigation for purposes of a criminal history check.
On June 21, 2004, Patel formed Bholae, and submitted an application for a new License for the Hayloft in the Corporation's name. See, Patel Dep., Zipf. Aff., Docket No. 23, at pp. 24-26. On July 7, 2004, Patel, Paresh, and Patel's attorney attended the Public Hearing held in conjunction with the regular Council meeting, to answer questions regarding the License application. See, Complaint, at ¶¶ 5.3-5.6; Zipf. Aff., Exh. H.
At the Hearing, Arlene Veeder, Kathy Schmidt, and Mark Orth, testified that they were caterers who had agreements to use the existing Hayloft facility, and that they wished to see the License remain at the Hayloft, "as it would benefit three catering businesses in the community and create a hardship" if not awarded to Patel. See, Zipf. Aff., Exh. H, at p. 2. Patel was asked a list of prepared questions, which included inquiry about whether Patel would be the only person dispensing liquor-as her application noted that she would not have any employees. The Council also noted, at the Hearing, that "[t]he checks in payment of the [Application] fee were drawn on an account titled Sauk Centre Lodging Inc. DBA Super 8 Motel," which were signed by Paresh, and the Plaintiff was asked to "describe the function which Paresh Patel will serve in regard to utilization of the liquor license at Hayloft Banquet and Meeting Facility." See, Plaintiffs' Memorandum of Law in Opposition, at p. 6. The questions posed to Patel were answered by Paresh, as well as Patel's attorney, as Patel represented that she could not communicate well in English, and that Paresh was authorized to speak on her behalf. See, Paresh Dep., at pp. 39-40; Patel Dep., at pp. 14-19. At the same Hearing, Rohde was asked questions regarding his application for a License. See, Zipf. Aff., Exh. H, at p. 2.
The City and Council required the Plaintiffs to undergo a background check. See, Complaint, at ¶¶ 5.7-5.9. The background check revealed that Paresh had pled guilty in 2004 to a criminal charge of making terroristic threats at the Motel, and was convicted of bribery in Houston, Texas, in 1995. In addition, Patel had been booked for shoplifting in Houston, Texas, in 1986. See, Background...
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Let Them Play MN v. Walz
...law determines whether the interest rises to the level of entitlement protected by the Due Process Clause." Patel v. City of Sauk Centre , 631 F. Supp. 2d 1139, 1146 (D. Minn. 2007) (quoting Memphis Light, Gas & Water Div. v. Craft , 436 U.S. 1, 9, 98 S.Ct. 1554, 56 L.Ed.2d 30 (1978) ) (int......
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Let Them Play MN v. Walz
...determines whether the interest rises to the level of entitlement protected by the Due Process Clause." Patel v. City of Sauk Centre, 631 F. Supp. 2d 1139, 1146 (D. Minn. 2007) (quoting Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1, 9 (1978)) (internal quotation marks omitted). As no......