Planet Earth Entertainment, Inc. v. Edwards

• Decision Date: 16 July 1999
• Docket Number: No. C-3-99-284.,C-3-99-284.
• Citation: 84 F.Supp.2d 891
• Parties: PLANET EARTH ENTERTAINMENT, INC., d/b/a Diamonds Plaintiff, v. Wallace E. EDWARDS, in his official capacity as Chairman, Liquor Control Commission of the State of Ohio, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

84 F.Supp.2d 891

PLANET EARTH ENTERTAINMENT, INC., d/b/a Diamonds Plaintiff, v. Wallace E. EDWARDS, in his official capacity as Chairman, Liquor Control Commission of the State of Ohio, et al., Defendants.

No. C-3-99-284.

United States District Court, S.D. Ohio, Western Division.

July 16, 1999.

COPYRIGHT MATERIAL OMITTED

Laurence Edward Sturtz, Carlile, Patchen & Murphy, Columbus, OH, Henry Louis Sirkin, Sirkin, Pinales, Mezibov & Schwartz, Cincinnati, OH, Chris O Paparodis, Hilliard, OH, for Planet Earth Entertainment Inc dba Diamonds, plaintiff.

David A Raber, Ohio Attorney General, Business & Government Regulation Section, Columbus, OH, for Ohio Liquor Control Commission, Betty D Montgomery, Attorney General, State of Ohio, defendant.

DECISION AND ENTRY OVERRULING PLAINTIFF'S MOTION FOR A TEMPORARY RESTRAINING ORDER (DOC. # 11); DEFENDANT LIQUOR CONTROL COMMISSION'S MOTION TO DISMISS (DOC. # 6) OVERRULED IN PART AND NOT RULED UPON IN PART; PLAINTIFF DIRECTED TO FILE MEMORANDUM RESPONDING TO REMAINING ARGUMENTS CONTAINED IN DEFENDANT LIQUOR CONTROL COMMISSION'S MOTION TO DISMISS; BRIEFING SCHEDULE SET; HEARING ON MOTION FOR PRELIMINARY INJUNCTION TO BE SET SHOULD CASE SURVIVE MOTION TO DISMISS

RICE, Chief Judge.

This litigation stems from the Plaintiff's attempt to prevent the Ohio Liquor Control Commission ("LCC") from enforcing an order revoking its license to sell alcoholic beverages. Pending before the Court are two motions: (1) the Plaintiff's Motion for a Temporary Restraining Order and Preliminary Injunction (Doc. # 11); and (2) the LCC's Motion to Dismiss the Plaintiff's Complaint, pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a claim upon which relief can be granted, or, in the alternative, to Overrule the Plaintiff's Motion for a Temporary Restraining Order.¹ (Doc. # 6). For the reasons set forth more fully below, the Court overrules the Plaintiff's Motion, insofar as it seeks a temporary restraining order. After considering the appropriate factors, the Court concludes that the Plaintiff has failed to satisfy the requirements for a temporary restraining order, directing the LCC to reinstate its now-revoked liquor license. The Court also overrules the LCC's Motion to Dismiss, in part, and reserves ruling upon said Motion, in part.

I. Analysis²

The Plaintiff, Planet Earth Entertainment, Inc., d/b/a Diamonds ("Diamonds"), filed a "Verified Complaint for Injunctive Relief" on June 21, 1999, alleging that Ohio's statutory scheme for liquor license revocations, and for administrative appeals from such revocations, violates substantive and procedural due process. (Doc. # 1). Diamonds' Complaint asserted a cause of action under 42 U.S.C. § 1983, for alleged violations of its due process rights under the Fifth and Fourteenth Amendments. In response, the LCC filed a Motion to Dismiss (Doc. # 6) on June 28, 1999, alleging: (1) that Diamonds' various claims are barred by res judicata; (2) that Diamonds' claims are barred by the "Rooker-Feldman" doctrine; (3) that the LCC is not subject to suit under § 1983; and (4) that individual members of the LCC are immune from liability for money damages under § 1983.

Thereafter, Diamonds filed an amended Complaint (Doc. # 10), seeking injunctive relief and a declaratory judgment. The amended Complaint names as Defendants LCC Chairman Wallace E. Edwards (as opposed to the LCC as an entity), in his official capacity, and Ohio Attorney General Betty Montgomery, in her official capacity. The amended Complaint contains three counts. Count I, which asserts a 42 U.S.C. § 1983 claim against LCC Chairman Edwards in his official capacity, seeks prospective injunctive relief. Counts II and III, which are directed toward the Ohio Attorney General in her official capacity, seek a declaratory judgment that Ohio Revised Code § 119.12 is unconstitutional.

Attached to Diamonds' amended Complaint is a new Motion for a Temporary Restraining Order and Preliminary Injunction, and a Memorandum in Support (Doc. # 11). This new Motion is directed only toward Count I of Diamonds' amended Complaint, which contains the § 1983 claim against the LCC Chairman. (Plaintiff's Memorandum in Support at 3). As a means of analysis, the Court first will address Diamonds' request for a temporary restraining order.

A. Plaintiff's Motion for a Temporary Restraining Order (Doc. # 11)

A District Court considers four factors when deciding whether to grant a temporary restraining order. Those factors are: (1) the likelihood that the party seeking relief will succeed on the merits of the claim; (2) whether the party seeking relief will suffer irreparable harm without the temporary restraining order; (3) the probability that granting the requested relief will cause substantial harm to others; and (4) whether the public interest is advanced by the issuance of the temporary restraining order. Cf. Washington v. Reno, 35 F.3d 1093, 1099 (6th Cir.1994) (setting forth the four factors in the context of a preliminary injunction). These four considerations are factors to be balanced, rather than prerequisites that must be met. Id. With these standards in mind, the Court turns now to its analysis of the Plaintiff's request for a temporary restraining order.

As noted, supra, only Count I of Diamonds' amended Complaint, which alleges a violation of 42 U.S.C. § 1983, relates to its request for a temporary restraining order. The crux of Diamonds' § 1983 claim against the LCC Chairman is two-fold. First, Diamonds alleges that the Commission conducted a sham investigation and entered three revocation orders (two based upon violations of a now-defunct administrative regulation (Regulation 52), and one based upon a "cooked up" violation of Ohio Rev.Code § 4301.66 for hindering LCC investigators), as part of an unlawful scheme to shut down Diamonds' business, which features semi-nude dancing. Second, Diamonds contends that Ohio's "statutory scheme" (i.e., Ohio Revised Code Chapter 119) provides no mechanism for it to challenge the severity of the revocation sanction imposed by the LCC.

Based upon a review of pertinent case law, the Court concludes that Diamonds has not demonstrated a substantial likelihood of success on the merits of its § 1983 claim. In reaching this conclusion, the Court notes that the first prong of Diamonds' § 1983 claim appears to be precluded by the doctrine of res judicata.³ In essence, Diamonds suggests that LCC agents conducted an investigation, enforced an unconstitutional ordinance (Regulation 52), "cooked up" a hindering charge, and entered revocation orders in an unlawful attempt to interfere with the exotic dancing conducted at its business.

One apparent problem with Diamonds' argument, however, is that the Regulation at issue was declared unconstitutional by the Ohio Eighth District Court of Appeals well after the LCC's investigation, citations, and revocation orders. At the time of the LCC's actions, the Regulation had not been declared unconstitutional. More importantly, for res judicata purposes, the Tenth District Court of Appeals issued a ruling on Feb. 8, 1998, finding "considerable evidence before the commission upon which it could base its determination that [Regulation 52] violations had in fact occurred and revocation of the permit was appropriate." Planet Earth v. Ohio Liquor Control Com'n, 125 Ohio App.3d 619, 709 N.E.2d 220, 224 (Ohio App.10th Dist. 1998). Furthermore, with respect to the Ohio Revised Code § 4301.66 "hindering" charge against the Plaintiff, a charge which plays a central role in the present litigation, the Tenth District found reliable, substantial, and probative evidence supporting the following factual findings made by the Commission:

At approximately 10:45 P.M., Agent Naginey entered the premises and properly identified herself to an unknown doorman who attempted to prevent Agent Naginey from entering by saying that Agent Naginey had to `wait by the door' until he contacted his supervisor. Agent Naginey entered anyway and conferred with Agent Clapp. (It should be noted that the majority of the employees at Diamonds are equipped with portable radios to communicate with other employees.).

Both Agent Naginey and Clapp properly identified themselves to Lucas Liakus *** who stated he was the `President' of the corporation and Scott Conrad *** who identified himself as `Vice-President' [sic], and advised them of the violation. Immediately both Liakus and Conrad became uncooperative. Agent Clapp requested L. Liakus to obtain the liquor permit and ordered him to have the dancers stop dancing topless. L. Liakus stated that he would and was then requested by Agent Clapp to have the dancers report to the office to obtain their information. After approximately 15 minutes, no dancers had reported to the office, and L. Liakus and S. Conrad continued to be uncooperative with both Agents. Agent Clapp asked again where the dancers were, and when Agent Naginey went to the bar/dancing area of the premises, she observed the Go-Go dancers still dancing topless, exposing their bare breasts.

Agent Naginey advised Agent Clapp of the dancers and Agent Clapp advised L. Liakus that due to his refusing to cooperate, that the premises would be temporarily closed while the investigation was underway. Agent Naginey proceeded to the bar area and advised S. Conrad that he needed to tell the D.J. to inform the patrons that the premises would be temporarily closed, and that they must leave. S. Conrad did not comply and the topless Go-Go dancers continued to dance. Agent Naginey then began to properly identify herself to the patrons and advised them to leave. S. Conrad continued to interfere with Agent Naginey while she made contact with the patrons. Agent Naginey had to also inform the remaining dancers to stop and return to the dressing room.

Planet Earth, 709 N.E.2d at 225.

The foregoing factual findings made by the Commission have collateral estoppel effect. United...