Skatemore, Inc. v. Whitmer

CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)
Citation40 F.4th 727
Docket Number21-2985
Parties SKATEMORE, INC., a Michigan corporation dba Roll Haven Skating Center; Slim's Rec, Inc., a Michigan corporation dba Spartan West Bowling Center/Beamers Restaurant; MR. K Enterprises, Inc., a Michigan corporation dba Royal Scot Golf & Bowl ; M.B. and D. LLC, a Michigan limited liability company dba Fremont Lanes; R2M, LLC, a Michigan limited liability company dba Spectrum Lanes & Woody's Press Box, Plaintiffs-Appellants, v. Gretchen WHITMER, in her official capacity as Governor of the State of Michigan ; Robert Gordon, in his official capacity as Director of the Michigan Department of Health and Human Services; Michigan Department of Health and Human Services, a Michigan Administrative Agency, Defendants-Appellees.
Decision Date19 July 2022

40 F.4th 727

SKATEMORE, INC., a Michigan corporation dba Roll Haven Skating Center; Slim's Rec, Inc., a Michigan corporation dba Spartan West Bowling Center/Beamers Restaurant; MR. K Enterprises, Inc., a Michigan corporation dba Royal Scot Golf & Bowl ; M.B. and D. LLC, a Michigan limited liability company dba Fremont Lanes; R2M, LLC, a Michigan limited liability company dba Spectrum Lanes & Woody's Press Box, Plaintiffs-Appellants,
v.
Gretchen WHITMER, in her official capacity as Governor of the State of Michigan ; Robert Gordon, in his official capacity as Director of the Michigan Department of Health and Human Services; Michigan Department of Health and Human Services, a Michigan Administrative Agency, Defendants-Appellees.

No. 21-2985

United States Court of Appeals, Sixth Circuit.

Argued: April 27, 2022
Decided and Filed: July 19, 2022


ARGUED: Stephen P. Kallman, KALLMAN LEGAL GROUP, PLLC, Lansing, Michigan, for Appellants. Daniel J. Ping, OFFICE OF THE MICHIGAN ATTORNEY GENERAL, Lansing, Michigan, for Appellees. ON BRIEF: Stephen P. Kallman, David A. Kallman, KALLMAN LEGAL GROUP, PLLC, Lansing, Michigan, for Appellants. Daniel J. Ping, Darrin F. Fowler, Kyla Barranco, OFFICE OF THE MICHIGAN ATTORNEY GENERAL, Lansing, Michigan, for Appellees.

Before: CLAY, GRIFFIN and WHITE, Circuit Judges.

CLAY, Circuit Judge.

Plaintiffs Skatemore, Inc., Slim's Rec, Inc., Mr. K Enterprises, Inc., M.B. and D. LLC, and R2M, LLC, operators of bowling alleys and roller-skating rinks in Michigan, sued Michigan Governor Gretchen Whitmer, former Michigan Department of Health and Human Services ("MDHHS") Director Robert Gordon, and the MDHHS alleging that various orders limiting the use of Plaintiffs' properties early in the COVID-19 pandemic constituted an unconstitutional taking in violation of the Fifth Amendment of the U.S. Constitution and Article X of the Michigan Constitution. The district court found that Defendants were entitled to immunity pursuant to the Eleventh Amendment and accordingly dismissed Plaintiffs' complaint for lack of jurisdiction. The district court also denied Plaintiffs' motion to amend their complaint. We AFFIRM for the reasons set forth below.

I. BACKGROUND

A. Factual Background

In late 2019 and early 2020, SARS-CoV-2—the virus responsible for COVID-19—began spreading around the world. This novel strain of a coronavirus caused an alarming uptick in hospitalizations and deaths. Early research found that the virus spreads through respiratory droplets. To mitigate the spread of the virus, individuals were promptly and repeatedly advised to avoid close indoor contact.

On March 10, 2020, Michigan Governor Gretchen Whitmer announced that state public health officials had detected the first known cases of COVID-19 in the state. That same day, Governor Whitmer

40 F.4th 730

declared a state of emergency in an attempt to slow the spread of the virus. A few days later, on March 16, 2020, Governor Whitmer signed Executive Order ("EO") 2020-09, which "closed to ingress, egress, use, and occupancy by members of the public" various places of public accommodation, including places of public amusement.1 Specifically included in the definition of "places of public amusement" were bowling alleys and skating rinks. Despite prohibiting the public from entering such premises, EO 2020-09 "encouraged [affected businesses] to offer food and beverage using delivery service, window service, walk-up service, drive-through service, or drive-up service." EO 2020-09. The purpose of this first EO was "[t]o mitigate the spread of COVID-19, protect the public health, and provide essential protections to vulnerable Michiganders ...." Id. Among the affected bowling alleys and roller-skating rinks were Plaintiffs Skatemore, Inc., Slim's Rec, Inc., Mr. K Enterprises, Inc., M.B. and D. LLC, and R2M, LLC (collectively "Plaintiffs").

Over the next several months, Governor Whitmer extended the closure of bowling alleys for a few weeks at a time. See EO Nos. 2020-20 (Mar. 21, 2020), 2020-43 (Apr. 15, 2020), 2020-69 (May 1, 2020), 2020-100 (May 26, 2020). However, the piecemeal extension of bowling alley and roller-skating rink closures ended on June 1, 2020, when Governor Whitmer ordered the affected businesses to indefinitely limit their operations. See EO Nos. 2020-110 (June 1, 2020), 2020-160 (July 30, 2020), 2020-176 (Sept. 3, 2020), 2020-183 (Sept. 25, 2020). Instead of identifying a specific expiration date, the EOs issued on or after June 1, 2020, simply identified factors the governor would consider when deciding whether to alter or end the restrictions. Beginning on September 3, 2020, bowling alleys and roller rinks were permitted to "serv[e] as a venue for organized sports." EO No. 2020-176. In several of the EOs, Governor Whitmer specifically noted that Michigan courts were reviewing the legality of the EOs. See EO Nos. 2020-110, 2020-160, 2020-176, 2020-183.

On October 2, 2020, the Michigan Supreme Court held that Governor Whitmer lacked the power to issue emergency orders after April 30, 2020. In re Certified Questions from U.S. Dist. Ct., W. Dist. of Mich., S. Div. , 506 Mich. 332, 958 N.W.2d 1, 11 (2020). On November 15, 2020, MDHHS Director Robert Gordon2 issued an order pursuant to his independent authority under Mich. Comp. Laws § 333.2253. Director Gordon's emergency order, which became effective on November 18, 2020, mirrored Governor Whitmer's EOs insofar as it prohibited the public from entering and using bowling alleys and skating rinks. MDHHS Order (Nov. 15, 2020), available at https://www.michigan.gov/coronavirus/0,9753,7-406-98178_98455-545136--,00.html. Director Gordon extended the closures twice. Plaintiffs' businesses remained closed until December 21, 2020, when MDHHS's orders naturally expired.

B. Procedural Background

On January 20, 2021, Plaintiffs commenced this action against Governor Whitmer, Director Gordon, both in their official capacities, and MDHHS. They alleged that the forced "closure" of their bowling alleys and roller-skating rinks from March 16, 2020 to October 2, 2020 and November 18, 2020 to December 21, 2020 were unconstitutional

40 F.4th 731

takings in violation of the Fifth Amendment of the U.S. Constitution and Article X, § 2 of the Michigan Constitution. Plaintiffs brought their Fifth Amendment takings claim against Governor Whitmer and Director Gordon under 42 U.S.C § 1983.

Defendants jointly moved to dismiss the complaint. They first argued that the district court lacked jurisdiction because they were entitled to Eleventh Amendment immunity. See Fed. R. Civ. P. 12(b)(1). Plaintiffs responded that because Defendants promulgated the EOs pursuant to legislation that was held unconstitutional by the Michigan Supreme Court, the Eleventh Amendment did not apply. They also argued that the Supreme Court's recent decision in Knick v. Township of Scott , ––– U.S. ––––, 139 S. Ct. 2162, 204 L.Ed.2d 558 (2019), carved out an exception to Eleventh Amendment immunity; and therefore, the Eleventh Amendment could not be invoked to dismiss a Fifth Amendment takings claim in federal court. Plaintiffs further argued that the Fourteenth Amendment, which made the Fifth Amendment Takings Clause applicable to the states, abrogated state sovereign immunity with respect to takings claims because the Fourteenth Amendment was ratified after the Eleventh Amendment. Finally, Plaintiffs argued that the Fifth Amendment is an exception to the Eleventh Amendment because it expressly provides for "just compensation" and "[i]t would not make any logical sense for the 5th Amendment to apply to the states through incorporation by the 14th Amendment, but to then have the 11th Amendment nullify it completely by barring all ‘just compensation’ from those same states." (Pls.' Resp. Br., R. 19, Page ID #96.)

Defendants also argued that Plaintiffs had failed to state a claim because the EOs did not amount to a taking. See Fed. R. Civ. P. 12(b)(6). While Defendants' motion to dismiss was pending, Plaintiffs sought leave to amend their complaint to supplement their factual allegations and to sue Governor Whitmer and Director Gordon in their personal capacities.

In a combined order, the district court granted Defendants' motion to dismiss and denied Plaintiffs' motion to amend the complaint. The district court first held that Defendants were entitled to immunity. It held that Knick did not overrule Sixth Circuit precedent, which had established that the Takings Clause is not an exception to Eleventh Amendment immunity. Although the Eleventh Amendment holding was sufficient to dismiss the case, the court went on to hold that even if it had jurisdiction, the EOs' temporary limitation on the use of Plaintiffs' property did not amount to an actionable taking. Finally, the court held that any attempt by Plaintiffs to amend their complaint would be futile. Even if Plaintiffs were permitted to sue Governor Whitmer and Director Gordon in their personal capacities, the EOs would still not amount to an unconstitutional taking. In sum, the district court dismissed Plaintiffs' complaint without prejudice and denied Plaintiffs' motion to amend the complaint. Plaintiffs timely appealed.

II. DISCUSSION

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