Top Flight Entm't, Ltd. v. Schuette
| Decision Date | 06 September 2013 |
| Docket Number | No. 12–2384.,12–2384. |
| Citation | 729 F.3d 623 |
| Parties | TOP FLIGHT ENTERTAINMENT, LTD., a Michigan Corporation, dba Flight Club; Flying Aces LLC, a Limited Liability Company, Plaintiffs–Appellants, v. Bill SCHUETTE, individually and in his official capacity as Attorney General of the State of Michigan; M. Scott Bowen, individually and in his official capacity as Commissioner of the Michigan Bureau of the State Lottery, a state agency; John C. Lessnau, Manager, Regulatory Investigations Support Section of the Michigan Gaming Control Board; Pamela Benzing, Detective Lieutenant, Gaming Section, Michigan State Police, Defendants–Appellees. |
| Court | U.S. Court of Appeals — Sixth Circuit |
OPINION TEXT STARTS HERE
ARGUED:Robert A. Sedler, Wayne State University Law School, Detroit, Michigan, for Appellants. Brian O. Neill, Office of the Michigan Attorney General, Lansing, Michigan, for Appellees. ON BRIEF:Robert A. Sedler, Wayne State University Law School, Detroit, Michigan, for Appellants. Brian O. Neill, Office of the Michigan Attorney General, Lansing, Michigan, for Appellees.
Before: KEITH, WHITE, and STRANCH, Circuit Judges.
WHITE, J., delivered the opinion of the court, in which, STRANCH, J., joined, and KEITH, J., joined in part. KEITH, J. (pp. 635–36), delivered a separate opinion concurring in part and dissenting in part.
Plaintiffs–Appellants Top Flight Entertainment and Flying Aces, LLC (collectively, “Plaintiffs”) appeal the dismissal of their complaint against Defendants–Appellees Bill Schuette (“Schuette”), the Michigan Attorney General, and M. Scott Bowen (“Bowen”), the Commissioner of the Michigan Bureau of the State Lottery, in their official and individual capacities (collectively, “Defendants”), alleging violations of their First and Fourteenth Amendment rights, under 42 U.S.C. § 1983. Plaintiffs' claims stem from the administrative denials of various nonprofit organizations' applications to hold “millionaire parties” at Plaintiffs' adult-entertainment club. Plaintiffs allege that Defendants adopted a blanket policy of denying all such applications in retaliation for Plaintiffs' exercising their First Amendment rights. The district court dismissed Plaintiffs' procedural and substantive due process and First Amendment retaliation claims for failure to state claims for which relief could be granted; and it dismissed the remainder of Plaintiffs' claims—which alleged retaliation for Plaintiffs' exercise of their First Amendment right to redress grievances in the courts—based on a finding that Bowen was entitled to quasi-judicial immunity and Schuette lacked the requisite personal involvement in the alleged constitutional violations. We AFFIRM in part, REVERSE in part, and REMAND for further proceedings.
A “millionaire party” is “an event at which wagers are placed upon games of chance customarily associated with a gambling casino through the use of imitation money or chips that have a nominal value equal to or greater than the value of the currency for which they can be exchanged.” Mich. Comp. Laws § 432.103a(8). Millionaire-party licenses are limited in scope and duration, and may be issued to a “qualified organization” for up to four consecutive days. Id. § 432.110b. A “qualified organization” is a “bona fide religious, educational, service, senior citizens, fraternal, or veterans' organization that operates without profit to its members and that either has been in existence continuously as an organization for a period of 5 years or is exempt from taxation under section 501(c) of the internal revenue code [.]” Id. § 432.103(g)(i). Each qualified organization may receive four millionaire party licenses a year, and each license is only valid for one location. Id. § 432.110b. The licensee of the millionaire party is responsible for “insuring” compliance with the law. Id. § 432.110a.
An application for a millionaire party must include, among other things, information identifying the applicant organization, the location at which the applicant proposes to conduct the event, the proposed dates for the event, and a sworn statement attesting to the nonprofit status of the applicant organization. Id.§ 432.104. A license may be denied if either the applicant or the lessor of the millionaire party's proposed location “is not in compliance with the requirements of the act, these rules, terms of probation, directives of the bureau, public policy of the state of Michigan, or any other local, state, or federal law or regulation.” Mich. Admin. Code r. § 432.21109. A denial of an application may be appealed by the applicant in state court. Id.;Mich. Comp. Laws § 600.631.
The proceeds from a millionaire party (less “reasonable” expenses incurred to operate the event) must be “devoted exclusively” to the charitable purposes of the licensee. Mich. Comp. Laws § 432.109(1). Leasing a location to hold the event is an approved use of the proceeds, id., but “all of the terms and conditions of rental, including the fee [must be placed] in a written agreement approved by the bureau.” Mich. Admin. Code r. § 432.21416. The location at which a licensed event is conducted must be open to inspection at all times. Mich. Comp. Laws § 432.114(3).
On June 11, 2012, the governor of Michigan transferred authority to administer millionaire-party licensing and regulation from the Lottery Commissioner to the Executive Director of the Michigan Gaming Control Board. Id. § 432.91.
Top Flight Entertainment (“Top Flight”), doing business as “Flight Club,” operates a topless-entertainment club in Inkster, Michigan. In 2010, Flight Club subleased a portion of its property to Flying Aces, LLC (“Flying Aces”) in anticipation that Flying Aces would contract with qualified organizations to hold millionaire parties at Flight Club.
On October 26, 2010, Flying Aces representatives held a meeting with Ronald K. Wells, the inspector supervisor of the Michigan Bureau of the State Lottery's (“the Bureau”) Charitable Gaming Division (“CGD”), and Mark Bentley, a supervisor for the CGD, to discuss the rules and procedures for locations where millionaire parties are conducted. Each of Flying Aces's representatives initialed and signed a memorandum listing the topics that were discussed at the meeting. The memorandum warned that: “Violations of the Act, rules, or directives will result in no further licenses being issued for organizations wishing to conduct events at that location and/or using the listed supplier.”
In March, 2011, Flying Aces representatives met with Lottery Commissioner Bowen and the mayor of Inkster to inform Bowen that Flying Aces's location also offered adult entertainment. Flying Aces felt this meeting was necessary because they were not aware of any other adult-entertainment location that had been approved by the Bureau as a location where a millionaire party could be held. Bowen did not indicate that Plaintiffs' status as an adult-entertainment business would be a problem.
On April 1, 2011, Plaintiffs entered into contracts for billboard advertising throughout the Detroit area related to the millionaire parties they anticipated would be held at their location. Shortly after these advertisements were posted, Wells contacted Flying Aces and instructed it to cancel its advertising campaign on the basis of complaints he had received. Public Act 343 of 2010, a Michigan state law which regulated signs and billboards advertising sexually oriented businesses, became effective on March 30, 2011. Shortly thereafter, on April 5, 2011, ABCDE Operating, LLC (ABCDE), an adult entertainment business managed by Alan M. Markovitz, who was a “substantial” shareholder in Flying Aces, filed suit against Michigan Governor Rick Snyder, alleging that Public Act 343 violated his rights under the First and Fourteenth Amendments. On May 18, 2011, Flying Aces filed a separate suit against Snyder, also alleging that Public Act 343 violated its constitutional rights, and Flight Club filed a separate suit on July 20 making similar claims. In late August 2011, Snyder and Bill Schuette, Michigan's Attorney General, entered into a settlement agreement resolving the three cases by entry of declaratory judgments and permanent injunctions in favor of ABCDE, Flying Aces, and Flight Club.
During April 2011, Flying Aces began conducting millionaire parties on Flight Club's premises. Sometime after May 18, 2011, Michigan State Police began investigating Flying Aces and Flight Club. Plaintiffs allege that beginning in June 2011, qualified organizations wishing to hold events at Flying Aces began experiencing “substantial and unusual delays” in the issuance of their licenses. State police executed a search warrant at the location on July 12, 2011, and questioned the management, staff, and entertainers at Flight Club and Flying Aces about suspicions of prostitution and drug use.
Shortly after the search of their premises, Plaintiffs learned that the Bureau intended to deny all millionaire-party licenses for events to be held on their premises for the “foreseeable future.” On August 15, 2011, representatives of Flying Aces met with representatives from the Bureau, as well as an assistant attorney general assigned to work with the Gaming Control Board. According to Flying Aces, the assistant attorney general advised it that the Bureau was bringing administrative charges against several of the organizations that had conducted millionaire parties at Flying Aces, and that until the investigation was complete, no further license applications for events at Flying Aces would be approved.
Plaintiffs filed an amended complaint on January 18, 2012, against Schuette and Bowen in their official and individual capacities, alleging that the blanket denial of all millionaire-party licenses to groups proposing to hold millionaire parties at their club was done in disapproval of, and in...
To continue reading
Request your trial
-
R.K. v. Lee
...Governor Lee has "some connection" to the statute sufficient for the Ex Parte Young exception to apply. See Top Flight Ent., Ltd. v. Schuette, 729 F.3d 623, 634 (6th Cir. 2013) (citation omitted) ("[T]he state official sued must have, by virtue of the office, some connection with the allege......
-
Left Fork Mining Co. v. Hooker
...contained in the complaint as true, and construe them in the light most favorable to the non-moving party. Top Flight Entm't, Ltd. v. Schuette, 729 F.3d 623, 630 (6th Cir.2013). To the extent that any of the factual assertions are in conflict, we accept the facts as stated by Left Fork in i......
-
Left Fork Mining Co. v. Hooker
...contained in the complaint as true, and construe them in the light most favorable to the non-moving party. Top Flight Entm't, Ltd. v. Schuette, 729 F.3d 623, 630 (6th Cir.2013). To the extent that any of the factual assertions are in conflict, we accept the facts as stated by Left Fork in i......
-
Gadd v. City of Warren
...created by the Constitution, instead they are created and defined by independent sources such as state law." Top Flight Entm't, Ltd. v. Schuette, 729 F.3d 623, 632 (6th Cir. 2013) (quoting Bd. Of Regents of State Colleges v. Roth, 408 U.S. 564, 577 (1972)). Not every benefit conferred by th......