Tower Realty Co. v. City of East Detroit, Mich.

• Decision Date: 15 December 1950
• Docket Number: No. 11179.,11179.
• Citation: 185 F.2d 590
• Parties: TOWER REALTY CO. v. CITY OF EAST DETROIT, MICH.
• Court: U.S. Court of Appeals — Sixth Circuit

185 F.2d 590 (1950)

TOWER REALTY CO. v. CITY OF EAST DETROIT, MICH.

No. 11179.

United States Court of Appeals Sixth Circuit.

December 15, 1950.

Wm. Henry Gallagher, Detroit, Mich. (Wm. Henry Gallagher, Detroit, Mich., George A. Francis, St. Clair Shores, Mich., on the brief), for appellant.

Carl B. Weymouth, East Detroit, Mich., for appellee.

Before SIMONS, McALLISTER and MILLER, Circuit Judges.

SIMONS, Circuit Judge.

This appeal involves a challenge to the constitutional validity of an ordinance of the City of East Detroit which governs the licensing and operation of amusement parks, and presents questions as to the presence of standards set up in the ordinance governing compliance therewith. A basic question of federal jurisdiction is also involved and this necessitates a somewhat detailed narration of events leading to the present controversy and the relationship of the parties thereto.

Much of the earlier history of the amusement park here involved is recited in Eastwood Park Amusement Company v. Mayor of East Detroit, 325 Mich. 60, 38 N.W.2d 77. There it appears that since 1927, a Michigan corporation known as Eastwood Park Amusement Company had operated the park in what was formerly the Village of Halfway, Michigan, later incorporated as the City of East Detroit. Halfway was at the time a sparsely populated district contiguous to the City of Detroit. It has since more than tripled in population and become a city of many homes. The Park Company operated under annual licenses pursuant to the provisions of the city ordinances, the last of such ordinances being No. 49, the validity of which is here assailed. Over the course of years the Park has developed so that in 1948 it represented an assessed valuation of $275,000. For many years it held a liquor license, which has not been renewed. Within the Park's activities are a roller coaster, swimming pool, skating rink, ballroom, freak show, and other entertainment facilities familiar to such places. There were also a large number of gambling devices openly conducted on the premises. Previous to the granting of the 1948 license, officers of the corporation had been found guilty of violating state laws forbidding gambling and had been heavily fined. In May of 1948 the Mayor of the City gave notice of revocation of the license in accordance with authority supposed to be vested in her by § 18 which provided that a Mayor may revoke any license for good and satisfactory reasons. The Park Company sued to restrain the revocation. The Circuit Court adjudicated § 18 as constitutionally invalid because of the failure of the ordinance to set up reasonable standards for compliance, and the Supreme Court affirmed.

In affirming, however, the Supreme Court reviewing the testimony de novo, concluded that there were other provisions of the ordinances which would have justified revocation had the notice included as grounds the violation of such provisions, and had the facts supported the violations. It also announced the law of the State to be that if invalid or unconstitutional language can be deleted from an ordinance and still leave it complete and operative, the remainder of the ordinance must be permitted to stand, citing Melconian v. City of Grand Rapids, 218 Mich. 397, 188 N.W. 521. Since the 1948 license would expire by its own limitation on May 1, 1949, no attempt was made by the City to again exert its power of revocation. It apparently awaited an application for renewal of the license for the year 1949. Such application was made and by the City denied, whereupon the Amusement Company brought a second suit praying an injunction restraining the City and its officers from interfering with the operation of the Amusement Park, assailing ordinance No. 49 as unconstitutional, and in the alternative seeking a mandatory injunction requiring the granting of a license to it. The City's crossbill asked for an injunction restraining the Park Company from operating. From a decree dismissing the bill and restraining the Park Company from operating without a license, there was an appeal which was disposed of by the Michigan Supreme Court in Eastwood Amusement Company v. City of East Detroit, 328 Mich. 272, 43 N.W.2d 851. This was announced on Septemebr 11, 1950, holding the provisions of § 19 of the ordinance to contain a sufficient basis for determination of the eligibility of an applicant for a license and to confer no arbitrary power upon the Mayor and the Council. It also held § 1 of the ordinance requiring a license as a prerequisite to the operation of an amusement park and § 16 forbidding licensees to permit gambling and other evils, as well as other sections of the ordinance, severable from the rest, complete and operative in and of themselves and so valid and enforcible. Whether some of the conclusions of the Michigan court are or are not dicta does not concern us, since we are required to ascertain local law from "all available sources." West v. American T. & T. Co., 311 U.S. 223, 237, 61 S.Ct. 179, 85 L.Ed. 139. The decree was therefore affirmed.

While the above cause was pending, but before decision, the appellant, Tower Realty Company, on February 3, 1950, filed its application for a license to operate the amusement park, reciting that the applicant was prepared to file insurance policies required by the ordinance. It also tendered performance of all lawful requirements, and proposed to operate its business on the site of the present Eastwood Park. It recited that the applicant is a Delaware corporation. In March of 1950 the appellant filed its present suit in the district court. It recited that it had been licensed to do business in Michigan; that jurisdiction was based upon diversity of citizenship; that it did not require a license to operate an amusement park because...