NOEL L. HILLMAN, District Judge.
This matter concerns claims by Plaintiff, Michael Conway, Proprietor of EHT Tavern, LLC, which does business as Ref's Taphouse & Grill in Egg Harbor Township, New Jersey. Plaintiff claims his application to extend temporarily his liquor license to the outside area of his restaurant for one night on June 12, 2016 was denied because he would not pay a $400 fee to Egg Harbor Township as demanded by the Township's police chief, Defendant Raymond Davis. Plaintiff claims that the $400 fee was arbitrarily imposed and amounted to extortion. Because Plaintiff refused to pay the fee, Davis voided Plaintiff's Division of Alcoholic Beverage Control ("ABC") temporary application.
Plaintiff claims that the decision to extend a liquor licenses rests solely with the ABC, and therefore Davis was without legal authority to unilaterally deny his application, which constitutes a violation of his due process rights. Plaintiff claims that he suffered a loss of business revenue and is seeking $750,000 in damages.
The Court previously decided two motions to dismiss filed pursuant to Fed. R. Civ. P. 12(b)(6) by Davis, the mayor, a township administrator, and three town council members. The Court dismissed Plaintiff's claims against all the defendants except for his claims against Davis. (See Docket No. 18.) The Court found that Plaintiff sufficiently pleaded his procedural and substantive due process violation claims against Davis. Plaintiff claims that Davis deprived him of a protected property interest — the ability to avail himself of his rights as a liquor license holder to seek a license extension — by voiding his application without any process to challenge that result, except for paying the demanded fee, a demand that had no legal basis and therefore could be found to shock the conscience. (Docket No. 18 at 12.)
The Court also found, with regard to Davis's argument that Plaintiff's complaint must be dismissed for failure to exhaust administrative remedies, that because Plaintiff's complaint did not indicate whether he exhausted his administrative remedies with the ABC, it could not be dismissed pursuant to Rule 12(b)(6), since the failure of a plaintiff to exhaust his administrative remedies is an affirmative defense to be pleaded by the defendant, and a district court may only dismiss a complaint when the plaintiff's failure to exhaust administrative remedies is apparent from the face of the complaint. (Docket No. 18 at 17.)
Shortly after the Court issued its Opinion, Davis filed a motion to dismiss Plaintiff's complaint for lack of standing pursuant to Rule 12(b)(1). Davis argues that Plaintiff lacks standing to bring his due process violation claims because he never held a property interest in the liquor license on which he bases his claims. Plaintiff has opposed Davis's motion.
Because Plaintiff has brought claims pursuant to 42 U.S.C. § 1983 for alleged violations of his constitutional rights, this Court has jurisdiction of this matter pursuant to 28 U.S.C. §§ 1331 and 1343.
"A motion to dismiss for want of standing is . . . properly brought pursuant to Rule 12(b)(1), because standing is a jurisdictional matter."
"The factual attack, however, differs greatly," because (1) "no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims," and (2) "the plaintiff will have the burden of proof that jurisdiction does in fact exist."
Davis, the Defendant, has submitted documents regarding the ownership trail of the liquor license at issue, which are not attached to Plaintiff's complaint. Procedurally, this suggests Defendant is making a factual attack to the Complaint. However, our Court of Appeals has made clear that a factual attack may only occur after the filing of an answer.
Nonetheless, the Court may consider the liquor license documents, because Plaintiff does not dispute their authenticity, and because Plaintiff's claims are based on his contention that his claims arise from his interest in liquor license.
Plaintiff's due process claims
Davis contends, however, that Plaintiff has never held ownership rights to the liquor license at issue, and he therefore cannot maintain a claim for a deprivation of property in which he does not have a property right. Davis's motion explains the history of ownership of the liquor license as follows:
(Docket No. 20-1 at 5-6.)
Davis argues that he could not have violated Plaintiff's substantive and procedural due process rights when Plaintiff's liquor license extension request was denied because Plaintiff did not hold an interest in the liquor license at that time. Davis further argues that even if Plaintiff's 2014 application to transfer ownership of the liquor license had been approved instead of denied in November 2016, he still did not have ownership rights at the time of the alleged deprivation.
In response, Plaintiff argues that he does have a property interest in the liquor license because during the pendency of the 2014 application to change the corporate structure of the liquor license, Plaintiff paid the ABC licensing fee for "an extended period of time," and on May 30, 2016, Plaintiff paid $1,200 to cover the fee for the extension of the license for use at the EHT Tavern. Plaintiff's claims can also be fairly construed to assert that, although he did not have a formal and government sanctioned interest in the liquor license at the time of the alleged incident, he had acquired a contractual interest through Madz Enterprises LLC subject to regulatory approval, in the entity that held the liquor license.
Plaintiff also contends that Davis retaliated against him for questioning how the Township was able to operate a country club with a liquor license in direct competition with private businesses in the Township, and how the Township did not have to pay the extension of premises fees like the other businesses. Plaintiff claims that Township patrol units began to block his single driveway at the EHT Tavern, which prevented vehicles from entering or leaving the business parking lot, which was in direct retaliation and punishment for Plaintiff raising questions about the ethical practices of the Township.
To establish standing, a plaintiff must show: "(1) an `injury in fact,' i.e., an actual or imminently threatened injury that is `concrete and particularized' to the plaintiff; (2) causation, i.e., traceability of the injury to the actions of the defendant; and (3) redressability of the injury by a favorable decision by the Court."
The injury sufficient to confer standing is particularly relaxed where the allegation asserts a violation of a constitutional right. As the Supreme Court recently noted, there is a well-established historic distinction between efforts to vindicate a public right, for example a violation of a regulatory statute, and a private right such as a constitutional tort.
In contrast, a plaintiff alleging a violation of a private right need only meet a lessened measure of standing. This is because violations of certain private rights are actionable even in the absence of actual damages, where the harm is intangible such as defamation, or where damages are difficult to calculate.
Davis's position that Plaintiff's lack of technical ownership of the liquor license prevents him from prosecuting his claims is too narrow a view on the standing requirement. Here, Plaintiff alleges a violation of a private right not a public one. Plaintiff claims that he was extorted by Davis relative to his business which was lawfully engaged in the sale of liquor under a valid liquor license, and his business was potentially entitled to a temporary extension of premises license. That extortion allegation alone demonstrates, when accepted as true, a cognizable injury.
Under the Hobbs Act, "extortion" is defined as "the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right." 18 U.S.C. § 1951(b)(2). The term "fear" includes the fear of economic loss.
It makes no sense, of course, as Defendant's argument seems to imply, that Plaintiff, an alleged victim of an extortion, would only have standing if Plaintiff paid Davis the $400 he allegedly demanded. It would be perverse to suggest that only the victim of a successful extortion would have standing and one who resists unlawful government action would not. Moreover, the allegation seems to incorporate the subjective belief of the Defendant that Plaintiff would have the economic interest or incentive to pay the extorted amount. The fact that Plaintiff alleges that Davis sought the payment from him makes his claim plausible that he had sufficient economic stake in the venture to establish injury-in-fact. Otherwise, assuming Plaintiff's allegations are true, Defendant's defense of lack of standing is, in essence, a claim that Davis tried to extort the wrong person — i.e., the de facto liquor license holder rather than the technical liquor license holder. That would seem to be an incomplete defense to the constitutional violations allegedly perpetrated by Davis.
Plaintiff's allegations in his complaint that his substantive and procedural due process rights were violated by Davis's alleged extortion related to Plaintiff's temporary extension of liquor license permit are sufficient to establish Article III standing.
Moreover, the Court is convinced that Plaintiff has standing even from an economic or financial point of view. Here, even though the liquor license applications and approvals submitted by Davis show that Plaintiff was never an official "holder" of the license at issue, either by his business entity Madz Enterprises, LLC or himself individually, Plaintiff's complaint
He also alleges he had a contractual interest in the company that controlled the license and paid the company's ABC fees when required. His role as "proprietor" or owner, investor, and his expenditures on behalf of the company are sufficient, alone and certainly in combination, to make out a plausible claim for economic injury sufficient to confer standing. These allegations, which identify an injury-in-fact, causation, and redressability by the Court, are sufficient to confer standing to Plaintiff at the motion to dismiss stage.
Now that the case will go forward, the Court notes that additional allegations, facts, and legal premises have been raised by the parties' submissions outside of Plaintiff's current complaint. In the Court's prior Opinion, the Court observed that obtaining an extension of premises license to sell alcohol is not limited to liquor license holders.
The Third Circuit has directed that in civil rights cases a district court must offer to a plaintiff the opportunity to file an amended complaint — irrespective of whether it is requested — when considering whether to dismiss a complaint, unless doing so would be inequitable or futile.
Indeed, an amended pleading is necessary under these circumstances. Here, it is required because Plaintiff, proceeding pro se, has asserted his claims piecemeal and in three separate documents; his original complaint, his first amended complaint, and in his brief in opposition to Defendant's motion to dismiss. While Plaintiff is proceeding pro se, he still has an obligation to abide by the rules of civil procedure. In order to accord the Defendant fair notice of all Plaintiff's claims, Plaintiff will be directed to file a Second Amended Complaint that encompasses and sets forth in a short and plain statement all of his legal claims and the facts to support those claims. Claims asserted in the Second Amended complaint, and the facts to support them, that are consistent with Plaintiff's claims as construed and described in this Opinion, will be allowed to proceed and will require an answer from the Defendant.
For the reasons expressed above, Defendant Raymond Davis's motion to dismiss Plaintiff's complaint will be denied. Plaintiff is afforded 30 days to file an amended complaint consistent with this Opinion if he wishes to do so. Davis's answer shall be filed 15 days after Plaintiff files his amended complaint, or 15 days after the expiration of the 30 days.
An appropriate Order will be entered.
"By its terms, of course, the statute creates no substantive rights; it merely provides remedies for deprivations of rights established elsewhere."