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Harrington v. Hall County Board of Supervisors

United States District Court, D. Nebraska

March 31, 2016

SHANE HARRINGTON, Plaintiff,
v.
HALL COUNTY BOARD OF SUPERVISORS, et al., Defendants.

MEMORANDUM AND ORDER

JOHN M. GERRARD UNITED STATES DISTRICT JUDGE

The plaintiff, Shane Harrington, is a Nebraska resident who operates an adult entertainment company. He has sued numerous individuals and entities who, he alleges, have violated his rights by taking steps to prevent him from opening a juice bar and strip club in Hall County, Nebraska. This matter is before the Court on several defendants' motions to dismiss (filings 46, 57, 69, 71, and 73), a motion to strike certain evidence the plaintiff has offered in opposition to these motions to dismiss (filing 111), and two plaintiffs motions to amend his complaint and consolidate this action with another case (filing 78 and 114).

BACKGROUND

Briefly summarized, the plaintiffs allegations are as follows.[1]Beginning in February 2015, the plaintiff sought to secure a location for an adult entertainment venue in Hall County. Filing 1 at 4. According to the plaintiff, he plans to open this business outside of Grand Island city limits, and more than 1, 000 feet from "any restricted areas or districts." Filing 1 at 5. The plaintiff alleges that his proposed business will benefit the community, and will not lead to any illegal activities. Filing 1 at 5.

According to the plaintiff, the defendants have taken various steps to prevent him from opening his business in Hall County. First, the plaintiff alleges that in 2004, defendant Hall County Board of Supervisors adopted a zoning resolution which restricts sexually oriented businesses to "tiny industrial districts constituting less than 0.1% of the entire Hall County land mass, where there are in fact no available locations." Filing 1 at 2. In addition, the zoning regulation restricts such businesses from operating between 12 and 6 a.m. Filing 1 at 2.

Next, the plaintiff alleges that "Defendants] individually, and collectively, have created, circulated, signed, published and promoted" a petition opposing the plaintiffs proposed business. Filing 1 at 6. The plaintiff specifically alleges that the Evangelical Free Church of Grand Island, Nebraska, Third City Christian Church, and Kent Mann (the director of Third City Christian Church) circulated and promoted the petition. Filing 1 at 8. And the plaintiff alleges that John and Jane Does 1-1, 000 signed it. Filing 1 at 13. But otherwise, the plaintiff does not specifically allege that any particular defendant had a role in creating, circulating, signing, publishing, or promoting the petition. The complaint reproduces the petition as follows:

Petition to stop Shane Harrington from opening a strip club. We the undersigned citizens from the town of Grand Island Nebraska and surrounding communities petition the Grand Island City Council and Hall County Board of Supervisors to not allow Shane Harrington to bring a strip club to this area. A strip club would promote sexual violence, prostitution, a larger burden on the area law enforcement officials, and will tear down and destroy families and individuals. Additionally, whether intentional or not, the adult entertainment industry promotes the exploitation of women for the entertainment of others and opens the door for potential trafficking of women. We demand that the Grand Island City Council and Hall County Board of Supervisors take any and all action necessary to protect the City of Grand Island Nebraska and all surrounding communities from suffering the negative consequences mentioned above.

Filing 1 at 3.

On May 7, 2015, there was a public hearing in Hall County about the petition. Filing 1 at 3. The plaintiff alleges that this hearing was held without notice to him or the public. Filing 1 at 3. The plaintiff alleges that at this hearing, two members of the Hall County Board of Supervisors made statements endorsing the petition. First, the plaintiff alleges that the defendant Pam Lancaster, a member of the Hall County Board of Supervisors, said, "It really is vital that people-who believe in the Christian basis of life stand for them . . . I'm of a similar mind as well." Filing 1 at 7 (alteration in original). Second, the plaintiff alleges that defendant Doug Lanfear, a member of the Hall County Board of Supervisors, said, "I want to thank you for bringing your Christian values to the forefront ... I want to thank you for getting this petition." Filing 1 at 7 (alteration in original).

In addition, the plaintiff alleges that various individuals made statements to the press in opposition to his plan to open a strip club in Hall County. First, the defendant alleges that Chad Nabity, the Regional Planning Director of Hall County, told the Grand Island Independent that "we have places where it can be done" and that the plaintiff could open his business in a "manufacturing or commercially zoned area in Grand Island." Filing 1 at 3. According to the plaintiff, this assertion was false because adult businesses are permitted to operate only in industrial districts in Hall County. Filing 1 at 3. Second, the plaintiff alleges that the defendant Shay McGowan, a Grand Island business owner, told the Independent that strip clubs constitute the felony of sex trafficking. Filing 1 at 6. Finally, the plaintiff alleges that the defendant Keith Baumfaulk, a St. Paul resident, told the Independent that "God put this on my heart with this strip club coming in . . . it's wrong in God's eyes." Filing 1 at 7 (alteration in original).

According to the plaintiff, the actions of the defendants have "destroyed [his] reputation to the extent that no one in Hall County will sell or lease [him] property for his business." Filing 1 at 7. The plaintiff alleges that the first real estate broker he hired to find a location for his business "informed [him] that he would not be able to find a location" as a result of the petition and the defendants' other actions. Filing 1 at 6. The plaintiff alleges that he retained a new real estate broker, and offered that broker an additional $10, 000 bonus if the broker could obtain a location for the plaintiffs business in Hall County. Filing 1 at 6. The broker did locate a property, and the plaintiff and property owners entered into negotiations. Filing 1 at 6. However, according to the plaintiff, as a result of the defendants' actions, "on or about May 11, 2015, the property owners informed Plaintiffs real estate broker that they could not sell the subject property to Plaintiff for any price." Filing 1 at 7. The plaintiffs broker subsequently informed the plaintiff that he "could not purchase or lease any property in Hall County, as no individual or entity will enter into a sale or lease contract" with him. Filing 1 at 7.

Finally, the plaintiff alleges that each of the defendants "have engaged in a conspiracy to violate Plaintiffs civil rights and defame Plaintiff and are jointly and severally liable for the damages herein alleged." Filing 1 at 9. The plaintiff has brought eleven causes of action; each against all of the defendants. First, he has brought four claims under 42 U.S.C. § 1983, alleging that the defendants have violated the Establishment Clause of the First Amendment, the Freedom of Speech Clause of the First Amendment, the Equal Protection Clause of the Fourteenth Amendment and Nebraska Constitution, and the Due Process Clause of the Fourteenth Amendment and Nebraska Constitution. Filing 1 at 14, 18, 20, 21. Next, he has brought antitrust claims, under the Sherman Act and Clayton Act. Filing 1 at 15-17. And finally, he has brought five state law tort claims: defamation; negligent hiring, training, and supervision; tortious interference with business relationships; infliction of emotional distress; and negligence. Filing 1 at 22-26.

According to the plaintiff, his damages include "lost income, estimated at $40, 000 per month, as well as emotional and psychological injuries, entitling Plaintiff to compensatory damages in the amount of $10 million." Filing 1 at 9. The plaintiff additionally seeks "punitive damages in the amount of $100 million to punish the Defendants and deter such conduct in the future, together with attorney's fees and the costs of this action." Filing 1 at 9. Finally, the plaintiff seeks "a declaratory judgment enjoining Defendants from enforcing their zoning resolution as prior restraint, " filing 1 at 20, as well as an injunction "precluding Defendants from using Plaintiffs name in their petition and requiring Defendants to allocate a property in Hall County for Plaintiffs business, " filing 1 at 27.

STANDARD OF REVIEW

A complaint must set forth a short and plain statement of the claim showing that the pleader is entitled to relief. Fed.R.Civ.P. 8(a)(2). This standard does not require detailed factual allegations, but it demands more than an unadorned accusation. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The complaint need not contain detailed factual allegations, but must provide more than labels and conclusions; and a formulaic recitation of the elements of a cause of action will not suffice. Twombly, 550 U.S. at 555. For the purposes of a motion to dismiss a court must take all of the factual allegations in the complaint as true, but is not bound to accept as true a legal conclusion couched as a factual allegation. Id.

And to survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a complaint must also contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face. Iqbal, 556 U.S. at 678. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. Where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not shown-that the pleader is entitled to relief. Id. at 679.

Determining whether a complaint states a plausible claim for relief will require the reviewing court to draw on its judicial experience and common sense. Id. The facts alleged must raise a reasonable expectation that discovery will reveal evidence to substantiate the necessary elements of the plaintiffs claim. See Twombly, 550 U.S. at 545. The court must assume the truth of the plaintiffs factual allegations, and a well-pleaded complaint may proceed, even if it strikes a savvy judge that actual proof of those facts is improbable, and that recovery is very remote and unlikely. Id. at 556.

DISCUSSION

l. Motion to Strike

As an initial matter, the defendants Third City Christian Church ("Third City") and Evangelical Free Church of Grand Island, Nebraska ("Evangelical Free Church") (collectively, "the Church Defendants") have moved to strike certain evidence the plaintiff has offered in opposition to the defendants' motions to strike. Filing 111. In response to the various motions to dismiss that are currently pending, the plaintiff has filed six separate but identical briefs. See, filings 84, 86, 87, 88, 89, 94. The plaintiff has filed multiple indexes of evidence in support of these briefs. See filing 85, 90, 91, 92, 93, 96, 97, 98, 99. Each index of evidence contains a "Narrative Report of Dr. Daniel Linz Plus 17 Exhibits." See, e.g., filing 99. Evangelical and Third City move to strike this report, its accompanying attachments, and all references to the report and its attachments in the plaintiffs briefs opposing the motions to dismiss. Filing 112 at 2.

When deciding a motion to dismiss under Rule 12(b)(6), the Court is normally limited to considering the facts alleged in the complaint. If the Court considers matters outside the pleadings, the motion to dismiss must be converted to one for summary judgment. Fed.R.Civ.P. 12(d). However, the Court may consider exhibits attached to the complaint and materials that are necessarily embraced by the pleadings without converting the motion. Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697 n.4 (8th Cir. 2003). Documents necessarily embraced by the pleadings include those whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading. Ashanti v. City of Golden Valley, 666 F.3d 1148, 1151 (8th Cir. 2012). The Court may also take notice of public records. Levy v. Ohl, 477 F.3d 988, 991 (8th Cir. 2007).

Here, Linz's report and its attachments were not mentioned in the complaint, nor are they public records. The plaintiff contends that the Court should nonetheless consider them because they are "presented in admissible form" and are relevant to "the defamatory nature of Defendants' statements and publications concerning Plaintiff." Filing 124 at 1. But a motion to dismiss under Rule 12(b)(6) tests only the sufficiency of the allegations in the complaint, not the sufficiency of the evidence offered to support those allegations. Accordingly, the Court will not consider the Linz report and its attachments in resolving the pending motions to dismiss.

2. Motions to Dismiss

(a) Kent Mann

The defendant Kent Mann has moved to dismiss (filing 69) on various grounds. Specifically, he contends that the complaint fails to allege he participated in the alleged wrongful acts, and that "even if it did, it would fail to state any actionable claims against him." Filing 70 at 5. Mann also requests attorney's fees under the Nebraska anti-SLAPP statute, Neb. Rev. Stat. § 25-21, 241 et seq., and 18 U.S.C. § 1988.

1. Motion to dismiss

First, Mann argues that the plaintiff has failed to state a claim against him because he has failed to allege that Mann personally participated in any of the alleged wrongs. Filing 70 at 5-6. The complaint mentions Mann specifically only twice. First, it alleges, "Defendant THIRD CITY CHRISTAIN [sic] CHURCH authorized and participated in the aforementioned civil rights violations and defamation by and through their leadership, including but not limited to . . . Director and Defendant KENT MANN . . . ." Filing 1 at 8. The second instance merely repeats a portion of the first: "Defendant KENT MANN is a Director of THIRD CITY CHRISTIAN CHURCH . . . ." Filing 1 at 13.

Mann's alleged status as director of Third City is insufficient to establish his liability on any of the plaintiffs claims.[2] First, his director status is insufficient to establish his liability under § 1983. To state a plausible claim for relief under § 1983 against an individual defendant, the complaint must allege facts supporting that defendant's "personal involvement or responsibility for the violations." See Ellis v. Norris, 179 F.3d 1078, 1079 (8th Cir. 1999). The plaintiff has not done so here.

Second, Mann's alleged status as director of Third City is insufficient to establish his liability for violations of anti-trust laws. The plaintiff brings two causes of action: one alleging violations of §§ 1 and 2 of the Sherman Act, and one alleging violations of §§ 4 and 16 the Clayton Act. But §§ 4 and 16 of the Clayton Act do not furnish independent causes of action; rather, they permit private parties to bring an action for relief upon a showing of a separate violation of the antitrust laws. See 15 U.S.C. §§ 15, 26. Accordingly, the Court construes the plaintiffs complaint as bringing a single cause of action under §§ 4 and 16 on the basis of alleged violations of §§ 1 and 2 of the Sherman Act.

Corporate officers, directors, or agents can be personally liable for a corporation's anti-trust violations only if they participate in, order, or authorize those actions. See Bergjans Farm Dairy Co. v. Sanitary Milk Producers, 241 F.Supp. 476, 482 (E.D. Mo. 1965) aff'd sub nom. Sanitary Milk Producers v. Bergjans Farm Dairy, Inc., 368 F.2d 679 (8th Cir. 1966); see also, 15 U.S.C. § 24; United States v. Wise, 370 U.S. 405, 416 (1962). Here, the plaintiff has not alleged that Mann took any particular action to participate in, authorize, or order Third City's alleged wrongdoing.

Third, Mann's status as director of Third City is insufficient to establish his liability under state tort law. Under Nebraska law, the directors of a corporation are generally not liable to third persons for the acts of the corporation solely by virtue of their status as directors. Huffman v. Poore, 569 N.W.2d 549, 556 (Neb. Ct. App. 1997). Rather, a director will be individually liable for the acts of a corporation only if he takes part in their commission. Id. at 558 (quoting 3A William M. Fletcher, Fletcher Cyclopedia of the Law of Private Corporations § 1137 at 300-01 (1994)). The plaintiff has not alleged any particular actions Mann took to participate in Third City's purported wrongdoing. Thus, the complaint's allegations that Mann is a director of Third City are insufficient to state a claim against him for any of the wrongs Third City is alleged to have perpetuated.

In addition to the allegations that mention Mann by name, the complaint also contains generalized allegations that "Defendants" have all committed each of the purported wrongs. But the problem with this pleading strategy is it does not inform any particular defendant of the specific claims against him in sufficient detail to permit him to defend himself against the claims. See, Iqbal, 556 U.S. at 678; Ellis, 179 F.3d at 1079 (affirming dismissal of a § 1983 case where the complaint failed to allege facts supporting any individual defendant's personal involvement in alleged constitutional violations). Accordingly, these generalized allegations are also insufficient to state a plausible claim for relief against Mann, and all of the plaintiffs claims against Mann will be dismissed.

2. Attorney's fees

Mann also argues that he is entitled to attorney's fees under Nebraska's anti-SLAPP statute, Neb. Rev. Stat. § 25-21, 241 et seq. and 42 U.S.C. § 1988.

First, Mann requests attorney's fees under Nebraska's anti-SLAPP statute, which provides, "A defendant in an action involving public petition and participation may maintain an action, claim, cross-claim, or counterclaim to recover damages, including costs and attorney's fees, from any person who commenced or continued such action." Neb. Rev. Stat. § 25-21, 243. The statute specifies that costs and attorney's fees are recoverable if "the action involving public petition and participation was commenced or continued without a substantial basis in fact and law and could not be supported by a substantial argument for the extension, modification, or reversal of existing law." Id. An action involving public petition and participation is defined as one "that is brought by a public applicant or permittee and is materially related to any efforts of the defendant to report on, comment on, rule on, challenge, or oppose the application or permission." Neb. Rev. Stat. § 25-21, 242. A public applicant or permittee, in turn, is "any person who has applied for or obtained a permit, zoning change, lease, license, certificate, or other entitlement for use or permission to act from any government body." Id.

The plaintiff argues that he is not a public applicant or permittee within the meaning of the statute because he never actually applied for permission from Hall County to open his proposed strip club. And there is no evidence in the record suggesting that he has. However, the Court need not determine this point at this stage in the proceedings, because a motion for attorney's fees has not been made pursuant to Fed.R.Civ.P. 54.

State laws providing a right to attorney's fees are considered Erie-substantive. Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 260 n.31 (1975). Accordingly, when a federal court exercises diversity or pendent jurisdiction over state law claims, it will enforce state law regarding attorney's fees. See Felder v. Casey, 487 U.S. 131, 151 (1988). However, federal courts will not enforce the procedural components of a state statute that grants a substantive right. See Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 429(1996).

In other words, this Court is required to give effect to the substantive right to attorney's fees and costs created by Nebraska's anti-SLAPP statute. However, the Court shall apply federal procedure, rather than the procedure set forth by the statute, in deciding whether to award those fees and costs. The appropriate mechanism for requesting attorney's fees in federal court is Fed.R.Civ.P. 54. Under this rule, a claim for attorney's fees must be made by motion, filed no later than 14 days after the entry of the judgment. Fed.R.Civ.P. 54(d)(2). Thus, if Mann wishes to pursue his claim for attorney's fees under the anti-SLAPP statute, he may file a motion in accordance with the provisions of Rule 54.

Mann also requests attorney's fees under 42 U.S.C. § 1988, which provides that for a § 1983 action, "the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs." 42 U.S.C. § 1988. But attorney's fees should be awarded only when the "claim was frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so." Hughes v. Rome, 449 U.S. 5, 15 (1980) (per curiam) (quoting Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 422 (1978)). A plaintiffs claims are not groundless merely because they "were properly dismissed for failure to state a claim." Id. at 15. As long as "the plaintiff has 'some basis' for [his] claim, a prevailing defendant may not recover attorneys' fees." EEOC v. Kenneth Balk & Assocs., Inc., 813 F.2d 197, 198 (8th Cir. 1987) (quoting Obin v. Dist. No. 9 of the Int'l Ass'n of Machinists, 651 F.2d 574, 587 (8th Cir. 1981)).

Again, the Court need not determine at this stage whether Mann is entitled to attorney's fees under § 1988. Mann may file a motion pursuant to Rule 54 to assert his claim to those fees.

(b) Church Defendants

The Church Defendants have moved to dismiss the plaintiffs complaint on several grounds, arguing that the plaintiff has failed to state any plausible claim for relief against them. Filing 47 at 3.

1. Consideration of petition

As an initial matter, the Church Defendants have attached to their motion a copy of the petition the defendants allegedly circulated in opposition to the plaintiffs plan to open a strip club. Filing 48-2. The Church Defendants request that the Court consider it in resolving their motion to dismiss. Filing 47 at 2-3. As discussed above, in considering a motion to dismiss, the Court may, without converting the motion to one for summary judgment, consider those documents that are "necessarily embraced by the pleadings." Mattes, 323 F.3d at 697 n.4. Documents necessarily embraced by the pleadings include those whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading. Ashanti, 666 F.3d at 1151. Here, the plaintiff alleges the contents of the petition in his complaint, see filing 1 at 3, and neither party disputes the authenticity of the petition.[3] Accordingly, the Court will consider the petition without converting the Church Defendants' motion to dismiss to a motion for summary judgment.

2. Constitutional violations

The plaintiff alleges that the defendants have violated his rights under the Establishment Clause of the First Amendment, the Freedom of Speech Clause of the First Amendment, the Equal Protection Clause of the Fourteenth Amendment, the Due Process Clause of the Fourteenth Amendment, and the Equal Protection and Due Process clause of Art. I, § 3 of the Nebraska Constitution. Filing 1 at 14, 18, 20, 21. He sues under 42 U.S.C. § 1983 for the alleged violations of his federal constitutional rights. Filing 1 at 14.

The Church Defendants have moved to dismiss these claims on the grounds that only state actors can violate those particular constitutional rights. See filing 47 at 4. And, indeed, they are correct. The only amendment of the federal Constitution that can be violated by a non-government actor is the Thirteenth-which the plaintiff has not alleged a violation of. Edmonson v. Leesville Concrete Co., 500 U.S. 614, 619 (1991). Likewise, the Equal Protection and Due Process clauses of the Nebraska Constitution ...


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