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ABCDE Operating, LLC v. Jones

United States District Court, E.D. Michigan, Southern Division

July 25, 2017

ABCDE OPERATING, LLC, Plaintiff,
v.
KEVIN JONES and CITY OF DETROIT, Defendants.

          OPINION AND ORDER DENYING PLAINTIFF'S AMENDED MOTION FOR PRELIMINARY INJUNCTION [10]

          Honorable Nancy G. Edmunds, Judge

         Plaintiff ABCDE Operating, LLC, doing business as the Penthouse Club, an adult entertainment establishment, commenced this suit in this Court on January 16, 2017, seeking a declaration that the rules and procedures used by the Defendant City of Detroit to suspend or revoke a license to operate an adult cabaret do not comport with the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution.[1] Through the present motion filed on February 2, 2017, shortly after this suit was brought, Plaintiff requests that the Court preliminarily enjoin the Defendant City and the manager of its Business License Center, Defendant Kevin Jones, from initiating the City's allegedly unlawful license revocation process in an effort to suspend or revoke Plaintiff's license to operate the Penthouse Club.

         Plaintiff's motion has been fully briefed by the parties, and on May 31, 2017, the Court heard oral argument on this motion. For the reasons stated more fully below, the Court DENIES Plaintiff's motion.

         I. FACTS

         Plaintiff ABCDE Operating, LLC operates the Penthouse Club, an adult cabaret located on Eight Mile Road in the City of Detroit. According to Plaintiff's complaint, the Penthouse Club is "currently licensed by [the] Defendant City of Detroit as a sexually oriented business, " and it “offers, for its patrons, performances of dance intended to convey an erotic message, which is expressive conduct protected by the First Amendment." (Complaint at ¶ 5.) As a sexually oriented business, Plaintiff's club is subject to a number of municipal regulations set forth in the Defendant City's Sexually Oriented Business Ordinance ("SOBO"), (see Complaint, Ex. 1, Detroit City Code Article XV), including a requirement that it must secure a “valid sexually-oriented business license, ” (id. at § 5-15-21(a)).

         As detailed at length in a summary judgment ruling issued in an earlier case brought by Plaintiff against the Defendant City and a number of law enforcement officers employed by the Detroit Police Department ("DPD"), the DPD's Vice Enforcement Unit ("VEU") has carried out a number of enforcement actions at Plaintiff's club dating back to January of 2014. See ABCDE Operating, LLC v. City of Detroit, No. 14-13158, Dkt. 81, 5/25/2017 Opinion and Order at 6-18. Although these enforcement actions have uncovered a number of alleged violations of the SOBO, Plaintiff states that it has annually applied for and obtained the requisite sexually oriented business license each year since 2010. (See Complaint at ¶¶ 22-24.)

         On January 10, 2017, counsel for the Defendant City sent an e-mail to Plaintiff's counsel indicating that the City intended to seek the suspension or revocation of Plaintiff's sexually oriented business license unless Plaintiff agreed to certain conditions, including (i) the discontinuation of so-called "VIP" rooms at Plaintiff's club, and (ii) the dismissal of the claims brought in Plaintiff's prior suit against the City of Detroit.[2] In response, Plaintiff commenced the present action on January 16, 2017 against the City and the manager of its Business License Center, Defendant Kevin Jones, challenging the constitutionality of the rules and procedures adopted by the Defendant City for pursuing the suspension or revocation of a sexually oriented business license.[3] Shortly thereafter, Plaintiff filed the present motion, seeking a preliminary injunction that would prevent the City from invoking its allegedly unconstitutional rules and procedures in an effort to suspend or revoke Plaintiff's license to operate its club.

         When Plaintiff brought this suit and filed its present motion for a preliminary injunction, the Defendant City had not yet initiated the process for suspending or revoking Plaintiff's license to operate the Penthouse Club. Since that time, however, the record indicates that the City has commenced an administrative proceeding to suspend or revoke Plaintiff's license, and a hearing officer evidently has presided over several days of hearings. (See Dkt. 19, Plaintiff's 4/25/2017 Emergency Motion for Temporary Restraining Order at ¶¶ 21-22.)[4] At the conclusion of this administrative proceeding, the hearing officer issued a May 22, 2017 decision and order providing that effective June 12, 2017, Plaintiff's license would be suspended for a period of six months. (See Dkt. 24, 5/22/2017 Decision and Order.)

         II. STANDARD OF REVIEW

         Through the present motion, Plaintiff seeks an order preliminarily enjoining Defendants from invoking the Defendant City's allegedly unconstitutional rules and procedures for the purpose of suspending or revoking Plaintiff's license to operate a sexually oriented business. The decision whether to award preliminary injunctive relief is governed by a familiar four-part standard, under which the Court must consider (i) whether Plaintiff, as the moving party, has a strong likelihood of success on the merits, (ii) whether Plaintiff would suffer irreparable injury in the absence of injunctive relief, (iii) whether an award of preliminary injunctive relief would cause substantial harm to others, and (iv) whether the public interest would be served by the requested award. Sandison v. Michigan High School Athletic Association, Inc., 64 F.3d 1026, 1030 (6th Cir. 1995). These four considerations “are factors to be balanced and not prerequisites that must be satisfied, ” and “are not meant to be rigid and unbending requirements.” American Imaging Services, Inc. v. Eagle-Picher Industries, Inc. (In re Eagle-Picher Industries, Inc.), 963 F.2d 855, 859 (6th Cir. 1992). “Moreover, a district court is not required to make specific findings concerning each of the four factors . . . if fewer factors are dispositive of the issue.” Jones v. City of Monroe, 341 F.3d 474, 476 (6th Cir. 2003), abrogated on other grounds as recognized in Anderson v. City of Blue Ash, 798 F.3d 338, 357 n.1 (6th Cir. 2015).

         III. ANALYSIS

         A. Plaintiff's Request for Preliminary Injunctive Relief Is Moot.

         Before turning to the merits of Plaintiff's motion for a preliminary injunction, the Court first considers whether this motion has been rendered moot in light of events that have transpired since it was filed. As the Sixth Circuit has explained, a claim for relief is moot when subsequent developments "render the court unable to grant the requested relief." Speer v. City of Oregon, 847 F.2d 310, 311 (6th Cir. 1988) (internal quotation marks and citation omitted); see also Fredette v. Hemingway, No. 02-1884, 65 F.App'x 929, 931 (6th Cir. April 1, 2003). Applying this principle here, the Court finds that it is no longer able to award the relief sought in the present motion.

         As noted earlier, at the time Plaintiff commenced this suit and filed its present motion, the Defendant City had not yet initiated a proceeding to suspend or revoke Plaintiff's license to operate a sexually oriented business, but had merely sent Plaintiff's counsel an e-mail stating its intention to do so. Against this procedural backdrop, Plaintiff has requested in its present motion that the Court enter an order preliminarily enjoining Defendants from invoking § 5-15-27 of the Detroit City Code and the associated administrative rules and procedures that establish and govern the process for suspending or revoking a sexually oriented business license. (See Plaintiff's Amended Motion for Preliminary Injunction at 4.)

         Since this motion was filed, however, the City has followed through with its stated intention to seek the suspension or revocation of Plaintiff's license. More specifically, the record indicates that on or around March 13, 2017, the City commenced an administrative proceeding to suspend or revoke Plaintiff's license, and that a hearing officer has subsequently presided over several days of hearings in this matter. (See Dkt. 19, Plaintiff's 4/25/2017 Emergency Motion for Temporary Restraining Order at ¶¶ 21-22.) More recently, the hearing officer issued a decision and order providing that Plaintiff's license should be suspended for six months. (See Dkt. 24, 5/26/2017 Decision and Order.) In light of these developments, the Court can no longer enjoin Defendants from invoking the City Code provisions and corresponding administrative rules and procedures that govern the suspension or revocation of Plaintiff's sexually oriented business license, because Defendants have already taken the actions that Plaintiff seeks to enjoin. It follows that Plaintiff's request for preliminary injunctive relief must be denied as moot.

         B. Plaintiff Has Not Demonstrated a Likelihood of Success on the Merits of Its Constitutional Challenges to the Defendant City's Process for Seeking to ...


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