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Johnson v. Morales

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

September 15, 2017

RITA R JOHNSON, Plaintiffs,
TIMOTHY MORALES, et al, Defendants.


          THOMAS L. LUDINGTON, United States District Judge

         On July 25, 2017, Plaintiff Rita R. Johnson filed a complaint alleging that Defendants Timothy Morales, Dennis Jordan, and the City of Saginaw violated her due process rights when they suspended her business license. Compl., ECF No. 1. On August 1, 2017, the parties submitted a stipulated proposed order requesting the Court adjourn the administrative deadline for Johnson to appeal the suspension of Johnson's business license. The Court declined to enter the order because the Court lacked authority to extend an appeal deadline in a separate administrative proceeding. ECF No. 4. On August 23, 2017, Johnson filed an amended complaint which provides additional factual allegations and contains an additional count alleging that Defendants violated her Fourth Amendment due process rights. ECF No. 5. An attorney for Defendants has filed an appearance, but Defendants have not been served with either the original or amended complaint.

         On September 9, 2017, Johnson filed a motion for a temporary restraining order and, alternatively, a motion for a preliminary injunction. ECF No. 7.[1] Johnson explains that Timothy Morales, the City Manager who issued the original “shutdown order, ” will be a member of the panel hearing Johnson's appeal. Johnson contends that her due process rights will be violated if the appeal is heard by the same person who originally suspended her business license. For the reasons that follow, Johnson's motion will be denied.


         At this stage, the well-pleaded factual allegations in Johnson's complaint will be assumed to be true. Johnson owns and operates Rita's Southern Soul Café in Saginaw, Michigan. Am. Compl. at 1. Defendant Timothy Morales is the Saginaw City Manager. Defendant Denis Jordan is the City of Saginaw's Human Resource Director.

         On May 6, 2017, Johnson rented out the cafe to a private party. Id. at 2. In the early morning hours of May 6, 2017, unknown individuals “emerged from a vehicle . . . and began shooting at Plaintiff's building.” Id. To her knowledge, Johnson's guests did not commit any crime during the assault and Johnson herself has no connection to any of the shooters.

         The Saginaw Police Department responded to the shooting. Police Chief Robert Ruth later opined that the incident was likely gang-related. Id. at 3. Johnson faults the City of Saginaw for not ordering “the criminal shooters to halt their illegal activities.” Id. at 4. Instead, in reaction to the shooting, the City of Saginaw took action against Johnson:

Rather than focus efforts on apprehending and stopping the unknown gang-members who actually acted illegally and unlawfully, Defendant CITY OF SAGINAW, likely in an attempt to shift blame from its poorly-staffed and ineffective police department, took adverse action against Plaintiff by suspending her business license for actions for which she is not responsible and for alleged crimes she did not otherwise commit or authorize

Id. (emphasis in original).

         The City of Saginaw also turned off Johnson's water supply “without notice or authority in a backhanded way to shut down Plaintiff's commercial operations.” Id.

         The administrative appeal process for challenges to the suspension of business licenses is governed by the City of Saginaw Code of Ordinances, 110.06(E). Pursuant to 110.06(F), if “the City Manager or their designee” determines that an immediate suspension of a business license is necessary, they may unilaterally order an immediate suspension. But the City Manager or their designee must hold a hearing within five days to allow the license holder to challenge the suspension. Id. On May 8, 2017, Timothy Morales “issued a governmental order entitled Notice of Immediate Suspension of Business Activity whereby he, as an agent of Defendant CITY OF SAGINAW, ordered the halt of all (and not just illegal) activities, including all commercial activities of any type.” Am. Compl. at 4. (emphasis in original). Johnson alleges that the shutdown order was intended to destroy Johnson's commercial interests.

         Pursuant to the governing city ordinance, a hearing on the suspension was scheduled for May 11, 2017. Denis Jordan was designated as the hearing officer. According to Johnson, Timothy Morales is the immediate supervisor of Defendant Jordan. The hearing was held as scheduled, but Johnson alleges that Jordan “allowed hearsay testimony, dubious evidence, and irrelevant testimony.” Id. at 4. Johnson highlights two examples of misconduct during the hearing. First, Johnson asserts that the City of Saginaw was represented at the hearing by a firm which had previously represented Jordan. Id. Despite this connection, Jordan did not recuse himself from the hearing. Second, Jordan permitted Police Chief Ruth to testify about the events of May 6, 2017, even though he had not been present at the scene or ensuing investigation.

         Two months after the hearing, Jordan denied the appeal. Id. at 6. While Jordan was considering the appeal, Johnson's counsel asked “how the City could have a Human Resources Director serve as a neutral, detached decision maker and how it could allow hearsay and conjecture as evidence in such a hearing.” Id. at 5. In response, counsel for the City suggested that because it was only an administrative hearing that level of due process was not required. Id. Johnson's counsel then submitted a number of Freedom of Information Act Requests seeking information regarding the City's processes and procedures. Id.

         On July 11, 2017, “City Attorney Amy Lusk introduced a proposal to the City of Saginaw City Council to amend the City Ordinance permitting the appointment of employees of the City of Saginaw as the hearing officer to conduct hearings like the one undertaken ...

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