Perfino, et al. v. State of CA Dept of Alcoholic Beverage Control (A.B.C.), et al., No. 2:2009cv00833 - Document 20 (E.D. Cal. 2009)
Court Description: ORDER granting in part and denying in part 12 Motion to Dismiss signed by Judge Garland E. Burrell, Jr on 10/5/09: Plaintiffs have ten days leave from the date on which this order is filed to file an amended complaint addressing any deficiency Plaintiffs opine they can cure. (Kaminski, H)
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Perfino, et al. v. State of CA Dept of Alcoholic Beverage Control (A.B.C.), et al. Doc. 20 1 2 3 4 5 6 7 8 IN THE UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 12 13 14 15 16 17 18 CARLOS PERFINO; JESS ZURANICH, ) ) Plaintiffs, ) ) v. ) ) EX OFFICIO STEVE HARDY, ) DIRECTOR OF THE STATE OF ) CALIFORNIA DEPARTMENT OF ALCOHOLIC ) BEVERAGE CONTROL [A.B.C.]; ) ELIZABETH GRAZIA OF THE A.B.C.; ) LORI AJAX OF THE A.B.C.; JUAN G. ) AYALA; HERBITO GARCIA, ) ) Defendants. ) ) 2:09-cv-00833-GEB-KJM ORDER 19 Defendants the State of California Department of Alcoholic 20 Beverage Control (“ABC”), Steve Hardy, Elizabeth Grazia, and 21 Lori Ajax move for dismissal of Plaintiffs’ four claims alleged 22 against these movants under Federal Rule of Civil Procedure (“Rule”) 23 12(b)(6), arguing Plaintiffs fail to state a claim upon which relief 24 can be granted. However, Plaintiff conceded at the hearing on the 25 motion that ABC is not sued and that the reference to the "State of 26 California" is merely for the purpose explaining the entity that 27 employs the named defendants; these Defendants are referenced herein 28 collectively as “the State Defendants.” Plaintiffs oppose the motion. 1 Dockets.Justia.com 1 2 STANDARD 3 On a motion to dismiss, the Court must assume the 4 truthfulness of all material facts alleged and construe all inferences 5 reasonably to be drawn from the facts in favor of the responding 6 party. NL Industries, Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 7 1986). To survive a motion to dismiss, a plaintiff needs to plead 8 “only enough facts to state a claim to relief that is plausible on its 9 face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). 10 Dismissal is appropriate, however, where the plaintiff fails to state 11 a claim supportable by a cognizable legal theory. Balistreri v. 12 Pacifica Police Dep't., 901 F.2d 696, 699 (9th Cir. 1990). 13 DISCUSSION 14 Plaintiffs Carlos Perfino and Jess Zuranich allege federal 15 and state claims against the State Defendants based on the allegations 16 that the State Defendants destroyed Plaintiffs’ business opportunity 17 to have a bar when the State Defendants refused to transfer a liquor 18 license to a limited liability company (“the LLC”), which Plaintiffs 19 created with two other men as the business to operate a Latino-themed 20 bar. 21 referenced men, agreed to transfer his liquor license from a 22 previously owned bar to the LLC, in exchange for one-fourth interest 23 in the LLC. (Compl. ¶ 16.) 24 the liquor license could be transferred to the LLC, all four men would 25 have to be named on the liquor license. 26 temporary license was issued, Defendant Ajax subsequently “told 27 [Plaintiff] Perfino that he could not be on the liquor license, lease, 28 or anything, because Perfino was a correctional officer employed at (Compl. ¶¶ 14, 17-20.) Defendant Juan Ayala, one of the four ABC employee Gravia told these men before 2 (Compl. ¶ 17.) Although a 1 . . . Folsom State Prison [in California].” (Compl. ¶ 19.) 2 relied on Title 4 of the California Code of Regulations, section 62 3 (“Section 62") as the basis for denying Perfino a liquor license, 4 stating that Perfino’s status as a California correctional officer 5 prohibited him from having a liquor license. 6 25.) Ajax (Compl. ¶¶ 19-22; 24- Section 62 states in relevant part: 7 No license authorized by the Alcoholic Beverage Control Act shall be held by, or issued or transferred to, any person holding office in, or employed by, any agency of the State of California or any of its political subdivisions when the duties of such person have to do with the enforcement of the Alcoholic Beverage Control Act or any other penal provisions of law of this State prohibiting or regulating the sale, use, possession or manufacture of alcoholic beverages. This rule is deemed to apply specifically, but without limiting its effect, to any persons employed in the Department of Justice of the State of California, in any district attorney’s office, in any sheriff’s office, in any local police department, or in the Department of Alcoholic Beverage Control. This rule shall not prohibit the ownership of any license interest by any local law enforcement officer or local reserve law enforcement officer where the licensed premises are located in a county other than that in which he is employed as a law enforcement officer. This rule shall apply to any person mentioned herein who has any ownership interest, directly or indirectly, in any business to be operated or conducted under an alcoholic beverage license . . . . 8 9 10 11 12 13 14 15 16 17 18 19 20 CAL. CODE REGS . tit. 4, § 62 (emphasis added). 21 Plaintiffs argue this reliance on Section 62 as the basis 22 for denying the liquor license violated their equal protection, 23 procedural and substantive due process, and takings constitutional 24 rights. Perfino, however, is the only Plaintiff who alleges he could 25 not be on the liquor license. (Compl. ¶ 19.) However, Plaintiff 26 Zuranich has not shown he has standing to challenge the refusal to 27 issue Plaintiff Perfino a liquor license. “[A] plaintiff generally 28 cannot rest his claim to relief on the legal rights or interests of 3 1 third parties.” 2 Ariz., 24 F.3d 56, 62 (9th Cir. 1994)(internal citation and quotations 3 omitted). 4 challenge denial of the liquor license to Perfino, the State 5 Defendants’ motion to dismiss Zuranich’s federal claims is granted. 6 Wedges/Ledges of California, Inc. v. City of Phoenix, Since Plaintiff Zuranich has not shown he has standing to The State Defendants also seek dismissal of Perfino’s 7 Fourteenth Amendment equal protection claim arguing essentially that 8 use of Section 62 to bar Perfino from getting a liquor license was not 9 illegal since a rational basis for the exclusion of California 10 correctional officers has been explained in cases interpreting Section 11 62. 12 showing that what is prescribed in Section 62 applies to a 13 correctional officer in Perfino’s situation. 14 portion of the State Defendants’ motion is denied. However, the State Defendants fail to provide any authority Therefore, this 15 The State Defendants also seek dismissal of Perfino’s 16 Fourteenth Amendment procedural due process and substantive due 17 process claims, arguing Perfino does not allege a sufficient property 18 right required to sustain these claims. 19 liquor license and his business interests in the bar are property 20 rights protected by the Due Process Clause. 21 State Defendants counter these claims fail because Perfino lacks a 22 property right in the liquor license he sought, and his business 23 interest in the LLC is not a sufficient property right. 24 Perfino alleges the temporary (Compl. ¶¶ 42-48.) The “The substantive component of the Due Process Clause 25 protects those rights that are ‘fundamental,’ that is, rights that are 26 ‘implicit in the concept of ordered liberty.’ Fundamental rights are 27 those rights created by the Constitution. 28 course, are not created by the Constitution. Rather they are created 4 Property interests, of 1 and their dimensions are defined by existing rules or understandings 2 that stem from an independent source such as state law.” 3 Village, L.L.C. v. Mountain Brook, City, 345 F.3d 1258, 1262 (11th 4 Cir. 2003)(internal citations and quotations omitted). Greenbriar 5 California state liquor license law at issue recognizes that 6 “a liquor license has certain attributes of property. It certainly has 7 value and is sold commercially. But it is a type of property which the 8 state, under the police power, has the power to control and regulate.” 9 Reece v. Alcohol Beverage Control Appeal Board, 64 Cal.App.3d 675, 688 10 (1976). 11 possess, make or deal in intoxicating liquor is not a privilege, nor 12 such a property right that state legislation prohibiting, restricting, 13 or regulating its manufacture, use, possession, distribution, or sale 14 violates the Fourteenth Amendment of the Federal Constitution.” Cooper 15 v. State Bd. Of Equalization, 137 Cal.App.2d 672, 679 (1955) (citing 16 State Board of Equalization v. Superior Court, 5 Cal.App.2d 374, 377 17 (1935)(internal quotations omitted)). 18 substantive due process claim predicated on a “state-granted 19 and-defined property right in the [liquor license] permit” fails to 20 allege a viable substantive due process claim, and this claim is 21 dismissed. Greenbriar Village, 345 F.3d at 1262. 22 “It is well settled [in California] that the right to Therefore, Perfino’s Nor has Perfino alleged a viable procedural due process 23 claim. 24 can take away property without affording its owner an adequate notice 25 and opportunity to be heard. 26 process claim or its analytically related cousin-substantive due 27 process (it arises when a government egregiously or arbitrarily 28 deprives one of his property)-they variously examine three things: (1) “‘Due process’ cases typically focus on whether governments When courts analyze a procedural due 5 1 whether there is enough of a property interest at stake to be deemed 2 “protectable”; (2) the amount of process that should be due for that 3 protectable right; and (3) the process actually provided, be it before 4 or after the deprivation. 5 of one or two of those analytical components by passing on another.” 6 Id. at 1264 (internal citations and quotations omitted). 7 Perfino has not alleged a sufficient federally protectable property 8 right, “no procedural due process claim exists” because “a 9 sufficiently certain property right under state law [has not been] 10 11 shown. ” Id. at 1265. Sometimes courts can moot the examination Here, since Therefore, this claim is dismissed. Nor are Perfino’s allegations that his business interests in 12 the LCC denied him a property interest sufficient to withstand the 13 dismissal motion since they are based on unsupported conclusory 14 statements, which are insufficient to allege a sufficient federally 15 protectable property right. 16 Therefore, this claim is dismissed. The State Defendants also seek dismissal of Perfino’s Fifth 17 Amendment takings claim. 18 of the Fifth Amendment, [Perfino] must first establish that he 19 possesses a constitutionally protected interest in the property 20 taken.” Abney v. Alameida, 334 F.Supp.2d at 1228 (citing McIntyre v. 21 Bayer, 339 F.3d 1097, 1099 (9th Cir. 2003)). 22 to allege sufficient facts showing he possesses a constitutionally 23 protected interest in the property at issue, this claim is dismissed. 24 To “state a claim under the Takings Clause Since Perfino has failed The State Defendants also seek dismissal of Plaintiffs’ 25 state inverse condemnation claims for lack of a property interest. 26 allege an inverse condemnation claim under the California 27 Constitution, a constitutionally protected property right must exist. 28 6 To 1 Since Perfino has failed to allege a property right under California 2 law, this claim is dismissed. 3 Further, Defendant Hardy seeks dismissal of Perfino’s 4 official and individual capacity claims against him, arguing they are 5 insufficient to state viable claims. 6 capacity allegations against Hardy are under In Ex parte Young, 209 7 U.S. 123 (1908). 8 declaratory relief claims in paragraph VII of his Complaint, which are 9 too unclear to state a viable claim. 10 11 Perfino counters his official However, Perfino alleges state injunctive and The claims in paragraph VII are therefore dismissed. However, Hardy has not shown that Perfino’s official 12 capacity suit against him for prospective relief is not a viable claim 13 since Perfino’s equal protection claim has survived the State 14 Defendants’ motion. 15 relief (including any damages) in his official capacity suit against 16 Hardy, those claims are dismissed. 17 (9th Cir. 2003)(“Under the doctrine of Ex parte Young, suits against 18 an official for prospective relief are generally cognizable, whereas 19 claims for retrospective relief (such as damages) are not.). 20 motion to dismiss Perfino’s individual capacity suit against him based 21 on Perfino’s equal protection claim is denied. 22 But to the extent Perfino seeks retrospective Porter v. Jones, 319 F.3d 483, 491 Hardy’s The State Defendants also seek dismissal of Plaintiffs’ 23 interference with contractual relations and intentional inducement of 24 breach of contract claims against Grazia and Ajax. 25 argue they are immune from liability for these claims under California 26 Government Code sections 818.4, 820.2, and 821.2. 27 have not provided sufficient authority that these immunities apply to 28 them, and admitted through counsel at the hearing on this motion 7 Grazia and Ajax Grazia and Ajax 1 counsel did not have authority other than the text of the above 2 California Government Code sections. 3 clearly show the motion should be granted, it is denied. 4 Since this authority does not CONCLUSION 5 For the reasons stated above, the State Defendants’ motion 6 to dismiss is denied in part and granted in part. 7 requested that they be granted leave to file an amended complaint if 8 any portion of the motion is granted. 9 from the date on which this order is filed to file an amended Plaintiffs Plaintiffs have ten days leave 10 complaint addressing any deficiency Plaintiffs opine they can cure. 11 Dated: October 5, 2009 12 13 14 GARLAND E. BURRELL, JR. United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8
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