Abcde Operating, LLC v. City of Detroit

254 F.Supp.3d 931

ABCDE OPERATING, LLC, Plaintiff,

v.CITY OF DETROIT, et al., Defendants.

Case No. 14-13158.

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

Signed May 25, 2017

Patrick J. McQueeney, Patrick J. McQueeney Assoc., Clinton Township, MI, John W. Henke, III, Law Offices of John W. Henke, III, Michael D. Langnas, Langnas & Associates, P.C., Southfield, MI, for Plaintiff.

Eric B. Gaabo, Detroit City Law Department, Detroit, MI, for Defendants.

OPINION AND ORDER REGARDING CROSS–MOTIONS FOR SUMMARY JUDGMENT [52, 53, 55, 75]

Nancy G. Edmunds, United States District Judge

Plaintiff ABCDE Operating, LLC, doing business as the Penthouse Club, commenced this suit in this Court on August 15, 2014, alleging that the Defendant City of Detroit and a number of individual Defendant officers in the Detroit Police Department ("DPD") violated Plaintiff's rights under the First and Fourth Amendments to the U.S. Constitution by conducting warrantless and suspicionless raids of Plaintiff's adult entertainment club in retaliation against Plaintiff's exercise of its First Amendment rights.¹ Specifically, Plaintiff alleges that the first of these challenged raids occurred in January of 2014, shortly after Plaintiff wrote to the Detroit Chief of Police complaining of increased police investigations of adult entertainment facilities, and that DPD officers conducted a number of additional raids after Plaintiff brought this suit and began actively pursuing discovery in support of its claims. In Plaintiff's view, the Defendant City and officers conducted these raids in retaliation against Plaintiff's exercise of its constitutionally protected rights to free speech and to seek redress from the courts, and the manner in which these raids were carried out violated the constitutional guarantee against unreasonable searches and seizures.

Four dispositive motions presently are pending before the Court. First, the Defendant City and its officers seek the dismissal of Plaintiff's claims or, alternatively, an award of summary judgment in their favor as to each of these claims,² arguing primarily (i) that the Defendant officers were entitled to enter the public areas of Plaintiff's club without a warrant, (ii) that the officers did not exceed the scope of their lawful authority while on Plaintiff's premises as they carried out administrative inspections and engaged in other legitimate law enforcement activities, (iii) that to the extent any Defendant officers might have violated any constitutional principles, these officers nonetheless would be entitled to qualified immunity from liability, and (iv) that Plaintiff cannot show that any constitutional violations are attributable to a municipal custom or policy, as necessary to hold the Defendant City liable for these alleged violations.³ For its part, Plaintiff has filed two motions for partial summary judgment, contending (i) that its constitutional rights were violated by virtue of a City of Detroit custom authorizing warrantless, suspicionless enforcement actions against adult entertainment venues located in the City, and (ii) that three particular Defendant police officers who led and participated in the warrantless raids of Plaintiff's club engaged in unlawful activities that violated Plaintiff's constitutional rights as a matter of law. Finally, Plaintiff contends in a more recent motion that under principles of issue preclusion, a state court ruling in a criminal proceeding brought against one of Plaintiff's employees prevents the Defendant City and three of the Defendant officers from relitigating the lawfulness of the December 2015 raid of Plaintiff's club.

On April 19, 2017, the Court heard oral argument on the parties' motions.⁴ For the reasons stated more fully below, the Court GRANTS Defendants' motion for summary judgment, and DENIES each of Plaintiff's three motions for partial summary judgment.

I. FACTS

A. The Parties

Plaintiff ABCDE Operating, LLC operates the Penthouse Club, an adult cabaret located on Eight Mile Road in Detroit. According to the complaint, the Penthouse Club "offer[s] adult entertainment including erotic dance to consenting adult[ ]" patrons. (Fourth Amended Complaint at ¶ 3.)

Plaintiff's club is subject to a number of municipal regulations governing sexually-oriented businesses, (see Defendants' Motion, Ex. 34, Detroit City Code Article XV), including such requirements as (i) securing a "valid sexually-oriented business license," (id. at § 5–15–21(a)), (ii) ensuring that each employee obtains a "valid sexually-oriented business employee license" and keeps this license on the premises while the employee is "working, performing or entertaining," (id. at §§ 5–15–41(a), 5–15–42(e)), (iii) limiting semi-nude dancers to performing on a "non-portable fixed stage, on which no patrons are permitted, that is at least eighteen (18) inches from the floor in a room of at least six hundred (600) square feet configured and maintained in such a manner that there is an unobstructed view of every area of the room," (id. at § 5–15–7(a)(3)), (iv) prohibitions against intentional contact between semi-nude performers and patrons, (id. at § 5–15–7(a)(4)), and (v) prohibitions against allowing the business "to become a place for criminal activity" or allowing "the possession, sale, or use of controlled substances or drug paraphernalia on the premises," (id. at §§ 5–15–7(a)(6), 5–15–7(a)(14)).⁵ In addition, because Plaintiff's club serves alcohol, it must comply with liquor laws and regulations enacted by the State of Michigan, including statutory provisions mandating that the club (i) obtain a liquor license, see Mich. Comp. Laws § 436.1501 et seq., (ii) secure a topless activity permit, see Mich. Comp. Laws § 436.1916, and (iii) make its premises available for "inspection and search" by an investigator from the Michigan Liquor Control Commission ("MLCC") or a law enforcement officer authorized to enforce the MLCC's regulations, Mich. Comp. Laws § 436.1217(2).

The Defendant City of Detroit is a municipal corporation located in Wayne County, Michigan. Each of the 23 individual defendants is or was employed by the Detroit Police Department ("DPD") as a law enforcement officer, and at all pertinent times, James Craig has served as Detroit's Chief of Police.⁶ Shortly after he was appointed to this position in July of 2013, Chief Craig reinstituted the DPD's Vice Enforcement Unit ("VEU"), which is charged with inspecting and investigating suspected illegal activity at a variety of Detroit commercial establishments, including sexually-oriented businesses, bars, liquor stores, and gas stations. (See Defendants' Motion, Ex. 13, Craig Dep. at 6–7.)⁷ Of the 23 individual DPD officers named as defendants in Plaintiff's Fourth Amended Complaint, 16 were either members of the VEU or exercised supervisory authority over VEU officers during the time period of relevance here. The remaining seven individual defendants were members of the DPD's narcotics unit during the relevant time period.

B. The January 18, 2014 Warrantless Entry into Plaintiff's Club

Within a short time after the DPD reinstated the VEU, this unit began conducting enforcement actions at a number of Detroit strip clubs. Plaintiff's club was not among the establishments targeted in these initial VEU operations. Nonetheless, on December 5, 2013, an attorney representing the Plaintiff club and other Detroit–based sexually-oriented businesses wrote a letter to Chief Craig expressing his clients' "substantial concern" about the increasing frequency of DPD investigations of adult cabarets and the conduct of the officers conducting these investigations. (See Dkt. 53, Plaintiff's Motion for Partial Summary Judgment, Ex. 10, 12/5/2013 Letter to Chief Craig.)

A few weeks later, on January 18, 2014, the VEU carried out a warrantless enforcement action at Plaintiff's club. (See Defendants' Motion, Ex. 8, 1/18/2014 Activity Log and Reports.) DPD officers had received reports of illegal drug transactions at the club, and members of the VEU, along with officers from the DPD's narcotics unit, were dispatched to the club to investigate this alleged activity. (See Defendants' Motion, Ex. 15, Greer–Travis 7/26/2016 Dep. at 55–56, 58; Ex. 20, Adams Dep. at 28, 30.) Two DPD officers, Defendant Jason Adams of the VEU and Officer Matthew Bray of the narcotics unit, entered Plaintiff's club in an undercover capacity at approximately 11:40 p.m.,⁸ and took seats at the bar in order to watch for illegal drug transactions and attempt to purchase narcotics. (See Adams Dep. at 20, 28, 36; Greer–Travis 7/26/2016 Dep. at 30, 48.) Officer Adams testified that he was in the club for a half hour or less when he signaled for the other members of the enforcement team to enter. (See Adams Dep. at 21.)

The record evidences a degree of confusion as to the basis for the other officers on the enforcement team to enter Plaintiff's club. Officer Adams testified that while he was seated at the bar, a female employee of the club approached him and solicited him for "an act of prostitution," and that he then sent a text message to Sergeant Stacy Greer–Travis, a supervisory officer in the VEU, calling for the other officers to enter the club. (Id. at 21–22, 48–49.) Sergeant Greer–Travis testified, in contrast, that the enforcement team entered the club upon receiving a communication from one of the undercover officers indicating that he had made a successful purchase of cocaine. (See Greer–Travis 7/26/2016 Dep. at 35, 37, 97–98.) After the team entered the club, however, Sergeant Greer–Travis learned that this belief was mistaken, and that neither of the undercover officers had succeeded in purchasing narcotics. (See id. at 37, 98.) Nonetheless, the VEU and narcotics officers remained on the premises and carried out a number of law enforcement activities.

The parties offer divergent accounts as to the nature and extent of these activities. According to Defendants,...