Brick City Grill, Inc. v. City of Newark

BRICK CITY GRILL, INC. d/b/a/ ARENA BAR, 218 MULBERRY, LLC, TITANMANAGEMENT GROUP, LLC, ANTONIO RODRIGUES, and JOHN BRITO, Plaintiffs, v. CITY OF NEWARK, NEWARK DIVISION OF ALCOHOL CONTROL BOARD, N.J.DIVISION OF ALCOHOLIC BEVERAGE CONTROL, Defendants.

No. 14-4491 (KSH)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

March 31, 2015

Not for Publication

Opinion

Katharine S. Hayden, U.S.D.J.

Before the Court are two motions to dismiss the complaint in this action that were filed by the City of Newark and the Newark Division of Alcohol Control Board (together, "Newark defendants") [D.E. 6] and the New Jersey Division of Alcoholic Beverage Control [D.E. 3]. For the reasons that follow, the motions are granted and the complaint is dismissed.

I. Background

This action arises out of the Newark defendants' alleged confiscation of Arena Bar's liquor license on May 15, 2012. Arena Bar operated as a restaurant and bar on Mulberry Street in Newark, New Jersey and, on May 14, 2012, a shooting occurred nearby. Though plaintiffs maintain that the shooting did not occur "in the bar or in any area directly outside the bar" (Compl. ¶ 10), the Newark defendants apparently confiscated Arena Bar's liquor license because of its proximity to the incident.

Plaintiffs now allege that this action was taken without cause, a suspicion purportedly confirmed by the Essex County Prosecutor's Office's subsequent inability to locate sufficient evidence that "the incident had any relationship whatsoever to Arena Bar." (Compl. ¶ 11.) Although the liquor license was returned on June 26, 2012, plaintiffs allege that the confiscation had severe consequences for Arena Bar's business—the license was revoked during "the busiest season of the year at the [nearby] Prudential Center as they were hosting the Devil's Stanley Cup playoffs and finals, Portugal Day festival and multiple concerts." (Compl. ¶ 14.) Plaintiffs claim they lost substantial revenue and Arena Bar's reputation was so damaged that it was unable to procure liquor liability insurance and assault and battery coverage. They assert that the damage—both to its bottom line and public image—ultimately caused the restaurant to close its doors.

Nearly two years after the license was revoked, plaintiffs commenced this action against the City of Newark, the Newark Division of Alcohol Beverage Control Board and the New Jersey Division of Alcoholic Beverage Control ("NJ-ABC") in the Superior Court of New Jersey, Essex County. On July 16, 2014, the action was removed to this Court pursuant to 28 U.S.C. § 1441(a).

II. Standard

To survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), a complaint must "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Legal conclusions, as well as facts that are not well-pleaded, are to be disregarded, and if what remains fails to "show" an entitlement to relief, even with all inferences being drawn in plaintiff's favor, the complaint will be dismissed. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009).

Because a Rule 12(b)(6) motion is a test of the complaint itself, it is generally improper for a court to consider matters outside of the pleadings in ruling on the motion, although a court maylook to exhibits attached to the complaint, matters of public record, and undisputedly authentic documents that form the basis of the complaint. See Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764, 772 (3d Cir. 2013).

III. Discussion

The complaint now before the Court consists of four counts asserting the following causes of action against all defendants: (1) negligence; (2) tortious interference with prospective economic advantage; (3) violation of the plaintiffs' right to due process and equal protection under 42 U.S.C. § 1981; and (4) violation of plaintiffs' rights under 42 U.S.C. § 1983.

1. Negligence and Tortious Interference

Plaintiffs allege negligence on the part of both Newark defendants and NJ-ABC, citing their failure to abide by the statutory, regulatory, and municipal code requirements for revocation of a liquor license. They argue that, as to Newark, the defendants failed to provide the requisite five-day notice before suspending or revoking Arena Bar's license; denied plaintiffs "a reasonable opportunity to be heard" with regard to the charges noticed; and improperly effectuated the confiscation by failing to provide "a notice in writing of ... revocation, designating the effective date thereof." See Plaintiffs' Opp. at 14-15 (citing N.J.S.A 33:1-31.) As to the NJ-ABC, plaintiffs maintain that the Division of Alcoholic Beverage Control was obligated by statute to "supervise the ... distribution and sale of alcoholic beverages," and, by allowing Newark to shirk its statutory obligations, the agency breached a duty owed to plaintiffs here. Plaintiffs also attempt to state a cause of action for tortious interference with prospective economic advantage on the basis of the same facts.

Defendants argue that these common law claims are barred by the New Jersey Tort Claims Act ("TCA"), which provides absolute immunity for public entities in the issuance, denial,suspension or revocation of a permit or license. See N.J.S.A. 59:2-5. The TCA provides that, with regard to the defendants' conduct here, "[a] public entity is not liable for an injury caused by the issuance, denial, suspension or revocation of, or by the failure or refusal to issue, deny, suspend or revoke, any permit, license, certificate, approval, order, or similar authorization where the public entity or public employee is authorized by law to determine whether or not such authorization should be issued, denied, suspended or revoked." In a comment to this rule, the Report of the Attorney General's Task Force on Sovereign Immunity added further that "[t]his immunity is necessitated by the almost unlimited exposure to which public entities would otherwise be subjected if they were liable for the numerous occasions on which they issue, deny, suspend or revoke permits and licenses." Report of the Attorney General's Task Force on Sovereign Immunity (May 1972), Comment to N.J.S.A. 59:2-5.

Interpreting N.J.S.A. 59:2-5, the New Jersey Supreme Court in Malloy v. State, 76 N.J. 515, 521 (1978) found as follows: "In this State there are literally millions of licenses, certificates, permits and the like applied for, issued, renewed or denied. It is inevitable that with such a staggering volume of activity, mistakes, both judgmental and ministerial, will be made. The purpose of the immunity is to protect the licensing function and permit it to operate free from possible harassment and the threat of tort liability." The Court added further that "the immunity granted is pervasive and applies to all phases of the licensing function, whether the governmental acts be classified as discretionary or ministerial." Id. at 520.

Given the broad scope of this immunity—applying to "all phases of the licensing function"—the Court finds that plaintiffs' claims here for negligence and tortious interference are barred by the Section 59:2-5 of the TCA. Apart from unsupported pleas that the Court find such immunity inapplicable to the claims asserted, plaintiffs mainly argue that dismissal is prematureat this motion to dismiss stage. They maintain that all cases cited by the defendants considered the TCA's application to a licensing issue with the benefit of at least some discovery, and that this Court should not deprive them of the opportunity to pursue the same here. While plaintiffs' observation regarding the authority cited is correct, the argument was explicitly rejected in Lemma v. Pennwood Racing, 2011 WL 2349820 (App. Div. 2011), where the court found that "[a]n affirmative defense, such as immunity from liability under the [Tort Claims Act], may be raised in a motion to dismiss under Rule 4:6-2(e) based upon the allegations in the pleadings." Id. at *3 ("Plaintiffs argue, however, that the trial court erred by granting the State's motion because these parties had not yet exchanged discovery. Again, we disagree."). Accordingly, that discovery has not yet been exchanged in this action is no bar to the Court's finding of immunity on motion to dismiss. See, e.g. Endl v. New Jersey, 5 F. Supp. 3d 689, 700 (D.N.J. 2014) (finding that UMDNJ, a state entity, was immune from liability under the TCA and granting motion to dismiss on that basis); Bellocchio v. N.J. Dep't of Envtl. Prot., 16 F. Supp. 3d 367, 380-381 (D.N.J. 2014) (granting motion to dismiss "any tort claims asserted by Plaintiffs against the [New Jersey Turnpike Authority] because the NJTA is immune from suit under the TCA.") Ruling otherwise would undermine the basic concept of immunity. Plaintiffs' claims against the City of Newark, Newark Division of Alcohol Beverage Control Board and NJ-ABC for negligence and tortious interference therefore are dismissed.

2. Violation of Plaintiffs' Rights Under 42 U.S.C. § 1981

In count three of the complaint, plaintiffs allege—without any factual support—that defendants violated their rights under 42 U.S.C. § 1981, which provides that: "All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all lawsand proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other." 42 U.S.C. § 1981. (Compl. ¶ 26.)

This statute addresses racial discrimination only, and plaintiffs' failure to allege any facts sufficient to show intentional, racial discrimination—or discriminatory animus of any kind—compels dismissal here. See Pryor v. Nat'l Collegiate Athletic Ass'n, 288 F.3d 548, 562 (3d Cir. 2002) ("§ 1981 provide[s]...