Midwest Retailer Associated v. City of Toledo

563 F.Supp.2d 796

MIDWEST RETAILER ASSOCIATED, LTD., et. al., Plaintiffs, v. CITY OF TOLEDO, Defendant.

No. 3:08CV00851.

United States District Court, N.D. Ohio, Western Division.

June 30, 2008.

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Scott A. Ciolek, Ciolek & Wicklund, Toledo, OH, for Plaintiffs.

Keith J. Winterhalter, City of Toledo, Toledo, OH, for Defendant.

ORDER

JAMES G. CARR, Chief Judge.

In this case, plaintiffs, owners of neighborhood convenience stores ("owners"), and an association to which they belong, the Midwest Retailers Association (MRA), challenge a municipal licensing scheme that aims to regulate their businesses. Defendant City of Toledo ("City") has distributed license applications to the plaintiffs under newly-enacted Toledo Municipal Ordinance 797-07 ("T.M.O.797-07"). The owners now seek a preliminary injunction (Doc. 7) preventing the City's enforcement of Ordinance 797-07, which took effect on May 1, 2008. See Fed.R.Civ.P. 65(a). Unless I grant such an injunction, the owners argue, the City will enforce an unconstitutional law that will cause them irreparable injuries.

The owners allege that the licensing regime in T.M.O. 797-07 "is contingent upon a vague, overly burdensome, and unconstitutional application process" and "vests Toledo City officials with nearly limitless discretion to revoke or refuse to renew licenses." (Doc. 7 at 2). As a result, the owners claim that the law violates the United States Constitution and conflicts with Ohio regulatory law.

Alleging that the "threat of irreparable injury to Plaintiff [MRA] and the store owners it represents is immediate and real,"¹ the owners also point to the criminal ramifications of operating a convenience store without a license; the prospect of lawsuits from governmental, quasi-governmental, and private parties; and the constitutional costs of complying with the law. (Doc. 7 at 2-3).

I convert the owners' request for a preliminary injunction into a motion for a temporary restraining order and grant the order, effective July 1, 2008.

Background

On December 11, 2007, the Toledo City Council passed Ordinance 797-07 by a vote of nine to two. The ordinance amended the Toledo Municipal Code and created Chapter 721, requiring all convenience stores to obtain a license. The reason for Council's action is stated in the "Summary & Background" section of the ordinance, which provides:

Toledo City Council has been faced with complaints about the operation of convenience stores, many of which are not subject to the [Special Use Permit] because they pre-date the 1992 zoning regulations. The concerns include the manner of operation, the activity, proximity to other properties, behavior by customers, licensees and the public. The provisions of this Chapter which establish licensing requirements for convenience stores will preserve the best interests of all parties in a more neighborhood-oriented environment because it will apply to all convenience stores. The new requirements will allow for the revocation of licenses for any convenience store that presents a continuing neighborhood problem.

(Doc. 12, Attachment 1).

The Ordinance contains several requirements addressing concerns that led to its adoption. These requirements include: criminal background checks for potential licensees; installation and maintenance of a twenty-four-hour surveillance camera system; maintenance of the business premises; and taking appropriate action to curtail gambling, prostitution, the sale of drugs, and other criminal acts on the premises. Failure to meet the appropriate standards or adhere to the enumerated regulations can lead to the City denying or revoking a license to operate a convenience store. This may occur "even though the license holder has taken all reasonable measures to achieve compliance." (Doc. 7-2 at 6 (§ 721.11(a)(2))).

Plaintiffs now allege that they are likely to prevail on the merits because T.M.O. 797-07: 1) is unconstitutionally vague; 2) conditions the receipt of a license on the convenience store owners' surrender of rights guaranteed by the Fourth, Fifth, Thirteenth, and Fourteenth Amendments, and the ex post facto clause; and 3) is preempted by Ohio law. Furthermore, the owners argue that implementation of the law will cause them to suffer immediate and irreparable injury in contrast to the insubstantial injury that an injunction will impose on the City and it citizens. As a result, plaintiffs allege that the public interest favors provisional relief.

Standard Governing Temporary Restraining Orders

The same standard generally applies to the issuance of temporary restraining orders and preliminary injunctions. Northeast Ohio Coal, for Homeless &amp Serv. Employees Int'l Union, Local 1199 v. Blackwell, 467 F.3d 999, 1009 (6th Cir. 2006); see also Rios v. Blackwell, 345 F.Supp.2d 833, 835 (N.D.Ohio 2004). To grant either form of injunctive relief, a court must consider: "(1) whether the movant has a strong likelihood of success on the merits; (2) whether the movant would suffer irreparable injury absent a stay; (3) whether granting the stay would cause substantial harm to others; and (4) whether the public interest would be served by granting the stay." Northeast Ohio, supra, 467 F.3d at 1009; see also Rios, supra, 345 F.Supp.2d at 835.

No one factor is dispositive; instead I balance all four factors. In re De Lorean Motor Co., 755 F.2d 1223, 1229 (6th Cir.1985) ("[T]he four considerations applicable to preliminary injunction decisions are factors to be balanced, not prerequisites that must be met."). The burden of persuasion is on the party seeking the injunctive relief. Stenberg v. Cheker Oil Co., 573 F.2d 921, 925 (6th Cir.1978).

The nature and purpose of injunctions informs my analysis of the four factors. As the Supreme Court has stated, "[t]he purpose of a preliminary injunction is merely to preserve the relative positions of the parties until a trial on the merits can be held." Univ. of Tex. v. Camenisch, 451 U.S. 390, 395, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981). Given this limited purpose, a temporary restraining order is customarily granted on the basis of procedures less formal and evidence less complete than one would find in the record of a trial on the merits. Id.

Discussion

A. Likelihood of Success on the Merits

1. Unconstitutional Vagueness

Plaintiffs cite a pair of Supreme Court cases to support their allegation that T.M.O. 797-07 "fails to give a person or ordinary intelligence fair notice that his contemplated conduct is forbidden by the statute ... encouraging] arbitrary and erratic" enforcement. Papachristou v. City of Jacksonville, 405 U.S. 156, 162, 92 S.Ct. 839, 31 L.Ed.2d 110 (1972); see also U.S. v. Harriss, 347 U.S. 612, 617, 74 S.Ct. 808, 98 L.Ed. 989 (1954).

A law so vague that persons of "common intelligence must necessarily guess at its meaning and differ as to its application" .violates due process of law. Planned Parenthood v. Ariz., 718 F.2d 938, 947 (9th Cir.1983) (quoting Connally v. Gen. Constr. Co., 269 U.S. 385, 391, 46 S.Ct. 126, 70 L.Ed. 322 (1926)); see also Ass'n of Cleveland Fire Fighters v. City of Cleveland, Ohio, 502 F.3d 545, 550-51 (6th Cir.2007). In practice, this means that a "law is unconstitutionally vague if it fails to provide a reasonable opportunity to know what conduct is prohibited or is so indefinite as to allow arbitrary and discriminatory enforcement." Tucson Woman's Clinic v. Eden, 379 F.3d 531, 554 (9th Cir.2004) (internal citations omitted); see also Giaccio v. Penn., 382 U.S. 399, 402-03, 86 S.Ct. 518, 15 L.Ed.2d 447 (1966); City of Chic. v. Morales, 527 U.S. 41, 52, 119 S.Ct. 1849, 144 L.Ed.2d 67 (1999).

While void for vagueness claims generally attack criminal statutes, they are not unheard of in the realm of administrative regulations. Cf. Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 102 S.Ct. 1186, 71 L.Ed.2d 362 (1982); Eden, supra, 379 F.3d at 554-55. To succeed, however, such claims must "demonstrate that the law is impermissibly vague in all of its applications." Village of Hoffman Estates, supra, 455 U.S. at 497, 102 S.Ct. 1186; Belle Maer Harbor v. Charter Tp. of Harrison, 170 F.3d 553, 557 (6th Cir.1999) ("[V]agueness claims not involving First Amendment freedoms must be examined in light of the facts of the particular case at hand and not as to the statute's facial validity."). The one exception to this rule is statutes implicating criminal penalties. Belle Maer Harbor, supra, 170 F.3d at 557 ("An enactment imposing criminal sanctions or reaching a substantial amount of constitutionally protected conduct may withstand facial constitutional scrutiny only if it incorporates a high level of definiteness.").

T.M.O. 797-07 is largely regulatory in purpose and scope. As a result, the owners do not have a substantial likelihood of success with regard to this issue. While the ordinance arguably: 1) fails to provide a reasonable opportunity to know what conduct is prohibited and 2) is so indefinite as to allow arbitrary and discriminatory enforcement, the owners, in this suit, cannot demonstrate "that the law is impermissibly vague in all of its applications." Village of Hoffman Estates, supra, 455 U.S. at 497, 102 S.Ct. 1186.

2. Unconstitutional Conditions

The gravamen of plaintiffs' irreparable harm claim is that convenience store owners will have to surrender numerous constitutional protections as a condition of receiving a license. See, e.g., G & V Lounge, Inc. v. Mich. Liquor Control Comm'n, 23 F.3d 1071, 1077 (6th Cir.1994) ("[A] state actor cannot constitutionally condition the receipt of a benefit, such as a liquor license or an entertainment permit, on an agreement to refrain from exercising one's constitutional rights...."). These rights include: 1) the Fourth Amendment's protections against unreasonable search and seizure; 2) the Fifth Amendment...