Right-Now Recycling, Inc. v. Ford Motor Credit Co.

RIGHT-NOW RECYCLING, INC., Plaintiff, v. FORD MOTOR CREDIT CO., et al., Defendants.

CASE NO.: 1:11-CV-364

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO WESTERN DIVISION

March 16, 2015

Judge Michael R. Barrett

OPINION AND ORDER

This matter is before the Court on the October 1, 2014 Report and Recommendation ("Report"). (Doc. 140). The Report recommends granting Right-Now Recycling, Inc.'s ("Right-Now") partial summary judgment motion on its due process claims against the City (Doc. 94), granting Ford Motor Credit Company, LLC's ("Ford") motion for summary judgment (Doc. 120), denying the City of Blue Ash's ("City") motion for summary judgment on its cross-claims (Doc. 121), and denying the City's motion for summary judgment on Right-Now's due process claims (Doc. 122). Right-Now and the City have filed objections to the Report (Docs. 144, 145, 146),¹ and Ford and Right-Now have filed their respective responses to those objections (Doc. 147, 148). These matters are now ripe for review.

I. STANDARD OF REVIEW FOR OBJECTIONS

When objections to a magistrate judge's report and recommendation are received on a non-dispositive matter, the district judge must consider timely objections and modify or set aside any part of the order that is clearly erroneous or is contrary to law. Fed. R. Civ. P. 72.

When objections to a magistrate judge's report and recommendation are received on a dispositive matter, the district judge "must determine de novo any part of the magistrate judge's disposition that has been properly objected to." Fed. R. Civ. P. 72(b)(3). After review, the district judge "may accept, reject, or modify the recommended disposition; receive further evidence; or return the matter to the magistrate judge with instructions." Id.; see also 28 U.S.C. § 636(b)(1). General objections are insufficient to preserve any issues for review: "[a] general objection to the entirety of the Magistrate [Judge]'s report has the same effect as would a failure to object." Howard v. Sec'y of Health & Human Servs., 932 F.2d 505, 509 (6th Cir. 1991).

II. ANALYSIS

A. Right-Now's Objections

Right-Now objects to the Report's recommendation that summary judgment be granted to Ford on Right-Now's breach of contract claim. (Doc. 144). Specifically, Right-Now contests the conclusion that summary judgment is appropriate on the issue of "waiver." (Id., PageId 3046). Right-Now argues that the issue of waiver is a mixed issue of fact and law that is inappropriate for summary disposition because a genuine issue of material fact exists as to whether Ford undertook a clear, unequivocal, and decisive act demonstrating the intent to waive by continuing to accept Right-Now's monthly installment payments while possessing the Trucks and by failing to later credit Right-Now for those payments. (Id. at PageId 3046-47).

Ford responds that Right-Now's objections lack merit. (Doc. 147). Ford contends that the objections merely restate arguments previously raised in the briefings considered by the Magistrate Judge such that they are not proper objections. (Id., PageID 3097-98). Ford further argues that the Magistrate Judge correctly rejected Plaintiff's argument that Ford's acceptance of monthly installment payments after a default constituted a waiver because such argument wasinconsistent with the terms of the contracts, Ohio waiver law, and the undisputed evidence of record. (Id., PageId 3106).

Upon review, the Court agrees that Plaintiff's argument is repetitive of the argument raised and considered by the Magistrate Judge. As such, it is not a specific objection that requires reconsideration here. Nonetheless, the undersigned agrees with the analysis and the conclusion reached in the Report that Right-Now's waiver argument is unpersuasive. (Doc. 140, PageId 2966-72). Accordingly, Right-Now's objection is overruled and the analysis and conclusion of the Magistrate Judge are adopted.

B. The City's Objections as to Right-Now's Due Process Claim

The City objects to the Magistrate Judge's Report on five grounds, which are addressed below.

1. First objection

The City argues that the Magistrate Judge erred in using inapplicable standards from "abortion-specific laws" to determine that Right-Now established its claim against the City. (Doc. 145, PageId 3049, 3065). It further argues that "whether a policy is facially constitutional or not is essential to determining whether a municipality may be liable for a Section 1983 claim." (Id., PageId 3066). Right-Now responds that the Magistrate Judge did not err because she relied upon generally applicable constitutional principles and the fact that it was taken from "abortion-specific" caselaw is irrelevant. (Doc. 148, PageId 3113-14).

The pertinent portion of the Report states:

Whether or not Policy 19.002 is facially constitutional is irrelevant and does not foreclose a finding that it was unconstitutionally applied to Right-Now. See Women's Medical Prof'l Corp. v. Voinovich, 130 F.3d 187, 193-94 (6th Cir. 1997) (laying out the distinctions between facial and as-applied challenges and noting that a statute that is deemed constitutional i[n] some applications may still be enforced in other circumstances). Right-Now's constitutionalclaim arises out of the City's alleged failure to provide notice - not from the release of the trucks or the decision by Lieutenant Boone to allow the release. The cases cited by the City are distinguishable because they address whether a municipality may be held liable for the decisions of its employees in the absence of an official written municipal policy. See, e.g., Pembaur v. City of Cincinnati, 475 U.S. 469, 477-84 (1986) (holding that municipal liability could be imposed based on single action of County Prosecutor who was acting as the final decision maker for the county, even in the absence of formal written rules that were intended to establish fixed plan of action to be consistently followed under similar circumstances).^[] As the undisputed facts establish that the City's actions in releasing the trucks to Ford were governed by and pursuant to an official City policy - Policy 19.002 - Right-Now need look no further. See Thomas [v. City of Chattanooga, 398 F.3d 426, 429 (6th Cir. 2005)].

(Doc. 140, PageId 2945-46) (footnote omitted). The City's first objection to the Report specifically is focused on the Magistrate Judge's reliance on Voinovich.

Upon review, the undersigned concludes that the Magistrate Judge did not err in the application of Voinovich. First, the Report relied on Voinovich for generally applicable constitutional principles concerning facial and as-applied challenges, and not for principles that are specific to abortion. (See Doc. 140, PageId 246).² Second, that caselaw is relevant to Right-Now's § 1983 claim, which requires a determination as to whether an unconstitutional municipal policy caused injury to Right-Now. Monell v. Dep't of Soc. Servs., 436 U.S. 658, 690-91 (1978); Cash v. Hamilton County Dep't of Adult Prob., 388 F.3d 539, 542 (6th Cir. 2004). It therefore was not error for the Magistrate Judge to apply the generally applicable constitutional principles set forth in Voinovich in determining the constitutionality of Policy 19.002. Third, the Court disagrees with the City, for the reasons explained in more detail as to the second and thirdobjections, that whether a policy is facially unconstitutional, rather than unconstitutional as applied, is essential to determining whether a municipality may be liable for a Section 1983 claim. Accordingly, the City's first objection is overruled.

2. Second and third objections³

The City contends that the Magistrate Judge disregarded Supreme Court precedent when she concluded that Right-Now could establish its § 1983 procedural due process claim if it could show that the City's policy as-applied to Right-Now, even in just a single instance, was unconstitutional. (Doc. 145, PageId 3066-71). Relatedly, the City argues that the Magistrate Judge erroneously imposed respondeat superior liability on it for its non-policymaking employees' alleged unconstitutional implementation of Policy 19.002. (Doc. 145, PageId 3071-72). Right-Now responds that Supreme Court precedent supports the finding that the City's actions were attributable to the City and were taken in conformity with the official policy of the City - that is, Policy 19.002. (Doc. 148, PageId 3115-17). Right-Now contends that the City witnesses support a finding that they were acting according to policy. (Id., PageId 3117). As such, Right-Now claims that the Magistrate Judge did not impose respondeat superior liability on the City simply because Lieutenant Boone made the decision to release the Trucks since caselaw plainly distinguishes between written policies and unwritten policies and customs. (Id., PageId 3118).

The portion of the Report set forth with respect to the first objection also is relevant here. Of particular relevance are the holding that whether Policy 19.002 is facially constitutional is irrelevant and the citation to Pembaur, 475 U.S. at 477-84. Also relevant is the Magistrate Judge's consideration of Oklahoma City v. Tuttle, 471 U.S. 808 (1985), in which she concludedthat Tuttle is distinguishable because it involved an unwritten policy, and that "Right-Now may establish its § 1983 due process claim if it can show that the City's policy as-applied to it, even in just a single instance, was unconstitutional." (Doc. 140, PageId 2946).

Upon de novo review, the undersigned concludes that the Magistrate Judge did not err in either respect. The doctrine of respondeat superior cannot be employed to hold governmental entities liable under § 1983 for the alleged constitutional torts of their employees based solely on the fact that they employed those employees. Monell, 436 U.S. at 691. As such, the actions of Lieutenant Boone (a non-policymaker) in regards to the release of the Trucks to Ford without providing Right-Now notice and an opportunity to...