Frey Corporation v. City of Peoria, Illinois

735 F.3d 505, 2013 WL 4257891, 2013 U.S. App. LEXIS 17123
CourtCourt of Appeals for the Seventh Circuit
DecidedAugust 16, 2013
Docket12-3571
StatusPublished
Cited by45 cases

This text of 735 F.3d 505 (Frey Corporation v. City of Peoria, Illinois) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frey Corporation v. City of Peoria, Illinois, 735 F.3d 505, 2013 WL 4257891, 2013 U.S. App. LEXIS 17123 (7th Cir. 2013).

Opinion

TINDER, Circuit Judge.

Frey Corporation brings the present appeal against the City of Peoria, Illinois, after an unfavorable disposition of its case in the district court. Frey has owned the commercial property located at 1823 West Lincoln Avenue, Peoria, Illinois 61605, for more than forty years. A shopping center is located on the property, which includes retail space for a grocery store. Frey had been leasing retail spaces within the shopping center for years, apparently without incident. But on November 5, 2009, the tenant renting Frey’s grocery store space, Krunal and Jiger, Inc. d/b/a Shop Rite Supermarket (hereinafter “Shop Rite”), ran into serious trouble with the law.

After receiving information that the President of this Shop Rite franchise, Va-sant Patel, was illegally selling Viagra from inside the store, Peoria police obtained a search warrant for both Patel and the Shop Rite store. There, police found 121 Viagra pills in Patel’s office, which Patel later admitted to selling at the store for $7 per pill. Patel was not a licensed pharmacist, nor did the Shop Rite store contain a pharmacy. As a result, Patel was arrested, indicted on felony drug charges, and later pled guilty to misdemeanor drug charges.

As the City of Peoria took legal action against Patel personally, the City simultaneously took legal action against Patel’s business, Shop Rite. On November 12, 2009 — only a week after Patel’s arrest— the City went after Shop Rite’s liquor license. The City charged the store with a violation of Peoria, Ill., Code § 3-28, which prohibits officers of a business holding a liquor license from “engaging] in any activity ... which is prohibited by ... the law of the state or the United States.” The Peoria Liquor Commission held a hearing regarding Shop Rite’s liquor license on November-24, 2009, and after evaluating the evidence, decided the next day to revoke the grocery store’s liquor license. The Commission’s decision to revoke Shop Rite’s liquor license is not at issue in this case; in fact, appellant Frey even admitted at oral argument that there was “no dispute that the liquor licensee violated the ordinance.”

What is at issue in this case, however, is the additional action taken by the Commission as a result of Shop Rite’s violation of Peoria, Ill., Code § 3-28. In its November 25th order, the Commission not only revoked Shop Rite’s liquor license; it also revoked “site approval for the retail sale of alcoholic liquors at the location of 1823 W. Lincoln, Peoria, Illinois.” Appellant Frey, the owner of 1823 W. Lincoln, believes that this revocation of site approval for the retail sale of alcohol denied the corporation of its property without due process of law. For the reasons stated below, we disagree with Frey’s position, and we affirm the judgment of the district court.

I

Appellant Frey argues that both its procedural and substantive due process rights under the Fourteenth Amendment were violated by the Peoria Liquor Commission’s revocation of its site approval. The district court largely ignored Frey’s substantive due process, claim after finding that Frey had failed to explain the claim sufficiently in its written filings. With respect to Frey’s procedural due process claim, the district court determined that Frey “simply ha[d] no property right to vindicate under the due process clause, and [the City of Peoria] owed him no ‘process’ when revoking the site approval.” As such, the district court denied Frey’s motion for summary judgment, granted *508 the City’s motion for summary judgment, and terminated Frey’s case. We review the district court’s disposition of Frey’s case de novo. Durable Mfg. Co. v. U.S. Dep’t of Labor, 578 F.3d 497, 501 (7th Cir.2009).

We turn first to Frey’s substantive due process argument, of which we too can easily dispose, given the argument’s total lack of development. Frey only mentioned the term “substantive due process” twice in its written submissions to the district court: once in its complaint, and once in its motion for summary judgment. Both times, Frey simply stated that its substantive due process rights had been violated. It never explained how or why the City of Peoria’s actions constituted a violation of Frey’s substantive due process rights. Even in its briefing to our court, Frey never explained how or why the City of Peoria’s actions constituted a violation of its substantive due process rights. Indeed, it became clear at oral argument that Frey was throwing around the term “substantive due process” without fully understanding its meaning. Accordingly, we take this opportunity to remind Frey that

[sjubstantive due process is not a blanket protection against unjustifiable interferences with property. And it does not confer on federal courts a license to act as zoning boards of appeals. It is instead a modest limitation that prohibits government action only when it is random and irrational. Unless a governmental practice encroaches on a fundamental right, substantive due process requires only that the practice be rationally related to a legitimate governmental interest, or alternatively phrased, that the practice be neither arbitrary nor irrational. A property owner challenging a land-use regulation as a violation of due process is therefore obliged to show that the regulation is arbitrary and unreasonable, bearing no substantial relationship to public health, safety, or welfare.

Gen. Auto Serv. Station v. City of Chi., 526 F.3d 991, 1000-01 (7th Cir.2008) (quotations and citations omitted).

Frey has not claimed to have a fundamental right to site approval for the retail sale of liquor on its property (nor should have Frey made such a far-fetched claim, for that matter). As long as the City of Peoria’s revocation of site approval did not encroach on one of Frey’s fundamental rights, the revocation would only need to be “rationally related to a legitimate governmental interest.” Id. at 1000. Given the City’s strong evidence that prescription drugs were being illegally sold on Frey’s property, the revocation certainly meets the rational basis test. Consequently, even if Frey had adequately explained its substantive due process claim, the claim would still fail.

With Frey’s substantive due process claim out of the way, we now turn to Frey’s procedural due process claim. Frey argues that site approval is a property right within the meaning of the Fourteenth Amendment due process clause, and as a result, the City of Peoria owed Frey some process before revoking its site approval. Thus, before we can evaluate the sufficiency of the process afforded Frey in the revocation of its site removal, we must first assess whether site approval is a protected property right under the Fourteenth Amendment due process clause. Frey advances two arguments why site approval is a protected property right: (1) site approval constitutes a land-use regulation similar to zoning, and (2) site approval is a property right under the language of Illinois law and the Peoria municipal code.

Frey’s first argument — that site approval constitutes a land-use regulation akin to *509 zoning — is interesting.

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735 F.3d 505, 2013 WL 4257891, 2013 U.S. App. LEXIS 17123, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frey-corporation-v-city-of-peoria-illinois-ca7-2013.