Kraft v. Jacka

872 F.2d 862, 1989 WL 33718
CourtCourt of Appeals for the Ninth Circuit
DecidedApril 12, 1989
DocketNo. 87-2804
StatusPublished
Cited by42 cases

This text of 872 F.2d 862 (Kraft v. Jacka) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kraft v. Jacka, 872 F.2d 862, 1989 WL 33718 (9th Cir. 1989).

Opinions

CHOY, Circuit Judge:

Sydell R. Kraft (“Kraft”), Levin International Corporation (“LIC”), Trans Atlantic Games, Inc. (“TAG”), and Trans Atlantic Games of Nevada (“TAG-Nevada”) (collectively referred to as “plaintiffs”) appeal from the district court’s grant of summary judgment in their action under 42 U.S.C. § 1983 against members of the Nevada Gaming Board (“Board” or “Board members”). This action arose from the Board’s refusal to extend further licensing to the plaintiffs after expiration of their one-year limited gaming licenses.

The district court concluded that the Board members were protected by absolute immunity. Alternatively, the district court ruled that the Board members were entitled to qualified immunity because plaintiffs had not shown that the Board violated clearly established constitutional rights of which a reasonable person would have [864]*864known. Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 2738, 73 L.Ed.2d 396 (1982). In part, this ruling was based on the court’s determination that plaintiffs had no protected property or liberty interest and thus could not make out a claim for violation of due process rights.

Without reaching the issue of immunity, we affirm and hold that the plaintiffs have failed to establish a violation of procedural due process. Plaintiffs had no protected property interest in further licensing and could show no other property or liberty interest that would trigger due process protection. In addition, we hold that plaintiff Kraft has failed to establish a violation of her fourteenth amendment right to freedom of intimate association.

BACKGROUND

In 1984, plaintiffs applied to the Board for licenses to manufacture, distribute, and operate gaming devices in Nevada. The Board considered the applications at a public meeting on February 13, 1985. At that meeting, Board members raised several concerns regarding matters uncovered during the investigation of plaintiffs. Specifically, the Board was concerned that plaintiffs had engaged in the sale and distribution of slot machines within Nevada without a license, had shipped a machine into the state which had been approved in a particular form but had been modified without approval, and apparently had difficulty maintaining control of their machines in Nevada. The Board also was concerned that Howard Levin (“Levin”), who was then president of all the plaintiff corporations, had been associating with a convicted felon.

The Board ultimately voted to recommend approval of one-year limited licenses. The Board advised plaintiffs that its action was merely a recommendation to the Nevada Gaming Commission (“Commission”), which would make the final decision.

The Commission considered the recommendation at a public meeting on February 21,1984. After raising several of the same concerns expressed by the Board, the Commission voted three to two to issue licenses in accordance with the Board’s recommendation. Each license stated that it was a “[ljimited license to expire on date of Nevada Gaming Commission meeting of February, 1986.” The Commission’s orders of registration of LIC and TAG also stated that the sale of any equity in LIC or TAG:

shall be void unless approved in advance by the ... Board. Such approval is deemed granted if an application ... has been filed with the Board for 30 days and the Board has not ... ordered acceleration or extension of time, or issued a stop order during such period.

In October, 1985, LIC filed a preliminary prospectus with the SEC in connection with a proposed public offering. On November 20, 1985, the Board issued an order stopping the offering. Two days later, the Board rescinded the order.

Plaintiffs and Levin subsequently applied for licenses to become effective at the end of the one-year period. The Board considered these applications at a meeting on February 6, 1986. Kraft and Levin attended the meeting. The Board members again raised numerous concerns, including Lev-in’s substantial gambling debts and the possibility that he had used subterfuge to avoid repayment of those debts. Prior to any decision of the Board, plaintiffs requested withdrawal of the LIC and TAG applications and a continuance of the Board’s consideration of the TAG-Nevada application. This continuance allowed LIC, TAG, and Levin time to transfer their interests to Kraft so that only Kraft and TAG-Nevada would be under consideration.

One week later, the Board considered the revised applications at a public meeting. The Board expressed concerns about the financial strength of TAG-Nevada, the continued involvement of Levin, and the genuineness of the separation of Levin from Kraft and TAG-Nevada. The Board ultimately voted unanimously to recommend denial of the applications “without prejudice,” meaning that the applicants could attempt to cure the deficiencies in their applications and reapply.

[865]*865On February 20, 1986 (one week later), the Commission considered the Board recommendation at a public meeting. Kraft attended the meeting with her attorney. The Commission echoed the concerns of the Board, and voted four to one against approval of either permanent licenses or six-month limited licenses.

The one-year licenses expired on February 21, 1986. On March 7, 1986, Board Chairman Jacka wrote to all Nevada licensees and their affiliates to notify them of the denial of new licenses to plaintiffs, quoting provisions of Nevada law requiring Commission approval prior to engaging in business transactions with denied applicants.

On July 18, 1986, plaintiffs filed their complaint in district court against S. Barton Jacka, Michael D. Rumbolz, and Guy T. Hillyer, members of the Board, and Larry G. Hickman, an employee of the Board. The complaint included two claims for relief under RICO, a claim based on common law fraud, and a request for injunctive relief. The complaint also included two claims under 42 U.S.C. §§ 1983, 1985, and 1986. The plaintiffs alleged their civil rights had been violated because they had been deprived of protected property and liberty interests without due process of law.

The Board moved for summary judgment on October 3, 1986. On August 31, 1987, the district court held a hearing on the motion. On September 4, 1987, the court issued its opinion granting the motion for summary judgment. Kraft v. Jacka, 669 F.Supp. 333 (D.Nev.1987). The district court concluded that the Board members were entitled to absolute immunity. Alternatively, the court held that the Board members were entitled to qualified immunity on the civil rights claims. The court determined that there was no procedural due process violation because plaintiffs could not show a protected property interest in further licensing after the limited licenses expired automatically in February, 1986. Id. at 337-39. The court further determined that the Board was not the actual or proximate cause of the injuries stemming from the refusal to license, since the Board only made recommendations and the Commission was responsible for the ultimate decision to license.1

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Cite This Page — Counsel Stack

Bluebook (online)
872 F.2d 862, 1989 WL 33718, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kraft-v-jacka-ca9-1989.