Top Flight Entertainment, Ltd. v. Schuette

729 F.3d 623, 2013 WL 4767180, 2013 U.S. App. LEXIS 18579
CourtCourt of Appeals for the Sixth Circuit
DecidedSeptember 6, 2013
Docket12-2384
StatusPublished
Cited by46 cases

This text of 729 F.3d 623 (Top Flight Entertainment, Ltd. v. Schuette) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Top Flight Entertainment, Ltd. v. Schuette, 729 F.3d 623, 2013 WL 4767180, 2013 U.S. App. LEXIS 18579 (6th Cir. 2013).

Opinions

WHITE, J., delivered the opinion of the court, in which, STRANCH, J., joined, and KEITH, J., joined in part. KEITH, J. (pp. 635-36), delivered a separate opinion concurring in part and dissenting in part.

OPINION

HELENE N. WHITE, Circuit Judge.

Plaintiffs-Appellants Top Flight Entertainment and Flying Aces, LLC (collectively, “Plaintiffs”) appeal the dismissal of their complaint against Defendants-Appel-lees Bill Schuette (“Schuette”), the Michigan Attorney General, and M. Scott Bowen (“Bowen”), the Commissioner of the Michigan Bureau of the State Lottery, in their official and individual capacities (collectively, “Defendants”), alleging violations of their First and Fourteenth Amendment rights, under 42 U.S.C. § 1983. Plaintiffs’ claims stem from the administrative denials of various nonprofit organizations’ applications to hold “millionaire parties” at Plaintiffs’ adult-entertainment club. Plaintiffs allege that Defendants adopted a blanket policy of denying all such applications in retaliation for Plaintiffs’ exercising their First Amendment rights. The district court dismissed Plaintiffs’ procedural and substantive due process and First Amendment retaliation claims for failure to state claims for which relief could be granted; and it dismissed the remainder of Plaintiffs’ claims—which alleged retaliation for Plaintiffs’ exercise of their First Amendment right to redress grievances in the courts—based on a finding that Bowen was entitled to quasi-judicial immunity and Schuette lacked the requisite personal involvement in the alleged constitutional violations. We AFFIRM in part, REVERSE in part, and REMAND for further proceedings.

I.

A. Millionaire Parties

A “millionaire party” is “an event at which wagers are placed upon games of chance customarily associated with a gambling casino through the use of imitation money or chips that have a nominal value equal to or greater than the value of the currency for which they can be exchanged.” Mich. Comp. Laws [628]*628§ 432.103a(8). Millionaire-party licenses are limited in scope and duration, and may be issued to a “qualified organization” for up to four consecutive days. Id. § 432.110b. A “qualified organization” is a “bona fide religious, educational, service, senior citizens, fraternal, or veterans’ organization that operates without profit to its members and that either has been in existence continuously as an organization for a period of 5 years or is exempt from taxation under section 501(c) of the internal revenue code[.]” Id. § 432.103(g)(i). Each qualified organization may receive four millionaire party licenses a year, and each license is only valid for one location. Id. § 432.110b. The licensee of the millionaire party is responsible for “insuring” compliance with the law. Id. § 432.110a.

An application for a millionaire party must include, among other things, information identifying the applicant organization, the location at which the applicant proposes to conduct the event, the proposed dates for the event, and a sworn statement attesting to the nonprofit status of the applicant organization. Id. § 432.104. A license may be denied if either the applicant or the lessor of the millionaire party’s proposed location “is not in compliance with the requirements of the act, these rules, terms of probation, directives of the bureau, public policy of the state of Michigan, or any other local, state, or federal law or regulation.” Mich. Admin. Code r. § 432.21109. A denial of an application may be appealed by the applicant in state court. Id.; Mich. Comp. Laws § 600.631.

The proceeds from a millionaire party (less “reasonable” expenses incurred to operate the event) must be “devoted exclusively” to the charitable purposes of the licensee. Mich. Comp. Laws § 432.109(1). Leasing a location to hold the event is an approved use of the proceeds, id., but “all of the terms and conditions of rental, including the fee [must be placed] in a written agreement approved by the bureau.” Mich. Admin. Code r. § 432.21416. The location at which a licensed event is conducted must be open to inspection at all times. Mich. Comp. Laws § 432.114(3).

On June 11, 2012, the governor of Michigan transferred authority to administer millionaire-party licensing and regulation from the Lottery Commissioner to the Executive Director of the Michigan Gaming Control Board. Id. § 432.91.

B. Facts

Top Flight Entertainment (“Top Flight”), doing business as “Flight Club,” operates a topless-entertainment club in Inkster, Michigan. In 2010, Flight Club subleased a portion of its property to Flying Aces, LLC (“Flying Aces”) in anticipation that Flying Aces would contract with qualified organizations to hold millionaire parties at Flight Club.

On October 26, 2010, Flying Aces representatives held a meeting with Ronald K. Wells, the inspector supervisor of the Michigan Bureau of the State Lottery’s (“the Bureau”) Charitable Gaming Division (“CGD”), and Mark Bentley, a supervisor for the CGD, to discuss the rules and procedures for locations where millionaire parties are conducted. Each of Flying Aces’s representatives initialed and signed a memorandum listing the topics that were discussed at the meeting. The memorandum warned that: “Violations of the Act, rules, or directives will result in no further licenses being issued for organizations wishing to conduct events at that location and/or using the listed supplier.”

In March, 2011, Flying Aces representatives met with Lottery Commissioner Bowen and the mayor of Inkster to inform Bowen that Flying Aces’s location also offered adult entertainment. Flying Aces felt this meeting was necessary because [629]*629they were not aware of any other adult-entertainment location that had been approved by the Bureau as a location where a millionaire party could be held. Bowen did not indicate that Plaintiffs’ status as an adult-entertainment business would be a problem.

On April 1, 2011, Plaintiffs entered into contracts for billboard advertising throughout the Detroit area related to the millionaire parties they anticipated would be held at their location. Shortly after these advertisements were posted, Wells contacted Flying Aces and instructed it to cancel its advertising campaign on the basis of complaints he had received. Public Act 343 of 2010, a Michigan state law which regulated signs and billboards advertising sexually oriented businesses, became effective on March 30, 2011. Shortly thereafter, on April 5, 2011, ABODE Operating, LLC (ABODE), an adult entertainment business managed by Alan M. Markovitz, who was a “substantial” shareholder in Flying Aces, filed suit against Michigan Governor Rick Snyder, alleging that Public Act 343 violated his rights under the First and Fourteenth Amendments. On May 18, 2011, Flying Aces filed a separate suit against Snyder, also alleging that Public Act 343 violated its constitutional rights, and Flight Club filed a separate suit on July 20 making similar claims. In late August 2011, Snyder and Bill Schuette, Michigan’s Attorney General, entered into a settlement agreement resolving the three cases by entry of declaratory judgments and permanent injunctions in favor of ABODE, Flying Aces, and Flight Club.

During April 2011, Flying Aces began conducting millionaire parties on Flight Club’s premises.

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729 F.3d 623, 2013 WL 4767180, 2013 U.S. App. LEXIS 18579, Counsel Stack Legal Research, https://law.counselstack.com/opinion/top-flight-entertainment-ltd-v-schuette-ca6-2013.