L C & S Inc v. Warren County Area ( 2001 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 00-3062
L C & S, Inc., et al.,
Plaintiffs-Appellants,
v.
Warren County Area Plan Commission, et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Indiana, Hammond Division.
No. 99 C 51--Rudy Lozano, Judge.
Argued January 11, 2001--Decided March 28, 2001
Before Flaum, Chief Judge, and Cudahy and Posner,
Circuit Judges.
Posner, Circuit Judge. "Legislative due process"
seems almost an oxymoron. Legislation is
prospective in effect and, more important,
general in its application. Its prospective
character enables the persons affected by it to
adjust to it in advance. Its generality offers
further, and considerable, protection to any
individual or organization that might be the
legislature’s target by imposing costs on all
others who are within the statute’s scope. The
prospect of such costs incites resistance which
operates to protect what might otherwise be an
isolated, vulnerable, politically impotent target
of the legislature’s wrath or greed. The
mechanism of protection is similar to that
provided by the principle of equal protection of
the laws. Equal protection limits the power of a
legislature to target a particular individual,
organization, or group by requiring that the
legislature confer benefits or impose costs on a
larger, neutrally defined group; it cannot pick
on just the most vulnerable. Prospectivity and
generality of legislation are key elements of the
concept of the rule of law, a concept that long
predates either the principle of equal protection
(though there is a resemblance) or the concern
with procedural regularity embodied in our modern
concept of due process of law. The right to
notice and a hearing, the essence of that
concept, are substitutes for the prospectivity
and generality that protect citizens from
oppression by legislators and thus from the
potential tyranny of electoral majorities. The
generality of legislation makes notice by service
or otherwise impracticable; many of the persons
affected by the legislation will be unknown and
unknowable.
Unfortunately the line between legislation and
adjudication is not always easy to draw,
especially when the extent of the legislative
domain is extremely limited, as is often the case
with zoning. In our Club Misty case, the domain
was a specific street address. The Illinois
legislature had authorized the voters of each
Chicago precinct to decide by electoral majority,
with no pretense of due process, to forbid the
sale of liquor at an address designated by the
voters. The seller’s right to remain in business
at his address was thus at the sufferance of the
voters, exercising a delegated legislative power
that seemed to us, in reality, a judicial power
akin to the power to abate a nuisance. Club
Misty, Inc. v. Laski, 208 F.3d 615 (7th Cir.
2000); compare Harris v. County of Riverside, 904
F.2d 497, 504-05 (9th Cir. 1990). We concluded
that the legislation deprived sellers of
alcoholic beverages of a property right
consisting of their license, without due process
of law. We did not reach the plaintiffs’
alternative claim that the legislation was a bill
of attainder, that is, legislative punishment.
The bill of attainder clause, U.S. Const., art.
I, sec. 10, cl. 1, evinces recognition of the
impropriety of legislatures’ stepping outside
their proper role and into the judicial role, but
the scope of the clause is quite narrow, see 208
F.3d at 617, and, as Club Misty makes clear, does
not preempt a due process challenge based on
similar concerns.
The plaintiffs claim that this case is like Club
Misty. Williamsport, population 1800, is the
county seat of Warren County, Indiana, a rural
county in the west central part of the state. In
1996 the plaintiffs obtained from the state a
liquor license for use in Williamsport, and they
leased a building in anticipation of opening a
restaurant in it where liquor would be served.
The building was in a part of the town zoned for
commercial use, and the operation of a "tavern"
was a permitted use in that zoning district,
meaning that the permission of the zoning board
was not required. In 1998, before the plaintiffs’
restaurant had opened, rumors swept Williamsport
that a topless bar, or perhaps even a gay bar,
was coming to the town--and that in fact it would
be opening in the building the plaintiffs had
leased, so presumably would be operated by them.
So far as appears, there was no basis for the
rumors. They were not even plausible, since
topless (or at least fully topless) bars are
illegal in Indiana (see Barnes v. Glen Theatre,
Inc., 501 U.S. 560 (1991)) and small country
towns are unlikely venues for openly homosexual
conclaves. Nevertheless, in response to the
rumors the county’s planning commission (one of
the defendants) recommended that the town council
amend its zoning ordinance to make "taverns"
"special exceptions" to the uses permitted in the
commercial zoning district. This would require
the plaintiffs, if they wanted to open a "tavern"
in the building they had leased, to apply to the
planning commission’s board of zoning appeals for
permission. The town council amended the
ordinance accordingly, but grandfathered the only
existing bar in Williamsport.
Neither the planning commission nor the town
council notified the plaintiffs of the change in
the ordinance. When the plaintiffs discovered
what had happened they applied for a special
exception for their proposed "tavern." At the
hearing before the board of zoning appeals they
denied intending to open either a topless or a
gay bar. Nevertheless their application for a
special exception was turned down, so far as
appears without any statement of reasons. The
plaintiffs did not appeal, as they could have
done by bringing suit in an Indiana state court.
Ind. Code sec. 36-7-4-1003. Instead they brought
this federal constitutional suit, claiming that
the amendment to the zoning ordinance had
deprived them of property without due process of
law and also that the term "taverns" in the
amendment was void for vagueness. The district
court granted summary judgment for the
defendants.
The plaintiffs argue that the amending of the
ordinance, though nominally a legislative act,
should be treated as adjudicative because it was
aimed solely at them and constituted in effect an
adverse "judgment" based on a "finding" that they
intended to open a topless or gay bar. They were,
therefore, the argument continues, entitled to
notice of the proposed amendment and an
opportunity for a hearing on the proposal. To
complete their due process argument they claim
that the effect of the ordinance was to take away
a property right, the right granted by the state
to sell liquor in Williamsport. This is doubtful,
but it will be convenient to postpone
consideration of the property question for a bit.
That the plaintiffs were the target, and so far
as appears the only target, of the amendment is
plain. The ordinance was amended solely because
of rumors that they were intending to use their
liquor license and building lease to open either
a topless bar or a gay bar, either use being
anathema to the burghers of Williamsport. But
this does not establish that the amendment was
not a bona fide legislative measure. It is
utterly commonplace for legislation to be incited
by concern over one person or organization. The
Sherman Act, for example, was intended in large
measure to curb John D. Rockefeller’s Standard
Oil Trust, and, sure enough, some years after it
was passed a successful suit was brought under it
to dismember the trust. Standard Oil Co. of New
Jersey v. United States, 221 U.S. 1 (1911).
Williamsport cannot be criticized for having
taken a long time to wake up to the need to treat
taverns differently from other commercial
establishments. The rumors, unfounded though they
were, operated as a wake-up call. Because of the
association noted by one of the Justices in
Barnes between striptease and prostitution, 501
U.S. at 582-88 (concurring opinion), a topless
bar can strain the resources of a small town’s
police force. Gay bars can require increased law
enforcement as well; they may become sites of
male prostitution and arouse the hostility of
"straights." The consumption of alcohol,
particularly in public places, is a rich source
of social problems, of which toplessness and the
flaunting of homosexual preference may be far
from the most serious, yet these exotic venues
for the sale of alcoholic beverages may have
stimulated a sharp if belated awareness of the
problematic character of adding to the number of
local taverns. There is as yet no constitutional
right to operate or patronize either type of bar;
and the plaintiffs do not challenge the amendment
as a denial of equal protection on the theory
that the defendants singled out the plaintiffs
for adverse treatment out of unreasoned
hostility. Village of Willowbrook v. Olech, 528
U.S. 562 (2000) (per curiam), Hilton v. City of
Wheeling, 209 F.3d 1005 (7th Cir. 2000); Esmail
v. Macrane, 53 F.3d 176 (7th Cir. 1995); Shipp v.
McMahon, 234 F.3d 907, 916 (5th Cir. 2000); Gelb
v. Board of Elections, 224 F.3d 149, 157 (2d Cir.
2000).
Not the motive or stimulus, but the generality
and consequences, of an enactment determine
whether it is really legislation or really
something else. If the Williamsport town council
had imposed a fine on the plaintiffs, or provided
that only the plaintiffs had to apply for
permission to operate a tavern in the town’s
commercial district, the amendment would have
lacked either prospectivity (in the first
example) or generality (in the second); it might
even have been a bill of attainder. But the
amendment operated prospectively, regulating a
future use but not imposing a sanction for past
conduct. Far from being punitive, the amendment
is not even prohibitory. It subjects taverns to
regulation; it does not ban them. And it applies
to anyone who might want to open a new tavern in
Williamsport, not just the plaintiffs. There must
be a market demand for a second tavern in the
town; otherwise the plaintiffs would not have
sought a liquor license for use in Williamsport
or leased the building. No doubt, therefore,
someone else will want to open a tavern in
Williamsport, and that someone else will have to
apply to the board of zoning appeals for a
special exception, just as the plaintiffs had to
do. Obviously the domain of this legislation is
limited, but it is limited basically by the size
of Williamsport. It cannot be the law that small
towns cannot legislate because they are likely to
know just who is likely to be hurt by the
legislation, and the who may indeed be singular.
We conclude that the amendment to the ordinance
was bona fide legislation; therefore no notice or
opportunity to be heard was constitutionally
required.
The foregoing discussion implies, moreover, that
the amendment to the ordinance did not deprive
the plaintiffs of property within the meaning of
the due process clause of the Fourteenth
Amendment. The liquor license was, we may assume,
their property within the amendment’s meaning,
Club Misty, Inc. v. Laski, supra, 208 F.3d at
618-19; Reed v. Village of Shorewood, 704 F.2d
943, 948-49 (7th Cir. 1983); Brookpark
Entertainment, Inc. v. Taft, 951 F.2d 710, 716
(6th Cir. 1991), but it was not taken away from
them. The grant of the license did not preempt
local zoning laws. A liquor licensee is always at
risk that he will not be able to use the license
because he can’t find suitable premises zoned for
the sale of liquor. He has no right, vested or
otherwise, to freeze zoning law as of the date on
which he obtains the license. He assumes the risk
that the zoning laws will be tightened up and
make it more difficult for him to use his
license. That is all that happened here. The
amendment to the ordinance did not revoke the
license that is the claimed property right; it
curtailed an expectation of unchanged zoning law,
and such an expectation is not a property right,
River Park, Inc. v. City of Highland Park, 23
F.3d 164, 166 (7th Cir. 1994), or even
reasonable.
Our conclusion that the amendment did not
deprive the plaintiffs of a property right or
deny them due process of law does not leave
people in their position remediless against rural
prejudice, if that is how the defendants’
response to the baseless rumors of an impending
challenge to local moral sentiment should be
interpreted. The plaintiffs could have appealed
the zoning decision to an Indiana court. Perhaps
they still can, by reapplying for the special
exception and, if it is again denied, appealing
that denial. We need not speculate on whether
they would be met by a defense of res judicata,
or whether the defendants’ statement in oral
argument that they would not be should be treated
as a waiver of that defense.
The plaintiffs’ second claim, that the word
"tavern" in the ordinance is unconstitutionally
vague, borders on the frivolous. The
constitutional concept of vagueness is
successfully invoked only in cases in which a
vague statutory term either has an in terrorem
effect or licenses uncabined discretion by police
or other public officers, thus inviting abuse.
See, e.g., Grayned v. City of Rockford, 408 U.S.
104, 108-09 (1972); Karlin v. Foust, 188 F.3d
446, 458-59 (7th Cir. 1999); Okpalobi v. Foster,
190 F.3d 337, 357-58 (5th Cir. 1999). Neither
danger is presented here. No one, and certainly
not the plaintiffs, would dare to open a
restaurant at which liquor is served without
applying for a special exception, on the theory
that such an establishment might not be
classified as a "tavern." The plaintiffs applied
for the exception knowing that their
establishment was quite likely, indeed quite
certain, to be classified as a tavern. They could
by appealing the denial of their application have
sought a narrowing interpretation of "tavern"
from the Indiana courts, whose interpretation of
the word whether broad or narrow would have
resolved any doubts about the meaning of
"tavern." They did not.
Affirmed.
Cudahy, Circuit Judge, concurring in part and
concurring in the judgment. Although the majority
opinion is persuasive, I am not convinced that
the first branch of the plaintiffs’ procedural
due process argument must fail here. In form and
in potential effect, the zoning amendment at
issue here was, as the majority points out, of
general application. On the specific facts of
this case, however, the amendment was designed to
apply to these plaintiffs, had no current
application to anyone else and, at least
arguably, these facts were known to the
defendants. Therefore, although legislative in
form, the amendment was essentially adjudicative
in application. In Harris v. County of Riverside,
a leading case cited by the majority, the Ninth
Circuit said:
In determining when the dictates of due process
apply . . . we find little guidance in
formalistic distinctions between "legislative"
and "adjudicatory" or "administrative" government
actions. As the Supreme Court impliedly
recognized in Bi-Metallic [Inv. Co. v. State Bd.
of Equalization, 239 U.S. 441 (1915)], the
character of the action, rather than its label,
determines whether those affected by it are
entitled to constitutional due process.
904 F.2d 497, 501-02 (9th Cir. 1990). See also
Nasierowski v. City of Sterling Heights, 949 F.2d
890, 896 (6th Cir. 1991) ("Government
determinations of a general nature . . . do not
give rise to a due process right . . . . But when
a relatively small number of persons is affected
on individual grounds, the right to a hearing is
triggered.").
These observations would suggest reversal here
if the plaintiffs had been deprived of property
within the meaning of the Due Process Clause of
the Fourteenth Amendment. However, the immediate
effect of the Tavern Amendment was to subject the
plaintiffs to additional regulation, not to
deprive them of property. For this and other
reasons cited in the majority opinion, the
plaintiffs have not been able to make their case
that they have been deprived of a property
interest. This is an essential part of the
showing required on summary judgment and I
therefore join in the judgment.