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Hill v. County of Sacramento

October 27, 2010


The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge


Defendants move for summary judgment on Plaintiff Ann Hill's Complaint. Plaintiff alleges in her Complaint that Defendants refused to allow her to continue operating her Java City food and beverage concession at the Sacramento County International Airport because of her African-American race, and that Defendants failed to comply with federal regulations requiring them to promote participation of "socially and economically" disadvantaged business concessionaires at the airport.

I. Legal Standard

A party seeking summary judgment bears the initial burden of demonstrating that there is no genuine issue as to any material fact concerning issues on which summary judgment is sought. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If this burden is satisfied, "the non-moving party must set forth, by affidavit or as otherwise provided in [Federal] Rule [of Civil Procedure] 56, specific facts showing that there is a genuine issue for trial." T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987)(quotations and citation omitted)(emphasis omitted). Defendants "must either produce evidence negating an essential element of the [plaintiff's claim] or show that the [plaintiff] does not have enough evidence of an essential element to carry [her] ultimate burden of persuasion at trial." Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir. 2000)(citations omitted). "Where disputed issues of material fact exist, we assume the version of the material facts asserted by the non-moving party. All reasonable inferences must be drawn in favor of the non-moving party." Bryan v. McPherson, 608 F.3d 614, 619 (9th Cir. 2010)(citations omitted).

II. Summary Judgment Factual Record and Procedural History

Defendant County of Sacramento ("the County") owns and operates the Sacramento County International Airport ("Sacramento Airport"). (Defs.' SUF ¶ 1.) Defendant Sacramento County Airport System ("SCAS") is a department within the County responsible for operating, maintaining, and developing the Sacramento Airport. Id. ¶ 2. The non-entity Defendants are the County's employees. (Pl.'s Compl. ¶¶ 8-9.) SCAS out-sources operations for most of the Sacramento Airport's food and beverage concessions to HMSHost Corporation ("Host") and has done so since at least 1970. (Defs.' SUF ¶ 23; Decl. of Ann Hill in Opp'n to Defs.' Mot. for Summ. J. ("Hill Decl.") ¶ 12.) Plaintiff formerly operated a Java City food and beverage concession at the Sacramento Airport. (Defs.' SUF ¶ 33.) Plaintiff first began operating a food and beverage concession at the Sacramento Airport in 1990 when she opened Ann Hill's Airport Bakery Deli. Id. ¶ 37. Plaintiff began operating her Java City concession at the airport in October of 1998, after she entered into a sublease with Host that authorized her to operate the business at the airport. Id. ¶¶ 38-39. This sublease prescribed July 31, 2009 as the expiration date. Id. ¶ 39. Plaintiff's Java City concession was located on the upper level of Terminal A (one of two passenger terminals at the Sacramento Airport) between airline arrival/departure gates. Id. ¶¶ 10-11.

The County receives federal funding for the Sacramento Airport and, therefore, SCAS is required to implement an Airport Concession Disadvantaged Business Enterprises program ("ACDBE program") at the Sacramento Airport pursuant to 49 C.F.R. section 23, et seq. Id. ¶¶ 182-183. This program is intended to promote participation of business owners who are both "socially and economically" disadvantaged in the operation of airport concessions. See 49 C.F.R. §§ 23.1, 23.3. When Plaintiff operated concessions at the Sacramento Airport, she was certified as a Disadvantaged Business Enterprise ("DBE") under the ACDBE program. (Defs.' SUF ¶ 34.)

In 2006, SCAS began evaluating "the terms of its biggest contracts" under which concessionaires were operating at the Sacramento Airport. Id. ¶ 51. "SCAS initiated this review for multiple reasons, including, the anticipated construction of the new Central Terminal B, the upcoming expiration of multiple major concession agreements at the Airport, and its belief that it was not performing comparably to similar airports." Id. ¶ 52. "Sometime in 2006, SCAS discovered that it was performing below the industry standards for airports of comparable size and traffic amounts. SCAS wanted to improve its performance by upgrading the concession offerings in the Terminals and increasing its sales and revenues." Id. ¶ 55. "During this same time, Host expressed a desire to extend its Agreement with the Airport so that it could maintain operations in Terminal A at least until the opening of the new Central Terminal B." Id. ¶ 55.

"In late 2006, the County and Host began discussing extension of the existing lease, and the need for refreshing and improving the concession concepts offered at the airport." Id. ¶ 64. Subsequently, a proposal was made to improve several concessions at the Sacramento Airport, which included reconcepting Plaintiff's Java City concession to a Starbucks Coffee concession. Id. ¶¶ 74-76. The parties dispute how Java City performed financially compared to other food and beverage concessions in Terminal A before the proposal was made to reconcept Java City. (Reply to Opp'n to Separate Statement of Undisputed Material Facts in Supp. of Mots. for Summ. J. and/or Partial Adjudication of Issues by Defs. ("Reply to SUF") ¶¶ 102-104.) Host and the County eventually agreed in 2007 to an amendment of their existing contract ("Amendment"); the Amendment included an agreement to convert Plaintiff's Java City concession into a Starbucks. (Defs.' SUF ¶ 97.) The decision to replace Java City with a Starbucks was one of thirteen concession improvements in the Amendment, ten of which involved food and beverage concessions. Id. ¶ 97. Four of the food and beverage concessions selected for reconcepting were at one time classified as DBEs; Plaintiff's Java City concession was one of the four. Id. ¶ 99. "The reconcepting of the Java City operated by Plaintiff was just one of the many revisions contemplated by the... Amendment and was not a focal point or a highlight of the negotiations or final terms." Id. ¶ 100. "At some point, SCAS and Host looked at all of the concessions in both terminals of the Airport and evaluated their performance." Id. ¶ 101.

In order to begin converting Plaintiff's Java City into a Starbucks before the lease Plaintiff had with Host expired on July 31, 2009, the Amendment required Host to work "in earnest" to buy out Plaintiff's lease. (Decl. of Amanda L. Butts in Supp. of Defs.' Mot. for Summ. J. ("Butts Decl.") Ex. 11.) The Amendment also required Host to pay the County $15,000 per month in liquidated damages if Host did not purchase the remainder of Plaintiff's lease by July 1, 2007. Id.

Plaintiff "received the first offer of a buyout from Host on March 8, 2007. At that time, Host notified Hill that her sublease would not be renewed." (Defs.' SUF ¶ 121.) "Host informed Hill that the concessions on the Southwest Airlines concourse of Terminal A were being renovated to bring in more nationally recognized brand [sic], and that there was no extension option available on her sublease agreement and that her sublease would expire by its terms on July 31, 2009." Id. ¶ 122. "On April 25, 2007, Hill rejected Host's initial buyout offer." Id. ¶ 125. "On January 3, 2008, Host increased the cash payment offer to buyout the [then] remaining 18 months of Hill's contract to the sum of $500,000.00. Host again reiterated that Hill's sublease would expire by its terms in July 2009." Id. ¶ 122. "Hill again rejected Host's offer." Id. ¶ 128. Host and Plaintiff failed to reach a buyout agreement.

Therefore, Plaintiff sought to directly lease the space for Java City from the County. (Hill Decl. ¶ 12.) The County refused to enter into a direct lease with Plaintiff, because "at the time" the "Amendment was negotiated and adopted there were no opportunities for direct leasing of a food and beverage concession at the Airport." (Defs.' SUF ¶ 139.)

Prior to when Plaintiff rejected Host's last buyout offer, Plaintiff, "[o]n May 7, 2008,... requested new signage and menu boards for the Java City through the County. The requested new menu board, menu items and updated pricing were approved along with one proposed sign." (Defs.' SUF ¶ 134.) Plaintiff also requested a "freestanding sign" that "was not approved due to operational and safety reasons in that it posed a trip hazard and could be easily knocked down." Id. Plaintiff also avers that the County did not inform her of an opportunity to place coupons advertising her business in a "'Preflight Checklist' brochure." (Hill Decl. ¶ 15). However, Plaintiff admits she was listed in the "'Pre Flight Checklist' [brochure] which included advertising for various Airport vendors, including Plaintiff's Java City," and fails to show that any vendor had coupons placed in the "Preflight Checklist" brochure. (Defs.' SUF ¶ 143).

Plaintiff remained the operator of Java City until her sublease with Host expired on July 31, 2009. Id. ¶ 206. Although Plaintiff ceased operating her Java City business at that time, Host began operating a Java City food and beverage concession in the same place where Plaintiff's Java City concession was located. Id. ¶¶ 205, 208. Host proposed reconcepting this Java City to a La Bou Bakery & Cafe instead of a Starbucks in December of 2009. Id. ¶ 209. SCAS has ...

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