United States District Court, E.D. California
LARRY C. FLYNT; HAIG KELEGIAN SR.; and HAIG T. KELEGIAN JR., Plaintiffs,
XAVIER BECERRA, et al., Defendants.
ORDER GRANTING DEFENDANTS' MOTION TO
MENDEZ UNITED STATES DISTRICT JUDGE.
card club owners want more than a one-percent interest in
out-of-state casinos, which California's gambling laws
prohibit. Because of this prohibition, Plaintiffs sue both
the Bureau of Gambling Control and California officials,
alleging these laws violate the U.S. Constitution's
dormant commerce and substantive due process clauses. Compl.,
ECF No. 1. Defendants move to dismiss this action. Mot., ECF
No. 19. Plaintiffs oppose. Opp'n, ECF No. 24. For the
reasons explained below, the Court grants Defendants'
clubs pervade California. Patrons frequent these
establishments to play card games. Compl. ¶ 17. With a
gaming license, California residents may own card clubs.
Id. Plaintiffs Larry C. Flynt, Haig Kelegian Sr.,
and Haig T. Kelegian Jr. each own gaming licenses.
Id. ¶¶ 8-10.
Plaintiffs want more than ownership: They also want to
substantially invest in out-of-state casinos. Id.
¶ 4. California forbids this. California's gambling
laws empower the state to revoke card club owners' gaming
licenses if they have more than one-percent interest in an
out-of-state, casino-style gambling entity. Cal. Bus. &
Prof. Code §§ 19858, 19858.5. Flynt and Kelegian
Sr. allege these laws made them forego lucrative business
opportunities; Kelegian Jr. owned more than one-percent
interest in an out-of-state casino, and the state made him
divest it. See Compl. ¶¶ 47-57.
these laws to be unconstitutional, Plaintiffs sue the Bureau
of Gambling Control and state officials. Notice of Automatic
Substitution of Parties, ECF No. 18. Through facial and
as-applied challenges, Plaintiffs argue §§ 19858
and 19858.5 violate the U.S. Constitution's dormant
commerce and substantive due process clauses. Compl.
¶¶ 1-7. Defendants move to dismiss this case as
untimely. Mem., ECF No. 19-1, at 4-5.
Statute of Limitations
1983 claims brought in California federal court have a
two-year statute of limitations. See Butler v. Nat'l
Cmty. Renaissance of Cal., 766 F.3d 1191, 1198 (9th Cir.
2014) (citing Cal. Civ. Proc. Code § 335.1). Although
state law defines the limitations period, federal law
determines the claim accrues “when a plaintiff knows or
has reason to know of the actual injury.” See
Scheer v. Kelly, 817 F.3d 1183, 1188 (9th Cir. 2016);
Knox v. Davis, 260 F.3d 1009, 1013 (9th Cir. 2001).
filed their complaint on November 30, 2016. See
generally Compl. The parties dispute whether this was
timely. Defendants contend it is not because Plaintiffs'
injuries occurred more than two years earlier. See
Mem. at 5. But Plaintiffs argue the case is timely because
their injuries are ongoing. See Opp'n at 6-8.
bolster their statute-of-limitations defense, Defendants cite
two operative dates. First, they cite January 1, 2008-the day
California enacted its gambling law. Mem. at 5 (referencing
§ 19858). The Ninth Circuit makes clear, however, that
when a plaintiff facially challenges a law, that law's
enactment date does not commence the limitations period.
See Scheer, 817 F.3d at 1188 (finding
plaintiff's claim timely because limitations period began
when the California Supreme Court denied her review petition,
not when the challenged rules were enacted).
Defendants cite June 12, 2014-the day the California Gambling
Control Commission (“Commission”) ordered
Kelegian Jr. to divest his illegal interest and fined him
$200, 000 for violating §§ 19858 and 19858.5.
See Mem. at 5. See also Commission Decision
(attached to Compl. as Ex. F). The Commission's decision
applies only to Kelegian Jr., but it also admittedly put
Flynt and Kelegian Sr. on notice about the injury underlying
this suit (Compl. ¶¶ 47-57) and therefore is the
operative date for all Plaintiffs' alleged injuries. The
Court finds, therefore that all of the Plaintiffs' claims
accrued on June 12, 2014-more than two years before
Plaintiffs filed suit and are time barred unless Plaintiffs
pled a continuing harm. See Knox, 260 F.3d at 1013.
did not. A continuing harm is one that first occurs beyond
the statute of limitations but continues to occur within the
statutory period. See id. Claims based on alleged
continuing harm may be timely even though they technically
accrued outside the statute of limitations. See id.
But to be a continuing harm, the alleged wrongdoing and
resultant injury must truly be ongoing or reoccurring; a
“mere continuing impact from ...