Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Diamond S.J. Enterprise, Inc. v. City of San Jose

United States District Court, N.D. California, San Jose Division

July 1, 2019

DIAMOND S.J. ENTERPRISE, INC., Plaintiff,
v.
THE CITY OF SAN JOSE, Defendant.

          ORDER GRANTING MOTION TO DISMISS AND GRANTING IN PART AND DENYING IN PART MOTION TO STRIKE RE: DKT. NO. 55

          LUCY H. KOH UNITED STATES DISTRICT JUDGE

         Plaintiff Diamond S.J. Enterprise, Inc. brings suit against Defendant the City of San Jose (“San Jose” or “City”). Plaintiff owns and operates a nightclub called SJ Live in San Jose, California. The City issued notice to Plaintiff revoking Plaintiff's entertainment permit to operate as a nightclub. After attempts to appeal the permit's revocation through administrative proceedings held by the City, Plaintiff brought suit here. Before the Court is the City's motion to dismiss and/or to strike. Having considered the parties' submissions, the relevant law, and the record in this case, the Court GRANTS Defendant's motion to dismiss, and GRANTS in part and DENIES in part Defendant's motion to strike.

         I. BACKGROUND

         A. Factual Background

         Plaintiff owns and operates a nightclub called SJ Live. ECF No. 54 at ¶ 11 (second amended complaint, or “SAC.”). On May 28, 2017, SJ Live was approached by Daniel Embay. Id. at ¶ 32. Embay had booked a performer named Lucci. Id. at ¶ 32. Originally, Lucci was supposed to perform at a club in San Francisco, but the club cancelled. Id. So, Embay approached SJ Live to see whether SJ Live could host Lucci. Id. SJ Live agreed to book Lucci for $10, 000. Id. “Lucci would pay any booking agent fees to Mr. Embay directly.” Id. The Plaintiff claims that Embay usually “holds himself out as an event promoter, ” though that was not the role he purportedly played in relation to the Lucci booking. Id. at ¶ 34. Plaintiff claims Embay was merely a booking agent, not an event promoter, because operating as an event promoter in San Jose requires a permit, whereas there is an exception to the permitting requirement for an “agent of an entertainer or performer who is compensated solely for negotiating his or her client's contract to perform at an event.” Id. (citing San Jose Municipal Code (“SJMC”) § 6.62.040(B)(4)).

         Plaintiff has a dress code and provides table bottle service. Id. at ¶ 35. The bottle service is booked prior to an event through the club's owner and manager, Jenny Wolfes. Id. at ¶ 26, 35. Before the Lucci event, Embay had a disagreement with Wolfes over whether sneakers should be allowed. Id. at ¶ 36. In the past, the club's dress code did not allow for sneakers, and Wolfes did not make an exception for the Lucci event. Id. Once guests began to arrive, some guests stated that they had booked table bottle service. Id. at ¶ 37. Embay admitted that he went around the club's usual protocol of the manager taking reservations for table bottle service. Id. Instead, Embay sold tickets and table service on eventbright.com without the approval of anyone at SJ Live. Id. Because Wolfes was concerned that there would be double-bookings which would create conflict, she cancelled the Lucci event and closed SJ Live's doors, though she allowed about 150 guests who had already entered the club to stay until the club's regular closing time. Id. at ¶¶ 37-38. Wolfes also told Embay to leave. Id. at ¶ 37. Once the club doors were closed, security dispersed the crowd of people trying to enter the club within 15 to 20 minutes. Id. at ¶ 38. At 1:38 a.m. on the night of the Lucci event, gunshots were fired in a shared parking lot behind SJ Live. Id. at ¶ 39. There were no injuries. Id. Embay turned out to be a suspect in the shooting, so Wolfes provided Lieutenant Trayer of San Jose Special Investigations Vice Unit with security camera footage to assist in the criminal investigation. Id. at ¶¶ 37, 39. A few weeks after the Lucci incident, on July 17, 2017, [1] San Jose's chief of police Edgardo Garcia issued a Notice of Intended Action informing Plaintiff that the City intended to revoke SJ Live's entertainment permit. Id. at ¶ 13.

         The Notice of Intended Action was based on the following alleged violations: (1) “using an unlicensed promoter (violation of SJMC § 6.62.200)”[2]; (2) “leaving a significant group of patrons on the peripheral of the business exterior (violation of SJMC § 6.60.240 F))”; (3) “failing to have security in or near the adjacent parking lot at the time of the shooting (violation of SJMC§ 6.60.240 (C))”; (4) “[n]ot maintaining a valid conditional use permit (violation of SJMC § 6.60.200)”; (5) “[o]perating the business in such a way that it constitutes a public nuisance . . . (violation of SJMC § 6.60.290)”; (6) “[c]reating a public nuisance by maintaining or using the property in a manner that jeopardizes or endangers health, safety, or welfare of persons on the premises or in the surrounding areas . . . (violation of SJMC § 1.13.050)”; and “[o]perating a disorderly house (violation of Cal. Bus. [a]nd Prof. Code § 25601)”. Id. at ¶ 13.

         Plaintiff believes that the attempt to revoke SJ Live's entertainment permit was politically motivated. As evidence of this political motivation, it is alleged that SJ Live's owner/manager Jenny Wolfes' other attempts at opening other ventures in San Jose, such as a bar, were repeatedly subject to the San Jose City Council's interference. Id. at ¶¶ 27-28. Furthermore, SJ Live is in the San Jose Bank of Italy Building, which investors were able to purchase in its entirety subject to SJ Live's lease. Id. at ¶ 29. Plaintiff claims that city officials “specifically targeted SJ Live with the most severe sanctions available[, revocation of SJ Live's entertainment permit, ] in order to clear the way for the redevelopment of the Bank of Italy Building.” Id. at ¶ 31. Plaintiff believes that proposed revocation of the entertainment permit was disproportionate because “other permitted entertainment businesses had far worse violations in recent years, [and] the actions taken by the Police Department against those businesses were far less severe.” Id. at ¶ 44.

         B. Procedural History

         After the July 17, 2017 notice of the intended revocation of SJ Live's entertainment permit effective July 28, 2017, SJ Live requested an administrative hearing to review Defendant's intended revocation of SJ Live's entertainment permit. Id. at ¶ 15. On October 11, 2017, an administrative hearing was held before deputy chief of police Mark Bustillos. Id. On November 17, 2017, Bustillos issued a “Notice of and Decision on Intended Action to Revoke Entertainment Permit, in which the City announced its decision to suspend SJ Live's entertainment permit for thirty days” as opposed to completely revoking the entertainment permit. Id. Bustillos found that Plaintiff violated the SJMC by: (1) hiring an unlicensed promoter for whom Plaintiff was responsible for, and creating or resulting in a public nuisance. Id.

         SJ Live then appealed the suspension to the Appeal Hearings Board, which held a hearing on February 8, 2018. Id. at ¶ 16. In its written decision mailed on February 26, 2018, the Board rejected the administrative hearing's finding regarding the hiring of an unlicensed promoter, but upheld the public nuisance charge. Id. at ¶ 17. Thus, the Board upheld the suspension of SJ Live's entertainment permit for 30 days. Id.

         On March 1, 2018, Plaintiff brought suit in this Court against Plaintiff. ECF No. 1. The complaint was accompanied by an ex parte motion for a temporary restraining order. ECF No. 2. The temporary restraining order was denied without prejudice on March 1, 2018.

         On March 2, 2018, Plaintiff filed an amended motion for a temporary restraining order. ECF No. 15. That same day, the Court directed the Plaintiff to serve Defendant, and ordered Defendant to respond. ECF No. 18. Defendant filed a response on March 2, 2018. ECF No. 20. On March 2, 2018, the amended motion for a temporary restraining order was denied. ECF No. 22.

         On March 12, 2018, Plaintiff filed a Writ of Administrative Mandamus in the Superior Court of Santa Clara County. ECF No. 37-1, Ex. C at i. On April 24, 2018, the Superior Court ruled that the administrative decision to suspend Plaintiff's entertainment permit was supported by substantial evidence. ECF No. 56, Ex. D at 2-3.

         On April 6, 2018, Defendant answered Plaintiff's federal complaint in the instant case, but Plaintiff filed a first amended complaint (“FAC”) on June 20, 2018. The City filed its motion to dismiss and/or strike the FAC on July 20, 2018. ECF No. 37.

         In the FAC, the Plaintiff alleged 5 causes of action, FAC at ¶¶ 51-93: (1) violation of the First Amendment under 42 U.S.C. § 1983, id. at 12; (2) violation of due process under the Fifth Amendment under 42 U.S.C. § 1983, id. at 14; (3) denial of a fair hearing in violation of the Fourteenth Amendment under 42 U.S.C. § 1983, id. at 16; (4) interference with free speech and due process secured by Article 1, § 2 of the California Constitution, id. at 19; and (5) a partial taking under the Fifth Amendment, id. at 21.

         On October 29, 2018, the Court filed an Order Granting-in-Part and Denying-in-Part as Moot Defendant's Motion to Dismiss, and Granting Defendant's Motion to Strike. ECF No. 51 (the “October 29, 2018 Order”). The October 29, 2018 Order dismissed the FAC's first claim- violation of the First Amendment-because “Plaintiff never allege[d] which subparts of the San Jose Municipal Code violate the First Amendment, only that entire chapters of the San Jose Municipal Code violate the First Amendment.” Id. at 10. The Order struck Plaintiff's second cause of action-violation of due process under the Fifth Amendment-because the Fifth Amendment's due process clause only applies to the federal government, and all “allegations in the FAC are against municipal actors.” Id. at 8. The Order dismissed Plaintiff's third cause of action-denial of a fair hearing in violation of the Fourteenth Amendment-because Plaintiff failed to specify which SJMC code provisions allegedly violated the Fourteenth Amendment, and “the hundred or so code provisions under each San Jose Municipal Code chapter that allegedly violate the Constitution creates an insurmountable burden on the City to respond.” Id. at 11. Likewise, the Order dismissed Plaintiff's fourth cause of action-interference with free speech and due process secured by Article 1, § 2 of the California Constitution-because the Plaintiff failed to identify with particularity which portions of the SJMC allegedly violated the California Constitution. Id. at 12. Finally, the Order denied Defendant's motion to dismiss as moot for Plaintiff's fifth cause of action-a partial taking under the Fifth Amendment-because Plaintiff withdrew the partial takings claim in Plaintiff's opposition brief. Id. at 13.

         In its October 29, 2018 Order, the Court gave Plaintiff 30 days to amend the first amended complaint, and warned Plaintiff that “failure to cure the deficiencies identified in this Order will result in dismissal with prejudice.” Id.

         On November 28, 2018, Plaintiff filed a second amended complaint. ECF No. 52 (second amended complaint, or “SAC”). On December 12, 2018, Defendant filed the instant motion to dismiss, for judgment on the pleadings, and/or to strike the SAC. ECF No. 55 (“Mot.”). On January 8, 2019, Plaintiff filed its opposition. ECF No. 60 (“Opp.”). On January 18, 2019, Defendant filed a reply. ECF No. 61 (“Reply”).

         On April 9, 2019, the Court ordered additional briefing on “whether the challenged ordinances and laws in Plaintiff's first cause of action in the second amended compliant implicate the First Amendment and whether the challenged ordinances and laws constitute a prior restraint on speech.” ECF No. 68. On April 22, 2019, both parties filed additional briefing in accordance with the Court's Order. ECF Nos. 71 (Defendant's supplemental brief, or “Def. Supp. Br.”), 72 (Plaintiff's supplemental brief, or “Pl. Supp. Br.”).

         II. LEGAL STANDARD

         A. Motion to Strike under Federal Rule of Civil Procedure 12(f)

         Federal Rule of Civil Procedure 12(f) permits a court to “strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). “[T]he function of a 12(f) motion to strike is to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial.” Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983). Motions to strike are generally disfavored and “should not be granted unless the matter to be stricken clearly could have no possible bearing on the subject of the litigation. If there is any doubt whether the portion to be stricken might bear on an issue in the litigation, the court should deny the motion.” Platte Anchor Bolt, Inc. v. IHI, Inc., 352 F.Supp.2d 1048, 1057 (N.D. Cal. 2004) (internal citations omitted). “With a motion to strike, just as with a motion to dismiss, the court should view the pleading in the light most favorable to the nonmoving party.” Id. “Ultimately, whether to grant a motion to strike lies within the sound discretion of the district court.” Cruz v. Bank of New York Mellon, 2012 WL 2838957, at *2 (N.D. Cal. July 10, 2012) (citing Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010)).

         B. Motion for Judgment on the Pleadings under Federal Rule of Civil Procedure 12(c)

         “After the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). “Judgment on the pleadings is properly granted when, accepting all factual allegations in the complaint as true, there is no issue of material fact in dispute, and the moving party is entitled to judgment as a matter of law.” Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012) (brackets and internal quotation marks omitted). Like a motion to dismiss under Rule 12(b)(6), a motion under Rule 12(c) challenges the legal sufficiency of the claims asserted in the complaint. See Id. Indeed, a Rule 12(c) motion is “functionally identical” to a Rule 12(b)(6) motion, and courts apply the “same standard.” Dworkin v. Hustler Magazine, Inc., 867 F.2d 1188, 1192 (9th Cir. 1989) (explaining that the “principal difference” between Rule 12(b)(6) and Rule 12(c) “is the timing of filing”); see also U.S. ex rel. Cafasso v. Gen. Dynamics C4 Sys., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011).

         Judgment on the pleadings should thus be entered when a complaint does not plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (internal quotation marks omitted). For purposes of ruling on a Rule 12(c) motion, the Court “accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

         C. Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6)

         Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” A complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). The U.S. Supreme Court has held that Rule 8(a) requires a plaintiff to plead “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.Iqbal, 556 U.S. at 678. “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (internal quotation marks omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court “accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek, 519 F.3d at 1031 (9th Cir. 2008).

         The Court, however, need not accept as true allegations contradicted by judicially noticeable facts, see Schwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000), and it “may look beyond the plaintiff's complaint to matters of public record” without converting the Rule 12(b)(6) motion into a motion for summary judgment, Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir. 1995). Nor must the Court “assume the truth of legal conclusions merely because they are cast in the form of factual allegations.” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam) (internal quotation marks omitted). Mere “conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004).

         D. Leave to Amend

          If the Court determines that a complaint should be dismissed, it must then decide whether to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely given when justice so requires, ” bearing in mind “the underlying purpose of Rule 15 to facilitate decisions on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotation marks omitted). When dismissing a complaint for failure to state a claim, “a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Id. at 1130 (internal quotation marks omitted). Accordingly, leave to amend generally shall be denied only if allowing amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir. 2008).

         E. Judicial Notice

         Defendant requests judicial notice of 4 exhibits: (1) the Notice of Intended Action to Revoke Entertainment Permit; (2) Notice and Decision on Intended Action to Revoke Entertainment Permit; (3) the City of San Jose Appeals Hearing Board's resolution upholding the suspension of Diamond SJ's public entertainment permit; and (4) the Santa Clara County Superior Court's ruling on a Writ of Administrative Mandamus in Diamond S.J. Enterprises, Inc. v. City of San Jose (Santa Clara County Superior Court No. 18-CV-324818). The Court may take judicial notice of matters that are either “generally known within the trial court's territorial jurisdiction” or “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b). Public records, including judgments and other publicly filed documents, are proper subjects of judicial notice. See, e.g., United States v. Black, 482 F.3d 1035, 1041 (9th Cir. 2007). Defendant's 4 exhibits constitute public records and are therefore judicially noticeable. Thus, the Court GRANTS Defendant's request for judicial notice.

         III. DISCUSSION

         In the SAC, Plaintiff asserts 4 causes of action. First, Plaintiff alleges facial and as-applied violations of the First Amendment for overbreadth, vagueness, and prior restraint relating to certain provisions of the SJMC. SAC at ¶¶ 52-66. Second, Plaintiff alleges facial and as-applied violations of due process under the Fourteenth Amendment relating to certain provisions of the SJMC being too vague. Id. at ¶¶ 67-73. Third, Plaintiff alleges an as-applied violation of due process under the Fourteenth Amendment for San Jose's alleged failure to provide Plaintiff with a fair hearing. Id. at ¶¶ 74-91. Fourth, Plaintiff alleges facial and as-applied challenges to various SJMC provisions that supposedly contravene Article 1, §§ 2 and 7 of the California Constitution that guarantee free speech and due process rights. The Court addresses each cause of action in turn.

         A. First Cause of Action: Violation of the First Amendment under 42 U.S.C. § 1983

          In its October 29, 2018 Order, the Court dismissed Plaintiff's allegations of a violation of the First Amendment under § 1983 with leave to amend. ECF No. 51 at 13. Plaintiff has now filed a SAC, reasserting the First Amendment claims against Defendant. After reviewing the SAC, the Court agrees with Defendant that Plaintiff's third attempt at stating a First Amendment prior restraint claim fails.

         The Court's October 29, 2018 Order held that Plaintiff's First Amendment § 1983 claim failed to identify the specific SJMC provisions at issue and thus failed to state a claim for relief under Rule 8. ECF No. 51 at 10. The Court warned that “failure to cure the deficiencies . . . will result in dismissal with prejudice of the claims.” Id. at 13.

         Here, Plaintiff alleges that various portions of the SJMC violate the First Amendment because of vagueness, overbreadth, and impermissible prior restraint. Specifically, Defendant moves to dismiss SJMC §§ 6.62.040, 6.62.360(B), 6.60.290, 6.60.370(L), 6.60.383(F), and 6.60.240, and moves to strike the SAC's allegations at paragraphs 55 and 63. Defendant, however, has chosen only to challenge Plaintiff's prior restraint theory by claiming that “Plaintiff's allegations regarding purported prior restraint are minimal and conclusory.” Mot. at 11. Thus, Plaintiff's constitutional challenges under the theories of vagueness and overbreadth are not addressed in this order. Mot. at 11; Reply at 1. The Court ultimately concludes that each of the challenged portions of the SJMC are not prior restraints and also that the SAC's allegations with regard to the challenged portions of the SJMC are conclusory, and thus do not meet Rule 8's pleading standard. Below, the Court will address each of the challenged subsections of the SJMC and the motion to strike certain SAC allegations in turn.

         1. SJMC § 6.62.040

         SJMC § 6.62.040 defines “event promoter” as any person who:

1. Is directly or indirectly responsible for the promotion of an event as evidenced by activities such as, but not limited to contracting with the principals, selecting entertainment, advertising or otherwise holding out the event to members of the general public, inviting participants to the event, renting or controlling the event site, or serving as a designated on-side representative while the event is occurring as provided in Section 6.62.350 of this chapter; and 2. In exchange for engaging in the promotion of the event, as described in Section 6.62.040A.1., directly or indirectly receives or shares in any of the following:
a. Admission or entrance fees paid by participants or spectators;
b. Compensation, consideration or other revenue from sponsors, private donors or managers and/or owners of the event site; or c. Revenues from concessions or other sales at the event.

SJMC § 6.62.040 also defines who is not considered an event promoter. The Court finds that under various precedents defining prior restraint, SJMC § 6.62.040 is not a prior restraint on protected First Amendment activity. Moreover, the Court finds that Plaintiff's allegations that SJMC § 6.62.040 are prior restraints do not meet the pleading standard set forth in Rule 8 and in Iqbal.

         a. SJMC § 6.62.040 is not a Prior Restraint

         The United States Supreme Court has defined prior restraint to be “administrative and judicial orders forbidding certain communications when issued in advance of the time that such communications are to occur.” Alexander v. United States, 509 U.S. 544, 550 (1993) (emphasis in original) (internal quotation marks omitted). Indeed, “not every governmental action that may affect future protected expression is . . . [a] prior restraint.” Set Enterps, Inc. v. City of Hallandale Beach, 2010 WL 11549707, at *12 (S.D. Fla. Dec. 30, 2010).

         In Alexander, the defendant was an owner of an adult entertainment business convicted of obscenity charges and violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”). Id. at 546-47. Part of the defendant's sentence imposed by the district court involved forfeiting various assets, which put the defendant out of business. Id. at 546, 548-49. The defendant argued that the district court's sentence constituted a prior restraint because it “prohibit[ed] future presumptively protected expression in retaliation for prior unprotected speech.” Id. at 549. The United States Supreme Court in Alexander rejected the defendant's prior restraint argument, and emphasized that the district court's punishment did not “forbid petitioner from engaging in any expressive activities in the future, ” nor did it “require [petitioner] to obtain prior approval for any expressive activities.” Id. at 550-51. In fact, the Alexander court noted that “petitioner can go back into the adult entertainment business tomorrow, and sell as many sexually explicit magazines and videotapes as he likes, without any risk of being held in contempt for violating a court order.” Id. at 551.

         Another United States Supreme Court decision that informs whether there was any impermissible prior restraint involved an undercover officer who witnessed sexual acts and prostitution solicitations at an adult bookstore, which took place within view of the bookstore owners. Arcara v. Cloud Books, Inc., 478 U.S. 697, 698-99 (1986). County officials, relying on public nuisance ordinances that permitted the closure of properties used for lewdness or prostitution, sought to close the bookstore. Id. at 699-700. The bookstore owners claimed that closing the store would “impermissibly interfere with their First Amendment right to sell books on the premises.” Id. at 700. The Arcara court rejected the bookstore owners' arguments that closure of the bookstore would be a prior restraint. The Arcara court explained:

The closure order sought in this case differs from a prior restraint in two significant respects. First, the order would impose no restraint at all on the dissemination of particular materials, since respondents are free to carry on their bookselling business at another location, even if such locations are difficult to find. Second, the closure order sought would not be imposed on the basis of an advance determination that the distribution of particular materials is prohibited-indeed, the imposition of the closure order has nothing to do with any expressive conduct at all.

Id. at 705 n.2. Basically, the Arcara court did not find that closure of the bookstore would constitute a prior restraint because the bookstore owners could continue to sell books elsewhere, and the imposition of the closure order failed to implicate any expressive conduct.

         Thus, United States Supreme Court precedent confirms that in order for a law to be a prior restraint of speech, the law “must have a close enough nexus to expression, or to conduct commonly associated with expression, to pose a real and substantial threat of the identified censorship risks.” City of Lakewood v. Plain Dealer Pub. Co., 486 U.S. 750, 759 (1988).

         Here, SJMC § 6.62.040 is not a prior restraint on speech because it does not fall within the United States Supreme Court's definition of prior restraint. SJMC § 6.62.040 is simply an ordinance stating the definitions of “event promoter.” Like in Alexander, SJMC § 6.62.040's definition of “event promoter” neither forbids anyone “from engaging in any expressive activities in the future, ” nor requires anyone “to obtain prior approval for any expressive activities” because SJMC § 6.62.040 does not seek to regulate an event promoter's activities based on the content or type of the event being promoted. 509 U.S. at 550-51. Also, like in Arcara, where a closure order closing a bookstore was determined not to be a prior restraint because the closure order imposed no restraints on how the bookstore owners could continue to sell books elsewhere, here, SJMC § 6.62.040 imposes no restraints on what type of activity an event promoter can or cannot promote. Moreover, as City of Lakewood held, there are no “censorship risks” in defining an event promoter because SJMC § 6.62.040 does not seek to regulate the content of events arranged by an event promoter. 486 U.S. at 759.

         Similarly, the Ninth Circuit considered the constitutionality of California's licensing laws that define “psychologist” and “psychoanalyst.” Nat'l Ass'n for Advancement of Psychoanalysis v. Cal. Bd. Of Psychology, 228 F.3d 1043, 1047 (9th Cir. 2000). The Advancement of Psychoanalysis court determined that “the psychology licensing laws are not a prior restraint on speech” because “the licensing scheme neither utilizes a suspect classification nor implicates a fundamental right.” Id. at 1050, 1056. Moreover, that “psychoanalysts employ speech to treat their clients does not entitle them, or their profession, to special First Amendment protection.” Id. at 1054. Here, the event promoter licensing definitions are akin to California's licensing laws that define psychologist and psychoanalyst because both are “within the state's police power to regulate and license professions.” Id. At bottom, the Advancement of Psychoanalysis court's decision demonstrates that simply because there is a licensing requirement as a prerequisite to exercising speech-related activities, this licensing requirement is not automatically a prior restraint on speech. In fact, in the instant case, the San Jose Appeal Hearings Board dismissed the charge that Plaintiff violated the prohibition on using an event promoter without an event promoter permit. SAC at ¶ 17.

         Moreover, in Microsoft Corp. v. United States Dep't of Justice, the court considered whether 18 U.S.C. § 2705(b), part of the Stored Communications Act (“SCA”), was constitutional. 233 F.Supp.3d 887, 895 (W.D. Wash. 2017). The SCA is a statute that regulates “relations between a government entity which seeks [electronic] information; a service provider which holds information; and the subscriber of the service who owns the information and is therefore a target of investigation.” Id. at 894. “Section 2703 of the SCA authorizes the government to acquire a subscriber's information from a service provider when the subscriber is a ‘target' of the government's information request.” Id. at 895. However, 18 U.S.C. § 2705(b) allows the government to seek indefinite nondisclosure orders from courts “to prevent [plaintiff] Microsoft from telling its customers (or anyone else) of the government's demands for that information.” Id. at 896. Microsoft contended that § 2705(b) violated the First Amendment because § 2705(b) impinges on the “First Amendment right of a business to talk to [the business'] customers and to discuss how the government conducts its investigations.” Id. at 897. However, the Microsoft court held that “the indefinite nondisclosure orders that Section 2705(b) allows are not administrative prior restraints imposed by a licensing scheme because Section 2705(b) itself does not impose the prior restraint; rather, the statute allows a court to issue an order imposing a prior restraint on speech.” Id. at 906. Thus, the Microsoft court distinguished between the law allowing a court to impose a prior restraint and the prior restraint itself. Here, SJMC § 6.62.040 is an even clearer example that SJMC § 6.62.040 is not a prior restraint than the situation in Microsoft. SJMC § 6.62.040 does not allow for San Jose or a court to impose a prior restraint, unlike 18 U.S.C. § 2705(b) in Microsoft, which allowed a court to enter an indefinite nondisclosure order. Rather, SJMC § 6.62.040 defines event promoter and allows San Jose to impose sanctions for those who hire an unlicensed promoter. SAC at ¶ 15. There are no allegations that San Jose authorities cited Plaintiff for a violation of SJMC § 6.62.040 to impose a prior restraint of speech, especially because the San Jose Appeal Hearings Board ultimately rejected the charge that Plaintiff violated the prohibition on using an event promoter without a permit. Id. at ¶ 17.

         Plaintiff argues that the Ninth Circuit has recognized the First Amendment rights of concert promoters. Pl. Supp. Br. at 2 (citing Cinevision Corp. v. Burbank, 745 F.2d 560, 567 (9th Cir. 1984)). Indeed, the Ninth Circuit in Cinevision held that “[a]s a promoter of protected musical expression, Cinevision enjoys [F]irst [A]mendment rights.” Cinevision, 745 F.2d at 568. However, in the instant case, the existence of a First Amendment right for event promoters is not in doubt. The Cinevision court's decision is inapposite because the Cinevision court was never tasked with identifying whether an ordinance defining event promoters was a prior restraint on speech, so Cinevision has no bearing on the instant case.

         b. Plaintiff Fails to State a Claim that SJMC § 6.62.040 is a Prior Restraint

         “Threadbare recitations of the elements of a cause of action, supported by mere conclusory statements, do not suffice” to meet Rule 8's requirement that “a short and plain statement of the claim showing that the pleader is entitled to relief.” Iqbal, 556 U.S. at 678. Moreover, courts are not bound to accept as true a legal conclusion couched as a factual allegation.” Id. Here, in allegations relating to SJMC § 6.62.040, Plaintiff makes conclusory statements such as: the “definition [of event promoter] is sweeping in the breadth of included activities and covers a substantial number of activities unrelated to any legitimate or compelling governmental interest the statute seeks to ameliorate, ” SAC at ¶ 56; “[t]here is no legitimate or compelling interest in regulating these activities, ” id. at ¶ 58; “[b]ecause a license is required to engage in protected expressive activity, the entertainment code serves as a prior restraint, ” id. at ¶ 54. Plaintiff's allegations do not meet the pleading standard of Rule 8 because they consist of conclusory statements of law that do not meet Rule 8 and Iqbal's standards.

         c. Summary

         Thus, given that SJMC § 6.62.040 neither forbids future expressive activity nor requires advanced approval for expressive activity, SJMC § 6.62.040 is not a prior restraint on speech. Moreover, Plaintiff's allegations that SJMC § 6.62.040 is unconstitutional fails to meet Rule 8's pleading standard. Thus, Defendant's motion to dismiss Plaintiff's claim that SJMC § 6.62.040 is a prior restraint of speech is GRANTED.

         The Court finds that granting leave to amend would be futile and unduly prejudicial to Defendant. Leadsinger, Inc., 512 F.3d at 532. In its October 29, 2018 Order, the Court dismissed the First Amendment claims against Defendant because the first amended complaint failed to meet the pleading standard of Rule 8. ECF No. 51 at 9. The Court warned that “failure to cure the deficiencies identified in this Order will result in dismissal with prejudice.” Id. at 13. Nonetheless, Plaintiff failed to cure the deficiencies because Plaintiff's pleadings still fail to meet the pleading standard of Rule 8. In addition, any amendment would be futile because SJMC § 6.62.040 is not a prior restraint on speech, an obstacle that cannot be overcome with amended pleadings. Moreover, it would be unduly prejudicial to Defendant to litigate a third motion to dismiss regarding the same deficiencies. Thus, leave to amend is DENIED.

         2. SJMC ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.