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

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

December 30, 2019

The CITY OF SAN JOSE, Defendant.

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          D. Gill Sperlein, Randazza Legal Group, PLLC, San Francisco, CA, for Plaintiff.

          Kathryn Jennifer Zoglin, Office of the City Attorney, San Jose, CA, for Defendant.


         LUCY H. KOH, United States District Judge.

         Before the Court is Defendant City of San Jose's motion for summary judgment, ECF No. 102, and Plaintiff Diamond S.J. Enterprise, Inc.'s cross-motion for partial summary judgment, ECF No. 103. Both motions have been fully briefed. Having considered the submissions of the parties, the relevant law, and the record in this case, the Court GRANTS Defendant's motion for summary judgment and DENIES Plaintiff's cross-motion for partial summary judgment.

         I. BACKGROUND

         A. Factual Background

         Defendant's version of the facts is drawn from its request for judicial notice of the state administrative record, ECF No. 102-1 ("RJN"). Plaintiff also asks the Court to adopt Defendant's statement of facts for purposes of summary judgment. Pl.'s Mot. at 1. A court "may take notice of proceedings in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to matters at issue." United States ex rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992). The Court GRANTS Defendant's request for judicial notice. The Court also grants Plaintiff's request that the Court adopt

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Defendant's statement of facts for purposes of the instant motions.

         Plaintiff Diamond S.J. Enterprise, Inc. operates a nightclub called SJ Live, sometimes referred to as Studio 8. The nightclub is owned by Jenny Wolfes, who also owns two other clubs. Plaintiff's patrons generally reserve tables and agree to purchase bottles of alcohol, referred to as "table service" or "bottle service," rather than paying in advance.

         Daniel Embay, an event promoter, approached Wolfes to have her book an artist named "Lucci," whom Wolfes agreed to book for the evening of May 27, 2017. However, during the event, Wolfes realized that Embay had collected money from some people in advance for table service. Wolfes believed that Embay had "double-booked" tables, when Embay was not supposed to book any tables at all. Wolfes responded by telling Embay, "We're done." Wolfes paid Embay approximately $5,000, cancelled the entertainment, and asked Embay to leave. Embay then threatened Wolfes in front of security guards. Wolfes soon closed the front door.

         San Jose Police Officer Condon was later called to the scene to respond to a call reporting that a shooting took place at approximately 1:30 a.m. Officer Condon learned that a man, later identified as Embay, exited Plaintiff's establishment, walked to his car, and retrieved a gun from the trunk. Embay purportedly walked toward a group of approximately ten people with his gun, and several people were seen ducking and running out of his way. Embay fired his gun multiple times before he returned to his car and drove out of the parking lot.

         Upon reviewing the footage, the San Jose Police Department noticed a number of security violations. For example, the outside area of the club was not cleared once the club decided to close its front door. Wolfes estimated that 40 to 50 people were in line when the doors were closed. Wolfes explained that people who were told they would have a table that night became angry once the doors closed, and they stormed the front door. Wolfes also acknowledged that she had not secured an indemnification agreement with Embay prior to the event.

         On July 17, 2017, the San Jose Police Chief issued a Notice of Intended Action to Revoke Entertainment Permit to Plaintiff. Plaintiff requested an administrative hearing to review Defendant's intended revocation of SJ Live's entertainment permit. On October 11, 2017, an administrative hearing was held before deputy chief of police Mark Bustillos. On November 17, 2017, Bustillos issued a "Notice of and Decision on Intended Action to Revoke Entertainment Permit, in which Defendant announced its decision to suspend SJ Live's entertainment permit for thirty days," in lieu of completely revoking the entertainment permit. Bustillos found that Plaintiff violated SJMC Chapter 6.60 by hiring an unlicensed promoter for whom Plaintiff was responsible and by creating a public nuisance.

         SJ Live then appealed the suspension to the Appeal Hearings Board, which held a hearing on February 8, 2018. 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. Thus, the Board affirmed the suspension of SJ Live's entertainment permit for 30 days.

         B. Procedural History

         On March 1, 2018, Plaintiff brought suit in this Court against Defendant. 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

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on March 1, 2018. ECF No. 12. 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. On March 2, 2018, the Court denied Plaintiff's amended motion for a temporary restraining order. ECF No. 22.

         On June 20, 2018, Plaintiff filed a first amended complaint ("FAC"). ECF No. 32. Defendant filed its motion to dismiss and/or strike the FAC on July 20, 2018, ECF No. 37, which the Court granted in part and denied as moot in part, ECF No. 51.

         On November 28, 2018, Plaintiff filed a second amended complaint. ECF No. 54 ("Second Amended Complaint," or "SAC"). The SAC alleges four claims for relief against Defendant: (1) a claim under 42 U.S.C. § 1983 for violation of Plaintiff's First Amendment rights, pursuant to theories of overbreadth, vagueness, and prior restraint; (2) a claim under 42 U.S.C. § 1983 for violation of Plaintiff's Fourteenth Amendment due process rights for impermissible vagueness; (3) a claim under 42 U.S.C. § 1983 for violation of Plaintiff's Fourteenth Amendment due process rights to a fair hearing; and (4) a claim under the California Constitution for interference with free speech and due process rights. Id.

         On December 12, 2018, Defendant filed a motion to dismiss, for judgment on the pleadings, and/or to strike the SAC. ECF No. 55. On July 1, 2019, the Court granted Defendant's motion in part and dismissed all of Plaintiff's claims, with the exception of its First Amendment claim based on theories of overbreadth and vagueness ("MTD Order"). ECF No. 82. On September 5, 2019, the Court denied Plaintiff's request to file a motion for reconsideration and denied Plaintiff leave to amend the Second Amended Complaint. ECF No. 97.

         On October 31, 2019, Defendant filed a motion for judgment on the pleadings, summary judgment, and/or partial summary judgment, ECF No. 102 ("Def's Mot."). On November 14, 2019, Plaintiff filed an opposition, ECF No. 105 ("Opp'n to Def.'s Mot."), and Defendant filed a reply on November 21, 2019, ECF No, 107 ("Reply to Def's Mot.").

         Plaintiff filed a cross-motion for partial summary judgment, ECF No. 103 ("Pl.'s Mot."). On November 14, 2019, Defendant filed an opposition, ECF No. 104 ("Opp'n to Pl.'s Mot."), and Plaintiff filed a reply on November 21, 2019, ECF No. 107 ("Reply to Pl.'s Mot."). Defendant filed an amended opposition on November 22, 2019, ECF No. 108, which only added a sentence to the table of contents.

         In its opposition, Defendant objects to evidence cited by Plaintiff in support of Plaintiff's cross-motion for partial summary judgment. Specifically, Defendant objects to paragraphs 4, 8, and 9 of the Declaration of Jenny Wolfes, ECF No. 103-1, on grounds of relevance and lack of foundation. Opp'n to Pl.'s Mot. at 2. Defendant also objects to Plaintiff's citations to its own unverified complaint as evidence. Id. However, even considering the evidence to which Defendant objects, the Court denies Plaintiff's cross-motion for partial summary judgment and grants Defendant's motion for summary judgment, as explained below. Accordingly, the Court overrules the objections as moot.


         A. Summary Judgment

         Summary judgment is proper where the pleadings, discovery, and affidavits show that there is "no genuine dispute as to any material fact and [that] the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Material facts are those which may affect the outcome of the case.

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See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See id.

         The party moving for summary judgment bears the initial burden of identifying those portions of the pleadings, discovery and affidavits that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party meets its initial burden, the nonmoving party must go beyond the pleadings and, by its own affidavits or discovery, "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). If the nonmoving party fails to make this showing, "the moving party is entitled to judgment as a matter of law." Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548.

         At the summary judgment stage, the Court must view the evidence in the light most favorable to the nonmoving party: if evidence produced by the moving party conflicts with evidence produced by the nonmoving party, the judge must assume the truth of the evidence set forth by the nonmoving party with respect to that fact. See Santillan v. USA Waste of Cal., Inc., 853 F.3d 1035, 1043 n.8 (9th Cir. 2017).

         B. First Amendment

         1. Protected Speech

         "The First Amendment applies to state laws and regulations through the Due Process Clause of the Fourteenth Amendment." Nat'l Ass'n for Advancement of Psychoanalysis v. California Bd. of Psychology, 228 F.3d 1043, 1053 (9th Cir. 2000). Although the First Amendment protects "the freedom of speech," U.S. Const. amend I, its protections are not limitless. The United States Supreme Court has distinguished between "restrictions on protected expression," which are subject to First Amendment scrutiny, and "restrictions on economic activity or, more generally, on nonexpressive conduct," which do not ordinarily implicate the First Amendment's protections. Sorrell v. IMS Health Inc., 564 U.S. 552, 567, 131 S.Ct. 2653, 180 L.Ed.2d 544 (2011).

         However, not every law can be easily categorized as either directed at protected expression or directed at commerce or conduct because "every civil and criminal remedy imposes some conceivable burden on First Amendment protected activities." Arcara v. Cloud Books, Inc., 478 U.S. 697, 706, 106 S.Ct. 3172, 92 L.Ed.2d 568 (1986). The First Amendment may be implicated where "`speech' and `non-speech' elements are combined in the same course of conduct," see United States v. O'Brien, 391 U.S. 367, 376, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968), although merely "incidental burdens on speech" are not alone sufficient to trigger First Amendment protections, Sorrell, 564 U.S. at 567, 131 S.Ct. 2653.

         Accordingly, to determine whether a governmental restriction on conduct with both expressive and nonexpressive elements implicates the First Amendment, the "threshold question is whether conduct with a `significant expressive element' drew the legal remedy or the ordinance has the inevitable effect of `singling out those engaged in expressive activity.'" Int'l Franchise Ass'n, Inc. v. City of Seattle,803 F.3d 389, 408 (9th Cir. 2015) (quoting Arcara, 478 U.S. at 706-07, 106 S.Ct. 3172). Put another way, a regulation does not implicate the freedom of expression unless nonexpressive conduct "intimately related to expressive conduct" led the ...

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