Beg Investments, LLC v. Alberti
85 F. Supp. 3d 13
D.D.C.2015Background
- BEG Investments operated Twelve Restaurant and Lounge in D.C.; ABRA/Alcoholic Beverage Control Board (the Board) renewed its liquor license in 2011 conditioned on hiring MPD reimbursable police details when providing certain live entertainment after reported violent incidents.
- Plaintiff sued six Board members in 2013 asserting RICO (Hobbs Act extortion), §1983 First Amendment and Equal Protection claims, and a Takings Clause claim; the court dismissed the complaint but granted leave to amend only the First Amendment and Equal Protection claims.
- Plaintiff filed an amended complaint reasserting all prior claims (including RICO and Takings) and added a Title VI claim; Defendants moved to strike/dismiss for failure to obtain Rule 15(a) leave and for failure to state claims.
- Plaintiff sought leave to file a supplemental complaint adding post-filing events (2013–2014): alleged fabricated noise complaint by an OAG attorney, two license cancellations/suspensions after hearings, an MPD sergeant’s allegedly false statements, and new defendants; Defendants opposed as futile and invoked various immunities and abstention doctrines.
- The Court struck/dismissed the improperly reasserted RICO and Takings claims (failure to seek leave and futility), dismissed Equal Protection/Title VI/§1985/First Amendment claims in the amended complaint for failure to plead discriminatory or content-based enforcement plausibly, granted in part and denied in part leave to supplement (permitting only an official-capacity First Amendment retaliation claim based on the May 14, 2014 license cancellation), and awarded limited Rule 11 fees for counsel’s baseless allegation that an OAG attorney fabricated an investigative report.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether amended complaint may reassert claims dismissed previously without seeking Rule 15(a) leave | Plaintiff contends prior court order granting leave to amend First Amendment and Equal Protection claims implicitly permitted broader amendment / sought to preserve claims for appeal | Defendants: Rule 15(a) requires court permission or consent; plaintiff lacked leave for RICO and Takings counts | Court: Struck RICO (Counts I, II) and Takings (V) — no leave sought and reassertion futile |
| Whether RICO and RICO conspiracy claims (individual & official capacities) and Hobbs Act theory survive | Plaintiff reasserts earlier RICO theory and adds minor facts (interstate commerce, occasional no-shows by MPD) | Defendants: qualified immunity bars individual claims; municipalities/official-capacity RICO not viable because treble damages punitive and municipalities lack requisite criminal intent | Court: Futile — individual claims barred by qualified immunity; official-capacity RICO futile (municipal RICO liability rejected) |
| Whether Fifth Amendment Takings claim (payments for police detail) states a claim | Plaintiff argues extortionate payments to MPD constitute a taking | Defendants: mere payment of money is not a Fifth Amendment taking; prior dismissal correct | Court: Futile/reaffirmed dismissal — payment without more is not a taking |
| Whether Equal Protection / Title VI / §1985 discrimination claims are pled plausibly | Plaintiff alleges pattern of reimbursable details imposed on predominantly Black, urban-music venues; points to other venues treated similarly and alleged disparate treatment | Defendants: complaints lack specific comparator allegations or facts showing discriminatory intent; allegations are conclusory | Court: Dismissed — pleadings fail Iqbal/Twombly plausibility; no adequate facts showing intentional or disparate treatment |
| Whether First Amendment claim (content-based or selective enforcement re music) states a claim | Plaintiff contends reimbursable detail condition was used to suppress urban music (R&B/Hip-Hop/Go-Go) and patrons | Defendants: condition is content-neutral time/place/manner regulation justified by public safety; if selective enforcement claim, plaintiff failed to plead similarly situated comparators; Board has standards and judicial review | Court: Dismissed — condition facially content-neutral; selective-enforcement theory inadequately pleaded; no plausible discriminatory intent alleged |
| Whether supplemental retaliation/defamation/§1985 claims based on post-filing events should be permitted | Plaintiff seeks to add First Amendment retaliation claims (fabricated noise complaint by OAG attorney; May 14 and June 6, 2014 closures), defamation claims against MPD sergeant, and §1985 conspiracy claim | Defendants: claims are futile due to timing, immunity (prosecutorial, quasi-judicial, absolute for witnesses), Younger abstention for ongoing administrative proceedings, and inadequately pleaded defamation/§1985 | Held: Court denied leave as to fabricated-noise theory (implausible and counsel failed reasonable inquiry) and denied defamation/§1985 supplemental claims as futile; granted leave only for official-capacity First Amendment retaliation claim based on May 14, 2014 cancellation (deemed filed today) but individual-capacity retaliation claims barred by immunities or Younger doctrine |
| Whether Rule 11 sanctions are appropriate for (a) reasserting previously dismissed claims and (b) alleging fabrication of investigative report by OAG attorney | (a) Plaintiff argues reassertion preserved appeal and was not in bad faith; (b) Plaintiff defended factual basis, invoked discovery | Defendants: reassertion frivolous and counsel made baseless fabrication allegation without reasonable inquiry; sought fees/sanctions | Held: No monetary sanctions for reassertion (court declines extreme sanction); Rule 11 relief granted limitedly for fabrication allegation — award of defendants’ attorneys’ fees/costs for sanctions motion because counsel pressed a grave, baseless allegation and declined safe-harbor cure |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state a plausible claim, not mere conclusory allegations)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for antitrust and general pleading)
- Imbler v. Pachtman, 424 U.S. 409 (1976) (prosecutorial absolute immunity for advocacy functions)
- Buckley v. Fitzsimmons, 509 U.S. 259 (1993) (no absolute immunity for prosecutors performing investigative functions)
- Newport v. Fact Concerts, Inc., 453 U.S. 247 (1981) (municipal immunity from punitive damages and related considerations)
- Genty v. Resolution Trust Corp., 937 F.2d 899 (3d Cir. 1991) (civil RICO claims cannot be maintained against municipalities)
- Ward v. Rock Against Racism, 491 U.S. 781 (1989) (time, place, manner doctrine and content neutrality analysis)
- Hafer v. Melo, 502 U.S. 21 (1991) (official-capacity suits implicate municipal liability principles)
- Ohio Civil Rights Comm'n v. Dayton Christian Schs., Inc., 477 U.S. 619 (1986) (Younger abstention applies to certain state administrative proceedings)