2:15-cv-02240
D. Nev.Mar 8, 2019Background
- Dotty’s Store #110 opened in March 2015 with a temporary restricted gaming license for 15 machines and had state approval for a 15-machine permanent restricted license.
- Plaintiff applied to convert to a permanent restricted gaming license; City Council repeatedly abeyed the decision and ordered a study on tavern gaming revenue.
- At hearings in November 2015, the Council initially voted to grant seven machines, reconsidered, and on November 18, 2015 granted a permanent restricted license for seven machines (5–2 vote).
- Plaintiff sued, alleging the reduction from 15 to 7 machines was arbitrary and constituted class-of-one equal protection and other relief; jury later found liability on the class-of-one claim, leaving mandamus and judicial review claims.
- Plaintiff sought to supplement the administrative record with exhibits and emails it had submitted to the Council; the Court found those exhibits were not clearly part of the record transmitted and denied supplementation.
- The Court vacated the Council’s seven-machine grant and remanded for reconsideration because the record lacked findings explaining why Dotty’s was treated differently and whether the Council considered Plaintiff’s exhibits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Council’s grant of only 7 machines was arbitrary or capricious under review standards | Council applied a novel revenue-focused interpretation of LVMC 6.40.020 and failed to treat Dotty’s like similarly situated applicants; exhibits would show disparate treatment | Council acted within discretion, considered tavern revenue, and supported decision with staff data and deliberation | Court: Record lacks sufficient findings and clarity on treatment; decision vacated and remanded for reconsideration |
| Whether the court may consider extra-record evidence (supplementation) | Exhibits and emails were presented to Council and are material to show disparate treatment; should be added to the record | Documents were not part of the administrative record transmitted and were not shown to have been considered by Council; supplementation improper | Denied supplementation of emails and exhibits because court may only consider evidence presented to the agency absent a showing of materiality and good reason for omission |
| Appropriate remedy/remand vs. direct relief (injunction awarding 15 machines) | Plaintiff seeks a permanent injunction directing City to grant full 15 machines like other licensees | City contends remand and discretionary reconsideration are appropriate; no basis to force grant | Court: Remand to Council for rehearing; denies order forcing grant of 15 machines; directs Council to apply standards consistently |
| Standard of review/applicable evidence weight | Plaintiff argues Council lacked substantial evidence to justify differential treatment | City argues substantial evidence supports its discretionary judgment and courts should not substitute their judgment | Court reiterates substantial-evidence standard and defers to agency if supported, but finds current record inadequate to apply that standard conclusively |
Key Cases Cited
- City Council of City of Reno v. Irvine, 721 P.2d 371 (Nev. 1986) (municipal board actions may be subject to judicial action when arbitrary or capricious)
- Consolidated Municipality of Carson City v. Lepire, 914 P.2d 631 (Nev. 1996) (court reviewing agency decisions may consider extra-record evidence only if material and there are good reasons it was not presented to the agency)
- Clark County Liquor & Gaming Licensing Board v. Simon & Tucker, Inc., 787 P.2d 782 (Nev. 1990) (court should not substitute its judgment for board’s when decision is supported by substantial evidence)
- Stratosphere Gaming Corp. v. City of Las Vegas, 96 P.3d 756 (Nev. 2004) (defines "substantial evidence" as that which a reasonable mind might accept as adequate)
- General Motors v. Jackson, 900 P.2d 345 (Nev. 1995) (district court may reverse and remand for factual determinations when the record lacks evidence to decide an issue)
- Tighe v. Von Goerken, 833 P.2d 1135 (Nev. 1992) (court vacated order directing a permit award and remanded to the council for rehearing to consider evidence)