Eisenberg v. City of Miami BeachEisenberg v. City of Miami Beach
ORDER
THIS CAUSE came before the Court on Defendant, City of Miami Beach’s (the “City[’s]”) Motion for Judgment on the Pleadings ... (“Motion”) [ECF No. 52]. Plaintiffs, Rod Eisenberg (“Eisenberg”) and Eisenberg Development Corp. (“Ei-senberg Development”) (collectively, “Plaintiffs”) filed their Response ... (“Response”) [ECF No. 61], to which the City replied (see [ECF No. 67]). The undersigned has carefully considered the parties’ written submissions, the record, and applicable law.
I. BACKGROUND
Between 2004 and 2009, Plaintiffs and others voiced many complaints about the health and safety risks and Code compliance violations of an abandoned hotel in their neighborhood. (See id. ¶ 20). The City investigated some of these complaints but did not resolve the problems with the abandoned building. (See id.). In 2009, Eisenberg urged the City’s Zоning Board of Adjustment to handle the Code violations more quickly, requesting the Board deny the abandoned hotel owner’s request for a one-year extension to comply with the Code. (See id.). The Zoning Board ultimately required the abandoned hotel owner to board the building and remove loose debris before granting the extension. (See id.). In light of this, Eisenberg withdrew his objection, and the Zoning Board later approved the extension. (See id.).
Between 2006 and 2012, multiple City officials were investigated and prosecuted for corruption. In 2006, a City electrical inspector was arrested for soliciting bribes (see id. ¶ 14); in 2008, a City fire protection analyst was fired after reporting suspicions of kickbacks (see id. ¶ 15), and a City planner, examiner, and inspector were all caught accepting bribes (see id. ¶ 16); in 2012, City procurement director, Gus Lopez, was charged with sixty-three felony counts, including racketeering, bid-tampering, and illegal compensation (see id. ¶ 17), and seven City Code compliance and fire department inspectors, including the City’s lead code compliance officer, Jose Alberto (“Alberto”), were arrested for
The Sadigo Court Apartment Hotel (the “Sadigo”) is a “contributing historic structure” in the City’s Museum Historic District. (Id. ¶ 6). The Sadigo opened in 1936 as an apartment with transient rentals, and it has continued operating in this fashion without objection by the City. (See id. ¶ 22). The Sadigo is located in a RM-2 zoning district, where the “ ‘main permitted uses’ include apartments, apartment hotels, and hotels.” (Id. ¶ 23 (quoting City of Miam I Beaoh LaNd Dev.Code (the “City Code”) §§ 142-212)). According to the City Code, “hotels” are only intended for occupancy by transient residents, and “apartments” require cooking facilities. (Id. (quoting City Code § 114-1)). The City Code permits transient rentals for apartment hotels and apartments in RM-2 zones. (See id. ¶ 24). The Sadigo’s original City-issued certificates of use and occupancy (“CO[s]”) were for use as an apartment building, and the Sadigo has maintained this status. (See id. ¶ 22). For a period of time, the Sadigo rented units on an annual basis. (See id. ¶25).
In 2006, after obtaining a state transient public lodging establishment license frоm the Florida Department of Business and Professional Regulation’s Division of Hotels and Restaurants, the Sadigo resumed transient rentals, for which it is licensed. (See id. ¶¶ 25-26). Plaintiffs verified with the City that transient apartment rentals are legally permissible for the zoning district and the COs applicable to the Sadigo. (See id. ¶27). Plaintiffs obtained a City Resort Tax Registration Certificate for the Sadigo, required for transient (six months or less) rentals of hotel and apartment units. (See id. (citing City Code §§ 102-306)).
Upon renting to transient guests in late 2006, the Sadigo constructed a cold food preparation area in an interior courtyard “pursuant to a City-approved and issued building permit.” (Id. ¶ 29). “After construction was completed and signed[-]off [ ] by the City, the City informed Plaintiffs that it was a ‘hotel[,]’ not an ‘аpartment’ ....” (Id.). The City required the Sadigo to obtain a new CO as a “hotel” because it rented apartments to transient guests and operated a food preparation area that was actually a “restaurant.” (Id.). Plaintiffs complied and applied for a CO as a “hotel” (id. ¶ 31), and were later told the Sadigo must comply with the fire protection standards applicable to “brand new hotel structures” (id. ¶32 (internal quotation marks omitted)).
From 2006 to 2012, Plaintiffs received numerous notices of violation and cease and desist orders
Plaintiffs objected to the City’s classification of the Sadigo as a new hotel and attended a City Commission meeting on January 19, 2011. (See id. 1129). At the meeting, Plaintiffs submitted materials explaining the various reasons the Sadigo should not be treated as a new hotel. (See id.). The Mayor, City Commissioners, City Manager, and City Attorney were indifferent, and the City Fire Chief took offense to Plaintiffs’ claims of unfair treatment. (See id.). Plaintiffs believe the City Fire Marshal told the Sadigo’s mortgagee the Sadigo was illegally operating as a hotel. (See id. ¶ 38). On January 21, 2011, that mortgagee advised it would not renew its loan after previously encouraging Plaintiffs to renew it. (See id. ¶ 37). Plaintiffs were left with no choice but to refinance the Sadigo at a higher interest rate — at enormous additional cost. (See id.).
In 2011, Eisenberg Development filed a petition in the state court seeking a temporary injunction against the City. (See MTD App., Ex. 4 at 2 [ECF No. 17-4]); see also Eisenberg Dev. Corp. v. City of Miami Beach, No. 11-20234 CA 15, 4 (Fla. 11th Cir.Ct. Jan. 10, 2012) (order denying emergency temporary injunction). The state trial court held an evidentiary hearing regarding compliance with the Florida Fire Prevention Code (“Fire Code”). (See id.). On January 10, 2012, the court denied the request for a temporary injunction. (See id. 5). The trial court’s decision was affirmed. See Eisenberg Dev. Corp. v. City of Miami Beach,
In April 2011, the City informed the Sadigo’s longstanding client, the Art Basel Foundation, the Sadigo was illegally operating as a hotel, and as a result the Foundation severed its business relationship with Plaintiffs. (See Compl. ¶ 39). In June 2011, the City sent undercover police officers to the Sadigo to verify the Sadigo was renting to transient guests. (See id. ¶ 40). After observing transient rental activity, City police officers shut down the Sadigo for noncompliance with City fire codes, evicting the Sadigo’s tenants and guests. (See id.). This shutdown caused the Sadigo’s largest client to sever its business relationship with Plaintiffs. (See id. ¶ 41).
In December 2011, fifteen police offers, ten code enforcement officers (including Alberto), and five fire officials forcibly shut down the Sadigo a second time for violations of City fire codes. (See id. ¶42). The shut down occurred while the Sadigo was hosting the “Poo[l] Art Fair” during the Art Basel Miami Beach art show, forcing guests to vacate the premises. (Id. ¶¶ 42-43). Alberto offered to solve Eisen-berg’s problems “by using ‘his people,’ insinuating a bribe would be due from [] Eisenberg. When [] Eisenberg refused by stating he already had legal counsel working on it, Alberto stated ... Eisen-berg would not get far using legal means.” (Id. ¶ 44). Eisenberg was then arrested. (See id. ¶ 45). In April 2012, Alberto and
The three remaining counts in the Complaint allege a First Amendment retaliation claim in Count II (see Compl. ¶¶ TITS); violation of due process under 42 U.S.C. section 1983 in Count III (see id. ¶¶ 79-86); and violation of due process under Articles I and X of the Florida Constitution in Count IV (see id. ¶¶ 87-94). The City now moves for judgment on the pleadings.
II. LEGAL STANDARD
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 appropriate where there are no material facts in dispute and the moving party is entitled to judgment as a matter of law.’ ” Palmer & Cay, Inc. v. Marsh & McLennan Cos., Inc.,
In resolving a motion for judgment on the pleadings, the Court considers the entire pleadings: the complaint, the answer, and any documents attached as exhibits. McGath v. Hamilton Local School Dist.,
III. ANALYSIS
The City moves for judgment on the pleadings arguing much as it did in its Motion to Dismiss the Complaint [ECF No. 16], that the Court should judicially notice and give deference to prior determinations made by municipal officials and organizations. (See Mot. 10-11; Reply 2). Again, the City contends the doctrine of collateral estoppel precludes Plaintiffs from relitigating issues adjudicated in pri- or proceedings. (See Reply 2-4). Specifically with regard to Count II, the City maintains Plaintiffs do not state a plausible claim of First Amendment retaliation, challenging Plaintiffs’ ability to establish a causal connection between the City’s allegedly retaliatory actions and any adverse effect on Plaintiffs’ speech. (See Mot. 11-14). As to Counts III and IV, the City argues Plaintiffs cannot state substantive due process claims under federal and state law, respectively, because an implied fundamental right is not at stake, and the City’s efforts to enforce the Fire Code are rationally related to public health and safety. (See Mot. 15-17). The Court considers these issues, again, and in particular examines new authorities and arguments
A. Collateral Estoppel and Administrative Deference
Under Florida lаw, for Plaintiffs’ claims to be precluded by the doctrine of collateral estoppel: “(1) an identical issue, (2) [must have] been fully [and fairly] litigated, (3) by the same parties or their privies, and (4) a final decision ... rendered by a court of competent jurisdiction.” Wingard v. Emerald Venture Florida LLC,
The City describes three categories of agency determinations it considers final and binding because Plaintiffs’ claims were withdrawn, or the findings were not appealed or overturned on appeal. (See Mot. 4-9). The first category includes Fire Marshal determinations resulting in notices of violation and cease and desist orders. (See id. 4-6). The second is City Building Official determinations, including BORA appeals. (See id. 7-8). The third category encompasses determinations by the Florida Historical Task Force. {See id. 8-9). The City also contends essential issues of fact and law were adjudicated in the prior state court proceeding denying' Eisenberg Development’s request for a temporary injunction against the City. (See id. 9). Given these prior determinations, the City insists the present claims are precluded because they concern identical underlying issues previously decided, and Plaintiffs
Plaintiffs contend the prior determinations did not address the constitutional issues raised here, specifically the allegedly pretextual and retaliatory nature оf the City’s conduct. (See Resp. 4-10). They further argue the determinations are not final and challenge whether they had a full and fair opportunity to litigate issues before municipal agencies, including the BORA and the Historical Task Force. (See id. 7-8).
The factors at issue — whether the prior proceedings involved identical issues critical to the prior determination, were fairly litigated, and are final determinations
The City Building Official, after refusing to accept Maxwell’s equivalency report, issued a decision requiring the Sa-digo to install a fire sprinkler system. (See Answer, Ex. 11 [ECF No. 51-11]). Plaintiffs formally appealed the City Building Official’s decision. The extent to which the BORA provided a full and fair opportunity to litigate is unclear. The only filings in the record related to the BORA determination include an April 7, 2010 memorandum regarding the Sadigo’s “Change of Division Within Same Occupancy” from an R-2 to an R-l designation,
The BORA narrowly examined the issue whether “the Building Official is incorrect in his interpretation of the Florida Building Code (Existing), 2007 Edition; Existing Section 1106, that an evaluation'report shows each existing safety feature is in compliance with the Historic Buildings Chapter and additional installation of safety features would damage the integrity of the historic structure.” (Id. at 1). The BORA reviewed the submitted equivalency report, found it incomplete, and determined the report did not substantiate the Sadigo’s existing alternative fire prevention systems were in fact equivalent to a fire sprinkler system. (See id. 2). Because the scope of the BORA review was limited to considering an incomplete equivalency report, the BORA’s finding is not given preсlusive effect. See Hercules Carriers, Inc.,
The most comprehensive, quasi-judicial hearings seem to have been held by the Historical Task Force. There, Ei-senberg presented arguments and evidence in person in an adversarial pro-
The present case involves constitutional law claims relating to the exercise of free speech and due process, none of which was ever fully and fairly litigated nor decided by a court of competent jurisdiction. Despite prior agency determinations regarding related underlying factual issues, Plaintiffs’ constitutional claims are not precluded by collateral estoppel.
Finally, the denial of Plaintiffs’ petition for a temporary injunction does not preclude Plaintiffs from “the subsequent grant of permanent equitable relief.” David Vincent, Inc. v. Broward Cnty., Fla.,
Admittedly, “[a]n agency’s interpretation of the guidelines that it is charged with administrating is entitled to judicial deference, and should not be overturned as long as the interpretation is in the range of permissible interpretations.” Atl. Shores Resort, LLC v. 507 South Street Corp.,
B. First Amendment Retaliation
In Count II, Plaintiffs claim the City violated their rights under the First and Fourteenth Amendments to the U.S. Constitution and seek equitable relief. (See Compl. ¶ 72). The City asserts it acted properly to enforce local laws and Plaintiffs fail to show a causal connection. (See Mot. 11-14). Although the City contends its conduct was lawful, such “lawful conduct” does not preclude Plaintiffs’ claim where “a retaliatory motive can be inferred” from a sequence of events, notwithstanding other non-retaliatory motives (here purportedly lawful grounds) the defendant may have. Lippman v. City of Miami,
The City urges the Court to apply a modified causation test (requiring proof of selective enforcement) based on Osborne v. Grussing,
The City also challenges causation in terms of the sequence of events, explaining its enforcement efforts predated Eisenberg’s free expression and the time between the protected speech and the City’s allegedly retaliatory conduct is too attenuated. (See Mot. 12-13). To establish a causal connection, a plaintiff must demonstrate his or her protected conduct was a motivating factor behind the alleged retaliatory misconduct. See Bennett v.
The parties have submitted voluminous records in support of their competing positions, most of which date from 2010 to 2013. (See generally Exs. [ECF Nos. 17, 51, 53, 61]). Missing are public documents predating 2010 that establish the timeline of events regarding Plaintiffs’ protected activities and the City’s enforcеment efforts.
C. Due Process
In Counts III and IV, Plaintiffs allege federal and state law due process claims. (See Compl. ¶¶ 79-94). The City argues Plaintiffs’ substantive due process claims fail on multiple grounds because Plaintiffs’ prоperty interest in the Sadigo is not an implied fundamental right, the City’s allegedly improper actions are not legislative in nature, and the City possesses a rational basis for enforcing the Fire Code. (See Mot. 15-16; Reply 9). For support, the City cites McKinney v. Pate,
The City’s reliance on McKinney is new; the argument was not raised when the City moved to dismiss Plaintiffs’ Complaint. In that briefing, the City did not contest whether “Plaintiffs have a constitutionally protected property and business interest in the Sadigo.” (Mar. 3, 2014 Order,
To state a claim for a violation of substantive due process under 42 U.S.C. section 1983, a plaintiff must allege “a deprivation of a constitutionally protected interest” resulting from “an abuse of governmental power sufficient to raise an ordinary tort to the stature of a constitutional violation.” Executive 100, Inc. v. Martin Cnty.,
In McKinney, a county building official sued his supervisors and members of the board of county commissioners alleging he was pretextually terminated, resulting in a violation of his “constitutional employment rights” and denial of substantive due process.
Plaintiffs argue McKinney is inapplicable because this case involves liberty as well as property interests. (See Resp. 16). Plaintiffs allege “property rights and liberty interests in their real property, their rights to use their real property for renting apartment units ... and ... engaging] in the business of renting apartment units .
The • City asserts Plaintiffs’ substantive due process claim is subsumed by Count II, alleging First Amendment retaliation. (See Reply 9 (citing Dingle v. Coleman, No. 5:10-cv-53-Oc-10GRJ,
To the extent Plaintiffs’ substantive due process claim is based on a First Amendment violation it fails because “ ‘a cause of action cannot be based in substantive due process where a more specific constitutional provision is applicable.’ ” Id. (quoting Brandenburg,
In determining whether a deprivation of a state-created right constitutes a substantive due process violation rather than a procedural one, McKinney and its progeny distinguish between deprivations resulting from legislative acts and executive acts. See McKinney,
Plaintiffs do not challenge rule-making or the enactment of City rules or regulations, but rather the City’s enforcement of the City Code as applied to the Sadigo, including Plaintiffs’ eligibility for a discretionary exemption to the Fire Code given the Sadigo’s historic status. The City’s enforcement actions are specific to Plaintiffs and the Sadigo and clearly do not affect the general population. Based on these alleged facts, Plaintiffs’ substantive due process claims fail. See id.; De-Kalb Stone, Inc.,
IV. CONCLUSION
For the foregoing reasons, it is
ORDERED AND ADJUDGED that Defendant, the City of Miami Beach’s Motion for Judgment on the Pleadings [ECF No. 52] is GRANTED in part and DE
Notes
. The Background is largely reproduced from the March 3, 2014 Order, 1. F.Supp.3d 1327 (S.D.Fla.2014) [ECF No. 36] dismissing Counts I, V, VI, and VII of the Complaint [ECF No. 1],
. The City issued the Sadigo a November 5, 2007 Fire Inspection Report and Cease and Desist Notice regarding an Oсtober 23, 2007 inspection (see Appendix to Motion to Dismiss (“MTD App.”), Ex. 1 [ECF No. 17-1]); a June 27, 2011 Fire Inspection Report and Cease and Desist Order (see id., Ex. 5 [ECF No. 17-5]); a September 23, 2011 Cease and Desist Order and Fire Inspection Report and September 29, 2011 Notice of Fire Violation (see id., Ex. 6 [ECF No. 17-6]); October 20, 2010, April 5, 2011, and September 27, 2011 Notices of Violation, and October 23, 2007 Fire Inspection Report (see id., Ex. 7 [ECF No. 17-7]). The City also issued a March 15, 2010 response letter (see id., Ex. 9 [ECF No. 17-9]) by the Fire Marshal regarding the Sadigo’s engineering report, and a June 28, 2011 Plans Processing Approvals notice (see id., Ex. 10 [ECF No. 17-10]).
. The City argues Eisenberg and Eisenberg Development can reasonably be said to be in privity because Eisenberg is the president of Eisenberg Development (see Compl. ¶¶ 1-2), and Eisenberg Develоpment owns and operates the Sadigo (see id. ¶ 6). See Drier v. Tarpon Oil Co.,
. Where Plaintiffs declined to pursue their legal remedies or appeal, prior, un-appealed administrative and judicial decisions are considered final.. See Fla. Transp. Serv., Inc. v. Miami-Dade Cnty.,
. Fire Marshal determinations may be appealed to the Fire Prevention and Safety Appeal Board. (See Mot. 6 (citing Miami — Dade County Code of Ordinances § 14-46(D) (2014))).
. Plaintiffs do not dispute the authenticity or accuracy of the intra-agency document. To the extent Plaintiffs challenge the Court’s ability to judicially notice the April 7, 2010 memorandum (see Resp. 3 n. 4), the Court considers the document only to frame the scope of the issues before the BORA. The memorandum is directed to Herminio F. Gonzalez, P.E., the same individual who sent Eisenberg the BORA’s April 21, 2010 decision letter.
. Plaintiffs challenge the authenticity of a May 27, 2010 Historical Task Force Committee Hearing transcript [ECF No. 53-1] because it was "not сertified by a court reporter, so [sic] no way to ensure accuracy.” (Resp. 3 n. 4). They do not object that a hearing took place on May 27, 2010, nor identify any portions of the transcript as inaccurate. The Court takes judicial notice that multiple Task Force hearings were held in 2010 and 2013 addressing the Sadigo’s historic preservation in the context of fire prevention and safety. Plaintiffs do not contest the authenticity of the other Task Force hearing transcripts in the record. (See [ECF Nos. 53-2-53-4]).
. The few filings predating 2010 are a 1988 Warranty Deed and Certificate of Occupancy [ECF No. 51-14]; a Code Compliance Violation [ECF No. 61-4] from August 2007 regarding a sanitation and debris violation that was resolved; an October 2007 Rеport of Fire Violations issued by Fire Department Inspector Machen at the time (see MTD App., Exs. 1, 7 at 4 [ECF Nos. 17-1 & 17-7]); a December 2008 change of occupancy/work permit application for the Sadigo [ECF No. 51-16]; and the Sadigo’s 1999 Florida Hotel License Application [ECF No. 51-3].
. For example, the alleged retaliatory act by the City related to the Sadigo's financing presents questions of fact; the extent and timeline of the mortgagee’s knowledge regarding the Sadigo’ alleged hotel violations and its reasons for not renewing the loan are disputed. {See Mot. 13 n. 6; Resp. 12 n. 15).
. Plaintiffs previously clarified they are not raising procedural due process claims. (See Mar. 3, 2014 Order,
. Property interests " 'are not created by the Constitution. Rather they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law — rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.' ” Coral Springs St. Sys., Inc. v. City of Sunrise,
.This case does not specifically concern zoning or land use permits. (See Mar. 3, 2014 Order,
. Counts III and IV incorporate allegations regarding the deprivation of Plaintiffs' liberty interest.
. The March 3 Order states:
Plaintiffs were denied their constitutionally protected right to utilize their property and engage in a legitimate rental business at the Sadigo. (See ... Compl. ¶¶ 22-25, 35-45, 81-86). Plaintiffs allege they had to refinance the Sadigo at enormous additional cost after the mortgagee decided not to renew the loan upon being informed the Sadigo was operating illegally as a hotel. (See \id¡\ ¶ 37). Plaintiffs also lost the Art Basel Foundation as a business client after the City informed the Foundation the Sadi-go was operating illegally. (See id. ¶ 39).
(Id. at 1346 (alterations added)). Plaintiffs allegedly suffered diminution in value, injury to the Sadigo's business reputation and good will, and interference with operating a legitimate business, resulting from the City’s repeated cease and desist orders, targeting of the Sadigo's clients, and two forced shutdowns of the Sadigo.
. In this respect, the Court departs from its analysis in the March 3 Order on the City’s Motion to Dismiss.
. McKinney does not prevent a plaintiff from maintaining a First Amendment retaliation claim even if the plaintiff lacks a protectable property interest or other state-created right. See Beckwith v. City of Daytona Beach Shores, Fla.,