Rita R. Johnson, Plaintiff-Appellant,
Timothy Morales; Dennis Jordan; City of Saginaw, Defendants-Appellees.
Argued: October 16, 2018
from the United States District Court for the Eastern
District of Michigan at Bay City. No. 1:17-cv-12405-Thomas L.
Ludington, District Judge.
L. Ellison, OUTSIDE LEGAL COUNSEL PLC, Hemlock, Michigan, for
A. Jordan, O'NEILL, WALLACE & DOYLE, P.C., Saginaw,
Michigan, for Appellees.
L. Ellison, OUTSIDE LEGAL COUNSEL PLC, Hemlock, Michigan, for
A. Jordan, Gregory W. Mair, O'NEILL, WALLACE & DOYLE,
P.C., Saginaw, Michigan, for Appellees.
Before: COLE, Chief Judge; WHITE and NALBANDIAN, Circuit
NALBANDIAN, CIRCUIT JUDGE.
Rita Johnson challenges the suspension of her business
license by Defendants City of Saginaw, City Manager Timothy
Morales, and City Human Resources Director Dennis Jordan.
Morales issued Johnson a notice to immediately suspend all
commercial activities at her restaurant. This came after
persons unaffiliated with Johnson or her restaurant began
shooting at it one night. Jordan upheld the suspension in a
hearing where he served as the hearing officer. And an appeal
panel later upheld his decision. Johnson eventually filed
this action in the district court, alleging several
constitutional violations. She now appeals the district
court's order dismissing her case for failure to state a
claim and denying her leave to amend her complaint. For the
following reasons, we AFFIRM in part, REVERSE in part, and
Johnson owns and operates Rita's Southern Soul
Café in the City of Saginaw, Michigan
("City"). One evening, Johnson rented her restaurant
to a private party. For unknown reasons, individuals
unaffiliated with her or the party emerged from a vehicle
that night and began shooting at the restaurant. According to
Johnson, no guest of the restaurant instigated the shooting.
Nor did the shooting "ha[ve] [anything] to do with the
commercial activities of [her] business." (R. 15-1,
Proposed Second Am. Compl. at PageID #250 ¶ 17.)
Although police were called during the shooting, they never
apprehended any of the shooters. But Saginaw Police Chief
Robert Ruth opined that the incident may have
"involve[d] gangs from the 'southside' and
'northside' of Saginaw." (Id. ¶
than two days after the shooting, City Manager Timothy
Morales issued Johnson a notice ordering the suspension of
all business activity related to her restaurant. Morales
issued the suspension order under section 110.06(F) of
Saginaw's Code of Ordinances. Section 110.06(F) allows
the city manager to immediately suspend any license or permit
issued by the City if he considers the suspension necessary
and "in the interest of the public health, morals,
safety, or welfare[.]" Saginaw, Mich., Code of
Ordinances § 110.06(F) (2018).
suspension order listed the following non-exclusive reasons
for suspending Johnson's license:
1. Serious and violent criminal activity generated by the
operation of this establishment;
2. The aforementioned serious and violent criminal activity
has resulted in significant injury to persons and damage to
3. The aforementioned serious and violent criminal activity
has occurred as recently as Saturday, May 6, 2017;
4. The aforementioned serious and violent criminal activity
constitutes a hazardous condition contrary to the health,
morals, safety and welfare of the public;
5. Failure to maintain adequate security to prevent or
discourage unlawful behavior[.]
(R. 15-1, Proposed Second Am. Compl. at PageID #265
order also informed Johnson that a hearing would occur three
days later, where she would have to "show cause" as
to why her license should not remain suspended or revoked.
(Id. at PageID #251 ¶¶ 33-36.) A little
over two months after the hearing, Human Resources Director
Dennis Jordan issued a decision upholding the suspension of
Johnson's license. But Johnson believed she did not
receive a fair administrative process. So she filed a
complaint in the district court alleging that Defendants had
violated several of her constitutional rights.
then amended her complaint to include additional factual
allegations and another count against Defendants. She also
filed a motion for a temporary restraining order and,
alternatively, a motion for a preliminary injunction to
prevent Morales from sitting on the appeal panel expected to
review Jordan's decision. The district court denied that
motion. Later, Defendants moved to dismiss Johnson's
complaint for failure to state a claim.
the district court denied Johnson's motion for equitable
relief, she filed her administrative appeal. The appeal
panel, which did not turn out to include Morales, held a
hearing where it affirmed Jordan's decision upholding the
suspension of her license. The very next day, Johnson filed a
motion for leave in the district court to amend her complaint
again. And roughly two months later, the district court
granted Defendants' motion to dismiss and denied
Johnson's motion to amend her complaint on futility
review the district court's grant of Defendants'
motion to dismiss de novo. Beydoun v. Sessions, 871
F.3d 459, 464 (6th Cir. 2017) (citing Kottmyer v.
Maas, 436 F.3d 684, 688 (6th Cir. 2006)).
Because the district court denied Johnson's motion to
file a second amended complaint on futility grounds, we
review that decision de novo. Id. (citing Colvin
v. Caruso, 605 F.3d 282, 294 (6th Cir. 2010)). Several
of Johnson's claims overlap both complaints; we analyze
those claims before we analyze the claims unique to her
proposed second amended complaint.
Count I of Johnson's first amended complaint and Count IV
of her proposed second amended complaint, Johnson alleges
that the City and Jordan violated her due process rights by
having Jordan serve as the hearing officer at her initial
administrative hearing. Her argument rests on a "command
influence theory," which she articulates as follows:
"[I]mmediate subordinates are not 'neutral and
detached' enough to satisfy due process when called upon
to review an immediate boss's decision."
(Johnson's Opening Br. at 18.) According to Johnson's
theory, Jordan was not "neutral and detached"
enough to serve as her hearing officer. (Id. at 10.)
This is because he was sitting in review of his immediate
supervisor's decision to suspend her license.
due process "guarantees 'an absence of actual
bias' on the part of a judge." Williams v.
Pennsylvania, 136 S.Ct. 1899, 1905 (2016) (quoting
In re Murchison, 349 U.S. 133, 136 (1955)). But we
apply an objective standard in evaluating whether the
government has fulfilled that guarantee. Id. So in
reviewing claims of actual bias, we "ask not whether a
judge harbors an actual, subjective bias, but instead
whether, as an objective matter, the average judge in his
position is likely to be neutral, or whether there is an
unconstitutional potential for bias." Id.
(internal quotation marks omitted). Moreover, claims of bias
"must overcome a presumption of honesty and integrity in
those serving as adjudicators[.]" Withrow v.
Larkin, 421 U.S. 35, 47 (1975).
traces the origins of her theory to two state court
decisions: State ex rel. Ellis v. Kelly, 112 S.E.2d
641 ( W.Va. 1960) and Mayer v. Montgomery County,
794 A.2d 704 (Md. Ct. Spec. App. 2002). We examine both
Kelly, West Virginia's Department of Motor
Vehicles ("Department") suspended a used car
dealer's license after the Department's commissioner
investigated the dealership and found that the dealer had
breached certain record-keeping requirements. 112 S.E.2d at
642. The Department later held a hearing on the suspension.
Id. at 643. There, the deputy commissioner served as
the hearing officer and the commissioner testified before the
deputy. Id. West Virginia's Supreme Court of
Appeals held that this violated due process. The court found:
It can hardly be contended that the commissioner, in the
making of the investigation and in testifying before the
deputy commissioner appointed by him and responsible to him,
beyond any reasonable probability, did not become biased and
prejudiced in the matter being heard. It would seem to be
beyond human experience and expectation for impartiality to
result where the officer is the investigator, prosecutor,
witness and trier of the facts.
Id. at 644.
was essential to the court's analysis that "the
commissioner personally conducted the investigation and
personally testified before his deputy." See
id. at 643. In contrast, Johnson alleges neither that
Morales testified at her hearing nor that he investigated her
business. Johnson's argument hinges on her allegations
that Morales issued the suspension order, selected Jordan to
serve as the hearing officer, and is Jordan's immediate
supervisor. Because Morales was not the "investigator,
prosecutor, witness and trier of the facts" in
Johnson's case, Kelly is inapposite.
second case Johnson relies on, Mayer, involved a
county police sergeant who sought a promotion to the rank of
lieutenant. 794 A.2d at 706. The sergeant filed a grievance
after he was denied the promotion. And a county director
denied his grievance through a written "Step II"
response. Id. at 708. Then, the County
Administrative Officer ("CAO") designated a
subordinate of the director to conduct a "Step III"
hearing. So the sergeant requested a different hearing
officer. Id. He argued that the subordinate
"would be loath to render a decision adverse to that of
her superior and therefore would not be impartial, or at
least would not appear to be impartial." Id.
The CAO denied the sergeant's request for a different
hearing officer. And the subordinate denied the grievance.
Id. at 709. So the sergeant appealed. Yet the
Maryland Court of Special Appeals concluded that "the
CAO's appointment was contrary to the governing laws . .
. ." Id. at 717.
those "governing laws" did not refer to the Due
Process Clause. Instead, they referred to the
county's "governing  laws, regulations,
or procedures," which the court cited at the beginning
of its analysis. Id. at 709, 711-12. Indeed, the
sergeant's argument was "that the fairness
requirements of the applicable Montgomery County
personnel laws and procedures were [not] satisfied in his
grievance . . . ." Id. at 711-12 (emphasis
added). That said, part of the court's reasoning relied
on Kelly, which analyzed federal due process.
See id. at 712-13. Yet the court distinguished the
sergeant's case from various federal due process cases
that the county cited in its brief. See id. at
714-15. At the very least, it does not appear as though the
court was exclusively interpreting the Due Process Clause
when it ruled for the sergeant.
assuming the contrary, Mayer would still be inapt.
Mayer held that "when . . . the Step III
hearing officer is a subordinate of the Step II responder,
there is a substantial likelihood that the hearing officer
. . . will not render an impartial decision[.]"
Id. at 714. But it was critical to the court's
decision that both the Step II and Step III officers were
adjudicators. See id. And it was on that basis that
the court distinguished another case: Consumer Prot. Div.
Office of Att'y Gen. v. Consumer Publ'g Co.,
Inc., 304 Md. 731, 763 (Md. 1985). There, "the mere
fact that both the prosecutorial and adjudicatory functions
occurred within the Attorney General's Office was not a
due process violation and, in fact, those . . . who
participated in the investigation and filing of charges did
not participate in the adjudicatory phase of the case."
Mayer, 794 A.2d at 714. In the sergeant's case,
"by contrast, . . . a subordinate was called upon to
pass judgment on the correctness . . . of his superior's
decision resolving a grievance." Id.
the Step III hearing officer in Mayer, Jordan did
not review an adjudication. Rather, he reviewed an
enforcement action taken by Morales-the suspension of
Johnson's business license. And Mayer said that
such a blend of executive and adjudicative functions within
an agency does not violate due process. More importantly, the
Supreme Court held as much. See Withrow, 421 U.S. at
95. Johnson asks us to find that due process precludes agency
adjudicators from reviewing the executive actions of their
direct supervisors. But that position is unsupported by
either our precedent or the Supreme Court's. And the two
state court cases Johnson directs us to do not support her
theory. We therefore hold that Jordan's participation in
Johnson's hearing as the hearing officer did not present
an unconstitutional risk of bias.
Count I of Johnson's first amended complaint and Count VI
of her proposed second amended complaint, Johnson lodges
another due process claim against Jordan and the City. She
argues that Jordan should have recused himself because one of
the City's attorneys at her hearing, Gregory Mair, had
represented Jordan in another case. In that case (unrelated
to Johnson's), a police officer sued Jordan and other
City officials, alleging that they discriminated against him
because of his race and disabilities. See Ramirez v. City
of Saginaw, No. 10-13408-BC, 2011 WL 6309158 (E.D. Mich.
Dec. 15, 2011).
cites just one case, Morrissey v. Brewer, 408 U.S.
471 (1972), supporting her argument. But Morrissey
did not address this issue, and Johnson does not explain its
relevance in her brief. And this circuit held that a school
board did not violate due process when one of its attorneys
acted as the hearing officer in a suspension hearing that it
commenced against a school superintendent. See Prichard
v. Lafferty, 974 F.2d 1338, 1992 WL 205659, at *4 (6th
Cir. 1992) (table). There, we said that "[n]either [the
hearing officer's] familiarity with the situation nor his
relationship to the Board per se disqualified
there is even less potential for bias since Jordan was not
himself an attorney for the City-one of the City's
attorneys had merely represented him in an unrelated case six
years before. See also Dell v. Bd. of Educ., Twp. High
Sch. Dist. 113, 32 F.3d 1053, 1065-66 (7th Cir. 1994)
(holding that a school district did not violate due process
where its law firm had represented the hearing officer's
employer); James v. Indep. Sch. Dist. No. I-050 of Osage
Cty., 448 Fed.Appx. 792, 798 (10th Cir. 2011) (holding
that members of a school board did not violate due process
where the board's law firm paid for the hearing officer
in a termination hearing). Given that Johnson fails to
articulate why Mair's representation violated her due
process rights, and the relevant case law we have found goes
against her, we hold that the district court did not err in
dismissing this claim.
Count II of Johnson's first amended complaint and Count
VII of her proposed second amended complaint, Johnson alleges
that the City and Morales violated her procedural due process
rights by suspending her business license before granting her
a chance to be heard.
Fourteenth Amendment prohibits states from depriving
individuals of life, liberty, or property without due process
of law. U.S. Const. amend. XIV, § 1. When evaluating a
claim alleging a property deprivation without due process, we
first determine whether due process applies. See
Morrissey, 408 U.S. at 481. If it does, we then
determine what process is due. See id. Johnson's
interest in her business license is enough to invoke due
process protection. See Bell v. Burson, 402 U.S.
535, 539 (1971); United Pet Supply, Inc. v. City of
Chattanooga, 768 F.3d 464, 486 (6th Cir. 2014). So we
consider whether due process entitled her to a pre-suspension
the general rule that due process "requires some kind of
a hearing before the State deprives a person of
liberty or property." Zinermon v. Burch, 494
U.S. 113, 127 (1990) (collecting cases). But there are
exceptions to this rule. For example, "we have held that
the failure to provide a pre-deprivation hearing does not
violate due process in situations where a government official
reasonably believed that immediate action was necessary to
eliminate an emergency situation and the government provided
adequate post-deprivation process." United
Pet Supply, 768 F.3d at 486 (collecting cases);
see also Spinelli v. City of New York, 579 F.3d 160,
170 (2d Cir. 2009). And under the Parratt doctrine,
"[c]ourts may dismiss a procedural due process claim if
the state provides an adequate postdeprivation remedy"
and the following conditions apply: "(1) the deprivation
was unpredictable or 'random'; (2) the predeprivation
process was impossible or impracticable; and (3) the state
actor was not authorized to take the action that deprived the
plaintiff of property or liberty." Daily Servs., LLC
v. Valentino, 756 F.3d 893, 907 (6th Cir. 2014) (quoting
Copeland v. Machulis, 57 F.3d 476, 479 (6th Cir.
1995) (per curiam)).
these exceptions apply to Johnson's case. Defendants do
not contend that the decision to suspend Johnson's
license was a "random" or "unauthorized"
act. And Johnson specifically disputes that, at the time of
the suspension, any type of emergency or exigent circumstance
required the immediate suspension of her license.
relevant here, we have said that "[t]he failure to
provide a hearing prior to a license or permit revocation
does not per se violate due process." United Pet
Supply, 768 F.3d at 488 (citing Barry v.
Barchi, 443 U.S. 55, 65-66 (1979)). Thus, the balancing
test from Mathews v. Eldridge, 424 U.S. 319 (1976),
determines whether the government must provide some type of
hearing before suspending a business license. See
Spinelli, 579 F.3d at 170.
Mathews test weighs three factors:
First, the private interest that will be affected by the
official action; second, the risk of an erroneous deprivation
of such interest through the procedures used, and the
probable value, if any, of additional or substitute
procedural safeguards; and finally, the Government's
interest, including the function involved and the fiscal and
administrative burdens that the additional or substitute
procedural requirement would entail.
424 U.S. at 335 (citing Goldberg v. Kelly, 397 U.S.
254, 263-71 (1970)).
Private Interest. The Supreme Court has long recognized
that an individual may have a significant interest in
maintaining a license. See, e.g., Burson,
402 U.S. at 539 ("Once licenses are issued . . . their
continued possession may become essential in the pursuit of a
livelihood."). More generally, the Court has
"repeatedly recognized the severity of depriving someone
of his or her livelihood." FDIC v. Mallen, 486
U.S. 230, 243 (1988).
Cleveland Board of Education v. Loudermill, for
example, a security guard sued the Cleveland Board of
Education ("Board") for dismissing him after it
discovered that he had falsely stated on his job application
that he had never been convicted of a felony. 470 U.S. 532,
535 (1985). The Court held that the Board violated the
security guard's due process rights by not providing him
a "pretermination opportunity to respond" to the
charges against him. Id. at 547. In so holding, the
Court noted that "the significance of the private
interest in retaining employment cannot be gainsaid" and