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Conway v. Davis

United States District Court, D. New Jersey

March 23, 2018

MICHAEL CONWAY, Proprietor EHT Tavern, LLC. doing business as REF'S TAPHOUSE & GRILL, Plaintiff,

          MICHAEL CONWAY Appearing pro se

          A. MICHAEL BARKER BARKER, GELFAND & JAMES LINWOOD GREENE On behalf of Defendant Raymond Davis


          NOEL L. HILLMAN, U.S.D.J.

         This matter concerns claims by Plaintiff, Michael Conway, Proprietor of EHT Tavern, LLC, which does business as Ref's Taphouse & Grill in Egg Harbor Township, New Jersey. Plaintiff claims his application to extend temporarily his liquor license to the outside area of his restaurant for one night on June 12, 2016 was denied because he would not pay a $400 fee to Egg Harbor Township as demanded by the Township's police chief, Defendant Raymond Davis. Plaintiff claims that the $400 fee was arbitrarily imposed and amounted to extortion. Because Plaintiff refused to pay the fee, Davis voided Plaintiff's Division of Alcoholic Beverage Control (“ABC”) temporary application.

         Plaintiff claims that the decision to extend a liquor licenses rests solely with the ABC, and therefore Davis was without legal authority to unilaterally deny his application, which constitutes a violation of his due process rights. Plaintiff claims that he suffered a loss of business revenue and is seeking $750, 000 in damages.[1]

         The Court previously decided two motions to dismiss filed pursuant to Fed.R.Civ.P. 12(b)(6) by Davis, the mayor, a township administrator, and three town council members. The Court dismissed Plaintiff's claims against all the defendants except for his claims against Davis. (See Docket No. 18.) The Court found that Plaintiff sufficiently pleaded his procedural and substantive due process violation claims against Davis. Plaintiff claims that Davis deprived him of a protected property interest - the ability to avail himself of his rights as a liquor license holder to seek a license extension - by voiding his application without any process to challenge that result, except for paying the demanded fee, a demand that had no legal basis and therefore could be found to shock the conscience. (Docket No. 18 at 12.)

         The Court also found, with regard to Davis's argument that Plaintiff's complaint must be dismissed for failure to exhaust administrative remedies, that because Plaintiff's complaint did not indicate whether he exhausted his administrative remedies with the ABC, it could not be dismissed pursuant to Rule 12(b)(6), since the failure of a plaintiff to exhaust his administrative remedies is an affirmative defense to be pleaded by the defendant, and a district court may only dismiss a complaint when the plaintiff's failure to exhaust administrative remedies is apparent from the face of the complaint. (Docket No. 18 at 17.)

         Shortly after the Court issued its Opinion, Davis filed a motion to dismiss Plaintiff's complaint for lack of standing pursuant to Rule 12(b)(1). Davis argues that Plaintiff lacks standing to bring his due process violation claims because he never held a property interest in the liquor license on which he bases his claims. Plaintiff has opposed Davis's motion.


         A. Subject matter jurisdiction

         Because Plaintiff has brought claims pursuant to 42 U.S.C. § 1983 for alleged violations of his constitutional rights, this Court has jurisdiction of this matter pursuant to 28 U.S.C. §§ 1331 and 1343.

         B. Standard for a Motion to Dismiss pursuant Rule 12(b)(1)

         “A motion to dismiss for want of standing is . . . properly brought pursuant to Rule 12(b)(1), because standing is a jurisdictional matter.” Constitution Party of Pa. v. Aichele, 757 F.3d 347, 357 (3d Cir. 2014) (citing Ballentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007)). There is “a crucial distinction, often overlooked, between 12(b)(1) motions that attack the complaint on its face and 12(b)(1) motions that attack the existence of subject matter jurisdiction in fact, quite apart from any pleadings.” Mortensen v. First Federal Sav. and Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). On a facial attack, “the court must consider the allegations of the complaint as true, ” and a court employs the Rule 12(b)(6) standard for assessment. Id.; see also Constitution Party of Pennsylvania v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014) (explaining “a facial attack calls for a district court to apply the same standard of review it would use in considering a motion to dismiss under Rule 12(b)(6), i.e., construing the alleged facts in favor of the nonmoving party”).

         “The factual attack, however, differs greatly, ” because (1) “no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims, ” and (2) “the plaintiff will have the burden of proof that jurisdiction does in fact exist.” Mortensen, 549 F.2d at 891.

         Davis, the Defendant, has submitted documents regarding the ownership trail of the liquor license at issue, which are not attached to Plaintiff's complaint. Procedurally, this suggests Defendant is making a factual attack to the Complaint. However, our Court of Appeals has made clear that a factual attack may only occur after the filing of an answer. Id. at 891 (providing that a Rule 12(b)(1) factual attack “may occur at any stage of the proceedings, from the time the answer has been served until after the trial has been completed”). Here, no answer has been filed as of yet, with Defendant proceeding, as he may, first with a motion to dismiss. Accordingly, the Court must view Davis's motion as a facial attack under the Rule 12(b)(6) standard.[2]

         Nonetheless, the Court may consider the liquor license documents, because Plaintiff does not dispute their authenticity, and because Plaintiff's claims are based on his contention that his claims arise from his interest in liquor license.[3] See Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993) (explaining in assessing a Rule 12(b)(6) motion, a court may consider “an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document”).

         C. Analysis

         Plaintiff's due process claims[4] hinge on whether he has a property interest that Davis deprived him of. See Nicholas v. Pennsylvania State Univ., 227 F.3d 133, 139-40 (3d Cir. 2000) (providing that to prevail on a procedural due process claim challenging a state actor's conduct, “a plaintiff must establish as a threshold matter that he has a protected property interest to which the Fourteenth Amendment's due process protection applies”). As the Court noted in its prior Opinion, a liquor license has been held to constitute a property interest protectable by the Fourteenth Amendment. See Sea Girt Restaurant and Tavern Owners Ass'n, Inc. v. Borough of Sea Girt, New Jersey, 625 F.Supp. 1482, 1488 (D.N.J. 1986) (holding that a New Jersey liquor license is an interest in property for purposes of federal due process analysis). Plaintiff alleges that he has a property interest in obtaining a temporary extension of his liquor license to the outside area of his establishment, and Davis deprived him of that right through extortion.

         Davis contends, however, that Plaintiff has never held ownership rights to the liquor license at issue, and he therefore cannot maintain a claim for a deprivation of property in which he does not have a property right. Davis's motion ...

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