United States District Court, D. Oregon
DONNA THAMES, COLUMBIA BAR & GRILL, INC., an Oregon corporation, dba EXOTICA, Plaintiff,
CITY OF PORTLAND, a municipal corporation; CHARLES HALES; OREGON LIQUOR CONTROL COMMISSION; STEVEN MARKS; JOHN ECKHART; DAVID LUSTER; JEFFREY BELL; SHANNON HOFFEDITZ; DAN MCNEAL; MIKE BOYER; MERLE LINDSEY; MARK KRUGER; AMY ARCHER; JASON TALLMADGE; Defendants.
A. HERNÁNDEZ United States District Judge.
Judge Papak issued a Findings & Recommendation  on
July 7, 2017, in which he recommends that this Court grant in
part and deny in part the motions to dismiss or strike
brought by City Defendants and OLCC Defendants. Defendants David
Luster and Jeffrey Bell are not included in either group of
defendants and have not joined the motions presently before
the Court. The matter is now before the Court pursuant to 28
U.S.C. § 636(b)(1)(B) and Federal Rule of Civil
any party objects to any portion of the Magistrate
Judge's Findings & Recommendation
(“F&R”), the district court must make a
de novo determination of that portion of the
Magistrate Judge's report. 28 U.S.C. § 636(b)(1);
Dawson v. Marshall, 561 F.3d 930, 932 (9th Cir.
2009); United States v. Reyna-Tapia, 328 F.3d 1114,
1121 (9th Cir. 2003) (en banc).
Defendants raise several objections to the F&R. City
Defendants argue that: (1) Plaintiffs failed to adequately
allege causation for their claims, (2) Plaintiffs failed to
adequately allege race-based animus with respect to
Defendants Mr. Kruger and Ms. Archer, (3) Defendants Ms.
Archer and Mr. Hales are entitled to qualified immunity, and
(4) the Court should strike the historical allegations
contained in paragraphs 27-30 of the complaint. The Court
rejects City Defendants' objections, except that it
agrees Defendants Ms. Archer and Mr. Hales are entitled to
Defendants object to the F&R's denial of their motion
to dismiss Plaintiffs' Claim 12, alleging intentional
interference with economic relations; and Claim 13, alleging
intentional infliction of emotional distress. The Court
agrees with OLCC Defendants' objections and declines to
adopt the F&R as to Claims 12 and 13.
Court has also reviewed the pertinent portions of the record
de novo and finds no other errors in the Magistrate
Defendants object to the F&R's conclusion that
Plaintiffs sufficiently alleged that Defendants' behavior
caused the damages Plaintiffs suffered due to the Club's
closure. Their objections mirror the arguments already put
forth and rejected by Magistrate Judge Papak.
their motion to dismiss, City Defendants brought a broad
challenge to all of Plaintiffs' claims against them,
arguing that Plaintiffs failed to allege adequate causation.
According to City Defendants, Plaintiffs' injuries and
damages arise solely out of the closure of the Club. City
Defendants argue that Plaintiffs fail to allege facts
plausibly suggesting that the City's investigation,
negotiation, or request for a nuisance abatement plan caused
Plaintiff Ms. Thames to close her business.
Judge Papak correctly rejected City Defendants'
arguments, finding that Plaintiffs' alleged damages
include more than just damages caused by the Club's
closure. F&R 25, ECF 53. More importantly, Plaintiffs
have adequately alleged that Defendants' conduct caused
Plaintiff to close the Club. Id. Magistrate Judge
Papak provides a detailed recitation of facts alleged in the
complaint that, when taken as true, support this conclusion.
Id. at 25-28.
their objections, City Defendants repeat the assertion that
all of Plaintiffs' alleged damages, both non-economic and
economic, arise solely out of the closure of the Club.
However, City Defendants ignore paragraph 179 of
Plaintiffs' Complaint, which is incorporated by reference
into all of Plaintiffs' claims for relief:
As a direct and proximate result of Defendants' actions
as alleged herein, Plaintiffs have suffered non-economic
damages in the form of loss of reputation, bodily harm,
emotional and mental distress, degradation, embarrassment,
and humiliation for which Plaintiff seeks compensation in an
amount to be proved at trial, but no less than $5, 000, 000.
Compl. ¶ 179. Such actions, “as alleged herein,
” include acts preceding the closure of the Club.
Plaintiffs make similar allegations regarding economic
damages. See Compl. ¶ 178. Thus, City
Defendants' objection is unavailing.
Allegations of Race-Based Animus as to Defendants Kruger and
Defendants object to Magistrate Judge Papak's conclusion
that race-based claims against Defendants Mr. Kruger and Ms.
Archer could withstand a motion to dismiss, despite the
absence of express allegations that Mr. Kruger or Ms. Archer
knew that Plaintiff Ms. Thames is African-American. City
Defendants did not seek this relief in their motion to
dismiss. Instead, City Defendants sought dismissal of entire
claims, not dismissal as to individual defendants. While City
Defendants' Reply does state, in the context of seeking
dismissal of Plaintiffs' conspiracy claim, that there are
no facts alleging that Mr. Kruger or Ms. Archer knew
Plaintiff was African-American, their motion to dismiss did
not make any argument as to Mr. Kruger's or Ms.
Archer's knowledge of Ms. Thames' race. See
Delgadillo v. Woodford, 527 F.3d 919, 930 n. 4 (9th Cir.
2008) (holding that reply is not proper place to raise new
arguments). The issue of whether all race-based claims
against Mr. Kruger and Ms. Archer could proceed was never
squarely presented to Magistrate Judge Papak. The Court
declines to exercise its discretion to consider such argument
at this point. See Brown v. Roe, 279 F.3d 742,
745-46 (9th Cir. 2002) (rejecting the Fourth Circuit's
holding that a district court must consider new arguments
raised for the first time in an objection to a magistrate
judge's F&R); (United States v. Howell, 231
F.3d 615 (9th Cir. 2000) (“[I]t would be fundamentally
unfair to permit a litigant to set its case in motion before
the magistrate, wait to see which way the wind was blowing,
and-having received an unfavorable recommendation-shift gears
before the district judge.” (citation omitted));
Olmos v. Ryan, No. CV-11-00344-PHX-GMS, 2013 WL
3199831, at *8 (D. Ariz. June 24, 2013) (“Generally, a
district court need not consider new arguments raised for the
first time in objections to an R &
Qualified Immunity for Defendants Archer and Hales
Court agrees with City Defendants' objection to
Magistrate Judge Papak's conclusion that Defendants Ms.
Archer and Mr. Hales are not entitled to qualified immunity.
their motion to dismiss, City Defendants argued that Ms.
Archer and Mr. Hales were entitled to qualified immunity. As
to these two defendants, Plaintiffs bring eight claims:
1. 42 U.S.C. § 1981-Race Discrimination
2. 42 U.S.C. § 1983-14th Amendment Procedural Due
3. 42 U.S.C. § 1983-14th Amendment Equal Protection
4. 42 U.S.C. § 1983-First Amendment
5. 42 U.S.C. § 1985(3)-Conspiracy to Interfere with