Businesses Have 90 Days Of Order to File for Violation of Constitutional Due Process
Note: Businesses may only have 60 days to file for Due Process. Contact your attorney for advice.
April 30, 2020
TO: FRIENDS AND BUSINESSES
INTRODUCTION
Our law firm and our clients have asked us what we can do to protect our constitutional rights and civil liberties during this time of forced business closures, and forced stay at home orders, and specifically Governor Brown’s Executive Orders. This letter is intended not as legal advice for any specific person or business but rather as an educational document that you can use to understand and evaluate the law and consult with your own attorney or counselors. Feel free to review this document and use any of the information provided in it as you will. Much of what is contained in here is also the advice or analysis that we are giving to our retained clients. Our firm continues to review, research, analyze well-established case law, and novel theories to help our clients protect both their constitutional rights as well as their very livelihood.
EXECUTIVE SUMMARY
The key point of this letter is that many owners of businesses may have been deprived of their procedural due process constitutional right by having their business closed against their will. If they are a licensed business, then there are notice and opportunity to be hear rights that exist under federal law to protect you from unlawful government actions. You may have to demand a hearing first, to protect your ability to later file a lawsuit compensation due to a due process violation of your federal constitutional rights.
FULL ANALYSIS
1. A licensed business owner has due process rights in his/her license.
Procedural due process involves a person’s right to have notice and the right to be heard before, or at least after, any significant deprivation of a protected property right by a state actor. To state such a claim under federal law pursuant to 42 USC § 1983, "a plaintiff must allege that (1) he was deprived of an individual interest that is encompassed within the Fourteenth Amendment's protection of 'life, liberty, or property,' and (2) the procedures available to him did not provide 'due process of law.'" Hill v. Borough of Kutztown, 455 F.3d 225, 233-34 (3d Cir. 2006). "The deprivation by state action of a constitutionally protected interest in 'life, liberty, or property,' is not itself unconstitutional; what is unconstitutional is the deprivation of such an interest without due process of the law." Zinermon v. Burch, 494 U.S. 113, 125, 110 S. Ct. 975, 108 L. Ed. 2d 100 (1990).
In the present context, a claimant and then a Court must determine: (1) whether there is a liberty or property interest that has been interfered with by Defendants (the state actor), and, if so: (2) whether the 'procedures attendant upon that deprivation were constitutionally sufficient.'" See Kentucky Dep't of Corrections v. Thompson, 490 U.S. 454, 460, 109 S. Ct. 1904 (1989).
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They key legal point that we hope people will understand from this educational letter is that: A business license is a property interest entitled to procedural due process protection. Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 543, 105 S. Ct. 1487 (1985) ("We have frequently recognized the severity of depriving a person of the means of livelihood."). Once issued, a license or permit "may become essential in the pursuit of a livelihood." Bell v. Burson, 402 U.S. 535, 539, 91 S. Ct. 1586 (1971); see also, e.g., H&R Grenville Fine Dining, Inc., 2011 U.S. Dist. LEXIS 145447, at 56 (finding a liquor license to be a property interest); Sea Girt Restaurant & Tavern Owners Asso., v. Borough of Sea Girt, New Jersey, 625 F. Supp. 1482, 1488 (D.N.J. 1986) (same); Spinelli v. New York, 579 F.3d 160, 169 (2d Cir. 2009) (holding business license, once granted, to be property interest for purposes of procedural due process); Wells Fargo Armored Serv. Corp. v. Ga. Pub. Serv. Comm'n, 547 F.2d 938, 941 (5th Cir. 1977) ("[P]rivileges, licenses, certificates, and franchises... qualify as property interests for purposes of procedural due process.").
2. A deprivation of your business license requires notice and an opportunity to be heard to determine whether the deprivation was wrongful or not.
When the government, who is by definition a state actor, closes down a business that has a license issued by that same government, then the business owner’s procedural due process rights are triggered and implicated. The next legal test is to determine whether the procedures, pre or post deprivation are sufficient in giving a full and fair hearing for the government to avoid a due process constitutional violation. For instance, "when a state affords a full judicial mechanism with which to challenge the administrative decision in question, the state provides adequate procedural due process...whether or not the plaintiff avails him or herself of the provided appeal mechanism." DeBlasio, 53 F.3d at 597. "In order to state a claim for failure to provide due process, a plaintiff must have taken advantage of the processes that are available to him or her, unless those processes are unavailable or patently inadequate." Alvin v. Suzuki, 227 F.3d 107, 116 (3d Cir. 2000). But, "[w]hen access to [the] procedure is absolutely blocked or there is evidence that the procedures are a sham, the plaintiff need not pursue them to state a due process claim." Alvin, 227 F.3d at 118. "All that due process requires. . . is a post-deprivation 'means of redress for property deprivations satisfy[ing] the requirements of procedural due process.'" McKinney, 20 F.3d at 1563 (quoting Parratt, 451 U.S. at 537).
Therefore, "the state may cure a procedural deprivation by providing a later procedural remedy; [it is ] only when the state refuses to provide a process sufficient to remedy the procedural deprivation does a constitutional violation actionable under section 1983 arise." McKinney, 20 F.3d at 1557; see also Cotton v. Jackson, 216 F.3d 1328, 1331 (11th Cir. 2000) ("It is the state's failure to provide adequate procedures to remedy the otherwise procedurally flawed deprivation of the protected interest that gives rise to a federal procedural due process claim.").
In other words, "even if a procedural deprivation exists . . ., such a claim will not be cognizable under 42 U.S.C. § 1983 if the state provides a means by which to remedy the alleged deprivation." Foxy Lady, Inc., v. City of Atlanta, 347 F.3d 1232, 1238 (11th Cir. 2003). Therefore, the relevant inquiry, and pre-requisite for ensuring that you have access to making a procedural due process claim, depends upon the availability and adequacy of state remedies, and you taking advantage of any available remedies.
As explained in the case Cotton supra, "[i]f adequate state remedies were available but the plaintiff failed to take advantage of them, the plaintiff cannot rely on that failure to claim that the state deprived him of procedural due process." 216 F.3d at 1331 (quoting McKinney, 20 F.3d at 1565).."
3. What is Oregon’s due processes for wrongful government action - the Oregon Administrative Procedures Act.
Not every kind of government action falls within the scope of Oregon’s Administrative Procedures Act. However, Oregon’s Administrative Procedures Act (APA) does allow a person who believes the government has made an erroneous order relating to them --- to one of two forms of due process. The first is called a “Contested Case” and the other is called an “other than contested case”. ORS 183.413 through ORS 183.471 covers most of the procedures for a contested case hearing. Contested cases, and the rights included therein include most license suspensions.
ORS 183.430(2) In any case where the agency finds a serious danger to the public health or safety and sets forth specific reasons for such findings, the agency may suspend or refuse to renew a license without hearing, but if the licensee demands a hearing within 90 days after the date of notice to the licensee of such suspension or refusal to renew, then a hearing must be granted to the licensee as soon as practicable after such demand, and the agency shall issue an order pursuant to such hearing as required by this chapter confirming, altering or revoking its earlier order. Such a hearing need not be held where the order of suspension or refusal to renew is accompanied by or is pursuant to, a citation for violation which is subject to judicial determination in any court of this state, and the order by its terms will terminate in case of final judgment in favor of the licensee.
Oregon does not, and will probably avoid giving Oregon licensed businesses those procedural rights in relation to COVID 19 shutdowns, because that might inundate them with hearings they don’t want to provide to people. Thus, I suspect the DOJ would argue that the governor’s Executive Order is not an agency order.1 This may be textually correct, however, that argument traps the State of Oregon into the corner. They don’t think the APA applies so they give no hearing, and they don’t have any other mechanism for affording a license holder with any other due process rights. Accordingly since there is no procedure either pre-deprivation or post-deprivation for vindicating an erroneous COVID 19 suspension/closure, then that creates a due process violation.
1 183.310 Definitions: (1) “Agency” means any state board, commission, department, or division thereof, or officer authorized by law to make rules or to issue orders, except those in the legislative and judicial branches. (6)(a) “Order” means any agency action expressed orally or in writing directed to a named person or named persons, other than employees, officers or members of an agency. Thus, the governor’s executive order’s are probably not orders subject to ORS
4. A business should preserve and exercise all administrative remedies.
As discussed above, a failure to utilize a state’s process for challenging a wrongful deprivation of rights can be a pre-requisite to bringing any lawsuit for a procedural due process violation under 42 USC § 1983. Thus, when and where the APA or other state remedy applies a person must avail themselves to any procedures that are available. A business owner could preserve their ability to bring a federal due process claim by demanding a hearing pursuant to ORS 183.430(2) (within 90 days of the suspension – here likely starting March 23 re: E.O. 20-12) and the agency would be lawfully required to give you the protections and procedures afforded by ORS Chapter 183 or else they would be admitting that Chapter 183 does not apply. This would likely apply only to those businesses that are specifically closed by name by an “agency” (as defined in ORS 183.310(A)). Thus, if you obtain a letter, or are given specific instructions to close your specific business down from a government entity, employee, or agency then you may in fact have contested case rights. And you would want to demand a hearing. If that request is denied by the government, or they never get back to you, then the agency has probably violated your due process constitutional rights.
If they deny you a hearing, or simply ignore you or claim that Chapter 183 and the due process protections do not apply, then you already have your equivalent of a legal “permission slip” to go to court because procedural due process violations do not become complete 'unless and until the state refuses to provide due process.'" McKinney, 20 F.3d at 1562 (quoting Zinermon, 494 U.S. at 123). At that point ana aggrieved business owner could bring a claim either via Oregon’s other than contested case, appear process in ORS 183.480 or in Court making a 42 U.S.C. §1983 claim. See ORS 183.480 Judicial review of agency orders.
(1) Except as provided in ORS 183.417 (3)(b), any person adversely affected or aggrieved by an order or any party to an agency proceeding is entitled to judicial review of a final order, whether such order is affirmative or negative in form. A petition for rehearing or reconsideration need not be filed as a condition of judicial review unless specifically otherwise provided by statute or agency rule.
(2) Judicial review of final orders of agencies shall be solely as provided by ORS 183.482, 183.484, 183.490 and 183.500.
And here the appeal process ORS 183.484 NOTE – the 60 and 90 day time windows.
(1) Jurisdiction for judicial review of orders other than contested cases is conferred upon the Circuit Court for Marion County and upon the circuit court for the county in which the petitioner resides or has a principal business office. Proceedings for review under this section shall be instituted by filing a petition in the Circuit Court for Marion County or the circuit court for the county in which the petitioner resides or has a principal business office.
(2) Petitions for review shall be filed within 60 days only following the date the order is served, or if a petition for reconsideration or rehearing has been filed, then within 60 days only following the date the order denying such petition is served. If the agency does not otherwise act, a petition for rehearing or reconsideration shall be deemed denied the 60th day following the date the petition was filed, and in such case petition for judicial review shall be filed within 60 days only following such date. Date of service shall be the date on which the agency delivered or mailed its order in accordance with ORS 183.470.
183.310 in the abstract sense, and instead they are rules (ORS 183.310 (9): “Rule” means any agency directive, standard, regulation or statement of general applicability that implements, interprets or prescribes law or policy, or describes the procedure or practice requirements of any agency. The term includes the amendment or repeal of a prior rule, but does not include: (e) Executive orders of the Governor. However, if they are executive orders, then no due process has been provided under the APA or any other state remedy!
5. Available damages and compensation.
An actual lawsuit that prevails asserting that constitutional rights were violated by a state actor under 42 U.S.C. §1983 can give rise to compensatory damages, costs of the litigation and attorney fees for a prevailing plaintiff. Consult with your own attorney about how any or all of these laws and legal rules may apply to you or your situation. As they say, no two situations are alike and the law does not apply the same to everyone. Here is my lawyer disclaimer, this is not specific advice to anyone, but may help some or all businesses preserve your rights, and put pressure on our governor to use real data, actual on the ground facts about the safety of your business, your town, and your practices, before shutting you down, or else she may be violating the constitution by not giving you a chance to be heard as to why you should not be closed.
CONCLUSION
Business owner do have a constitutional due process right to not be deprived of a property right, such as a business license, without being afforded a due process right to be heard on the merits of the closure in meaningful time and a meaningful manner. If a person is not given such right, then their constitutional rights have been violated and they may be entitled to damages, costs, and attorney fees.
Thank you,
Tyler Smith
Tyler Smith | Owner and Founding Attorney
Tyler Smith & Associates P.C.
503-266-5590 (work) | 503-266-5594 (work)
503-212-6392 (fax)
tyler@ruralbusinessattorneys.com
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