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Wrecker Works, LLC v. City of Aberdeen

United States District Court, N.D. Mississippi, Aberdeen Division

November 14, 2017




         In their Amended Complaint [21], Stephanie Thompson and Wrecker Works, LLC allege that the City of Aberdeen Mississippi, and City Police Chief Henry Randle, violated their constitutional rights and maliciously interfered with their business. The City and Randle filed a Motion for Summary Judgment [57] requesting that the Court grant summary judgment in their favor on all of the Plaintiffs' claims. The Plaintiffs filed a response [62], and the Defendants replied [67], making these issues ripe for review.[1]

         Factual and Procedural Background

         In the spring of 2016, Stephanie Thompson decided that she wanted to own a wrecker service. Thinking that it would be easier to purchase an established local company instead of starting her own, Thompson asked around and entered into talks with local businessperson Dean Irvin about purchasing his wrecker company, Irvin Wrecker Service, LLC, that had been in business in the Aberdeen area since 2009. In addition to its physical assets, mainly towing vehicles and equipment, Irvin Wrecker Service had a small list of existing customers and was on rotation with several insurance companies and nearby municipalities including the City of Aberdeen.

         Being on rotation with Aberdeen meant that Irvin Wrecker Service was on a list of approved companies that the City Police Department would call and dispatch as needed to accidents and other situations where a vehicle needed to be recovered, towed, or transported. Irvin Wrecker Service was one of several companies on Aberdeen's rotation list. According to Irvin, the Aberdeen rotation list typically resulted in between one and three calls each week. The City had a Wrecker Service Ordinance in place since March of 2014. Under this ordinance, the City Clerk was responsible for some of the procedures and duties, in particular the list application process, while the Police Department handled dispatch and rotation.

         On week later, on April 20, 2016, Thompson filed the required paperwork with the Secretary of State of Mississippi to establish a new company, Wrecker Works, LLC. Around this same time, Randle removed Irvin Wrecker Service from the rotation list after hearing that the company was sold. Although Irvin and Thompson were then in talks, the sale was not completed. Neither Irvin nor Thompson knew that Randle removed Irvin Wrecker Service from the rotation list.

         On April 27, 2016, Thompson filed a request with the Aberdeen City Clerk to have Wrecker Works, LLC added to the wrecker rotation list. At their next regular meeting, May 3, 2016, the Aberdeen Board of Aldermen approved Wrecker Works' request. Interestingly, although the Board approved Wrecker Works in this case, the Wrecker Service Ordinance in place at that time does not require or provide for any approval process by the Board. According to the ordinance, the application and approval process goes through the City Clerk, the “investigating officer, ” and the Chief of Police. Two days later, on May 5, 2016, Irvin executed a sell agreement, and Wrecker Works' new insurance policy became effective that same day.[2] According to the sell agreement, Irvin sold several vehicles, a variety of service equipment, several business telephone numbers, a few “existing customers, ” and ten “service providers” including the City of Aberdeen. The sell agreement also contains a “non-compete contract” stating that Dean Irvin would not compete with Wrecker Works in any way for five years. Notably, Irvin did not sell the name of the company or the LLC. It is undisputed that Irvin Wrecker Service dissolved after the sale and that Wrecker Works, LLC is a new and separate independent company.

         At the next regular Board of Aldermen meeting on May 17, 2016 Chief Randle proposed a new Wrecker Service Policy. After a motion by Alderman Sykes, and a second from Alderman Ewing, the Board took the new policy under advisement by unanimous vote.

         Around this same time, Thompson noticed that Wrecker Works was not receiving any calls from the Aberdeen Police Department. Thompson complained to Alderman Buffington who raised the issue with Chief Randle at the next Board meeting on June 7, 2016. At this same meeting, the Board approved the new Wrecker Service Policy previously proposed by Randle by unanimous vote. Soon after the Board approved the new policy, Wrecker Works began receiving the normal, expected volume of rotation calls.[3]

         On June 27, 2016, Thompson and Wrecker Works filed this suit. In their Amended Complaint [21], the Plaintiffs allege three claims based on constitutional violations under 42 U.S.C. §1983 against both the City of Aberdeen and Randle in his individual capacity and one claim based on Mississippi law against Randle individually. First, the Plaintiffs allege that the Defendants took their liberty and property without due process in violation of the Procedural Due Process Clause of the Fourteenth Amendment to the United States Constitution. Second, the Plaintiffs allege that the Defendants' actions were irrational and arbitrary and not for any legitimate governmental purpose in violation of the Substantive Due Process Clause of the Fourteenth Amendment. Third, the Plaintiffs allege that the Defendants violated their rights protected by the Equal Protection Clause of the Fourteenth Amendment. Finally, the Plaintiffs allege a state law claim, that Randle maliciously interfered with their business.

         Standard of Review

         Federal Rule of Civil Procedure 56 governs summary judgment. Summary judgment is warranted when the evidence reveals no genuine dispute regarding any material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The rule “mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

         In reviewing the evidence, factual controversies are to be resolved in favor of the non-movant, “but only when . . . both parties have submitted evidence of contradictory facts.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). When such contradictory facts exist, the Court may “not make credibility determinations or weigh the evidence.” Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000).

         The moving party “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex, 477 U.S. at 323, 106 S.Ct. 2548. The nonmoving party must then “go beyond the pleadings” and “designate ‘specific facts showing that there is a genuine issue for trial.'” Id. at 324, 106 S.Ct. 2548 (citation omitted). This Court has no duty to “sift through the record in search of evidence to support” the nonmovant's opposition to summary judgment. Edwards v. Cont'l Cas. Co., 841 F.3d 360, 363 (5th Cir. 2016) (citing Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994) (quoting Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915 n.7 (5th Cir. 1992)).

         Discussion and Analysis

         The Plaintiffs are seeking relief based on two separate factual bases. First, the Plaintiffs argue that the removal of Irvin Wrecker Works from the rotation list was a denial of due process that accrued to the Plaintiffs as the successors in interest of Irvin's business. The rest of the Plaintiffs claims are based on the delay between the time the Board approved Wrecker Works for the rotation list and the time when they started receiving calls, approximately one month.

         Federal courts only have jurisdiction over “cases” or “controversies.” Williams v. Parker, 843 F.3d 617, 620-21 (5th Cir. 2016) (citing Raines v. Byrd, 521 U.S. 811, 818, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997) (quoting U.S. Const. Art. III, § 2, cl. 1)). “There is no case or controversy without standing to sue.” Id. Standing is a threshold issue that this Court considers before examining the merits of the claims. Id. (citing Cibolo Waste, Inc. v. City of San Antonio, 718 F.3d 469, 473 (5th Cir. 2013)). As the parties invoking federal jurisdiction, the Plaintiffs must show:

(1) that they suffered an injury in fact, which is a concrete and particularized invasion of a legally protected interest; (2) that the injury is traceable to the challenged action of the [defendant]; and (3) it is likely, rather than merely speculative, the injury will be redressed by a particular decision.

Williams, 843 F.3d at 620 (citing Hollis v. Lynch, 827 F.3d 436, 441 (5th Cir. 2016); Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). “If the party invoking federal jurisdiction fails to establish any one of injury in fact, causation, or redressability, then federal courts cannot hear the [claim].” Id. (citing Rivera v. Wyeth-Ayerst Labs., 283 F.3d 315, 318-19 (5th Cir. 2002)).

         Based on the record in this case, the Plaintiffs do not have standing to sue for Irvin's removal from the rotation list. The only argument the Plaintiffs make to support their claim is that that they were the “successors in interest” to the assets of Irvin Wrecker Service. The Plaintiffs do not cite any evidence or authority to support this mere allegation. It is undisputed that the Plaintiffs did not purchase Irvin Wrecker Service, LLC and that Irvin Wrecker Service was dissolved when the Plaintiffs purchased its assets. It is undisputed that Irvin Wrecker Service was a separate, independent business, and that Thompson only purchased some of the assets of the company. When questioned in her 30(b)(6) deposition as to whether she had any interest in Irvin Wrecker Service, Thompson responded, “I did not.” Although the sell agreement purports to sell the “City of Aberdeen Police” as a “service provider, ” it is undisputed that Irvin Wrecker Service was removed from the list before the sale took place, making such a transaction an impossibility.[4]

         Based on these facts, the Plaintiffs cannot establish the “injury in fact” or “redressability” prongs of the standing inquiry. See Williams, 843 F.3d at 620; Lujan, 504 U.S. 555, 560-61, 112 S.Ct. 2130.[5] Thompson did not suffer an injury because she did not have an interest in Irvin Wrecker Service, was not entitled to its profits, and never purchased the corporation. As to redressability, any potential recovery would accrue to Irvin Wrecker Service and not to Thompson or Wrecker Works. Irvin Wrecker Service is not a party to this litigation. Because the Plaintiffs' lack standing relative to this claim, it is dismissed.

         The Plaintiffs established standing for the remainder of their claims related to the delay in referrals, and the Court ...

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