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Nevada Restaurant Services, Inc. v. Clark County

United States District Court, D. Nevada

March 23, 2017

NEVADA RESTAURANT SERVICES, INC., dba DOTTY'S, Plaintiff,
v.
CLARK COUNTY, a Municipal Corporation, and Does I through X, Defendants.

          ORDER

          Gloria M. Navarro, Chief Judge

         Pending before the Court is the Motion to Dismiss, (ECF No. 14), filed by Defendant Clark County (the "County"). Plaintiff Nevada Restaurant Services, Inc. ("Plaintiff) filed a Response, (ECF No. 21), and Defendant filed a Reply, (ECF No 22). For the following reasons, the Motion to Dismiss is GRANTED.

         I. BACKGROUND

         Plaintiff owns gaming and drinking establishments in Clark County, Nevada, that operate as taverns under "Class A" gaming licenses. (Compl.¶13, ECF No. 1). These licenses "permit[ ] the operation of a total of fifteen or fewer slot machines incidental to the primary business at the establishment wherein the slot machines are to be located." Clark County Code (the "Code") § 8.04.040(B)(3) (emphasis added).

         Following a proliferation of businesses operating under a Class A license, the Clark County Board of County Commissioners (the "Board") passed an amendment to its tavern laws (the "2011 Ordinance") effective April 9, 2011. (Compl. | 15). The 2011 Ordinance required that taverns operating under Class A limited gaming licenses have a bar and at least eight slot machines "embedded" in the bar. Code § 8.20.020.385 (Apr. 19, 2011). Taverns licensed "at the same location" prior to December 22, 1990, were exempted from the new requirement. Id.

         After some problems with enforcement of the 2011 Ordinance, the Board amended the Code bypassing Ordinance L-256-14 (the "2014 Ordinance") on December 3, 2014. (Compl. ¶ 21-27). The 2014 Ordinance requires taverns to maintain bars with a minimum height of forty inches and to operate a minimum number of slot machines as "bartop machines."[1] Code § 8.20.020.385(c)(1). Alternatively, a tavern may comply if less than fifty-percent of its revenue is derived from slot machines. Code § 8.20.020.385(c)(2). A tavern need not comply with these provisions if it either operates seven or fewer slot machines or qualifies as a grandfathered tavern. Code § 8.20.020.385(d)-(e). According to the Code, a "grandfathered tavern" is:

(i) A tavern licensed for fifteen or fewer slot machines, the application for which was pending or approved prior to [December 8, 2006]; or
(ii) Any tavern which, as of December 2, 2014, operated more than fifty percent of the slot machines on its premises as bartop machines, regardless of the height of such bartop machines located in a bar....

Code § 8.20.020.385(a)(i)-(ii).

         On February 20, 2015, Director Jacqueline Holloway of the Department of Business License for Clark County ("Director Holloway") sent Plaintiff a letter (the "February Letter") that identified exempted locations that were grandfathered taverns under the terms of the 2014 Ordinance. (Compl. ¶ 33); (see Ex. 3 to Compl. at 2-4, ECF No. 1-4). The February Letter reflected Director Holloway's interpretation that, like the 2011 Ordinance, exemption under the 2014 Ordinance depended on the date the tavern location first received a gaming license. (See Ex. 3 to Compl. at 2-4, ECF No. 1-4). Plaintiff complied with retrofitting the taverns that were not considered grandfathered according to the February Letter. (Compl. ¶¶ 36-37).

         On October 28, 2015, Plaintiff received an additional letter from Director Holloway (the "October Letter") (collectively the "letters") stating that "previous notifications concerning the grandfathered status of [Plaintiff's] taverns . . . must be revised." (Compl.¶38); (see Ex. 6 to Compl. at 2, ECF No. 1-7). Director Holloway revised her interpretation and concluded that the application date of "current ownership, " rather than tavern location, determined grandfathered status. (Id.).

         Rather than complying with the 2014 Ordinance, Plaintiff filed the instant case seeking a petition for writ of mandamus and judicial review, and alleging violations of due process and § 1983. (See generally Compl.). Additionally, Plaintiff alleges that the County has "arbitrarily and capriciously denied [Plaintiff's] locations the package liquor licenses it regularly grants other taverns" pursuant to Code § 8.20.020.250. (Compl. 11:19-23). Plaintiff alleges this claim under its petition for writ of mandamus, judicial review, and due process causes of action.

         On February 10, 2016, Plaintiff filed a Motion for Preliminary Injunction, (ECF No. 6), which the Court later denied, (ECF No. 27). The County filed its opposition to Plaintiff's Motion for Preliminary Injunction and included in its opposition the instant Motion to Dismiss Plaintiffs claims related to the 2014 Ordinance. (See generally Mot. to Dismiss ("MTD"), ECF No. 14).

         II. LEGAL STANDARD

         Dismissal is appropriate under Rule 12(b)(6) where a pleader fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6); BellAtl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A pleading must give fair notice of a legally cognizable claim and the grounds on which it rests, and although a court must take all factual allegations as true, legal conclusions couched as a factual allegations are insufficient. Twombly, 550 U.S. at 555. Accordingly, Rule 12(b)(6) requires "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. This standard "asks for more than a sheer possibility that a defendant has acted unlawfully." Id.

         "Generally, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion .... However, material which is properly submitted as part of the complaint may be considered on a motion to dismiss." Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citations omitted). Similarly, "documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered in ruling on a Rule 12(b)(6) motion to dismiss" without converting the motion to dismiss into a motion for summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Under Federal Rule of Evidence 201, a court may take judicial notice of "matters of public record." Mack v. S. Bay BeerDistrib.,798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if the district court considers materials ...


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