Mich. City Officials Immune in Marijuana Dispensary Case

On September 8, the Eastern District of Michigan ruled that a municipality’s decision to not grant a business owner a requested a permit to open a medical marijuana dispensary did not violate the Fifth Amendment’s Equal Protection Clause nor the Fourteenth Amendment’s Due Process Clause for the unsuccessful applicant. The court held that municipality’s departments and their employees acting in an official capacity retain immunity from such suits giving prospective plaintiffs a lack of constitutional standing to proceed.

The court order and associated opinion developed as a result of a legal battle between Exclusive Brands LLC (Exclusive) and the City of Garden City, Michigan, where Exclusive sued Garden City for an injunction to reverse the city’s denial of the plaintiff’s application for a special use permit to open a marijuana dispensary within Garden City limits. Garden City denied Exclusive a permit due to the City Council’s decision to impose a moratorium on all new applications. As a result, the plaintiff alleged that the defendant violated the Equal Protection Clause by secretly approving other applications during the moratorium and violated the Due Process Clause by depriving the plaintiff of “property” in the form of a right to a permit without “due process” in the form of proper notice of the impending moratorium and the right to a hearing before the Council to object to the moratorium and the resulting denied permit application.

Exclusive filed suit against Garden City, the City Manager of Garden City (Manager), the Planning and Zoning Administrator for Garden City (Administrator), the Senior Principal Planner for Garden City (Planner), the Building Department for Garden City (Department), and the City Council for Garden City (Council). All defendants, except for the Planner, filed a motion to dismiss the legal action on grounds that the plaintiff lacked standing because the defendants possess immunity. The court agreed and granted the defendants’ motion, ruling that “when a claim is brought against both an individual in her official capacity and the governmental entity, the claim against an individual in her official capacity is redundant,” resulting in the rule that “municipal departments are not separate legal entities capable of being sued because they are ‘merely agencies of the city’…” also applying to employees of said departments.

The court also granted the motion to dismiss from the Planner, an independent contractor the court stated not capable of asserting immunity, on different grounds. District Judge Levy determined that the plaintiff failed to provide evidence that: (1) established a “causal connection between (Planner’s) actions and the (p)laintiff’s alleged harm” and (2) that showed that the “(p)laintiff’s alleged harm is redressable via any judgment against (Planner).”

The court held that a lack of causal connection existed because after reviewing the Planner’s employment contract, it was clear that “he was not in a position to deny (the) (p)laintiff’s (application) and cannot be the causal link to (the plaintiff’s) alleged harm.” Furthermore, the court also ruled that a lack of redressable harm existed because the Planner lacked “authority to make any decision with respect to a special use permit” nor could the Planner change the decision to implement a moratorium on new applications as the Planner “is not a member of the City Council, which enacted the six-month moratorium.”

The court concluded by determining that even if a lack of standing did not exist, the plaintiff’s asserted constitutional violations lacked merit. As to the Equal Protection Clause, the court stated that if the defendants had granted applications for others during the moratorium that a violation could occur, however, the plaintiff failed to provide nothing more than “bare allegations” about such an alleged unconstitutional practice that did not even show the court who “such similarly situated applicants are.”

Moving to the alleged Due Process Clause violations, the court determined that a violation only occurred if one was being deprived of a constitutionally protected property interest, for which a permit is not. The court reasoned that “where an entity granting a zoning permit has discretion to deny a permit application despite applicant’s compliance with the minimum requirement, the permit applicant has no constitutionally protected property interest. If there is unconstrained discretion to deny the benefit, a prospective recipient of that benefit can establish no more than a ‘unilateral expectation’ to it.”