904 F2d 40 Golden Road Motor Inn Inc v. City of Reno Golden Road Motor Inn Inc

904 F.2d 40

Unpublished Disposition

NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.

GOLDEN ROAD MOTOR INN, INC., a Nevada corporation, dba
Quality Inn; Farahi Investment Company, a Nevada
General Partnership, Plaintiffs-Appellants,
CITY OF RENO, a municipal corporation; Sue Smith, council
member; Katherine Wishart, council member; Florence
Lehners, council member; Peter Sferrazza, council member;
Gaming Industry Association of Nevada, Inc., a Nevada
corporation, Defendants-Appellees.
GOLDEN ROAD MOTOR INN, INC., a Nevada corporation, dba
Quality Inn; Farahi Investment Company, a Nevada
General Partnership, Plaintiffs-Appellants,
CITY OF RENO, a municipal corporation; City Council,
Thereof; Sue Smith; Katherine Wishart; Florence Lehners;
Peter Sferrazza; Gaming Industry Association of Nevada,
Inc., a Nevada corporation, Defendants-Appellees.

Nos. 89-15553, 89-15991.

United States Court of Appeals, Ninth Circuit.

Submitted May 15, 1990.
Decided May 29, 1990.

Appeal from the United States District Court for the District of Nevada; Bruce R. Thompson, District Judge, Presiding.



Before TANG, WILLIAM A. NORRIS and FERNANDEZ, Circuit Judges.

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Appellants Golden Road Motor Inn, Inc. ("Golden Road") and Farahi Investment Co. ("Farahi") alleged that the City of Reno, the City Council, several of its individual members, and the Gaming Industry Association of Nevada, Inc. ("Gaming Industry") violated appellants' rights to due process and equal protection, as secured by 42 U.S.C. Sec. 1983, as well as Secs. 1 and 2 of the Sherman Act, when there was a 42-day delay before their zoning request was granted. Appellants now argue in consolidated actions that the district court erred when it granted appellees' motions to dismiss and for attorney's fees.


* Appellants asserted three causes of action against various defendants, which the district court dismissed for failure to state a claim, and which we now review de novo. In the first cause of action, appellants claimed that the City, the Council, and the Council's individual members violated their constitutional rights to due process and equal protection, as secured by 42 U.S.C. Sec. 1983, when they delayed their consideration of appellants' request for a special use permit that would allow appellants' 143-room motel to be placed in the same zoning category as a 301-room hotel for the purpose of expanding their gaming operations.1


Appellants claim, in a very convoluted brief, that they have a "property right" not only to the zoning designation but also to an immediate decision by the Council. They argue that the Council's power to grant a special use permit was "ministerial" rather than "discretionary" and that they had a right to present evidence in support of their application without any delay.


The district court held that appellants failed to establish any property right, and we agree. See Excerpt of Record ("E.R.") at 3 (Order Dismissing Complaint). Property rights do not arise from "an abstract need or desire for" or a "unilateral expectation of" a benefit. Board of Regents v. Roth, 408 U.S. 564, 577 (1972). In Nevada, use of property for gaming is a privilege not a right, see NRS 463.0129(2) ("Any license issued ... is a revocable privilege, and no holder acquires any vested right therein or thereunder."), and municipalities have long had discretion to regulate or suppress gaming. See State v. Rosenthal, 93 Nev. 36, 559 P.2d 830 (1977). Where the issuing authority has discretion to grant or deny license applications in a closely regulated field, applicants cannot claim a property right protected by the Fourteenth Amendment. See Erdelyi v. O'Brien, 680 F.2d 61, 63 (9th Cir.1982) (per curiam). Nor does mere delay constitute a denial of due process. See also Parratt v. Taylor, 451 U.S. 527, 543-44 (1981). Appellants cannot succeed in their claim of a violation of Sec. 1983 where they have failed to establish a right protected by the Constitution.


In their second cause of action, appellants claim that they were denied their right to equal protection; however, this claim is also without merit. Appellants have failed to establish that they were treated differently than any other applicant similarly situated or that the zoning classifications do not bear a rational relationship to a permissible government objective. Here, the ordinance in dispute limits gaming to hotels of 301 or more rooms for the express purpose of "provid[ing] for the mitigation of the impacts of the hotel-casino development and encourag[ing] higher quality destination resorts which will increase tourism." RMC Sec. 18.06.265. The purpose of the ordinance is rationally related to a legitimate government objective.


Appellants' third cause of action deserves even less attention than the other two. Appellants asserted that the city, the Council, and the Gaming Association unlawfully conspired to constrain trade, in violation of the Sherman Act. 15 U.S.C. Secs. 1 and 2. Appellants failed to show the elements required to establish a prima facie case of violations under Secs. 1 and 2. See McGlinchy v. Shell Chemical Co., 845 F.2d 802, 811 (9th Cir.1988). They cite no facts which establish the material elements necessary to sustain a claim for violations of Secs. 1 and 2. See E.R. at 2 (Complaint). Even if appellants had managed to establish antitrust violations, they would still have had to overcome the Gaming Association's antitrust immunity under the Noerr-Pennington doctrine, see United Mine Workers v. Pennington, 381 U.S. 657, 670 (1965); Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 136-37 (1961); Boone v. Redevelopment Agency, 841 F.2d 886 (9th Cir.1988), cert. denied, 109 S.Ct. 489 (1988), and the municipality's antitrust immunity as a governmental actor. See Eastern Railroad Presidents Conference, 365 U.S. at 136.


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The Gaming Industry sought attorney's fees of $11,231.83 pursuant to Fed.R.Civ.P. 11 and the other appellees sought attorney's fees of $10,100 pursuant to 42 U.S.C. Sec. 1988. The district court granted both motions. We review for abuse of discretion, and affirm.


Appellants argue that the complaint was not "frivolous" and that even if any one cause of action was frivolous the entire pleading was not. Although appellants contest the award of attorney's fees, they do not appear to challenge the amount.


The district court found the complaint to be "patently frivolous both factually and legally at the time Mr. Mollath signed the complaint in violation of Fed.R.Civ.P. Rule [sic] 11." E.R. at 4 (Order Granting Attorney Fees). The district court included appellants' counsel in the Rule 11 sanction, even though appellee Gaming Industry had only moved for sanctions against appellants, on the grounds that "counsel knew the facts intimately" and that he had "initiated this action in bad faith to harass the defendants." Id.2 According to the district court, "[t]his case is an excellent example of the abuse of the judicial process in this litigious society. These plaintiffs, in a nutshell, are complaining about a 43-day delay before the Reno City Council granted them everything they asked for." E.R. at 3.


Appellants provided no factual or legal basis for their claims. The district court did not abuse its discretion in concluding that appellants' complaint was frivolous and unfounded at the time of filing and in awarding attorney's fees pursuant to Fed.R.Civ.P. 113 and 28 U.S.C. Sec. 1988.


For the reasons stated above, the judgments of the district court are




The panel unanimously finds this case suitable for decision without oral argument. Fed.R.App.P. 34(a) and Ninth Circuit Rule 34-4


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3


RMC Sec. 4.24.260 (Exception for hotels with more than three hundred rooms) and RMC Sec. 18.06.625 (HC Hotel Casino) have the effect of limiting gaming to hotels with 301 rooms or more


After appellants' counsel was sanctioned, he failed to raise the issues of notice and hearing before the district court, see E.R. at 1; Appellee Gaming Industry's Brief at 15, and therefore, we will not consider these issues on appeal


Because we hold that the district court did not abuse its discretion in awarding attorney's fees to Gaming Industry pursuant to Fed.R.Civ.P. 11, we need not address the question raised by the district court of whether it also had authority to grant attorney's fees pursuant to its inherent power or 28 U.S.C. Sec. 1927