Beg Investments, LLC v. Alberti

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

BEG INVESTMENTS, LLC, :
:
Plaintiff, : Civil Action No.: 13-cv-0182 (RC)
:
v. : Re Document No.: 10
:
NICHOLAS ALBERTI, et al., :
:
Defendants. :

MEMORANDUM OPINION

DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION OF THE COURT’S DISMISSAL OF
PLAINTIFF’S CLAIMS

I. INTRODUCTION

Plaintiff BEG Investments, LLC, believes that six members of the D.C. Alcohol

Beverage Control Board (“the Board”) acted unlawfully when they conditioned Plaintiff’s liquor

license on the hiring of a police detail to patrol the area surrounding Plaintiff’s establishment.

Plaintiff views the Board members’ imposition of a police detail requirement as extortion, and

claims that the Board members violated the Racketeer Influence and Corrupt Organizations Act

(“RICO”), and the Takings Clause of the Fifth Amendment. On March 31, 2014, this Court

dismissed Plaintiff’s complaint, explaining that the Board members were entitled to qualified

immunity as to Plaintiff’s claims under RICO, and that Plaintiff’s allegations relating to an

obligation to pay money were insufficient to establish a takings claim under the Fifth

Amendment. Now before the Court is Plaintiff’s motion for reconsideration. Plaintiff contends

that this Court’s decision was erroneous in two respects: first, it misapplied the qualified

immunity doctrine, and second, it ignored controlling Supreme Court authority that supported

Plaintiff’s takings claim. Upon consideration of Plaintiff’s motion and the memoranda in
support thereof and opposition thereto, the Court will deny the motion for reconsideration as to

both claims.

II. FACTUAL BACKGROUND

Plaintiff is a company that operated Twelve Restaurant and Lounge in the District of

Columbia. Defendants Nicholas Alberti, Donald Brooks, Herman Jones, Calvin Nophlin, Mike

Silverstein, and Ruthanne Miller (collectively, “Defendants”), are members of the Board who

issued a series of orders pertaining to Plaintiff’s liquor license. 1

As detailed in this Court’s Memorandum Opinion of March 31, 2014, 2 the Board was

established by D.C. Code § 25-201, and it is authorized to “issue licenses to persons who meet

the requirements” set forth in the Alcoholic Beverage Statute and to impose “certain conditions”

on those licenses if the Board “determines that the inclusion of the conditions will be in the best

interest of the locality . . . where the licensed establishment is to be located.” D.C. Code § 25-

104(a), (e). The Board also oversees the Alcoholic Beverage Regulation Administration

(“ABRA”), which provides “professional, technical, and administrative staff assistance to the

Board in the performance of its functions.” D.C. Code § 25-202.

On June 22, 2011, the Board issued an order on Plaintiff’s application for renewal of its

liquor license. Compl. ¶ 26, ECF No. 1; Board Order 2011-289. 3 After finding that there had

1
The term “liquor license” is used to refer Plaintiff’s Retailers’ Class CT License to
serve alcoholic beverages.
2
The Court hereby incorporates by reference the factual allegations set forth in its earlier
Memorandum Opinion. See generally BEG Investments, LLC v. Alberti, 34 F. Supp. 3d 68, 73–
75 (D.D.C. 2014).
3
The Board’s June 2011 Order, which is a matter of public record and a document on
which Plaintiff’s complaint relies, has subsequently been filed with this Court by Defendants.
See Def.’s Ex. A at 3–8, ECF No. 19-2; available at

2
been three assaults and fifteen calls to MPD at the establishment’s address, and that MPD had

increased patrols in the area due to intoxicated individuals leaving Plaintiff’s establishment, the

Board granted Plaintiff’s application for renewal of its license on the condition that Plaintiff hire

a Metropolitan Police Department (“MPD”) reimbursable detail “whenever the establishment

provides any entertainment permitted by the establishment’s entertainment endorsement.”

Compl. ¶ 26; Board Order 2011-289 at 4, 7. 4 A reimbursable detail is comprised of “MPD

officers [who] patrol the surrounding area of an establishment for the purpose of maintaining

public safety.” See D.C. Code § 25-798(a)(3); Emergency Suspension of Liquor Licenses Act of

2005, D.C. Act 16-20.

Upon Plaintiff’s motion for reconsideration, the Board modified its June 22 order on

August 10, 2011, ordering that Plaintiff hire an MPD reimbursable detail “whenever the

establishment provides any DJs or live music as entertainment at the establishment.” Compl. ¶

30; Board Order 2011-368 at 12.5 Additionally, the modified order required that the MPD detail

“be hired for a minimum of four hours and shall end no sooner than one hour after closing.”

Compl. ¶ 30. On July 11, 2012, the Board fined Plaintiff $1500 for failing to hire an MPD

reimbursable detail when a DJ performed at Plaintiff’s establishment on October 9, 2011.

Compl. ¶ 33; Board Order 2012-301 at 22. 6

http://abra.dc.gov/sites/default/files/dc/sites/abra/publication/attachments/Twelve%20Restaurant
%20and%20Lounge%20-%20June%2022%202011.pdf.
4
Page numbers refer to the numbers generated by the Court's ECF filing system.
5
The Board’s August 2011 Order, which is a matter of public record and upon which
Plaintiff’s complaint relies, has subsequently been filed with this Court by Defendants. See
Defs.’ Ex. B at 10–12, ECF No. 19-2, available at
http://abra.dc.gov/sites/default/files/dc/sites/abra/publication/attachments/Twelve%20Restaurant
%20Lounge%20-%20August%2010%202011.pdf.
6
The Board’s July 2012 Order, which is a matter of public record and upon which
Plaintiff’s complaint relies, has subsequently been filed with this Court by Defendants. See

3
 Plaintiff initiated this action by filing a six-count complaint against Defendants in their

individual capacities on February 11, 2013. Plaintiff claimed that the Board’s order requiring

Plaintiff to hire an MPD detail at a rate of over $55 per hour – more than double the basic wage

of police officers – was unlawful and extortionate. As is pertinent here, Plaintiff alleged: (1)

racketeering in violation of RICO, 18 U.S.C. § 1962(c); (2) conspiracy to commit racketeering in

violation of RICO § 1962(d); and (3) deprivation of property interests pursuant to the Takings

Clause of the Fifth Amendment. Defendants moved to dismiss under Federal Rule of Civil

Procedure 12(b)(6), and the Court granted Defendants’ motion. Compl. ¶¶ 83–90, 94–98.

In its Memorandum Opinion, this Court explained that Plaintiff’s two RICO claims,

which were predicated on violations of the Hobbs Act, failed because Plaintiff did not allege that

Defendants’ imposition of a reimbursable detail violated clearly established law. BEG

Investments, 34 F. Supp. 3d. at 80–84. As a result, Defendants were entitled to qualified

immunity. Id. The Court also dismissed Plaintiff’s Takings Clause claim, finding that Plaintiff’s

allegation that he was obligated to pay money was insufficient to state a claim under the Fifth

Amendment. Id. at 86–88.

Plaintiff now argues that the Court erred in both analyses, first by misapplying the

qualified immunity doctrine to Plaintiff’s extortion-based RICO claims, and second, by failing to

consider the effect of Koontz v. St. Johns River Water Mgmt. Dist., 133 S. Ct. 2586 (2013), on

Plaintiff’s Takings Clause claim. The Court addresses each issue in turn.

Defs.’ Ex. C at 15–23, ECF No. 19-2, available at
http://abra.dc.gov/sites/default/files/dc/sites/abra/publication/attachments/Twelve%20Restaurant
%20and%20Lounge%20-%20July%2011%202012_0.pdf.

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 III. ANALYSIS

A. Legal Standard

Because Plaintiff seeks reconsideration of an interlocutory order, Rule 54(b) governs the

Court’s analysis. See Judicial Watch v. U.S. Dep’t of Army, 466 F. Supp. 2d 112, 123 (D.D.C.

2006) (discussing Rule 54(b)’s application to denials of dispositive motions). Rule 54(b) is

silent, however, on the standard of review applicable to motions for reconsideration of such

interlocutory decisions and orders. “To fill this gap, courts in this district have held that ‘relief

upon reconsideration [of an interlocutory decision] pursuant to Rule 54(b) is available as justice

requires.’” United States v. Coughlin, 821 F. Supp. 2d 8, 18 (D.D.C. 2011) (quoting Hoffman v.

District of Columbia, 681 F. Supp. 2d 86, 90 (D.D.C. 2010)). Under the “as justice requires”

standard, reconsideration may be warranted when a court has “patently misunderstood the

parties, made a decision beyond the adversarial issues presented, made an error in failing to

consider controlling decisions or data, or where a controlling or significant change in the law has

occurred.” U.S. ex rel. Westrick v. Second Chance Body Armor, Inc., 893 F. Supp. 2d 258, 268

(D.D.C. 2012) (internal citation, quotation, and alteration omitted); see also Cobell v. Norton,

224 F.R.D. 266, 272 (D.D.C. 2004).

“These considerations leave a great deal of room for the court’s discretion and,

accordingly, the ‘as justice requires’ standard amounts to determining ‘whether relief upon

reconsideration is necessary under the relevant circumstances.’” Lewis v. District of Columbia,

736 F. Supp. 2d 98, 102 (D.D.C. 2010) (quoting Cobell, 224 F.R.D. at 272). “[I]n general, a

court will grant a motion for reconsideration of an interlocutory order only when the movant

demonstrates: (1) an intervening change in the law; (2) the discovery of new evidence not

previously available; or (3) a clear error in the first order.” Stewart v. Panetta, 826 F.Supp.2d

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176, 177 (D.D.C.2011) (quoting Johnson-Parks v. D.C. Chartered Health Plan, 806 F. Supp. 2d

267, 269 (D.D.C. 2011)). At the same time, a court’s discretion under Rule 54(b) is “limited by

the law of the case doctrine and subject to the caveat that where litigants have once battled for

the court’s decision, they should neither be required, nor without good reason permitted, to battle

for it again.” Singh v. George Washington Univ., 383 F. Supp. 2d 99, 101 (D.D.C. 2005)

(internal quotation marks omitted). A court therefore may deny a motion for reconsideration

when it merely asserts “‘arguments for reconsideration [that] the court has already rejected on

the merits.’” McLaughlin v. Holder, 864 F. Supp. 2d 134, 141 (D.D.C. 2012) (quoting Capitol

Sprinkler Inspection, Inc. v. Guest Servs., Inc., 630 F.3d 217, 227 (D.C. Cir. 2011)). Finally,

“[t]he burden is on the moving party to show that reconsideration is appropriate and that harm or

injustice would result if reconsideration were denied.” Second Chance Body Armor, 893 F.

Supp. 2d at 268.

B. Qualified Immunity

Plaintiff’s complaint alleged that Defendants violated and conspired to violate RICO by

demanding payment to MPD’s reimbursable detail program under color of official right but

without lawful authority, using wrongful economic harm and wrongful fear of economic harm to

obtain property for the benefit of MPD police officers in violation of the Hobbs Act, 18 U.S.C. §

1951. Compl. ¶¶ 83–90. In granting Defendants’ motion to dismiss Plaintiff’s RICO and

underlying Hobbs Act claims, this Court explained that state actors are entitled to qualified

immunity on RICO claims for “conduct that does not violate clearly established statutory or

constitutional rights of which a reasonable person would have known.” BEG Investments, 34 F.

Supp. 3d at 81 (quoting Int'l Action Ctr. v. United States, 365 F.3d 20, 24 (D.C. Cir. 2004)). The

Court then went on to analyze the provisions of state law upon which Plaintiff relied and

6
determined that in June 2011, it was not clearly established that the Board lacked the authority to

impose reimbursable details as a condition on licenses. Id. at 81–84.

In Plaintiff’s motion for reconsideration, it does not dispute the Court’s conclusion that

no clearly established law limited the Board’s authority to impose MPD detail conditions. And

Plaintiff concedes that qualified immunity is a potential defense to a RICO claim. Pl.’s Mot.

Recons. at 6, ECF No. 10. Plaintiff does argue, however, that the Court “misapplied such

qualified immunity in direct conflict with controlling precedent.” Id. at 1. Plaintiff argues that

the qualified immunity “defense is not available where, as herein, the plaintiff pleads an intent to

extort money from the victim regardless of the facial lawfulness of the acts improperly employed

in furtherance of such extortionate acts.” Id. at 6.

To support its position, Plaintiff directs the Court’s attention – for the first time – to

Robbins v. Wilkie, 433 F.3d 755 (10th Cir. 2006).7 The plaintiff in Robbins alleged that

employees of a federal agency extorted him by refusing to maintain a road to his property,

bringing unfounded criminal charges against him, cancelling his permits and privileges,

trespassing on his land, and interfering with his business, all in an effort to force the plaintiff to

give the agency a right-of-way on the plaintiff’s property. Id. at 768. The Tenth Circuit

reasoned that even if the agency could cite regulatory provisions permitting each individual

action, “if Defendants engaged in lawful actions with an intent to extort a right-of-way from [the

plaintiff] rather than with an intent to merely carry out their regulatory duties, their conduct is

actionable under RICO.” Id.

7
Plaintiff’s opposition to Defendants’ motion to dismiss made no mention of this opinion
from the Tenth Circuit, citing only the Supreme Court opinion that subsequently reversed
Robbins. See Pl.’s Opp’n. at 26–27, ECF No. 6.

7
 As Defendants correctly point out, however, Robbins is not controlling precedent. In

addition to being a non-binding decision from another circuit, Robbins was reversed by the

Supreme Court in 2007. 8 See Wilkie v. Robbins, 551 U.S. 537, 567 (2007) (holding that “the

conduct alleged does not fit the traditional definition of extortion,” and finding that RICO did not

give the plaintiff a cause of action). As the Supreme Court explained in Wilkie, the common law

definition of extortion, presumably relied upon by Congress when it passed the Hobbs Act, “was

a property offense committed by a public official who took any money or thing of value that was

not due to him under the pretense that he was entitled to such property by virtue of his office.”

Id. at 564 (internal quotation marks omitted). The Supreme Court emphasized that common law

extortion implicated private, rather than public beneficiaries, and it declined to find “extortion in

efforts of Government employees to get property for the exclusive benefit of the Government.”

Id. at 564–65. The Court went on to explain that there was good reason to shield public officers

from Hobbs Act liability where those officers acted aggressively to collect property owed to the

Government, because the alternative “could well take the starch out of regulators who are

supposed to bargain and press demands vigorously on behalf of the Government and the public.”

Id. at 566–67; id. at 566 (“[Agency] employees ‘do not become racketeers by acting like

aggressive regulators.’” (quoting Sinclair v. Hawke, 314 F.3d 934, 944 (C.A.8 2003))).

Even if this Court were inclined to treat Robbins as controlling precedent, however,

subsequent Tenth Circuit case law shows that Plaintiff’s RICO claims would still fail. In

Gillmor v. Thomas, 490 F.3d 791 (10th Cir. 2007), issued shortly before the Supreme Court

8
Although Plaintiff suggests that the portion of Robbins on which it relies remains good
law because Robbins was reversed on other grounds, the Court notes that Plaintiff’s motion for
reconsideration does not cite a single post-Wilkie decision to support its qualified immunity
argument.

8
reversed Robbins, the Tenth Circuit rejected a plaintiffs’ argument that county officials whose

actions were authorized by zoning ordinances were nevertheless liable under RICO if they acted

with the intent to extort property. Id. at 799–800. The Gillmor court found the argument

unpersuasive, taking care to distinguish the facts of Robbins, which involved allegations of “a

pattern of harassing and punitive acts that were both targeted at [the plaintiff] and well outside

the bounds of normal [agency] practice,” from the facts in Gillmor, where “County Officials

merely engaged in the normal administrative duties required to enforce the zoning ordinances,”

and the plaintiffs did “not allege that they were treated any differently than other . . . developers,

all of whom are subject to” the same regulations. Id. at 799.

In this case, Plaintiff’s allegations are analogous to those found inadequate in Gillmor.

Far from alleging that the Board targeted Plaintiff and treated it differently than other

establishments, Plaintiff’s complaint actually indicates that other DC nightclubs were subject to

the same reimbursable detail condition. See Compl. ¶¶ 35–82. Plaintiff’s RICO claims and the

preceding paragraphs are devoid of any allegation that a similar establishment was treated

differently by the Board, or that the Board members’ actions in issuing and enforcing license

conditions were “well outside the bounds of normal [ABC Board] practice.” Cf. Gillmor, 490

F.3d at 799.

Plaintiff would nevertheless have us infer a RICO conspiracy to extort because the Board

imposed an otherwise lawful reimbursable detail condition after hearing testimony from MPD

officers regarding the need for the detail to ensure public safety, which Plaintiff characterizes as

“illegal solicitation of such details . . . in violation of the Omnibus Police Reform Amendment

Act of 2000, 6A DCMR § 301.6 and MPD General Order 201.17.” Pl.’s Mot. Recons. at 6.

Both provisions that Plaintiff cites, however, pre-date the 2005 DC Code provision that explicitly

9
authorizes MPD to assign overtime officers to reimbursable details. See DC Code § 25-798

(2005). It is thus far from clear that, in June 2011, an MPD officer who testified that he or she

believed that a reimbursable detail was necessary at a given establishment clearly violated the

prohibitions against soliciting or providing off-duty officers’ police-related services to

commercial establishments as set forth in 6A DCMR § 301.69 and MPD General Order 201.17.10

Moreover, Plaintiff has failed to establish that a reasonable Board member who was

authorized to impose a reimbursable detail condition, and who allegedly did so with the intent of

providing additional funding to MPD, has violated a clearly established constitutional or

statutory right. True, any reasonable Board member would know that extortion, or “the

obtaining of property from another, with his consent, induced by wrongful use of actual or

threatened force, violence, or fear, or under color of official right,” is unlawful under the Hobbs

Act. 18 U.S.C. § 1951(b)(2). However, the Supreme Court has repeatedly instructed courts “not

to define clearly established law at a high level of generality.” Ashcroft v. Al-Kidd, 131 S. Ct.

2074, 2084 (2011) (“The general proposition, for example, that an unreasonable search or seizure

violates the Fourth Amendment is of little help in determining whether the violative nature of

particular conduct is clearly established.”). Here, Plaintiff’s claims depend upon establishing

that a reasonable Board member who engaged in the alleged conduct at issue – issuing an order

consistent with the regulator’s authority but with the unlawful intent to benefit MPD – “would

have understood that what he is doing” violated the Hobbs Act, thereby giving rise to RICO

liability. See id. at 2083. Plaintiff has failed to meet this burden, providing neither “controlling

authority in [its] jurisdiction at the time of the incident which clearly established the rule on

9
See D.C. Mun. Regs. tit. 6-A, § 301 (2000).
10
MPD General Order GO-PER-201.17 (April 16, 2004), available at
https://go.mpdconline.com/GO/PER_201_17.pdf.

10
which [it] seek[s] to rely, nor . . . a consensus of cases of persuasive authority such that a

reasonable [Board member] could not have believed that his actions were lawful.” Wilson v.

Layne, 526 U.S. 603, 617 (1999).

Accordingly, the Court finds that Plaintiff has not shown that the Court erred by failing to

consider controlling decisions, or that justice requires reconsideration of the Court’s order

dismissing Plaintiff’s RICO and underlying Hobbs Act claims on qualified immunity grounds.

C. Takings Claim

Plaintiff’s second argument for reconsideration is presented as a request that the Court

consider “new controlling authority” related to Plaintiff’s Fifth Amendment Takings Clause

claim. Pl.’s Mot. Recons. at 1. Plaintiff’s complaint alleged that Defendants had taken

Plaintiff’s property in violation of the Fifth Amendment by forcing Plaintiff “to pay for public

policing services, without compensation to the Plaintiff.” Compl. ¶ 97–98. When granting

Defendants’ motion to dismiss for failure to state a claim, this Court explained that a mere

obligation to pay money is not sufficient to establish a taking under the Fifth Amendment. BEG

Investments, 34 F. Supp. 3d at 86–88 (“[A] majority of the federal appellate courts have held that

a mere payment of money, without more, is not a taking within the meaning of the Takings

Clause.”); see Commonwealth Edison Co. v. United States, 46 Fed. Cl. 29, 37–41 (Fed. Cl. 2000)

(collecting cases). Plaintiff now contends that a Supreme Court opinion decided after the parties

completed briefing on the motion to dismiss but before the issuance of this Court’s Order

requires reconsideration of Plaintiff’s Takings claim. Specifically, Plaintiff argues that Koontz v.

St. Johns River Water Mgmt. Dist., 133 S. Ct. 2586 (2013), provides new support for Plaintiff’s

claim because it held that the “impermissible denial of a governmental benefit is a

constitutionally cognizable injury,” id. at 2596, and the liquor license that Plaintiff would have

11
lost if it refused to pay for the MPD detail is such a governmental benefit. This “supervening

authority,” Plaintiff contends, directly contradicts those authorities relied upon by this Court.

Pl.’s Mot. Recons. at 9.

Plaintiff is incorrect. In Koontz, a state agency sought to circumvent the Supreme Court’s

holdings in Nollan v. California Coastal Comm’n, 483 U.S. 825 (1987) and Dolan v. City of

Tigard, 512 U.S. 374 (1994), which together held that “a unit of government may not condition

the approval of a land-use permit on the owner’s relinquishment of a portion of his property

unless there is a ‘nexus’ and ‘rough proportionality’ between the government’s demand and the

effects of the proposed land use.” Koontz, 133 S.Ct. at 2591. The agency in Koontz, rather than

directly conditioning its land-use permit approval on the relinquishment of the plaintiff’s

property, instead provided the plaintiff with the choice of either relinquishing his property or

paying to improve other public lands, denying the permit when the plaintiff refused to yield. Id.

at 2592–93. The Supreme Court explained that the requirements of Nollan and Dolan did not

change “depending on whether the government approves a permit on the condition that the

applicant turn over property or denies a permit because the applicant refuses to do so.” Id. at

2595. The Court went on to explain that the agency’s alternative demand for money also did not

satisfy Nollan and Dolan. The Court acknowledged that in Eastern Enterprises v. Apfel, 524

U.S. 498 (1998), five justices agreed that “the Takings Clause does not apply to government-

imposed financial obligations that ‘do not operate upon or alter an identified property interest.”

Koontz, 133 S. Ct. at 2599 (internal quotation marks omitted). Nevertheless, Eastern Enterprises

was readily distinguishable from Koontz, the Court explained, because in Koontz, “unlike

Eastern Enterprises, the monetary obligation burdened petitioner’s ownership of a specific

parcel of land.” Id. (analogizing to decisions finding that the government must pay just

12
compensation when it takes a lien, because a lien is “a right to receive money that is secured by a

particular piece of property”).

Although Plaintiff would have this Court extend Koontz well beyond the land-use

permit context to a situation involving monetary obligations necessitated by a liquor license

condition, Koontz explicitly prevents such a reading. The Supreme Court clearly stated that “the

fulcrum [Koontz] turns on is the direct link between the government’s demand and a specific

parcel of property.” Id. at 2600. No such direct link to real property is present in this case. And

if there were any doubt about the possible extension of Koontz’s takings analysis to obligations

to pay money to the government untethered to specific parcels of property in the land-use permit

setting, Koontz helpfully clarifies that “[t]his case . . . does not affect the ability of governments

to impose property taxes, user fees, and similar laws and regulations that may impose financial

burdens on property owners.” Id. at 2601.

In short, Koontz addresses the scope of Nollan and Dolan and the application of the

Takings Clause to the land-use permitting process, but none of those subjects are implicated in

this case. This Court’s analysis of Plaintiff’s Takings Clause claim pursuant to Eastern

Enterprises is unaffected by Koontz, 11 and Plaintiff has failed to meet its burden “to show that

reconsideration is appropriate and that harm or injustice would result if reconsideration were

denied.” Second Chance Body Armor, 893 F. Supp. 2d at 268. Plaintiff’s motion for

reconsideration of its takings claim on the basis of intervening authority is denied.

11
See Am. Council of Life Insurers v. District of Columbia, 2014 WL 5893464, at *20
(D.D.C. Nov. 13, 2014) (holding that because “Koontz did not alter the majority view of the
Supreme Court, as reflected by the plurality in Eastern Enterprises, . . . a general monetary
exaction does not qualify as a specific, identifiable property interest to serve as a predicate for a
takings claim”) (internal quotation marks and citation omitted).

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 IV. CONCLUSION

For the foregoing reasons, Plaintiff’s motion for reconsideration is denied. An order

consistent with this Memorandum Opinion is separately and contemporaneously issued.

Dated: March 24, 2015 RUDOLPH CONTRERAS
United States District Judge

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