Plaintiff Obsession Sports Bar & Grill, Inc. (“Plaintiff”) alleged that the City of Rochester (“City”) violated its due process rights and improperly restricted its hours of operation because Section 120-34(O) of the Rochester Municipal Code was “an impermissible exercise of municipal zoning power” that conflicted with the New York State Alcoholic Beverages Control Law (“ABC Law”).  Under the ABC Law, establishments with liquor licenses can sell alcohol from 8:00 a.m. until 2:00 a.m. Monday through Saturday, and from 12p.m. to 2:00 a.m. on Sundays.  Plaintiff commenced an Article 78 proceeding to challenge the regulation, and both the Supreme Court and Fourth Department agreed the City law was preempted by the ACB Law.  Plaintiff then filed the instant action in federal court.  

The District Court for the Western District of New York first held that while the Complaint did not specify whether the claim was for procedural or substantive due process, the Court interpreted the pleading as asserting a substantive due process claim, as it alleged the City injured Plaintiffs’ property rights to operate their business during all hours allowed by the ABC Law through an “illegal ordinance.”  Such claims require both “a valid property interest” and that “defendants infringed on the property right in an arbitrary or irrational manner.”  However, a plaintiff cannot maintain a substantive due process claim merely because he was deprived of property pursuant to a statute or ordinance that is later found to be contrary to, or preempted by, state law.  Here, it was undisputed that the City acted under color of state law when it enacted § 120-34(O), which had the effect of restricting the hours in which Plaintiff could remain open and sell alcohol.

Thus, even assuming Plaintiff had a sufficient constitutionally-protected property interest in their New York State Liquor License, the Court found Plaintiffs failed to show that the City lacked the authority to enact this zoning provision. Furthermore, Plaintiff did not challenge the City’s authority to enact zoning provisions generally, or that any type of “fundamental procedural irregularity” occurred during the process by which Defendant enacted § 120-34(O). Finally, Plaintiffs did not produce any evidence that in enacting § 120-34(O), Defendant was motivated by any personal animosity towards Plaintiffs, or that Defendant acted for an improper purpose. As such, the court held Plaintiff’s failed to state a claim and dismissed the action.

The case was Obsession Sports Bar & Grill, Inc. v. City of Rochester, 235 F.Supp.3d 461 (W.D.N.Y. 2017).