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Richard U. Heppler v. Pennsylvania Liquor Control Board

July 18, 2011

RICHARD U. HEPPLER,
PLAINTIFF,
v.
PENNSYLVANIA LIQUOR CONTROL BOARD, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Baylson, J.

MEMORANDUM REGARDING MOTION TO DISMISS

I. Introduction

Plaintiff Richard Heppler ("Heppler") commenced this case pro se against Defendants Patrick J. Stapleton III ("Stapleton") and the Pennsylvania Liquor Control Board ("PLCB") (collectively, "Commonwealth Defendants") for alleged violations of the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution and Section 2 of the Sherman Act. (Am. Compl., ECF No. 9.) Presently before the Court is Defendants' Motion to Dismiss Heppler's Amended Complaint for lack of jurisdiction because Defendants are entitled to sovereign immunity under the Eleventh Amendment. (Mot. to Dismiss., ECF No. 10.) The immediate issue is whether the PLCB is an "arm" or "alter ego" of the Commonwealth of Pennsylvania and thus entitled to Eleventh Amendment immunity from suit in federal court. On June 22, 2010, the Court entered an Order granting the Motion. (Order, ECF No. 23). This Memorandum will state the reasons.

II. Factual and Procedural Background

The relevant facts, construed in the light most favorable to Heppler, are set forth below.*fn1

Heppler owns and operates a private liquor business called Spirits of Valley Forge. (Am. Comp. at 1.) Heppler alleges that Commonwealth Defendants have monopolized and prevented his access to the Pennsylvania liquor market. (Id. at 2-4.) Heppler seeks injunctive, declaratory and monetary relief for his injuries. (Id. at 1.)

On July 7, 2010, Heppler filed his original Complaint against the Commonwealth Defendants. (Compl., ECF No. 1.) Defendants then moved to dismiss the Complaint. (Mot. to Dismiss, ECF No. 7.) The Court granted the Motion to Dismiss, but allowed Heppler thirty (30) days to file an Amended Complaint. (Order, ECF No. 8.) Heppler filed an Amended Complaint on Dec. 16, 2010. (Am. Compl.) Defendants moved to dismiss the Amended Complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. (Mot. to Dismiss, ECF No. 10.) Heppler responded in opposition to the Motion to Dismiss. (Resp., ECF No. 12.) In response to the Court's order, the Commonwealth Defendants submitted supplemental briefing on the issue of their entitlement to sovereign immunity under the Eleventh Amendment. (Order, ECF No. 14; Suppl. Mem. of Law, ECF No. 17.) On May 23, 2011, Heppler filed a Reply to Defendants' Supplemental Memorandum and then, on June 20, 2011, filed an Amended Reply. (Reply, ECF No. 20; Am. Reply, ECF No. 21.)

III. Jurisdiction and Legal Standards

A. Jurisdiction

The Court has jurisdiction over Heppler's § 1983 and Sherman Act claims under 28 U.S.C. § 1331.

B. Legal Standards

Under a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, the plaintiff usually bears the burden of persuasion that the court has subject matter jurisdiction, Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991), except where the defendant is asserting sovereign immunity. See Christy v. Pa. Tpk. Comm'n, 54 F.3d 1140, 1144 (3d Cir. 1995) (concluding that the Eleventh Amendment claim of sovereign immunity should be treated as an affirmative defense and therefore must be proven by the asserting party).

There are two categories of Rule 12(b)(1) motions: a facial attack on the complaint, and a factual attack that challenges the plaintiff's facts "at any stage of the proceedings, from the time the answer has been served until after the trial has been completed." Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891-92 (3d Cir. 1977). The assertion of Eleventh Amendment immunity as a defense is properly treated as a facial challenge. Urella v. Pa. State Troopers Ass'n, 628 F. Supp. 2d 600, 604 (E.D. Pa. 2008). "In reviewing a facial attack, the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff." Gould Elecs., Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000). When considering a facial attack, "the Court must consider the allegations of the complaint as true." Mortensen, 549 F.2d at 891. "[A] dismissal for lack of subject matter jurisdiction is not an adjudication on the merits and thus should be ordered 'without prejudice.'" Figueroa v. Buccaneer Hotel, Inc., 188 F.3d 172, 182 (3d Cir. 1999); see also Korvettes, Inc. v. Brous, 617 F.2d 1021, 1024 (3d Cir. 1980) ("A dismissal for lack of jurisdiction is plainly not a determination of the merits of a claim.").

In deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the court must accept as true all well-pleaded factual allegations and must construe them in the light most favorable to the non-moving party. Phillips v. County of Allegheny, 515 F.3d 224, 228 (3d Cir. 2008). The Third Circuit has addressed the effect of the Supreme Court's most recent pleading-standard decisions, Twombly v. Bell Atlantic Corp., 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009). See Phillips, 515 F.3d at 233-34. Twombly established a three-pronged approach for all civil actions: first, the court must identify the elements plaintiff must plead to state a claim; second, the court asks whether the complaint sets forth factual allegations or conclusory statements; third, if the complaint sets forth factual allegations, the court must assume their veracity and draw reasonable inferences in favor of the non-moving party, but then must determine whether the factual allegations plausibly give rise to an entitlement to relief. Santiago v. Warminster Twp., 629 F.3d 121, 130 n.7 (3d Cir. 2010); see Iqbal, 129 S. Ct. at 1950, 1953. For the second step, the court should separate the factual and legal elements of the claims, accepting the well-pleaded facts as true and disregarding any legal conclusions. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009).

To state a claim, a plaintiff must allege circumstances with enough factual matter to suggest the required claim exists. Phillips, 515 F.3d at 234. This does not impose a probability requirement at the pleading stage, but instead simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary elements of the claims. Iqbal, 129 S. Ct. at 1949; Phillips, 515 F.3d at 234. Pleading standards are not the same as standards of proof. See Fowler, 578 F.3d at 213-14.

Whether a claim is plausible depends on the context, i.e. the nature of the claim asserted. Phillips, 515 F.3d at 233. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to reasonably infer that the defendant is liable for the misconduct alleged. Gelman v. State Farm Mut. Auto. Ins. Co., 583 F.3d 187, 190 (3d Cir. 2009).

IV. The Parties' Contentions

Heppler claims that Commonwealth Defendants have discriminated against him in

violation of the Equal Protection Clause of the Fourteenth Amendment by not allowing him access to the Pennsylvania liquor market. (Am. Compl. at 2.) Specifically, Heppler alleges that his products were arbitrarily removed from the Pennsylvania market and that three of his applications to introduce certain products to the market were denied without reason. (Id. at 3.) Heppler further alleges that Defendants have monopolized the Pennsylvania liquor market and have transformed the PLCB from a regulatory agency into a "For Profit Business." (Id. at 2-4.)

The Commonwealth Defendants contend that Heppler's claims should be dismissed for lack of subject matter jurisdiction and for failure to state an equal protection claim. (Mot. to Dismiss at 4-5.) They assert that both the PLCB and Stapleton are entitled to sovereign immunity under the Eleventh Amendment, which deprives the Court of jurisdiction over Heppler's claims. (Id. at 4.) They also assert that ...


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