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Plaintiffs-Appellees,
Defendant-Appellant.
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Before DUHÉ, BARKSDALE, and DENNIS, Circuit Judges.
RHESA HAWKINS BARKSDALE, Circuit Judge:
Primarily at issue is whether Texas law preempts a City ofHouston ordinance regulating gun shows conducted on city property. The City contests the partial summary judgment granting declaratoryand injunctive relief to HC Gun & Knife Shows, Inc., and Todd Bean,individually and d/b/a High Caliber Gun & Knife Shows; the judgmenton a jury verdict awarding lost profits to Appellees; andattorney's fees awarded Appellees. We AFFIRM .
Bean and his successor corporation (Appellees) have held gunand knife shows since 1988. From 1990 until late 1993, theyconducted ten at the City's George R. Brown Convention Center (thecenter).
In June 1993, the Houston City Council passed an ordinancerequiring all persons attending gun shows at city-owned facilities, inter alia : (1) to sign a form declaring the firearms in theirpossession (registration requirement); and (2) for all firearmsbrought to such shows, to either remove the firing pins or installkey-operated trigger locks (disabling requirement). Houston, Tex.Code of Ordinances § 12-24.
Bean conducted three shows at the center in 1993, but canceledthe fourth, scheduled for that December, because of the ordinance'sregistration and disabling requirements. No shows were held at thecenter between December 1993 and March 1997.
In January 1996, Appellees filed this action in state court,alleging that the ordinance's registration and disablingrequirements effectively prevented them from holding shows on city-owned property: the registration requirements would cause delay,expense, and impositions that would deter attendance; removal ofthe firing pins would damage many of the guns shown and traded atthe shows; and installation of trigger locks would be costprohibitive and result in delays that would greatly reduceattendance. The City removed this action to federal court.
In early 1997, the district court denied summary judgment forthe City and granted partial summary judgment for Appellees. Declaratory relief was premised on the ordinance being preempted byTex. Local Gov't Code § 215.001, which prohibits, inter alia ,municipal regulation of the "transfer, private ownership, keeping,transportation, ... or registration of firearms"; and on theordinance being violative of the commercial speech protectionsguaranteed by the United States and Texas Constitutions. The Citywas permanently enjoined from enforcing the ordinance.
Following a trial on damages that May, the jury awarded$329,000 for lost profits. In addition, the court awardedAppellees $54,442 (stipulated amount) for attorney's fees andexpenses.
The City contends that the preemption and commercial speechholdings are erroneous; that the court abused its discretion byrefusing to order production of documents relating to, and byexcluding evidence of, Appellees' gross revenues and expenses,including with respect to shows conducted outside the Houston area;that the evidence is insufficient to support the verdict; and that,because the judgment must be reversed, so must the fees award.
The summary judgment is reviewed de novo , pursuant to the samestandard applied by the district court. E.g. , Drake v. AdvanceConst. Service, Inc. , 117 F.3d 203, 204 (5th Cir. 1997). It isproper when the summary judgment record, viewed in the light mostfavorable to the non-movant, establishes that "there is no genuineissue as to any material fact and ... the moving party is entitledto a judgment as a matter of law". Fed. R. Civ. P. 56(c); Drake ,117 F.3d at 204.
The ordinance requires applicants seeking to use the centerfor gun shows to execute an agreement which includes, inter alia ,covenants (1) to provide and compensate off-duty City policeofficers to provide security for the show; (2) that all persons inattendance will be required to sign a form declaring all weapons intheir possession; and (3) to comply with the city's regulations,which require either the removal of firing pins or the installationof trigger locks on all firearms brought into the facility. (1)
The Texas statute, Tex. Loc. Gov't Code Ann. § 215.001, held bythe district court to preempt the ordinance, prohibitsmunicipalities from regulating, inter alia , "the transfer, privateownership, keeping, transportation, ... or registration offirearms". (2)
The City's brief devotes less than four pages (one of which isdevoted to quoting § 215.001) to preemption. Essentially, the Citycontends that the ordinance is not preempted by § 215.001(a),because, rather than restricting the transfer, private ownership,keeping, transportation, licensing, or registration of firearms,the ordinance is instead a valid exercise of the City's authority,under § 215.001(b)(2), to regulate the discharge of firearms withinthe city limits.
The district court rejected this contention, reasoning that,although the ordinance's disabling requirement (removal of firingpins or installation of trigger locks) prevents the discharge offirearms, the ordinance also seeks to regulate the transfer,private ownership, or keeping of firearms, which is prohibited by§ 215.001(a). It concluded that, through the ordinance, the City"attempts to occupy all but a hair's width of the entire field ofthe regulation of gun shows"; and that, if the City'sinterpretation of § 215.001(b)(2) (discharge-exception) wereaccepted, it would "swallow[] the general rule preempting municipalregulation of firearms". We agree.
The City does not address the ordinance's registrationrequirement; nor does it make any attempt to defend thatrequirement as a regulation relating to firearms-discharge. In anyevent, pursuant to our review of whether the ordinance ispreempted, it is obvious that the registration requirement is not related to preventing such discharge. Therefore, the ordinance is not authorized by § 215.001(b)(2). Moreover, the registrationrequirement is expressly preempted by § 215.001(a).
In district court, the City maintained that the disablingrequirement was authorized by § 215.001(b)(6), which permitsmunicipal regulation of the conduct of persons in certain publicplaces; and that the ordinance is an exception to the City's morerestrictive ban on possession of all firearms on city premises. But, the City does not make those contentions here and, therefore,has abandoned them. See Yohey v. Collins , 985 F.2d 222, 224-25 (5th Cir. 1993).
Instead, the City relies on a Texas Attorney General opinionthat a different ordinance, Houston, Tex. Code of Ordinances § 28-47,which makes it unlawful for a child to discharge a firearm withinthe City limits, is not preempted by § 215.001(a). Op. Tex. Att'yGen. No. 94-56 (1994). Unlike the ordinance now at issue, theordinance addressed by the Attorney General prohibited only firearms-discharge; it did not impose registration or disablingrequirements such as those now at issue.
In sum, based on our review of the summary judgment record,the ordinance is preempted by Tex. Loc. Gov't Code Ann. § 215.001(a);it is not authorized by the discharge-exception in subpart(b)(2). Because we so hold, we need not reach the federal and statecommercial speech constitutional issues. See County Court ofUlster County, N.Y. v. Allen , 442 U.S. 140, 154 (1979) (court has"strong duty to avoid constitutional issues that need not beresolved in order to determine the rights of the parties to thecase under consideration").
The City moved for summary judgment in April 1996; Appellees,that May. By a May scheduling order, the discovery deadline wasearly January 1997, with trial in late March. In late November1996, the parties moved jointly to extend the discovery deadlineuntil the end of February 1997; the motion was granted in earlyDecember.
In mid-January 1997, the City requested documents related toall gun shows conducted by Appellees. But, one week later, theywere awarded partial summary judgment. Accordingly, in mid-February, the parties' joint motion to limit discovery toAppellees' damages was granted.
In early March, one week after the discovery deadline, theparties moved jointly to continue trial. On 13 March, it wascontinued until mid-May.
That same day (13 March), Appellees moved for a protectiveorder, contesting the relevancy of the requested documentspertaining to non-Houston shows. On 31 March, the City moved tocompel document production and to amend the scheduling order; itmaintained that, in order to determine Appellees' profit margins,it was necessary to review documents related to all of their shows.
On 29 April, the court granted the protective order and deniedthe motion to compel. Noting that the case was no longer at anearly stage of pre-trial discovery, and that the partial summaryjudgment had narrowed discovery to damages for Appellees' inabilityto conduct shows at the center, the court held that the documentrequests were overly broad, unreasonable, and unduly burdensome. On Thursday, 15 May 1997, only four days before trial set forMonday, 19 May, the City moved to continue trial for 45 days,claiming that it had received incomplete information to allocateAppellees' overhead expenses and income in order to calculate theirprofit margin. The continuance was denied at a hearing conductedthe following day. At trial, the City repeatedly, butunsuccessfully, re-urged the relevance of the non-Houston evidence.
In contending that it was prohibited from defending againstAppellees' damages claims, the City presses its need for documents,including income tax returns, relating to Appellees' gross revenuesand expenses for non-Houston shows. Therefore, it contests theadverse rulings on its motions to compel, for continuance, and forjudgment as a matter of law, as well as the non-Houston evidencebeing excluded, and the protective order being granted.
In sum, the damages issue is extremely limited. For example,the City does not contest the methodology employed by Appellees, nor assert, as it did in district court, that, as a matter of Texaslaw, lost profits could not be recovered under the circumstancesexisting in this case. Distilled, the issue relates only todenied-evidence wanted for challenging lost profits. Concomitantly, as hereinafter discussed, the scope of our review is narrow.
The discovery, evidentiary, and no -continuance rulings arereviewed for abuse of discretion. E.g., Coughlin v. Lee , 946 F.2d1152, 1158 (5th Cir. 1991) (discovery); Polanco v. City of Austin,Tex. , 78 F.3d 968, 982 (5th Cir. 1996) (evidentiary rulings); Dorsey v. Scott Wetzel Servs., Inc. , 84 F.3d 170, 171 (5th Cir.1996) (continuance). "A trial judge's control of discovery isgranted great deference." Meadowbriar Home for Children, Inc. v.Gunn , 81 F.3d 521, 534 n.12 (5th Cir. 1996). We will reverse adiscovery ruling only if it is "arbitrary or clearly unreasonable", Mayo v. Tri-Bell Industries, Inc. , 787 F.2d 1007, 1012 (5th Cir.1986), and the complaining party demonstrates that it wasprejudiced by the ruling. See Hastings v. North East Indep. SchoolDist. , 615 F.2d 628, 631 (5th Cir. 1980). Similarly, unless anerroneous evidentiary ruling substantially affects the rights ofthe complaining party, the error is harmless. Fed. R. Evid. 103(a). "When the question for the trial court is a schedulingdecision, such as whether a continuance should be granted, thejudgment range is exceedingly wide, for, in handling its calendarand determining when matters should be considered, the districtcourt must consider not only the facts of the particular case butalso all of the demands on counsel's time and the court's." Fontenot v. Upjohn Co. , 780 F.2d 1190, 1193 (5th Cir. 1986). Wewill not "substitute our judgment concerning the necessity of acontinuance for that of the district court", unless the complainingparty demonstrates that it was prejudiced by the denial. Id . at1194.
The denial of judgment as a matter of law is reviewed de novo ;in so doing, we apply the same standard as did the district court;and "[s]uch judgment is appropriate if, after viewing the trialrecord in the light most favorable to the non-movant, there is no'legally sufficient evidentiary basis' for a reasonable jury tohave found for the prevailing party". Hill v. International PaperCo. , 121 F.3d 168, 170 (5th Cir. 1997).
Obviously, each of the challenged rulings turns, to a greatextent, on the relevance of Appellees' non-Houston documents. Discovery and evidence being limited to Houston revenues andexpenses was premised, inter alia , on the court's conclusion thatthe other data was not relevant to Appellees' damages resultingfrom inability to conduct shows at the center. (As discussed, indenying the motion to compel and granting the protective order, thecourt also noted that the case was "no longer at an early stage ofpretrial discovery", and held that the discovery requests were"overly broad, unreasonable, and unduly burdensome".)
Consistent with this limitation-basis, the court, in denyingjudgment as a matter of law, rejected the City's contention thatAppellees could not recover lost profits without evidence of theirtotal revenues and expenses.
The City maintains that the desired evidence was relevant tothe profitability of Appellees' business, alternate methods ofcalculating lost profits, and mitigation of damages; and that theevidence does not support the verdict because the lack of evidencerelating to total gross revenues and expenses precludedestablishing entitlement to lost profits. We conclude that theevidentiary, discovery, and no -continuance rulings were not anabuse of discretion; and that the damages award is supported bysufficient evidence.
Before 1996, Bean, who lives approximately 30 minutes awayfrom the center, did business as a sole proprietorship; hisbusiness was incorporated in 1996. In essence, the business was athree-person operation, headed by Bean. Other personnel, such assecurity, were hired as necessary for a show. During the period1992-97, Bean conducted approximately 35 non-Houston showsannually. He testified that, because of the ordinance, he wasprecluded from presenting 13 shows at the center; and thatpresenting a show there was not precluded by his presenting a non-Houston show on the same day.
Appellees sought damages only for lost profits resulting fromtheir inability, because of the ordinance, to conduct center-shows. As noted, they did not claim that it affected their ability toconduct shows in other markets, and did not seek to recover otherpossible damages, such as for injury to business reputation, lossof good will, or other potential harm related to non-Houston shows. In its brief, the City has failed totally to demonstrate how theevidence at issue is relevant to the awarded lost profits.
In any event, the record reflects that the challengeddiscovery, evidentiary, and no-continuance rulings did not precludethe City from defending against the damages claim. In short, therequisite prejudice is lacking. Appellees presented evidencepertaining to each of their Houston shows (both at the center andat a private facility) before and after the ordinance was enacted. The City cross-examined Bean about his calculation of profits andexpenses for each of those shows, and about his method ofallocating fixed expenses. Concerning mitigation, the City'scross-examination of Bean established, for example, that he did not seek to conduct shows at several other facilities in the Houstonarea while the ordinance was in effect. In addition, the courtallowed the City, over Appellees' objection, to elicit from Beanthe above-described number of non-Houston shows held annually, andruled that it could question him about those in Biloxi,Mississippi.
The City's assertion that the evidence does not support theaward is belied by the record, which includes not only Bean'stestimony, but extensive documentary evidence corroborating it. Inthe light of the framing of this issue on appeal, the exclusion ofthe non-Houston data does not undermine the sufficiency of thatevidence. Restated, there is a legally sufficient evidentiarybasis for the awarded lost profits.
Because we affirm, the City's only challenge to the fees award(stipulated amount of $54,442) -- that a reversal compels itsabrogation -- fails.
For the foregoing reasons, the judgment is
AFFIRMED.
1. 1 The ordinance states, in pertinent part:
(a) Each approved applicant for the useof a facility to conduct a gun show shall berequired to execute a special form ofoccupancy agreement that incorporates therequirements generally applicable to therental of facilities and the additionalrequirements established in this section. Theagreement shall include:
(1) A covenant to provide a specifiedminimum number of off-duty citypolice officers who shall becompensated solely at the occupant'sexpense and shall provide
security for the gun show; the number shall be approved by thedirector and shall at least be based upon the number of expectedexhibitors, the expected number of patrons and the size of the areato be leased;
....
(3) A covenant that all persons whoattend the gun show will be requiredto sign a form approved by the cityattorney setting forth a declarationof weapons in their possession, ifany, and expressing theirunderstanding of theirresponsibilities relating topossession, use and access to anyfirearms and ammunition at the gunshow;
(4) A covenant to comply with andenforce the public gun showregulations of the city, which shallinclude, without limitation, arequirement that no firearm may bebrought into any exhibit area of anyfacility without first beinginspected by a city police officer... who shall verify that eachfiring pin has been removed from thefirearm, or alternatively, the citypolice officer may install a triggerlock upon the firearm if it is ofsuch a design that the firing pin(s)may not be removed by any procedurethat will not cause permanent damageto the firearm, provided that thecity police officer shall retain thekey to the lock and the lock shallnot be removed from the firearmuntil the firearm is checked out ofthe exhibit area....
Houston, Tex. Code of Ordinances § 12-24.
2. 2 The statute provides, in pertinent part:
(a) A municipality may not adoptregulations relating to the transfer, privateownership, keeping, transportation, licensing,or registration of firearms, ammunition, orfirearm supplies.
(b) Subsection (a) does not affect theauthority a municipality has under another lawto:
....
(2) regulate the discharge offirearms within the limits of themunicipality;
....
(6) regulate the carrying of afirearm by a person other than a personlicensed to carry a concealed handgununder Subchapter H, Chapter 411,Government Code, at a:
(A) public park;
(B) public meeting of amunicipality, county, or othergovernmental body;
(C) political rally, parade,or official political meeting; or
(D) nonfirearms-relatedschool, college, or professionalathletic event.
(c) The exception provided by Subsection
(b)(6) does not apply if the firearm is in or is carried to or froman area designated for use in a lawful hunting, fishing, or other
sporting event and the firearm is of the type commonly used in theactivity.
Tex. Loc. Gov't Code Ann. § 215.001.