ILNews

Pawn shop owner loses case based on ‘class-of-one’ theory

Back to TopCommentsE-mailPrintBookmark and Share

An Evansville pawn shop owner couldn’t convince the 7th Circuit Court of Appeals that the state singled him out for disparate treatment without a rational basis when it initially denied his application for a pawnbroking license.

William Saalwaechter, owner of Fares Pawn LLC, applied for a pawnbroking license with the Indiana Department of Financial Institutions. DFI’s director, David Mills, had just started the job when Saalwaecther applied for the license. So instead of making a decision on the application as is allowed under statute, Mills sent the application to the full board for consideration, but it was denied. The agency cited concerns about previous pawnbroking on the property and about his store manager’s criminal history. He eventually received the license after he signed a memorandum of understanding that he would comply with certain conditions, including not employ the store manager in question.

Convinced the license application process should have gone more smoothly, he sued the DFI in federal court alleging it violated the equal protection clause. He argued the state singled him out without a rational basis, the “class-of-one” theory, which rests on the premise that the equal protection clause requires at least a rational reason for the difference to ensure all persons are being treated alike under like circumstances and conditions.

The District Court ruled in favor of the agency.

“We agree with the district court that for each proposed  comparator, either no reasonable jury could conclude that Saalwaechter and the comparator were similarly situated, or there was a rational basis for any differential treatment,” Judge Joel Flaum wrote in Fares Pawn LLC and William K. Saalwaechter v. Indiana Department of Financial Institutions, et al., 13-3240.

The defendants also asked the Circuit Court to extend the U.S. Supreme Court’s holding Engquist v. Oregon Department of Agriculture to Indiana’s pawn-licensing scheme, or at least to Mills’ decision not to exercise delegated authority, both of which the defendants suggest also demand consideration of subjective, discretionary factors.

In Engquist, the Supreme Court held that public employees cannot bring class-of-one claims against their public employers because the theory is a poor fit in the employment context, which involves “discretionary decisionmaking based on a vast array of subjective, individualized assessments.”

The practical problem with allowing class-of-one claims to go forward in the public employment context is … “‘that governments will be forced to defend a multitude of such claims in the first place, and courts will be obliged to sort through them in a search for the proverbial needle in a haystack,’” Judge Joel Flaum wrote, citing Engquist. “Because ‘taking the equal protection route bypasses the administrative and judicial review procedures established to remedy arbitrary official action,’ such a task seems especially wasteful when Indiana already offers an administrative channel to challenge the wrongful denial of license applications.”

“Regardless, having sorted through this haystack and found no needle, the judgment of the district court is affirmed.”
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. YES I WENT THROUGH THIS BEFORE IN A DIFFERENT SITUATION WITH MY YOUNGEST SON PEOPLE NEED TO LEAVE US ALONE WITH DCS IF WE ARE NOT HURTING OR NEGLECT OUR CHILDREN WHY ARE THEY EVEN CALLED OUT AND THE PEOPLE MAKING FALSE REPORTS NEED TO GO TO JAIL AND HAVE A CLASS D FELONY ON THERE RECORD TO SEE HOW IT FEELS. I WENT THREW ALOT WHEN HE WAS TAKEN WHAT ELSE DOES THESE SCHOOL WANT ME TO SERVE 25 YEARS TO LIFE ON LIES THERE TELLING OR EVEN LE SAME THING LIED TO THE COUNTY PROSECUTOR JUST SO I WOULD GET ARRESTED AND GET TIME HE THOUGHT AND IT TURNED OUT I DID WHAT I HAD TO DO NOT PROUD OF WHAT HAPPEN AND SHOULD KNOW ABOUT SEEKING MEDICAL ATTENTION FOR MY CHILD I AM DISABLED AND SICK OF GETTING TREATED BADLY HOW WOULD THEY LIKE IT IF I CALLED APS ON THEM FOR A CHANGE THEN THEY CAN COME AND ARREST THEM RIGHT OUT OF THE SCHOOL. NOW WE ARE HOMELESS AND THE CHILDREN ARE STAYING WITH A RELATIVE AND GUARDIAN AND THE SCHOOL WON'T LET THEM GO TO SCHOOL THERE BUT WANT THEM TO GO TO SCHOOL WHERE BULLYING IS ALLOWED REAL SMART THINKING ON A SCHOOL STAFF.

  2. Family court judges never fail to surprise me with their irrational thinking. First of all any man who abuses his wife is not fit to be a parent. A man who can't control his anger should not be allowed around his child unsupervised period. Just because he's never been convicted of abusing his child doesn't mean he won't and maybe he hasn't but a man that has such poor judgement and control is not fit to parent without oversight - only a moron would think otherwise. Secondly, why should the mother have to pay? He's the one who made the poor decisions to abuse and he should be the one to pay the price - monetarily and otherwise. Yes it's sad that the little girl may be deprived of her father, but really what kind of father is he - the one that abuses her mother the one that can't even step up and do what's necessary on his own instead the abused mother is to pay for him???? What is this Judge thinking? Another example of how this world rewards bad behavior and punishes those who do right. Way to go Judge - NOT.

  3. Right on. Legalize it. We can take billions away from the drug cartels and help reduce violence in central America and more unwanted illegal immigration all in one fell swoop. cut taxes on the savings from needless incarcerations. On and stop eroding our fourth amendment freedom or whatever's left of it.

  4. "...a switch from crop production to hog production "does not constitute a significant change."??? REALLY?!?! Any judge that cannot see a significant difference between a plant and an animal needs to find another line of work.

  5. Why do so many lawyers get away with lying in court, Jamie Yoak?

ADVERTISEMENT