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

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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.”
 

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  1. Can I get this form on line,if not where can I obtain one. I am eligible.

  2. What a fine example of the best of the Hoosier tradition! How sad that the AP has to include partisan snark in the obit for this great American patriot and adventurer.

  3. Why are all these lawyers yakking to the media about pending matters? Trial by media? What the devil happened to not making extrajudicial statements? The system is falling apart.

  4. It is a sad story indeed as this couple has been only in survival mode, NOT found guilty with Ponzi, shaken down for 5 years and pursued by prosecution that has been ignited by a civil suit with very deep pockets wrenched in their bitterness...It has been said that many of us are breaking an average of 300 federal laws a day without even knowing it. Structuring laws, & civilForfeiture laws are among the scariest that need to be restructured or repealed . These laws were initially created for drug Lords and laundering money and now reach over that line. Here you have a couple that took out their own money, not drug money, not laundering. Yes...Many upset that they lost money...but how much did they make before it all fell apart? No one ask that question? A civil suit against Williams was awarded because he has no more money to fight...they pushed for a break in order...they took all his belongings...even underwear, shoes and clothes? who does that? What allows that? Maybe if you had the picture of him purchasing a jacket at the Goodwill just to go to court the next day...his enemy may be satisfied? But not likely...bitterness is a master. For happy ending lovers, you will be happy to know they have a faith that has changed their world and a solid love that many of us can only dream about. They will spend their time in federal jail for taking their money from their account, but at the end of the day they have loyal friends, a true love and a hope of a new life in time...and none of that can be bought or taken That is the real story.

  5. Could be his email did something especially heinous, really over the top like questioning Ind S.Ct. officials or accusing JLAP of being the political correctness police.

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