United States District Court, D. South Dakota, Central Division
OPINION AND ORDER DENYING PLAINTIFF'S MOTION TO
ROBERTO A. LANGE UNITED STATES DISTRICT JUDGE
Dollar Loan Center of South Dakota, LLC (DLC) brought this
suit under 42 U.S.C. § 1983 against Defendant Bret
Afdahl (Afdahl), the director of the South Dakota Division of
Banking (the Division), alleging Afdahl deprived DLC of
procedural due process required under the Fourteenth
Amendment when he revoked DLC's money lending licenses.
Doc. 1. Afdahl moved to dismiss the action for failure to
state a claim, Doc. 8, DLC moved for partial summary
judgment, Doc. 11, and Afdahl filed a cross motion for
summary judgment, Doc. 19. This Court issued an opinion and
order granting DLC's motion for partial summary judgment
in part and denying Afdahl's motion to dismiss and cross
motion for summary judgment on May 29, 2018. Doc. 37. DLC
subsequently filed a motion to reconsider the portion of this
Court's May 29 opinion and order discussing the
deprivation of DLC's protected property interest as
lasting for a 15-day period (or "at least for 15
days" as the Court twice put it) between the
issuance of Afdahl's Cease and Desist and License
Revocation Order (Order) on September 13, 2017, and the
limited stay of that Order, issued on September 28, 2017, and
subsequent notice of hearing given on October 3, 2017. Doc.
41. Afdahl then filed an interlocutory appeal of this
Court's decision to the Eighth Circuit on the issues of
absolute and qualified immunity, Doc. 44, and DLC filed a
cross appeal on the same questions presented in its motion to
reconsider, Doc. 48. The Eighth Circuit is currently holding
the appeal and cross appeal briefing schedule in abeyance
until this Court addresses DLC's motion to reconsider.
For the reasons stated below, this Court denies DLC's
motion to reconsider.
Facts Relevant to this Motion
Court's May 29, 2018 opinion and order details the full
factual background that gave rise to DLC's § 1983
claim. The facts presented here are those relevant to
DLC's current motion to reconsider only.
Division conducted a target examination and a full scope
examination of DLC in the summer of 2017, and Afdahl
subsequently issued his Order on September 13, 2017. Doc.
10-1 at 7-12. The Order instructed DLC to "cease
engaging in the business of money lending in South
Dakota" and to notify all consumers who were issued
loans after June 21, 2017, that the loans were void and
uncollectible as to "any principal, fee, interest, or
charge pursuant to SDCL 54-4-44." Doc.lO-latll. The
Order further required DLC to surrender all of its South
Dakota money lender licenses and return them to the Division.
Doc. 10-1 at 11. The Order contained a "Findings of
Fact" section, a "Conclusions of Law" section,
and a notice that "any person aggrieved by this
order" could within 30 days file a request for a hearing
before the South Dakota Banking Commission. Doc. 10-1 at
8-12. The Division emailed representatives of DLC on
September 15, 2017, emphasizing that DLC was no longer a
licensed money lender in South Dakota, and again on September
18, 2017, requesting confirmation that DLC was complying with
the Order. Doc. 1-7; Doc. 1-8.
served this current lawsuit on Afdahl on September 25, 2017.
Doc. 5. Perhaps then realizing that he had been too hasty in
his Order, Afdahl issued a limited stay of the Order on
September 28, 2017, which provided that DLC could continue
servicing all loans originated prior to November 16, 2016.
Doc 10-1 at 14-15. DLC was also to provide certain
information to the Division about the unpaid loans originated
prior to November 16, 2016, basic identifying information
about the loans and borrowers, and monthly reports to the
Division showing all loan payments received during the
preceding month. Doc. 10-1 at 14-15.
October 3, 2017, the Division served DLC with a notice of
hearing to be held on October 17, 2017, in front of the
Office of Hearing Examiners (OHE). Doc. 10-1 at 1-5: The
Notice advised that the purpose of the hearing was "to
determine whether Dollar Loan Center has violated the
provisions of SDCL Chapter 54-4, and whether or not its money
lending license[s] should be revoked and the terms and
conditions as contained in the [Order] should be
enforced." Doc. 10-1 at 1. Afdahl had statutory
authority to issue a cease and desist order and this Court
determined that the combined effect of the limited stay on
September 28 and the October 3 notice of hearing was to
transform the original Order into a cease and desist order.
Doc. 37 at 36.
than availing itself of the hearing to challenge the
propriety of Afdahl's actions, DLC on October 5, 2017,
requested to continue the hearing, though no specific date
was proposed. Doc. 10-6 at 2. Around the same time, DLC's
Chief Operations Officer, Edward Anderson, authored a letter
to the Division, advising that DLC was remrning its lending
licenses to the Division in accordance with Afdahl's
Order. Doc. 43-1. The Division received this letter and the
licenses for DLC's main Sioux Falls location and Rapid
City location on October 6, 2017. Doc. 52-1 at ¶¶
22-23. DLC also had valid licenses for locations in Aberdeen,
Watertown, and a satellite Sioux Falls branch, but had not
reopened those locations at the time DLC returned its main
Sioux Falls and Rapid City location licenses to the Division.
Doc. 43 at ¶ 6. DLC did not return to the Division the
valid licenses for the three non-operational branches. Doc.
43 at ¶ 6. The Division has retained possession of the
licenses for DLC's main Sioux Falls location and Rapid
City location since October 6, 2017. Doc. 52-1 at ¶ 25.
All money lending licenses issued to DLC expired on December
31, 2017, and DLC has not filed any renewal applications.
Doc. 52-1 at ¶30.
October 12, 2017, DLC filed an appeal of Afdahl's Order
in the South Dakota Sixth Judicial Circuit Court, arguing
that it constituted a final agency action. Doc. 10-2. That
appeal was dismissed by the Sixth Judicial Circuit Court,
Doc. 52-1 at ¶ 31, and DLC then appealed to the Supreme
Court of South Dakota, which has not yet issued a ruling on
that appeal, Doc. 52-1 at ¶32.
May 29, 2018 opinion and order, this Court determined that
Afdahl violated DLC's constitutionally guaranteed right
to procedural due process when he revoked, through his Order,
DLC's money lending licenses without providing DLC with a
predeprivation hearing. Doc. 37 at 22-37. This Court granted
summary judgment to DLC for the 15-day period between the
issuance of Afdahl's Order on September 13, 2017, and the
issuance of the stay of that Order on September 28, 2017. As
explained in footnote 2 above, this Court elsewhere
characterized the deprivation as being "for at least 15
days" leaving for trial whether the deprivation was only
15 days or perhaps 20 days (through to the notice of
hearing). In doing so, this Court noted that
"[w]hen Afdahlvstayed his Order on September
28, 2017, and subsequently on October 3, 2017, gave notice of
a hearing, he essentially transformed the Order into a cease
and desist order, and [not knowing at the time what DLC
subsequently has placed in the record] it appears that DLC
remains in possession of its licenses at this
time." Doc. 37 at 36.
Analysis A. Standard for a Motion to
moves this Court to reconsider the determination it made
regarding the duration of the deprivation of DLC's
protected property interest. Doc. 41. Rule 54(b) of the
Federal Rules of Civil Procedure instructs that "any
order or other decision, however designated, that adjudicates
fewer than all the claims or the rights and liabilities of
fewer than all the parties does not end the action as to any
of the claims or parties and may be revised at any time
before the entry of a judgment adjudicating all the claims
and all the parties' rights and liabilities."
Fed.R.Civ.P. 54(b); see also Julianello v. K-V Pharm.
Co.. 791 F.3d 915, 923 n.3 (8th Cir. 2015) (noting that
Rule 54(b), rather than Rule 60(b), is the appropriate rule
under which to consider a reconsideration motion when final
judgment has not yet entered on any of plaintiff s claims).
district court's decision to reconsider a motion for
summary judgment is reviewed under the abuse of discretion
standard because "[t]he district court has the inherent
power to reconsider and modify an interlocutory order any
time prior to the entry of judgment." K.C. 1986
Ltd.'P'ship v.ReadeMfg., 472 F.3d 1009, 1017
(8th Cir. 2007) (quoting Murr Plumbing, Inc. v. Scherer
Bros. Fin. Servs. Co., 48 F.3d 1066, 1070 (8th Cir.
1995)). Courts generally should not reopen issues decided in
prior stages of the same litigation unless the court is
"convinced that [its prior decision] is clearly
erroneous and would work a manifest injustice."
Agostini v. Felton, 521 U.S. 203, 236 (1997)
(alteration in original) (quoting Arizona v.
California. 460 U.S. 605, 618 n.8 (1983)).