Egres Society, Corp. et al v. City of Brookhaven, Georgia
Filing
17
ORDER granting 3 Motion for Preliminary Injunction; denying 8 Motion to Dismiss. Signed by Judge Thomas W. Thrash, Jr. on 7/26/2018. (ss)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
EGRES SOCIETY, CORP.
DOING BUSINESS AS
JOSEPHINE'S, et al.,
Plaintiffs,
v.
CIVIL ACTION FILE
NO. 1:18-CV-1586-TWT
CITY OF BROOKHAVEN, GEORGIA,
Defendant.
OPINION AND ORDER
This is an action seeking to enjoin the Defendant’s new Alcoholic
Beverage Ordinance. It is before the Court on the Plaintiffs Egres Society, Corp.,
Medusa Restaurant & Lounge, LLC, and XS Restaurant & Lounge, LLC’s
Motion for Preliminary Injunction [Doc. 3], and on the Defendant City of
Brookhaven’s Motion to Dismiss [Doc. 8]. For the following reasons, the
Plaintiffs’ Motion for Preliminary Injunction is GRANTED, and the Defendant’s
Motion to Dismiss is DENIED.
I. Background
The
Plaintiffs
are
a
group
of
African
American
owned
nightclub/restaurants that operate within the borders of the Defendant City of
Brookhaven, Georgia. The Plaintiffs serve a predominately African American
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and Latino clientele.1 All three also employ deejays during their late night
hours.2
On October 10, 2017, the City overhauled its alcohol license regulations
with the adoption of a new Alcoholic Beverage Ordinance.3 Under the old
regime, the Plaintiffs had been categorized as “restaurants,” had been required
to pay only a few thousand dollars for their alcohol licenses, and had been able
to operate and serve alcohol seven days per week until 3:00 a.m.4 The new
Ordinance, however, substantially limited the hours of operation for alcohollicensed venues. Now, alcohol licensed venues must close at 2:00 a.m. Monday
through Saturday, and some are not allowed to serve alcohol on Sundays at all.5
The Ordinance also redefined several categories of businesses. For
example, to qualify as a “restaurant,” a business now needs to (1) have a
primary purpose of preparing food or drink for on-site consumption, (2) derive
at least 60 percent of its gross sales from the sale of food, and (3) only offer live
entertainment if any entertainment is offered at all.6 “Live entertainment,”
meanwhile, is defined by the Ordinance as “a vocal or instrumental performance
1
Compl. ¶¶ 37, 48, 72.
2
Id. at ¶¶ 38, 45, 54.
3
Id. at ¶ 17.
4
Id. at ¶¶ 36, 40, 44, 70, 71.
5
Id. at ¶ 17.
6
Alcoholic Beverage Ordinance § 4-103 [Doc. 3-2].
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by a natural person or persons physically present in the establishment while
delivering the performance.”7 Importantly, however, the Ordinance also contains
a unique carve out from this broad definition, as it states that “[l]ive entertainment specifically excludes disc jockeys . . . .”8
When the Plaintiffs applied to renew their alcohol licenses for 2018, they
designated themselves as “restaurants” as they had done previously.9 The City’s
Finance Director, however, said that the Plaintiffs were not “restaurants”
because they qualified as “entertainment venues.”10 Under the Ordinance, an
alcohol licensed business can now be labeled as an “entertainment venue” if it
has “at least one of the following characteristics: (1) has a disc jockey; (2) has a
stage; or (3) has a dance floor.”11 Businesses that fall under the “entertainment
venue” category are now required to pay significantly higher license fees than
other licensed businesses – approximately $150,000 compared to approximately
$5000-8000.12 Because the Plaintiffs had only submitted the lesser fees required
of restaurants, the Finance Director denied their applications. The Plaintiffs
7
Id.
8
Id.
9
Compl. ¶¶ 82-83.
10
Id. at ¶ 84.
11
Alcoholic Beverage Ordinance § 4-103.
Compl. at ¶ 22. See also Alcoholic Beverage Application Fee
Schedule, at 1-2 [Doc. 3-3].
12
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appealed these denials to the City’s Alcohol Board. Hearings were held at which
the Plaintiffs voiced statutory and constitutional objections to the new
Ordinance.13 But on February 13, 2018, the Alcohol Board affirmed the
Director’s denials.14
Meanwhile, the City continued to grant “restaurant” alcohol licenses to
other businesses that employ deejays, or have stages, or dance floors, including
Pink Pony.15 Pink Pony is a white-owned strip club located in the City that
caters to a predominately white clientele.16 It features stages for the dancers,
and employs deejays.17 In November 2014, Pink Pony and the City entered into
an Exit Transition Agreement in order to settle long-running litigation between
the two parties. Under the Agreement, which lasts until 2020, Pink Pony agreed
to pay the City $225,000 annually. In exchange, Pink Pony is allowed to
continue operating its sexually oriented business, and is allowed to sell and
serve alcoholic beverages, as long as it otherwise complies with the permitting
and fee requirements of the City’s Alcohol Ordinance (notwithstanding the
Ordinance’s blanket ban on granting alcohol licenses to sexually oriented
13
Id. at ¶ 86.
14
Id. at ¶ 87.
15
Id. at ¶¶ 88, 90, 98.
16
Id. at ¶ 92.
17
Id. at ¶ 91.
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businesses).18 Despite the fact that Pink Pony employs deejays and contains
stages, however, the City has continued to grant it an alcohol license as a
“restaurant,” and has allowed Pink Pony to serve alcohol seven days per week
until 4:00 a.m.19
After the Plaintiffs’ appeals were denied by the City’s Alcohol Board, the
Plaintiffs each filed separate actions in the Superior Court of DeKalb County
seeking writs of certiorari to review the City’s denials of their license applications, which the Plaintiffs recently dismissed voluntarily. About one month later
after filing their state actions, the Plaintiffs filed this action, asserting claims
under 42 U.S.C. § 1983 for violations of the First Amendment, Due Process
Clause, and Equal Protection Clause of the United States Constitution; a claim
for a violation of the Georgia Constitution’s Takings Clause; a separate count for
a petition for a writ of certiorari; and a claim for attorney’s fees.20 The Plaintiffs
seek declaratory and injunctive relief, as well as damages. The Plaintiffs now
move for a preliminary injunction, and the City moves to dismiss the Plaintiffs’
Complaint.
18
Id. at ¶ 93. The Agreement also stated that if the City’s hours of
operations changed under the Alcohol Ordinance, the SOB Fee would either
increase or decrease by $25,000 for every additional or lost thirty minute
increment, respectively. See Exit Transition Agreement, Ex. E [Doc. 3-4].
19
Compl. ¶¶ 98, 112.
20
Id. at ¶¶ 105-30.
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II. Legal Standards
A.
Preliminary Injunction Standard
A “preliminary injunction is an extraordinary and drastic remedy not to
be granted until the movant clearly carries the burden of persuasion as to the
four prerequisites.”21 In order to obtain a preliminary injunction, a movant must
demonstrate: “(1) a substantial likelihood that he will ultimately prevail on the
merits; (2) that he will suffer irreparable injury unless the injunction issues; (3)
that the threatened injury to the movant outweighs whatever damage the
proposed injunction may cause the opposing party; and (4) that the injunction,
if issued, would not be adverse to the public interest.”22 “The purpose of a
preliminary injunction is merely to preserve the relative positions of the parties
until a trial on the merits can be held.”23 “[A] preliminary injunction is
customarily granted on the basis of procedures that are less formal and evidence
that is less complete than in a trial on the merits.”24 “At the preliminary
injunction stage, a district court may rely on affidavits and hearsay materials
which would not be admissible evidence for a permanent injunction, if the
21
th
Northeastern Fla. Chapter v. Jacksonville, Fla., 896 F.2d 1283,
1285 (11 Cir. 1990).
Zardui-Quintana v. Richard, 768 F.2d 1213, 1216 (11th Cir. 1985);
Gold Coast Publications, Inc. v. Corrigan, 42 F.3d 1336, 1343 (11th Cir. 1994).
22
23
University of Texas v. Camenisch, 451 U.S. 390, 395 (1981).
24
Id.
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evidence is ‘appropriate given the character and objectives of the injunctive
proceeding.’”25
B.
Motion to Dismiss Standard
A complaint should be dismissed under Rule 12(b)(1) only where the court
lacks jurisdiction over the subject matter of the dispute.26 Attacks on subject
matter jurisdiction come in two forms: “facial attacks” and “factual attacks.”27
Facial attacks “require[ ] the court merely to look and see if [the] plaintiff has
sufficiently alleged a basis of subject matter jurisdiction, and the allegations in
his complaint are taken as true for the purposes of the motion.”28 On a facial
attack, therefore, a plaintiff is afforded safeguards similar to those provided in
opposing a Rule 12(b)(6) motion.29
“‘Factual attacks,’ on the other hand, challenge ‘the existence of subject
matter jurisdiction in fact, irrespective of the pleadings, and matters outside the
25
th
Levi Strauss & Co. v. Sunrise Intern. Trading Inc., 51 F.3d 982, 985
(11 Cir. 1995).
26
Fed. R. Civ. P. 12(b)(1).
Garcia v. Copenhaver, Bell & Assocs., M.D.’s, 104 F.3d 1256, 1261
(11th Cir. 1997); Lawrence v. Dunbar, 919 F.2d 1525, 1528-29 (11th Cir. 1990).
27
28
Lawrence, 919 F.2d at 1529 (quoting Menchaca v. Chrysler Credit,
613 F.2d 507, 511 (5th Cir. 1980)).
29
Williamson v. Tucker, 645 F.2d 404, 412 (5th Cir. 1981).
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pleadings, such as testimony and affidavits, are considered.’”30 The presumption
of truthfulness does not attach to the plaintiff’s allegations.31 Further, “the
existence of disputed material facts will not preclude the trial court from
evaluating for itself the merits of jurisdictional claims.”32
Meanwhile, a complaint should be dismissed under Rule 12(b)(6) only
where it appears that the facts alleged fail to state a “plausible” claim for
relief.33 A complaint may survive a motion to dismiss for failure to state a claim,
however, even if it is “improbable” that a plaintiff would be able to prove those
facts; even if the possibility of recovery is extremely “remote and unlikely.”34 In
ruling on a motion to dismiss, the court must accept the facts pleaded in the
complaint as true and construe them in the light most favorable to the
plaintiff.35 Generally, notice pleading is all that is required for a valid
30
Lawrence, 919 F.2d at 1529 (quoting Menchaca, 613 F.2d at 511).
31
Id.
32
Scarfo v. Ginsberg, 175 F.3d 957, 960-61 (11th Cir. 1999).
33
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009); Fed. R. Civ. P.
12(b)(6).
34
Bell Atlantic v. Twombly, 550 U.S. 544, 556 (2007).
See Quality Foods de Centro America, S.A. v. Latin American
Agribusiness Dev. Corp., S.A., 711 F.2d 989, 994-95 (11th Cir. 1983); see also
Sanjuan v. American Bd. of Psychiatry & Neurology, Inc., 40 F.3d 247, 251 (7th
35
Cir. 1994) (noting that at the pleading stage, the plaintiff “receives the benefit
of imagination”).
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complaint.36 Under notice pleading, the plaintiff need only give the defendant
fair notice of the plaintiff’s claim and the grounds upon which it rests.
III. Discussion
A.
Preliminary Injunction
Although the Plaintiffs assert a number of claims in their Complaint, they
only base their motion for a preliminary injunction on two of them: (1) a First
Amendment claim as to the Alcohol Ordinance’s ban on non-live entertainment
in restaurants, and (2) an Equal Protection claim alleging that the City is
selectively enforcing the Alcohol Ordinance’s operating hours.37 In order to
satisfy the “substantial likelihood of success” prong, the Plaintiffs need only
demonstrate that they would likely win on at least one of these claims. Because
the Plaintiffs demonstrate a substantial likelihood of success on their Equal
Protection claims, the Court need not address the First Amendment claim at
this time.
1.
Substantial Likelihood of Success
The Plaintiffs’ equal protection claim is that the City is selectively
enforcing the Alcoholic Beverage Ordinance’s operating hours and fee requirements against the Plaintiffs, while allowing other businesses to avoid the Code’s
See Lombard’s, Inc. v. Prince Mfg., Inc., 753 F.2d 974, 975 (11th
Cir. 1985), cert. denied, 474 U.S. 1082 (1986).
36
37
See Pls.’ Br. in Supp. Mot. for Prelim. Inj., at 1.
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new restrictions. This is a “class of one” equal protection claim.38 “To prevail on
a ‘class of one’ equal protection claim, [the] Plaintiffs must show they were
intentionally treated differently from others who were ‘similarly situated’ and
that there is no rational basis for the difference in treatment.”39 In order to be
“similarly situated,” the Plaintiffs and the other businesses “must be ‘prima
facie identical in all relevant respects.’”40 Although the Complaint contains
allegations of numerous businesses being allowed to renew their alcohol licenses
as restaurants despite having deejays or dance floors,41 the Plaintiffs’ brief only
addresses Pink Pony. Thus, the Court will focus its analysis on Pink Pony as the
relevant comparator.
The Plaintiffs and Pink Pony both currently hold or seek to hold alcohol
licenses, and are therefore subject to the requirements of Brookhaven’s Alcoholic
Beverage Ordinance. The current Ordinance does not leave room for discretion.
It makes clear that it is “unlawful for any person to sell . . . any alcoholic
beverage without a license from the city” to do so.42 Additionally, it states that
each application for an alcohol permit “shall include payment of all applicable
38
See Village of Willowbrook v. Olech, 528 U.S. 562, 564 (2000).
Grider v. City of Auburn, Ala., 618 F.3d 1240, 1263–64 (11th Cir.
2010) (quoting Olech, 528 U.S. at 564).
39
40
Id. at 1264 (quoting Griffin Indus. v. Irvin, 496 F.3d 1189, 1202
(11th Cir. 2007)).
41
Compl. ¶ 88.
42
Alcoholic Beverage Ordinance § 4-200(a) [Doc. 3-2]
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licensing fees as set forth in the annual revenue ordinance.”43 Applicable fees are
determined by an applicant’s class and type. “Entertainment venues,” in
particular, are defined by the Code as:
a place of business that is licensed to serve alcoholic beverages for
on-premises consumption and meets at least one of the following
characteristics: (1) has a disc jockey; (2) has a stage; or (3) has a
dance floor.44
Pink Pony fits this description,45 as do the Plaintiffs’ nightclubs. Because the
gravamen of the Plaintiffs’ equal protection claim is that they have to follow the
requirements of the Ordinance while Pink Pony does not, the businesses are
similar in all relevant respects.
The City, however, argues that Pink Pony has operated in its current
location for nearly thirty years and has been recognized as a lawful
nonconforming use, whereas the Plaintiffs opened after Brookhaven was
incorporated.46 Although this argument may be relevant in a case involving
zoning laws, it is not relevant in this context, which involves annually issued
alcohol permits that do not provide any sort of vested right beyond the term of
the license.
43
Id. at § 4-203(d)(1) (emphasis added).
Id. at § 4-103. Excluded from this definition are “Dinner Theaters,”
a separate category that is not relevant here.
44
45
a stage).
46
See Exit Transition Agreement, Ex. C (showing that Pink Pony has
Def.’s Resp., at 23.
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The City also argues that its settlement agreement with Pink Pony, which
was “the result of extensive negotiation between Pink Pony and the City to
resolve multiple lawsuits between them,” sets it apart from the Plaintiffs.47 But
this argument does not hold water either. The agreement itself states that Pink
Pony shall only have the right to receive an alcohol permit “[u]pon compliance
with the permitting requirements set forth in the Alcohol Ordinance and the
payment of the permitting fee required in the Alcohol Ordinance.”48 Nothing in
the agreement suggests that these requirements are fixed to the Ordinance in
effect at the time the parties agreed to the settlement. Rather, it indicates that
Pink Pony must follow whatever the current code requires, just like every other
applicant.49 Further, to the extent that the settlement allows the City to
circumvent its own duly enacted ordinances, the settlement would be ultra vires,
and thus void, making it irrelevant to the consideration of whether Pink Pony
and the Plaintiffs are similarly situated.50 Significantly, Pink Pony is number
7 in the City’s Top Ten Businesses Identified with Alcohol Permits in terms of
47
Id.
48
Exit Transition Agreement § 14(k).
Id. at Ex. E (stating that certain negotiated fees will change should
the Alcohol Ordinance hours of operation change).
49
50
See Lexra, Inc. v. City of Deerfield Beach, Fla., 593 Fed. Appx. 860,
865 (11th Cir. 2015) (finding settlement which allowed one bar to escape city’s
ordinances was ultra vires).
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police calls for service and incidents. Josephine’s Lounge is number ten with half
the number of calls for service as Pink Pony.51
Given that the comparators are similarly situated, the issue is now
whether they are being treated differently, and if so, whether such disparate
treatment has a rational basis. Under the current Alcoholic Beverage Ordinance, most permits to sell distilled spirits, malt beverages, and wine for
consumption on the premises cost between $5,000 to $8,000 annually.52 The cost
for “entertainment venues,” like the Plaintiffs and Pink Pony, however, is about
$150,000 annually.53 This disparate treatment in and of itself is not necessarily
an equal protection problem, as there are a number of potential reasons why
Brookhaven might feel the need to charge higher fees for certain types of
businesses.
What is an equal protection problem, however, is that the Code also states
that “[s]exually-oriented businesses,” like Pink Pony, “are specifically prohibited
from receiving any license or permit under” the Alcoholic Beverage Ordinance.54
Despite this clear prohibition, however, the City continues to grant Pink Pony
permits to sell alcohol. Even so, despite the fact that Pink Pony should at least
be labeled an entertainment venue under the Alcoholic Beverage Ordinance, the
51
See City’s Certified Records 094 [Doc. 16-1].
52
Alcoholic Beverage Application Fee Schedule, at 1-2 [Doc. 3-3].
53
Id.
54
Alcoholic Beverage Ordinance § 4-201(b).
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City continues to grant it these licenses as a restaurant, saving it from having
to pay the higher license fees.55 The City also allows Pink Pony to serve alcohol
until 4:00 a.m. every day of the week.56 Other alcohol licensed venues, however,
like the Plaintiffs, can only serve alcohol until 2:00 a.m. and cannot sell alcohol
at all on Sundays, traditionally the Plaintiffs’ most profitable day of business.57
There is no rational reason for this selective enforcement.58 The distinction
between “restaurants” and “entertainment venues” based upon whether live
music is performed or music produced by deejays from prerecorded music
appears to be totally arbitrary. It is therefore clear that the Plaintiffs would
have a substantial likelihood of success on the merits of their equal protection
claim.59
55
Compl. ¶¶ 88, 90, 98.
56
See Seutou Aff. ¶ 34; Besher Aff. ¶ 23; Kedir Aff. ¶ 18.
57
See Alcoholic Beverage Ordinance § 4-302(a); Seutou Aff. ¶ 27;
Besher Aff. ¶ 16; Kedir Aff. ¶ 11.
58
See Lexra, 593 Fed. Appx. at 865 (collecting cases from multiple
jurisdictions finding similar behavior “wholly arbitrary” and “not rationally
related to a legitimate state interest.”).
59
The City also argues that the Plaintiffs have failed to demonstrate
intentional discrimination based on invidious motives, bad faith, or
impermissible considerations. But this is not the standard. See Lexra, 593 Fed.
Appx. at 866 (stating that plaintiffs may establish “class of one” equal protection
claims where they alleged disparate treatment, regardless of the defendant’s
intent).
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2.
Irreparable Injury
The Plaintiffs must also show that they would “suffer irreparable harm
absent injunction relief.”60 The injury must be “neither remote nor speculative,
but actual and imminent,”61 and can be “‘irreparable’ only if it cannot be undone
through monetary remedies.”62
The City first argues that the Plaintiffs have failed to demonstrate that
their alleged injuries are actual and immediate because they continue to sell
alcohol. But this argument ignores the fact that the only reason why the
Plaintiffs are able to do so is because the City has voluntarily elected not to
enforce its own Ordinance while this litigation is ongoing. At any point,
however, the City could choose to do otherwise. The City’s argument is
somewhat like telling a lobster not to worry about the pot of boiling water
nearby because the cook has not put it in yet. Such a statement would bring
little comfort to the lobster.
The City also argues that any alleged injuries could be remedied by
money damages. Although this may be true when it comes to the license fees, it
S & M Brands, Inc. v. Georgia ex rel. Carr, 230 F. Supp. 3d 1338,
1344 (N.D. Ga. 2017) (citing Burk v. Augusta–Richmond Cty., 365 F.3d 1247,
1263 (11th Cir. 2004)).
60
Ne. Fla. Chapter of Ass'n of Gen. Contractors of Am. v. City of
Jacksonville, Fla., 896 F.2d 1283, 1285 (11th Cir. 1990) (quoting Tucker
Anthony Realty Corp. v. Schlesinger, 888 F.2d 969, 973 (2d Cir.1989)).
61
62
Id.
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is not necessarily true regarding the Alcoholic Beverage Ordinance’s hours of
operation provisions. As the Plaintiffs have said, Sundays are traditionally their
busiest days of the week. The inability to open on Sundays could substantially
hurt not just their bottom line, but also their reputation among their customers.
They could lose significant business to competitors in other jurisdictions;
business which may not return even if they were to win this case. Such injuries
are not easily compensable through money damages. Thus, the Plaintiffs have
demonstrated that the Alcoholic Beverage Ordinance would cause them
irreparable injury.
3.
Balance of Harms and the Public Interest
The balance of harms is also in the Plaintiffs’ favor. The Plaintiffs seek
to continue serving alcohol on Sundays and operating until 3:00 a.m. While it
is normally the case that “any time a State is enjoined by a court from
effectuating statutes enacted by representatives of its people, it suffers a form
of irreparable injury,”63 that is less of a concern in a case like this, where the
City has already allowed another party to be effectively exempt from the laws
at issue. For the same reason, the Court also finds that granting a preliminary
injunction in this case would not disserve the public interest.
63
New Motor Vehicle Bd. of California v. Orrin W. Fox Co., 434 U.S.
1345, 1351 (1977).
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B.
Motion to Dismiss
1.
Standing
The Defendant, meanwhile, argues that the Plaintiffs’ Complaint should
be dismissed because they lack standing. Under Article III, the jurisdiction of
federal courts is limited to “Cases” and “Controversies.”64 To satisfy the case-orcontroversy requirement, a plaintiff must establish standing.65 This requires the
plaintiffs to show that: (1) they suffered an “injury in fact” that is concrete and
particularized and actual or imminent, not conjectural or hypothetical; (2) the
injury is fairly traceable to the complained of conduct of the defendant; and (3)
it is likely that the requested relief will redress or remedy the alleged injury.66
Here, the City contends that the Plaintiffs’ claims do not satisfy the third
prong: redressability. First, the City argues the Plaintiffs’ alleged injuries are
not redressable because they do not allege sufficient facts to show that they
qualify as restaurants under the Alcoholic Beverage Ordinance. The Plaintiffs
were denied an alcohol license for failure to pay the fees required – nearly
$150,000 annually – for an “entertainment venue.” The City characterizes the
Plaintiffs’ desired relief as wanting a “restaurant” alcohol license, which would
require the Plaintiffs to show, among other things, that they derive “at least 60
64
Lujan v. Defenders of Wildlife, 504 U.S. 555, 559-60 (1992).
65
Steel Co. v. Citizens For a Better Env., 523 U.S. 83, 102 (1998).
66
Id. at 103.
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percent of gross sales from the sale of prepared meals and food.”67 Because they
have not alleged such a fact in their Complaint, the City argues that their
Complaint should be dismissed.
But this is a fundamentally flawed argument based on an overly formal
reading of the Twombly and Iqbal standard. The Plaintiffs need only plead
enough facts to state a plausible claim for relief. Here, the Complaint clearly
alleges that the Plaintiffs were consistently granted permits as restaurants in
the past under the previous versions of the City’s Alcohol Ordinance.68 Those
versions still required restaurants to derive at least 60 percent of their revenue
from the sale of food.69 And there is no evidence that the City has ever tried to
revoke or deny the Plaintiffs’ alcohol licenses in the past on the basis that they
failed to meet this 60 percent standard. Nor is that the basis of the City’s denial
in this case. Thus, the City has created a presumption that the Plaintiffs
continue to meet this standard.
Second, the City argues that the Plaintiffs’ claims are not redressable
because they are separately in violation of the City’s Zoning Ordinance. The
Zoning Ordinance prohibits nightclubs and other late-night establishments from
67
Alcoholic Beverage Ordinance § 4-103.
68
Compl. ¶¶ 36, 40, 44, 70, 71.
69
Brookhaven, Ga., Code § 4-1 (2017) (repealed by Brookhaven, Ga.,
Ordinance No. 2017-10-02 (Oct. 10, 2017)).
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operating within 1,500 feet of a residential area.70 The City argues that the
Plaintiffs qualify as nightclubs, and are therefore prohibited by the Zoning
Ordinance from operating in their current locations. But this argument suffers
from a similar flaw as the argument above, namely, that this is not why the City
denied the Plaintiffs’ applications for alcohol licenses. Further, the City has
never before tried to enforce this Ordinance against the nightclubs. If it wishes
to do so in a separate counterclaim, it may do so, but otherwise it is totally
irrelevant to the issues of whether licenses should have been granted under the
Ordinance or whether the Ordinance is unconstitutional.71
2.
Pullman Abstention
The Defendant also argues that this Court should abstain from exercising
its jurisdiction pursuant to the doctrine first articulated in Railroad Commission
of Tex. v. Pullman Co.72 Under the Pullman doctrine, federal courts are given
the ability to abstain from exercising jurisdiction in “deference to state court
resolution of underlying issues of state law.”73 The purpose of the Pullman
doctrine is to:
70
Def.’s Reply Br., at 6.
71
Such arguments might be potentially relevant to a counterclaim by
the City, but as it stands, the City has not asserted one.
72
312 U.S. 496 (1941).
Rindley v. Gallagher, 929 F.2d 1552, 1554 (11th Cir. 1991) (quoting
Harman v. Forssenius, 380 U.S. 528, 534 (1965)).
73
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[A]void unnecessary friction in federal-state functions, interference
with important state functions, tentative decisions on questions of
state law, and premature constitutional adjudication. Because
abstention is discretionary, it is only appropriate when the
question of state law can be fairly interpreted to avoid adjudication
of the constitutional question.74
In order to qualify for Pullman abstention, “(1) the case must present an
unsettled question of state law, and (2) the question of state law must be
dispositive of the case or would materially alter the constitutional question
presented.”75 At the same time, it is also well established that abstention is an
“extraordinary and narrow exception” to a federal court’s obligation to hear
constitutional claims.76 Thus, it should be exercised only in “exceptional
circumstances where the order to the parties to repair to the state court would
clearly serve an important countervailing interest.”77
This case does not involve such exceptional circumstances. The City
argues that the Court should abstain because the issue of statutory caps on fees
has not been dispositively addressed by Georgia courts. As part of their
Complaint, the Plaintiffs argue that the City’s alcohol license fees for entertainment venues violate O.C.G.A. § 3-4-48, which sets the maximum fee
a
74
Pittman v. Cole, 267 F.3d 1269, 1286 (11th Cir. 2001).
75
Id.
76
Allegheny County v. Frank Mashuda Co., 360 U.S. 185, 188 (1959).
77
Id.; see also Reetz v. Bozanich, 397 U.S. 82, 86 (1970) (recognizing
that “[a]bstention certainly involves duplication of effort and expense and an
attendant delay”).
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municipality or county can charge for licenses given “pursuant to this article”
at no more than $5,000. If O.C.G.A. § 3-4-48 applies to this case, then clearly the
City’s license fees would be unlawful. But the Defendant argues that this
provision applies only to situations regulated by Article 3 (Local Authorization
and Regulations for Manufacture, Distribution, and Package Sales), which it
says is not relevant here. Rather, the Defendant argues that the instant case is
governed by Article 5 (Sales by the Drink), which contains no such maximum
limit on license fees.
Apparently, there is no Georgia case law on this issue. The Defendant,
therefore, argues that the issue has not yet been resolved by Georgia courts,
meeting the first prong of the Pullman test. Further, the Defendant argues that
if the Georgia courts agree with the Plaintiffs’ position on the applicability of
O.C.G.A. § 3-4-48, it will moot or fundamentally alter the rest of the constitutional issues.
Assuming for the moment that this is the type of unsettled issue of state
law contemplated by Pullman, the City still fails to satisfy the second prong.
While a published decision on the applicability of O.C.G.A. § 3-4-48 might
address the license fee issue, it would not decide the equal protection issues
related to operational hours discussed above. The only thing to be gained,
therefore, would be delay or a frustration of the Plaintiffs’ choice of a federal
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forum. For these reasons, abstention under Pullman would be inappropriate in
this case.78
IV. Conclusion
For the reasons stated above, the Plaintiffs’ Motion for Preliminary
Injunction [Doc. 3] is GRANTED, and the Defendant’s Motion to Dismiss [Doc.
8] is DENIED. The City is enjoined from treating the Plaintiffs as “entertainment venues” under the Alcoholic Beverage Ordinance of 2017 with respect to
Sunday sales (Section 4-302(a)(5) and the Alcoholic Beverage Application Fee
Schedule until further Order of this Court.
SO ORDERED, this 26 day of July, 2018.
/s/Thomas W. Thrash
THOMAS W. THRASH, JR.
United States District Judge
78
The City also argued in its motion that the Complaint should be
dismissed for improper claim splitting. This argument was rendered moot,
however, in light of the Plaintiffs’ voluntary dismissal of their state actions. See
Notice of Filing Dismissals of State Court Petitions [Doc. 15].
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