Beach Blitz Co. v. City of Elizabeth

• Decision Date: 21 September 2021
• Docket Number: No. 19-11380; 19-11397,19-11380; 19-11397
• Citation: 13 F.4th 1289
• Parties: BEACH BLITZ CO., d.b.a. Ocean 9 Liquor, d.b.a. Ocean 11 Market, Plaintiff - Appellant Cross Appellee, v. CITY OF MIAMI BEACH, FLORIDA, a municipal corporation of the State of Florida, Philip Levine, an individual, Jimmy L. Morales, an individual, Mickey Steinberg, an individual, Ricky Arriola, an individual, Michael Greico, an individual, Joy Malakoff, an individual, Kristen Rosen Gonzalez, an individual, John Elizabeth Aleman, an individual, Raul J. Aguila, an individual, Aleksandr Boksner, an individual, Defendants - Appellees Cross Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

13 F.4th 1289

BEACH BLITZ CO., d.b.a. Ocean 9 Liquor, d.b.a. Ocean 11 Market, Plaintiff - Appellant Cross Appellee,

v.CITY OF MIAMI BEACH, FLORIDA, a municipal corporation of the State of Florida, Philip Levine, an individual, Jimmy L. Morales, an individual, Mickey Steinberg, an individual, Ricky Arriola, an individual, Michael Greico, an individual, Joy Malakoff, an individual, Kristen Rosen Gonzalez, an individual, John Elizabeth Aleman, an individual, Raul J. Aguila, an individual, Aleksandr Boksner, an individual, Defendants - Appellees Cross Appellants.

No. 19-11380; 19-11397

United States Court of Appeals, Eleventh Circuit.

September 21, 2021

Patrick Dervishi, Shir Law Group, Boca Raton, FL, Phillip M. Hudson, III, Duane Morris, LLP, Hilda Piloto, Saul Ewing Arnstein & Lehr, LLP, Miami, FL, for Plaintiff-Appellant-Cross Appellee.

Richard J. Ovelmen, Enrique Daniel Arana, Scott Everett Byers, Carlton Fields, PA, Miami, FL, for Defendants-Appellees-Crosss Appellants.

Before JILL PRYOR, NEWSOM, and MARCUS, Circuit Judges.

MARCUS, Circuit Judge:

This appeal concerns a dispute about attorney's fees, specifically, who was the prevailing party, and whether the claims were frivolous. On October 30, 2017, Beach Blitz Co. d/b/a Ocean 9 Liquor and d/b/a Ocean 9 Market ("Beach Blitz") sued the City of Miami Beach ("the City") and ten individual defendants (the "Individual Defendants") asserting three procedural due process claims, a substantive due process claim, and a First Amendment retaliation claim. Beach Blitz alleged that the City's enactment and enforcement of ordinances regulating the sale of liquor and requiring businesses selling liquor to obtain licenses violated its substantive and procedural due process rights. It further alleged that the City's closure of its store one day after it met with a City attorney constituted retaliation for Beach Blitz's protected First Amendment conduct. The City sought to dismiss Beach Blitz's claims pursuant to Federal Rule of Civil Procedure Rule 12(b)(6). The district court granted the City's motion, dismissing the procedural and substantive due process claims on the merits, without prejudice, and without leave to amend, and the First Amendment retaliatory claim on the merits as well, without prejudice but with leave to amend. Beach Blitz did not amend its First Amendment claim by the stated deadline and the district court dismissed that claim too.

The district court found the City to be the prevailing party on all five claims, determined that each of them were "frivolous, unreasonable, or without foundation," Christiansburg Garment Co. v. E.E.O.C., 434 U.S. 412, 421, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978), and awarded fees for each. We agree with the district court's prevailing party determination because the City rebuffed Beach Blitz's efforts to effect a material alteration in the legal relationship between the parties. We also agree with the district court's frivolity determination concerning the procedural and substantive due process claims. We think, however, that Beach Blitz's First Amendment retaliation claim was not frivolous. We, therefore, affirm in part, vacate in part, and remand this case to the district court to recalculate the attorney's fees to which the City is entitled on the procedural and substantive due process claims.

I.

The essential facts necessary to understanding the instant appeal are these:

A. The Ordinances.

In 2016, a City Commission passed several ordinances regulating the sale of liquor in the mixed entertainment use area of South Beach (the "MXE District")¹ after determining that the sales were having a negative effect on the health, safety, and welfare of the City's residents and visitors. Some of the ordinances limited the times during which liquor could be sold by package liquor stores in the MXE district to between 10 a.m. and 10 p.m. The Commission also considered an ordinance that would prohibit sales after 8 p.m. In addition, the City adopted an ordinance prohibiting package liquor stores and package sales of alcoholic beverages by any retail store or alcoholic beverage establishment within the MXE District. This ordinance did not affect the operation of existing package stores in the MXE district. The Commission Memorandum supporting the ordinance explained that "[p]ackage sales of alcoholic beverages may encourage patrons to walk around with alcoholic beverages and consume alcoholic beverages in the City's parks, and on the City's streets and sidewalks." The Memorandum further noted that "[t]he consumption of open containers of alcoholic beverages in public places may cause undesirable noise, as well as contribute to litter and noxious odors."

B. BTR License and Beach Blitz.

The City Code requires every business operating in the City to pay a business tax, for which it receives a Business Tax Receipt ("BTR license" or "BTR"), "for the privilege of engaging in or managing any business, profession, or occupation within the city." Code of the City of Miami Beach, Florida §§ 102-356, 102-357 (the "City Code"). Each BTR is valid for one year -- the City issues on October 1 each year and the BTR expires on September 30 of the following year. City Code § 102-360.

Beach Blitz owned and operated Ocean 9 Liquor, a package liquor store in the MXE District. Beach Blitz applied for and renewed its BTR license for the 2015–16 fiscal year. The BTR license expired on September 30, 2016, and Beach Blitz did not timely renew it.

Between December 2016 and June 2017, Beach Blitz received three citations related to its Ocean 9 store. The first citation, issued on December 21, 2016, cited Beach Blitz for selling liquor before 10:00 a.m. and imposed a $1,000 fine. It provided Beach Blitz 20 days to appeal the citation to a Special Master. The latter two citations were both issued on June 25, 2017. The first was for selling liquor after 10:00 p.m. and imposed a $1,000 fine. The second was a Notice of Violation of Section 102-377 for "failure to obtain a Business Tax Receipt," which also imposed a $1,000 fine. The Notice expressly directed Beach Blitz to "[c]ease immediately until you obtain a Business Tax Receipt from the City of Miami Beach." Both citations provided Beach Blitz with 10 days to appeal to a Special Master. Beach Blitz did not appeal any of the citations within the time frames provided. As a result, the citations were considered obligations due and owed to the City as of the date the time to appeal expired.

On August 28, 2017, Beach Blitz reached an agreement with the City Attorney's Office to resolve all three citations for $1,000. The settlement did not include the payment owed for a BTR license. On September 28, 2017,² the Special Master entered an agreed order in which Beach Blitz admitted to the violations and agreed to pay $1,000 to resolve all three citations. On or about October 4, 2017, Beach Blitz paid the $1,000 fine pursuant to the consent agreement. But Beach Blitz did not submit payment for a BTR license on that date, nor did it submit payment to the City to renew its BTR license at any point during the 2016–2017 fiscal year (from October 1, 2016 to September 30, 2017).

On October 5, 2017, Beach Blitz's counsel met with City representatives and the deputy city attorney. During this meeting, Beach Blitz's lawyer stated that he believed the ordinances enacted were "arbitrary, capricious, unreasonable and designed to force the package stores out of business in the MXE district."

On October 6, 2017, the City issued another citation to Beach Blitz for continuing to operate without a BTR license. The citation directed Beach Blitz to "[c]ease [operating] immediately until you obtain a Business Tax Receipt from the City of Miami Beach." Beach Blitz alleged that following the closure, the deputy city attorney advised its counsel that the City's actions "were not likely coincidental and a long time coming." On October 11, 2017, Beach Blitz submitted payment to the City to renew its BTR license. Because Beach Blitz had not renewed its license in the fiscal year after its expiration, its license had been placed in "closed" status. Beach Blitz, therefore, needed to submit a new BTR license application pursuant to § 102-371 of the City Code in order for the City to act on a request for the BTR license.

C. Prior Proceedings.

On October 30, 2017, Beach Blitz filed the instant action in the Southern District of Florida asserting three procedural due process claims (Counts I, II, and V), a substantive due process claim (Count III), and a First Amendment retaliation claim (Count IV) against the City and ten individual defendants.³ Beach Blitz alleged that the City violated its procedural due process rights by "establish[ing] a custom, policy, pattern and practice of unlawfully targeting package stores in the MXE district." Beach Blitz further alleged that the City violated its procedural due process rights by "wrongfully threaten[ing] and wrongfully coerc[ing] ... [Plaintiff] to shut down" its business and that the City Code's "authorization to prevent a business from operating until [it obtains] the required BTR without requiring due process, violates the United States Constitution." Beach Blitz also claimed that it had a "liberty and/or property interest in conducting its lawful business of selling alcohol," and "[t]he City's unilateral and arbitrary suspension of [its] BTR license and resulting closure of its business [was] without due process of law" and, therefore, violated its substantive due process rights. Finally, Beach Blitz's First Amendment retaliation claim arose from the fact that the day after Beach Blitz's attorney met with the deputy city attorney to discuss Beach Blitz's concerns with the ordinances, the City shut down Beach Blitz's Ocean 9 store, and the deputy city attorney later remarked that the closure was "not likely coincidental and a long time coming."

Shortly after filing its complaint, Beach Blitz filed an emergency motion for...