Foxy Lady, Inc. v. City of Atlanta, Ga.

• Decision Date: 16 October 2003
• Docket Number: No. 03-12396 Non-Argument Calendar.,03-12396 Non-Argument Calendar.
• Citation: 347 F.3d 1232
• Parties: FOXY LADY, INC., d.b.a. Foxy Lady, Darius L. Mitchell, agent for the alcoholic beverage license of Foxy Lady, Inc., S.G.T., Inc., d.b.a. Pleasers, M. Paul Hicks, Jr., agent for the alcoholic beverage license of S.G.T., Inc., Plaintiffs-Appellees, v. CITY OF ATLANTA, GEORGIA, Shirley Franklin, Mayor, in her official capacity as Mayor for the City of Atlanta, Georgia, Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1232

347 F.3d 1232

FOXY LADY, INC., d.b.a. Foxy Lady, Darius L. Mitchell, agent for the alcoholic beverage license of Foxy Lady, Inc., S.G.T., Inc., d.b.a. Pleasers, M. Paul Hicks, Jr., agent for the alcoholic beverage license of S.G.T., Inc., Plaintiffs-Appellees, v. CITY OF ATLANTA, GEORGIA, Shirley Franklin, Mayor, in her official capacity as Mayor for the City of Atlanta, Georgia, Defendants-Appellants.

No. 03-12396 Non-Argument Calendar.

United States Court of Appeals, Eleventh Circuit.

October 16, 2003.

Rajan Bhandari, Jeffrey Brenton Norman, City of Atlanta Law Dept., Atlanta, GA, for Defendants-Appellants.

Owen Jackson Cook, Cary S. Wiggins, Steven M. Youngelson, Cook, Youngelson & Wiggins, Atlanta, GA, for Plaintiffs-Appellees.

Appeal from the United States District Court for the Northern District of Georgia.

Before DUBINA, HULL and MARCUS, Circuit Judges.

PER CURIAM:

After the City of Atlanta ("The City") ordered the plaintiffs¹ (the "Clubs") to show cause why their alcoholic beverage licenses should not be revoked for non-compliance with City of Atlanta ordinances concerning the regulation of nude dancing, the Clubs filed this 42 U.S.C. § 1983 action seeking, among other relief, a permanent injunction enjoining the City from proceeding with the revocation hearings. The Clubs contended that the City ordinances governing the liquor license revocation process did not provide them with the right to subpoena witnesses, and therefore the City's process for revocation of the Clubs' liquor licenses violated the Clubs' procedural due process rights.

The district court agreed with the Clubs, denied the City's motion for summary judgment, and certified its order for interlocutory appeal.² This Court then granted the City's application for interlocutory appeal pursuant to 28 U.S.C. § 1292(b). After review, we conclude that the City provides a constitutionally adequate process for the revocation of a liquor license. Thus, we vacate the district court's denial of summary judgment to the City.

I. FACTUAL BACKGROUND

The Clubs operate nude-dance facilities which are licensed by the City to sell alcoholic beverages for consumption on the premises. The City sought to revoke the Clubs' liquor licenses, alleging their dancers were violating certain laws.³ For example under Georgia law, "touching, caressing, or fondling of the breast, buttocks, anus, or genitals" is prohibited in any premise which is licensed to sell alcoholic beverages. O.C.G.A. § 3-3-41(a)(2); see also Harris v. Ent. Sys., Inc., 259 Ga. 701, 704, 386 S.E.2d 140 (1989) (limiting the scope of the statute under the Georgia Constitution). Under the City's ordinances, it is unlawful for "any person to commit" or "any licensee to knowingly permit or allow" any of the following acts: "For any person to touch, caress or fondle an entertainer or dancer, except to place money in garters worn for such purposes" or "[f]or any dancer to, by bending, stooping and other postural movements, display the interior of the dancer's anus or vagina." Code of Ordinances of the City of Atlanta ("C.O.C.A.") § 10-228(b)(1) & (b)(3).

In October 2001, the City ordered Pleasers to show cause why its alcoholic beverage license should not be revoked for two illegal incidents. Specifically, the City alleged that on September 28, 2000, "8 female dancers were observed using their hands to fondle their breasts and vagina while dancing nude." The City also alleged that on March 12, 2001, 13 dancers were "dancing improperly." In November 2001, Foxy Lady received a similar letter to show cause why its alcoholic beverage license should not be revoked, alleging that on August 1, 2001, "12 female dancers were observed dancing improperly."

Although charges were brought against the female dancers for their alleged conduct, all charges were eventually dismissed without adjudication. The City, however, proceeded with its attempt to revoke both Clubs' liquor licenses.

As mentioned above, the Clubs filed this § 1983 action seeking to enjoin the City from proceeding with the revocation hearings, arguing that the City's liquor license revocation process violated procedural due process. The district court denied the City's motion for summary judgment, stating that the Clubs "cannot receive a meaningful hearing under the City of Atlanta's current license revocation process without the right to subpoena witnesses." Because the Clubs did not have an absolute or independent right to subpoena witnesses, the district court concluded that the City's process for license revocation violated procedural due process rights guaranteed under the Fourteenth Amendment. The district court denied the City's motion for summary judgment, and this interlocutory appeal followed.

II. DISCUSSION

A. Liquor License Revocation Process in Georgia

Before discussing the substantive issue in this case, we first outline the process applied in the City of Atlanta before the City can revoke an establishment's liquor license. Pursuant to C.O.C.A. § 10-109(c), the City must provide "five-day written notice to the licensee, stating the place, date, time and purpose of such hearing and setting forth the charge upon which the hearing shall be held." In this case, Paul Hicks and Pleasers received written notice on October 29, 2001, of its liquor license revocation hearing on November 20, 2001. The notice provided more than three weeks' notice and in all other ways complied with § 10-109(c). As for Darius Mitchell and Foxy Lady, the City notified Mitchell on November 11, 2001, of the liquor license revocation hearing on December 4, 2001. Once again, the City provided more than three weeks' notice and in all other respects complied with § 10-109(c).

Because the Clubs filed this § 1983 action and the City voluntarily agreed to stay the liquor license revocation proceedings until this case is resolved, the remainder of the liquor license revocation process was not implemented. However, pursuant to § 10-109, the License Review Board would normally "conduct the hearings and report its conclusions and recommendations to the mayor." C.O.C.A. § 10-109(d).

At a liquor license revocation hearing, the License Review Board must afford the Clubs an opportunity to present their evidence, to introduce testimony in support of their case, and to cross-examine the City's witnesses (presumably the under-cover police officers who witnessed the dancers' alleged acts).⁴ Furthermore, pursuant to C.O.C.A. § 30-27,⁵ a party can request that the Mayor or the Mayor's designee issue a subpoena to compel a witness to appear before the License Review Board.

After the hearing, the License Review Board issues a report to the Mayor, recommending that the Clubs' liquor licenses be revoked, suspended, or renewed. The Mayor, upon a finding of "due cause," then has the authority to revoke, suspend, or renew the Clubs' liquor licenses. See C.O.C.A. § 10-109(b) & (d). Due cause is defined at length in § 10-109(a). The applicable definitions of "due cause" in this case are: the "[f]ailure by the licensee to adequately supervise and monitor the conduct of the employees ... on the licensed premises" or "[t]he violation of any other law, ordinance or regulation governing the operation of establishments licensed to sell alcoholic beverages." See C.O.C.A. § 10-109(a)(12) & (14).

B. Right to Subpoena Witnesses

In this case, the district court concluded that the process described above violated the Clubs' procedural due process rights because the Clubs did not have the absolute or independent right to subpoena witnesses before the License Review Board. On appeal, the City argues that due process does not require an absolute or independent right to subpoena witnesses at an administrative hearing, and that the Atlanta City Code provides a reasonable means by which witnesses may be subpoenaed for the revocation hearing. We agree, and conclude that the City provides a constitutionally adequate process for the revocation of a liquor license.

In Cryder v. Oxendine, 24 F.3d 175, 177 (11th Cir.1994), this Court developed a three-prong test for establishing a procedural due process clause violation under § 1983. First, the Clubs must establish "a deprivation of a constitutionally-protected liberty or property interest." Id. The parties do not dispute that the Clubs have a constitutionally-protected property interest in their existing respective liquor licenses, and we do not discuss that question.

Second, the Clubs must establish "state action." Cryder, 24 F.3d at 177. Once again, the parties do not dispute that the City's attempts to revoke the Clubs' liquor licenses amount to state action for the purposes of § 1983. See Bell v. Burson, 402 U.S. 535, 539, 91 S.Ct. 1586, 1589, 29 L.Ed.2d 90 (1971) ("Once licenses are issued, as in [this] case, their continued possession may become essential in the pursuit of a livelihood. Suspension of issued licenses thus involves state action that adjudicates important interests of the licensees.").

Third, and finally, the Clubs must establish a "constitutionally inadequate process." Cryder, 24 F.3d at 177. The parties dispute whether the Clubs must have a right to subpoena witnesses to the revocation hearing in order for the City's liquor license revocation process to be constitutionally adequate.

In Goldberg v. Kelly, 397 U.S. 254, 268-69, 90 S.Ct. 1011, 1021, 25 L.Ed.2d 287 (1970), the United States Supreme Court explained that "[t]he opportunity to be heard must be tailored to the capacities and circumstances of those who are to be heard." That is, procedural due process "is not a technical conception with a fixed content unrelated to time, place, and circumstances." Mathews v. Eldridge, 424 U.S. 319, 334, 96 S.Ct. 893, 902, 47 L.Ed.2d 18 (1976) (quotation marks and citation omitted). Rather, procedural due process "is flexible and calls for such procedural protections as the particular situation demands." Id. (quotation...