Koziara v. City of Casselberry
| Decision Date | 10 December 2002 |
| Docket Number | No. 6:02CV828-ORL-31KRS.,6:02CV828-ORL-31KRS. |
| Parties | Pauline KOZIARA & Seminole Entertainment, Inc. d/b/a Rachel's, Plaintiffs, v. CITY OF CASSELBERRY, Defendant. |
| Court | U.S. District Court — Middle District of Florida |
R. Steven Ruta, Victor L. Chapman, Barrett, Chapman & Ruta, P.A., Orlando, FL, Steven Gerald Mason, Law office of Steven G. Mason, Orlando, FL, for plaintiff.
Usher L. Brown, Anthony A. Garganese, Brown, Ward, Salzman & Weiss, P.A., Orlando, FL, for defendant.
This Court has for its consideration Defendant's Motion to Dismiss (Doc. 11), Defendant's Memorandum of Law (Doc. 12), Plaintiffs' Response to Defendant's Motion (Doc. 19), Plaintiffs' Motion for Preliminary Injunction (Doc. 8), and Defendant's Response thereto (Doc. 16). The Court converted Defendant's Motion to Dismiss (Doc. 11) to a Motion for Summary Judgment under Federal Rule of Civil Procedure 56 (Doc. 14). The Court heard oral argument on the Defendant's Motion for Summary Judgment and the Plaintiffs' Motion for Preliminary Injunction on September 27, 2002. On November 8, 2002, the Court ordered the Defendant to supplement the record with all filings in the state court proceedings between the parties. The Court has carefully considered the motions and responses including the accompanying memoranda, affidavits, and exhibits, the supplemental filings, the transcript from the hearing, and is otherwise fully advised in the premises.
Plaintiffs, Pauline Koziara ("Koziara") and Seminole Entertainment, Inc., d/b/a Rachel's ("Seminole Entertainment" or "Rachel's"), seek a declaratory judgment, as well as both a preliminary and permanent injunction, against Defendant, the City of Casselberry ("Casselberry"). In their complaint, Koziara and Rachel's assert a claim against Casselberry pursuant to 42 U.S.C. § 1983 for allegedly violating their rights under the First, Fifth, and Fourteenth Amendments when Casselberry revoked Rachel's license to operate an adult entertainment establishment. Koziara and Rachel's ask this Court to (1) declare the Casselberry ordinance unconstitutional and (2) enter an injunction prohibiting Casselberry from enforcing its ordinance and revoking Rachel's license. In response, Casselberry has filed a motion to dismiss, which this Court treated as a motion for summary judgment, contending that Rachel's claims are barred by the doctrine of res judicata.1
Seminole Entertainment, Inc. d/b/a/ Rachel's has operated an adult entertainment establishment under the name of Rachel's3 at its present location on State Road 436 in Casselberry, Florida since approximately March 1990.4 For over ten years, Rachel's offered erotic dancing and striptease entertainment, as well as food and alcoholic beverages, to its patrons. Pauline Koziara was a dancer at Rachel's until Rachel's license was revoked.
On June 9, 1999, the City of Casselberry passed an ordinance providing for suspension and/or revocation of adult entertainment licenses upon a showing that the licensee5 knowingly allowed the sale or possession of controlled substances, prostitution, or the performance of sex acts or simulated sex acts as defined in the ordinance to occur on the premises.6 On January 29, 2000, an undercover investigation of Rachel's began. The investigation involved several local law enforcement agencies. The law enforcement officers involved in the investigation posed as wellto-do businessmen and the owner of an escort service.7 The undercover officers found numerous criminal activities as well as violations of the ordinance during the investigation. These included: (1) sales of illicit drugs to undercover officers either by a worker of Rachel's or set up by a manager of Rachel's; (2) several acts of prostitution; and (3) numerous sex acts, simulated sex acts, displays of female genitalia, and prohibited physical contact between the dancers and the undercover officers or patrons.8 The investigation of Rachel's ended in July 2000. But the investigation into the individual officers of Seminole Entertainment continued until December 27, 2000.
On August 29, 2000, Rachel's applied for license renewal under the new ordinance. Casselberry granted the license on October 1, 2000. On November 10, 2000, Rachel's received a Notice of Revocation of Adult Entertainment License, which was amended on November 14, 2000. Rachel's filed its challenge to the revocation and requested a hearing on November 21 or 22, 2000. On December 4, 2000, Rachel's moved to disqualify the City Commission and Mayor. On December 14, 2000, the Casselberry City Commission denied Rachel's Motion.
Hearings on the revocation were held by the Casselberry City Commission with the Mayor presiding on December 14, 27, and 28, 2000. Casselberry was represented by the City Manager through counsel, Michael Kahn. Rachel's was represented by attorneys, D. Gray Thomas and Victor Chapman.
All of the undercover officers involved in the investigation testified to the numerous criminal activities they witnessed. At least one witness testified that he used his credit card to obtain funds to purchase drugs and that Rachel's added a 10% surcharge to this transaction. The transaction was conducted by one of the managers of Rachel's. Further, managers and doormen received tips and acted as lookouts for the acts of prostitution or the prohibited sexual activities that occurred. It was also uncovered that a bookkeeper had been providing information to the officers during the investigation, and that after the investigation concluded and arrests of the workers, managers, and doormen were made, several more employees agreed to cooperate with law enforcement in their investigation of Seminole Entertainment.
During the hearings, counsel for Rachel's cross-examined Casselberry's witnesses. Although Rachel's counsel was given the opportunity to call witnesses on Rachel's behalf, counsel chose to forgo this opportunity. Instead, in closing argument, counsel admitted that drug sales and prostitution occurred on the premises, but argued that the officers and directors of Seminole Entertainment were not aware of the illegal activities. Casselberry, on the other hand, asserted that "licensee" was broadly defined in the ordinance and that under the ordinance definition Casselberry had proved knowledge of the licensee. The City also argued that the pervasiveness of the illegal activity showed that the officers and directors of Seminole Entertainment either knew or should have known about the criminal activities occurring at Rachel's.
The Casselberry City Commission agreed to accept proposed findings of fact and conclusions of law from the City Manager and Rachel's. The Commission met again on January 9, 2001 to publicly discuss the matter. During this meeting, Commissioner Henson disqualified himself from participating in the decision. On January 16, 2001, the City Commission began its deliberations. It also stated that despite the ordinance requiring that the violation be proven by a preponderance of the evidence, the Commission would use the higher clear and convincing evidence standard.9 On January 31, 2001, the Casselberry City Commission entered its findings of fact and conclusions of law finding by clear and convincing evidence that the ordinance had been violated and that the owners of Seminole Entertainment, James Veigle, Charles Veigle, Nancy Voegtlin, and Robert Kelly, knew or should have known about the illegal acts and prohibited conduct of the managers, doormen,10 and workers because of the pervasiveness of the conduct.11 The license was revoked for two years, beginning February 1, 2001.
On March 2, 2001, Rachel's filed a Petition for Writ of Certiorari ("Certiorari Petition") with the Circuit Court for the Eighteenth Judicial Circuit in and for Seminole County Florida, case number 01-23-AP. In its Certiorari Petition, Rachel's argued that revocation of its license implicated freedom of expression under the First Amendment to the U.S. Constitution, as well as several provisions of the Florida Constitution. Specifically, Rachel's asserted that (1) it was denied a neutral, unbiased factfinder because the City Commission refused to disqualify itself; (2) no due process was afforded Rachel's at the hearing as guaranteed by Article I, Section 9, of the Florida Constitution (); (3) there was insufficient evidence that the officers and directors of Seminole Entertainment knew of the illegal activities occurring on the premises; (4) the ordinance vested unbridled and unfettered discretion with the City Commission and the ordinance and revocation order constituted an unconstitutional prior restraint of expression in violation of Article I, Section 4, of the Florida Constitution; (5) Casselberry relied on the wrong standard, to wit: preponderance of the evidence, in rendering its decision and improperly shifted the burden to Rachel's; and (6) the ordinance did not provide prompt judicial review or a stay pending review by the courts. In its Certiorari Petition, Rachel's relied heavily on federal case law in making its arguments. Rachel's requested the Circuit Court, to issue a writ of certiorari directing Casselberry to vacate its order revoking Seminole Enterainment's adult entertainment license. On March 7, 2001, Rachel's filed a Motion to Stay the license revocation pending the Circuit Court's review of the Certiorari Petition arguing that the case implicated the First, Fifth, and Fourteenth Amendments.12
On July 17, 2001, the Honorable Debra Nelson, Circuit Judge, denied Rachel's Certiorari Petition and affirmed the...
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