Starship Enters. of Atlanta, Inc. v. Coweta Cnty.

• Decision Date: 14 February 2013
• Docket Number: No. 11–11287.,11–11287.
• Citation: 708 F.3d 1243
• Parties: STARSHIP ENTERPRISES OF ATLANTA, INC., Plaintiff–Appellant, v. COWETA COUNTY, GEORGIA, Eva Wagner, in her individual and official capacity, Defendants–Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

708 F.3d 1243

STARSHIP ENTERPRISES OF ATLANTA, INC., Plaintiff–Appellant,

v.COWETA COUNTY, GEORGIA, Eva Wagner, in her individual and official capacity, Defendants–Appellees.

No. 11–11287.

United States Court of Appeals, Eleventh Circuit.

Feb. 14, 2013.

George Brian Spears, G. Brian Spears, PC, Alan I. Begner, Cory G. Begner, Begner & Begner, PC, Atlanta, GA, for Plaintiff–Appellant.

Corinne Whitfield Caughman, William Joseph Linkous, III, Dana Kristin Maine, Freeman, Mathis & Gary, LLP, Darl Champion, Warshauer Law Group, PC, Atlanta, GA, Nathan Thomas Lee, Glover & Davis, PA, Newnan, GA, for Defendants–Appellees.

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

Before TJOFLAT, CARNES and JORDAN, Circuit Judges.

TJOFLAT, Circuit Judge:

Starship Enterprises of Atlanta, Inc. (“Starship”), a purveyor of various novelty items including sexually explicit materials, appeals the judgment of the District Court dismissing under Federal Rule of Civil Procedure 12(b)(6) its federal constitutional claims brought under 42 U.S.C. § 1983¹ against Coweta County, Georgia, and Eva Wagner, the Coweta County Business License Director,² and refusing to exercise supplemental jurisdiction over its state constitutional claims.³ Starship's claims stem from the County's decision to uphold Wagner's denial of its application for a business license to operate a retail bookstore. Starship promptly challenged that decision in two courts. First, Starship petitioned the Superior Court of Coweta County for a writ of mandamus directing the County and Wagner to grant its license application. Then, four months later, it brought in the United States District Court for the Northern District of Georgia the action now before us on appeal. While this action was still in the pleading stage, the Superior Court granted Starship a writ of mandamus, and Wagner issued the business license at issue. The District Court then dismissed Starship's complaint, concluding that the § 1983 claims arising from denial of the business license were barred by the doctrine of res judicata and that the § 1983 claims not barred by the doctrine failed as a matter of law. We find no error in the District Court's disposition of Starship's § 1983 claims and the court's decision not to exercise supplemental jurisdiction over Starship's state law claims and therefore affirm.

I.

We begin with a recitation of the relevant facts, which, for the most part, are not in dispute.⁴ Starship describes itself as a commercial business that sells a wide variety of items, including tobacco products, clothing, and novelty items. In addition, it sells some sexually explicit videos, DVDs, and magazines. Starship's stores vary their inventory, use of floor space, and sales of sexually explicit material to comply with local ordinances under which the stores operate.

In April 2008, Starship leased an empty building in an unincorporated area of Coweta County; it had been used as a gym. Starship planned to renovate the building and turn it into a retail store. On May 12, 2008, Starship's attorney wrote a letter advising the County Attorney that, pursuant to Chapter 18, Art. II, of the Coweta County Ordinances (the “Business License Ordinance”), Starship planned to apply for a general business license to operate the store. He was aware that if the store sold a certain amount of adult material, the county would consider it a sexually oriented business and Starship would not be able to obtain a general business license. Instead, it would have to obtain a license pursuant to Chapter 18, Art. VII, of the Coweta County Ordinances (the “Sexually Oriented Business Ordinance”). Anticipating this situation, Starship's attorney represented that Starship would not be operating a facility that met the ordinance's definition of a sexually oriented business.⁵

On July 17, 2008, Starship's chief executive officer and its attorney met with Coweta County officials, including the County Attorney, to explain Starship's business plan and to affirm that it would limit the sexually explicit material the store sold so as to eliminate the need for a license for a sexually oriented business. Starship needed a general business license because if it were to operate a sexually oriented business, it could not obtain a permit to operate its store at the location under lease, which was not zoned to allow a sexually oriented business. Nor could it obtain a building permit to renovate the building it had leased.

Despite the County's doubt that Starship's store could qualify for a general business license, the County Attorney wrote Starship's counsel on November 18, 2008, stating that if Starship was not going to operate a sexually oriented business, the County could not deny Starship the building permit it needed. In late November, the County issued the permit.

Starship thereafter contacted Eva Wagner, the Coweta County Business License Director, about applying for a general business license. She said that an application would not be accepted until the renovations to the premises were complete and a Certificate of Occupancy issued. Within two months, the renovation was completed, at a cost of $150,000, and on January 19, 2009, a Certificate of Occupancy was issued.

Meanwhile, on January 15, Starship's attorney met with the County Attorney, Wagner, and other county officials. Counsel presented the officials with a diagram of the store, which showed where the adult material would be located on the premises. Wagner informed the attorney that a general business license would issue after Starship fully stocked the store in accordance with the diagram. On January 20, Starship filed its application for a general business license, and by January 28, it had completed stocking the store. Wagner was scheduled to visit the store on January 28 to view its inventory to determine whether it had been placed as depicted in the diagram, but she failed to appear.

On January 26, the Coweta County Board of Commissioners repealed the Sexually Oriented Business Ordinance, Coweta County, Ga., Code of Ordinances Ch. 18, art. VII (2000), and adopted a Sexually Oriented Business Ordinance containing a new definition of a sexually oriented business, Coweta County, Ga., Code of Ordinances Ch. 18, art. VII (2009). As described by Starship's attorney at his July 17 and January 15 meetings with county officials, Starship's store would not have been a sexually oriented business under the repealed ordinance. If operated as stocked on January 26, however, the store would qualify as a sexually oriented business under the new ordinance and, as such, would not qualify for a general business license.

On February 2, Starship's attorney wrote the County Commissioners a letter stating that Starship planned to rearrange the store's inventory so that it would not constitute a sexually oriented business under the new Sexually Oriented Business Ordinance and thus would qualify for a general business license. On February 6, Wagner, applying the new Sexually Oriented Business Ordinance, denied Starship's application for a general business license; she concluded that even though the inventory had been arranged in accordance with the diagram shown earlier, the store would be operating as a sexually oriented business under the new ordinance.

On February 18, Starship appealed denial of its business license application to the Coweta County Business and Occupational Tax Rate Review and Appeals Committee (the “Appeals Committee”). The Appeals Committee held a series of hearings concerning the denial. On May 20, the committee issued findings of fact and voted 4 to 1 to recommend that the Board of County Commissioners reverse the denial of Starship's application. The Appeals Committee assumed that the store would be operated as depicted in Starship's attorney's letter of February 2, and found that the store would not constitute a sexually oriented business as defined in the new ordinance; thus, the store could function as a regular business. The Board of County Commissioners, however, voted unanimously on June 16 to uphold Wagner's denial of Starship's application.

On July 13, 2009, Starship petitioned the Superior Court of Coweta County for a writ of mandamus. The court granted the writ on April 19, 2010. Adopting the Appeals Committee's finding as to how Starship planned to operate the store, the court reversed the Board of Commissioners' decision affirming Wagner's denial of the business license and ordered that the license issue.

At the time the Superior Court concluded the mandamus proceeding, Starship's lawsuit in the District Court against the County and Wagner, which had been pending since November 16, 2009, was still in the pleading stage, awaiting the court's ruling on Starship's motion for leave to file a first amended complaint. On April 28, 2010, the court granted its motion. Starship's first amended complaint, as amended, contained ten causes of action;⁶ eight sought legal and equitable relief under 42 U.S.C. § 1983 for the defendants' alleged infringement of Starship's federal constitutional rights, and two presented claims under the Georgia Constitution. The ten causes of action were not pled as separate counts, each with factual allegations germane to it. Rather, the ten causes of action were pled in successive paragraphs, each based on one or more constitutional provisions or theories of recovery, preceded by eighty-four paragraphs of factual allegations and a series of exhibits, which were freestanding in that none were incorporated by reference into any of the paragraphs asserting the causes of action.⁷

For convenience, we recast the ten causes of action into seven separate counts, as follows:⁸

Count 1, Substantive Due Process. The County and Wagner deprived Starship of the use of its store property between the date it filed its application for a business license, January 20, 2009, and the date the Superior Court...