Tokyo Gwinnett, LLC v. Gwinnett County, Georgia

Decision Date11 October 2019
Docket NumberNo. 17-11871,17-11871
Citation940 F.3d 1254
Parties TOKYO GWINNETT, LLC, d.b.a. Tokyo Valentino, Plaintiff - Appellant, v. GWINNETT COUNTY, GEORGIA, Defendant - Appellee.
CourtU.S. Court of Appeals — Eleventh Circuit

Cary Stephen Wiggins, Wiggins Law Group, ATLANTA, GA, for Plaintiff - Appellant.

Scott D. Bergthold, Bryan Dykes, Law Office of Scott D. Bergthold, PLLC, CHATTANOOGA, TN, Richard A. Carothers, Amy Bryant Cowan, Michael E. Hobbs, Carothers & Mitchell, LLC, BUFORD, GA, Duane Dennis Pritchett, City of Atlanta Law Department, ATLANTA, GA, for Defendant - Appellee.

Before MARTIN, JILL PRYOR and JULIE CARNES, Circuit Judges.

MARTIN, Circuit Judge:

In 2015, Tokyo Gwinnett, LLC (doing business as "Tokyo Valentino") sued Gwinnett County, Georgia ("the County"), challenging certain business licensing and adult entertainment ordinances. Tokyo Valentino sought damages under 42 U.S.C. § 1983 and declaratory and injunctive relief. Unfortunately for these parties, they have been litigating ever since.

The District Court first dismissed Tokyo Valentino’s amended complaint on mootness grounds after the County repealed and replaced the challenged ordinances. This Court vacated the District Court’s order and remanded. On remand, Tokyo Valentino filed a second amended complaint, challenging both the repealed ordinances and the County’s new, replacement ordinances. Again the District Court dismissed Tokyo Valentino’s claims. It is this second dismissal that is the subject of the present appeal.

Tokyo Valentino appeals the District Court’s finding that it lacks standing to bring claims related to the repealed ordinances. Tokyo Valentino also appeals the District Court’s decision to abstain under the doctrine established in Younger v. Harris, 401 U.S. 37, 91 S. Ct. 746, 27 L.Ed.2d 669 (1971). Citing Younger, the District Court abstained from hearing claims as to the replacement ordinances because of a pending state court enforcement proceeding initiated by the County against Tokyo Valentino while the earlier appeal was pending before this Court.

After careful consideration, and with the benefit of oral argument, we affirm the District Court’s dismissal of Tokyo Valentino’s claim for compensatory damages relating to the repealed ordinances. However, we reverse the dismissal of Tokyo Valentino’s request for a declaratory judgment regarding whether its sale of sexual devices constitutes a lawful prior nonconforming use authorized under the repealed ordinances and whether the new ordinances’ failure to include provisions grandfathering in prior lawful uses violates federal and state law. It is also our judgment that the District Court abused its discretion by abstaining under Younger from hearing Tokyo Valentino’s claims stemming from the County’s new ordinances. We therefore affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

I.

In May 2015, Tokyo Valentino applied for an initial business/occupation tax certificate. The application defined the business’s line of work as "Retail" and appended a copy of Tokyo Valentino’s license to sell tobacco products. The County approved the application, describing Tokyo Valentino as a "Tobacco Store[ ]" on the certificate it issued.

The next month, Tokyo Valentino wrote to the County stating it intended to stock sexually explicit materials. It specified it would be adding a small number of DVDs and magazines, and sexual devices "including dildos, vibrators, and other devices commonly used to stimulate human genitalia"—to its inventory. The letter indicated Tokyo Valentino believed its plans comported with the County’s ordinances and maintained Tokyo Valentino did not need any additional licenses to lawfully operate.

Weeks later, the County took two actions. First, on June 23, 2015, it adopted a resolution beginning a study into the effects of adult entertainment on its community. The resolution included a moratorium on accepting any new applications or issuing any new licenses for adult entertainment establishments until August 27, 2015, when the study was due to be completed. Second, the County responded to Tokyo Valentino in a letter dated June 24, 2015. In this letter, the County asserted that Tokyo Valentino’s new description of its product lines was not consistent with the description it offered in its initial application. The County insisted Tokyo Valentino update its application and threatened to revoke its business license if it failed to do so.

After Tokyo Valentino submitted revised application materials, the County informed the business that, although it was authorized to sell most of the items it planned to stock, it would need an adult entertainment establishment license to sell sexual devices. Nevertheless, because of the County’s moratorium on issuing such licenses, the County advised Tokyo Valentino of two options: it could eliminate sexual devices from its planned inventory or it could wait until the County lifted its moratorium and apply for a license then. The County also advised it would "have no choice but to enforce its ordinances" if Tokyo Valentino did not take one of the courses the County had outlined. Instead of taking either outlined option, Tokyo Valentino filed suit on July 22, 2015.

Tokyo Valentino’s first amended complaint challenged the constitutionality of several local ordinances, asserting they violated its First and Fourteenth Amendment rights. The complaint sought an injunction barring the County from interfering with Tokyo Valentino’s business operations, a "declar[ation] that [Tokyo Valentino] is a lawful use under the County’s existing ordinances," nominal and compensatory damages, and attorney’s fees and costs. On September 1, 2015, the parties agreed to a consent temporary restraining order. Under this agreement, the County would refrain from requiring Tokyo Valentino to seek an adult entertainment establishment license for ninety days so long as it operated its business according to representations made in its amended business/occupation tax certificate application. In October 2015, the County answered Tokyo Valentino’s amended complaint.

Before the agreed upon ninety-day period elapsed, the County adopted new adult entertainment ordinances and rescinded its former ordinances. The new ordinances specifically defined "sexual device" and identified "sex paraphernalia stores" as a regulated "adult establishment" for which an operator must receive a special permit. Gwinnett County, Ga., Ordinance § 18-292 (2015).

Shortly after the new ordinances were enacted, the County moved to dismiss Tokyo Valentino’s suit as moot. Insisting dismissal was not warranted, Tokyo Valentino sought leave to amend its complaint for a second time to add claims challenging the newly enacted ordinances. In a one paragraph order issued in January 2016, the District Court denied Tokyo Valentino’s motion for leave to amend because "there may be a ripeness issue" and granted the County’s motion to dismiss the action as moot. Tokyo Valentino appealed to this Court.

Before this Court decided Tokyo Valentino’s appeal, the County filed a separate action against Tokyo Valentino in the Superior Court of Gwinnett County. Gwinnett County v. Tokyo Gwinnett, LLC, Civ. No. 16-A-06816-2 (Gwinnett Cty. Super. Ct., filed July 8, 2016). In that action, the County sought an injunction prohibiting Tokyo Valentino from operating in violation of the replacement adult entertainment ordinances. On September 26, 2016, the Superior Court denied the County’s motion for an interlocutory injunction and stayed the action pending the outcome of the federal appeal.1

Just two days later, a panel of this Court decided Tokyo Valentino’s appeal. The panel partly vacated the order dismissing Tokyo Valentino’s action and remanded the case, explaining the District Court erred in dismissing the entire action as moot. Tokyo Valentino’s damages claim was not mooted when the County’s ordinances were repealed, even though its claims for prospective declaratory and injunctive relief were mooted and were rightly dismissed. But the panel clarified that its opinion did not address whether there might be some other valid ground for dismissing Tokyo Valentino’s action. The panel also held that the District Court abused its discretion when it denied Tokyo Valentino’s motion for leave to amend on the "mere possibility" its proposed claims might be unripe.

In November 2016, Tokyo Valentino filed its second amended complaint. In the new complaint, Tokyo Valentino sought "an order (1) granting preliminary and permanent injunctive relief preventing the County from enforcing certain adult entertainment laws against it, and from threatening to revoke its business license based on perceived violations of those adult [entertainment] laws, (2) declaring that it is a lawful prior nonconforming use under the County’s existing ordinances, (3) awarding damages for infringing on its rights, and (4) awarding reasonable attorney’s fees and costs."

Once again, the County moved to dismiss. This time, the County argued Tokyo Valentino lacked standing to bring claims challenging the original ordinances. The County’s standing argument centered on a previously unmentioned provision of the Gwinnett County zoning code that identifies permitted activities within each zoning district. That provision contains a table of permitted uses that features more than 100 commercial and retail land uses—including "Convenience Store (with or without fuel pumps)," "Department Store," "Discount Department Store, Big-Box Specialty Store or Supercenter," "Dollar or Variety Store," "Recreation and Entertainment Facility (indoor)," "Smoke Shop or Novelty Shop." Gwinnett Cty., Ga., Unified Dev. Ordinance § 230-100 (2015). The provision provides "[a]ny use not listed in said table shall be prohibited, except as contained herein" and indicates the County’s Zoning Director has the authority to approve unlisted land uses. Id. A different part...

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