WBY, Inc. v. City of Chamblee

• Decision Date: 16 January 2020
• Docket Number: Civil Action No. 1:18-cv-02739-SDG
• Parties: WBY, INC. d/b/a Follies, Plaintiff, v. CITY OF CHAMBLEE, GEORGIA, et al., Defendants.
• Court: U.S. District Court — Northern District of Georgia

434 F.Supp.3d 1298

WBY, INC. d/b/a Follies, Plaintiff,

v.CITY OF CHAMBLEE, GEORGIA, et al., Defendants.

Civil Action No. 1:18-cv-02739-SDG

United States District Court, N.D. Georgia, Atlanta Division.

Signed January 16, 2020

Cary Stephen Wiggins, Wiggins Law Group, Atlanta, GA, for Plaintiff.

Bryan A. Dykes, Scott D. Bergthold, Law Office of Scott D. Bergthold, P.L.L.C., Chattanooga, TN, for Defendants.

ORDER

Steven D. Grimberg, United States District Court Judge

This matter is before the Court on Plaintiff WBY, Inc. d/b/a Follies' Motion for Partial Summary Judgment [ECF 84] and Defendants City of Chamblee, Robert Bodron, and Andrew Clark's Motion for Summary Judgment [ECF 85]. For the reasons stated below, Follies' motion is DENIED and Defendants' motion is GRANTED .

I. BACKGROUND

A. Facts

The following facts are not in dispute. Follies is an adult entertainment nightclub located in Chamblee, Georgia that offers nude dancing and sells alcohol for consumption on the premises.¹ In 2014, the City of Chamblee annexed territory from unincorporated DeKalb County, which included the sites where Follies and other alcohol-serving nightclubs operate.² Before the annexation, Chamblee required establishments selling alcohol for consumption on the premises to end alcohol sales at 2:00 am and to close entirely by 3:00 am.³ An agreement between Follies and DeKalb County permitted Follies to sell alcohol until 3:55 am and remain open to the public until 4:55 am.⁴ After the annexation of the territory in which Follies is located, Chamblee did not continue the hours-agreement between Follies and DeKalb County. However, it reached a compromise with Follies and allowed it to sell alcohol until 3:00 am and to close entirely by 3:30 am.⁵ From 2014 through 2018, Follies obtained alcohol licenses from Chamblee under this new agreement.⁶ These licenses clearly stated: "This license is mere privilege subject to revocation or annulment and any future ordinances which may be enacted by the City of Chamblee."⁷

In the three years following annexation of the unincorporated territory, Chamblee contends its compromises with Follies (and similar establishments) proved detrimental to the City.⁸ A 2017 report showed that the annexation incorporated into Chamblee eleven establishments that routinely stayed open past midnight and permitted the consumption of alcohol.⁹ After the annexation, Chamblee contends that it experienced an increase in the number of thefts, fights, assaults, and arrests in and around these establishments.¹⁰ At the same time, areas surrounding Chamblee, such as Doraville and Sandy Springs, began requiring alcohol-serving establishments to close at 2:00 am. They experienced a decrease in police calls, violent crimes, and property crimes.¹¹ On February 20, 2018, the Chamblee City Council adopted Ordinance No. 754.¹² That Ordinance amended Section 6-152(a) of Chamblee's Alcohol Code to require establishments selling alcohol for consumption on premises to stop selling alcoholic beverages (i) at 2:00 am on Monday through Saturday; and (ii) by 11:59 pm on Sunday.¹³ Such establishments were also required to close to the public every day by 2:30 am.¹⁴

On February 17, 2018, Chamblee law enforcement officers, members of the DeKalb County Fire Marshals, and agents with the Georgia Department of Revenue engaged in an administrative inspection of Follies.¹⁵ Defendants Robert Bodron and Andrew Clark were two of the four Chamblee police officers who assisted with this compliance check.¹⁶ The inspection included 11 officers, agents, and fire marshals, and lasted approximately 55 minutes.¹⁷ After the inspection, the state and local agencies issued Follies two citations for violations of the City's alcohol and fire codes.¹⁸

In October 2018, Chamblee further amended its Alcohol Code, removing a carve out that had permitted restaurants with alcohol licenses that served food 24-hours per day to remain open later than Follies.¹⁹ As amended, Ordinance No. 754 does not refer to establishments "regularly open 24 hours as a restaurant."²⁰

B. Procedural History

On June 5, 2018, Follies filed a six-count Complaint against Chamblee, Bodron, and Clark.²¹ In Count I, Follies alleged that Defendants violated its Fourth Amendment rights by conducting an unreasonable search of its premises on February 17, 2018.²² In Counts II through V, Follies alleged that Chamblee's adoption of Ordinance No. 754 violated its rights under the United States and Georgia constitutions.²³ Count VI asserted a claim for attorney's fees under 42 U.S.C. § 1988 and O.C.G.A. § 13-6-11.²⁴

On June 11, 2018, the Court consolidated Follies' case with this action, originally brought by DeKalb Event Center, Inc. d/b/a Mansion Elan, which also challenged the constitutionality of Ordinance No. 754.²⁵ On March 26, 2019, the Court granted Mansion Elan's voluntary motion to dismiss with prejudice,²⁶ leaving Follies as the sole remaining Plaintiff.

On August 12, 2019, Follies filed its Motion for Partial Summary Judgment²⁷ and Defendants filed their Motion for Summary Judgment.²⁸ Each side opposed the other's summary judgment motion.²⁹ Defendants filed a reply in support of their motion on October 11, 2019.³⁰ On November 21, 2019, the Court heard oral argument on the cross-motions.³¹

II. LEGAL STANDARD

Summary judgment is appropriate when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A fact is "material" only if it can affect the outcome of the lawsuit under the governing legal principles. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A factual dispute is "genuine ... if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

A party seeking summary judgment has the burden of informing the district court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If a movant meets its burden, the party opposing summary judgment must present evidence showing either (1) a genuine issue of material fact or (2) that the movant is not entitled to judgment as a matter of law. Id. at 324, 106 S.Ct. 2548.

In determining whether a genuine issue of material fact exists, the evidence is viewed in the light most favorable to the party opposing summary judgment, "and all justifiable inferences are to be drawn" in favor of that party. Anderson , 477 U.S. at 255, 106 S.Ct. 2505 ; see also Herzog v. Castle Rock Entm't , 193 F.3d 1241, 1246 (11th Cir. 1999). "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions," and cannot be made by the court in evaluating summary judgment. Anderson , 477 U.S. at 255, 106 S.Ct. 2505. See also Graham v. State Farm Mut. Ins. Co. , 193 F.3d 1274, 1282 (11th Cir. 1999). Summary judgment for the moving party is proper "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

III. FOLLIES IS NOT ENTITLED TO PARTIAL SUMMARY JUDGMENT.

Follies seeks partial summary judgment on the sole issue of whether, under the Georgia Constitution, it possessed a vested property right in its 2018 alcohol license.³² Follies argues its vested rights were "defined by the version of [Chamblee's Alcohol Code] in the books in December 2017."³³ According to Follies, Chamblee infringed these vested rights by adopting Ordinance No. 754 and subjecting Follies to its hours restrictions.³⁴ Chamblee, on the other hand, contends that Ordinance No. 754 did not annul or repeal Follies' alcohol license.³⁵ Chamblee recasts Follies' argument as a request for a "property interest in the code itself, i.e. , in the code as it existed when its alcohol license was granted."³⁶ Chamblee states such an argument is foreclosed by Georgia law and that the City was free to amend the code and to require Follies' compliance with it.³⁷

In an action premised on diversity of citizenship subject matter jurisdiction, a federal court "must apply the controlling substantive law of the state" in which it sits. Cambridge Mut. Fire Ins. Co. v. City of Claxton, Ga. , 720 F.2d 1230, 1232 (11th Cir. 1983) (citing Erie R. Co. v. Tompkins , 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) ). Thus, the Court must apply Georgia state law to the substantive issues underlying Follies' claims. As Follies acknowledges, the success of its motion depends on the Court's application of the Georgia Supreme Court's decision in Goldrush II v. City of Marietta , 267 Ga. 683, 482 S.E.2d 347 (1997), and its progeny.

In Goldrush II , adult entertainment clubs challenged an amendment to the City of Marietta's local ordinances that prohibited them from selling alcohol. Id. at 351. The clubs argued they possessed a vested property right in the continued renewal of their alcohol licenses based on their previous renewals and significant expenditure of money. Id. This, the adult entertainment clubs argued, entitled them to due process of law and prevented Marietta from amending its ordinances to impede their ability to sell alcohol. Id. at 357.

Citing the United States Supreme Court's decision in Board of Regents v. Roth , 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972), the Georgia Supreme Court stated that "to have a property interest ... a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it." Goldrush II , 482 S.E.2d at 358. The court held that, while parties can obtain vested rights by virtue of zoning laws, they cannot obtain a vested property right in an...