ATLANTA, Ga.—The Eleventh Circuit Court of Appeals just handed a major win to Michael Morrison, the owner of specialty retail outlet Tokyo Valentino, which Gwinnett County, on Atlanta's outskirts, has been trying to close down since 2015 under its adult entertainment and licensing ordinances.
It's not Tokyo Valentino's first trip to the appeals court. The company's first lawsuit got dismissed as moot after Gwinnett changed its ordinances mid-suit, but an appeal to the Eleventh got the suit reinstated, and Tokyo Valentino filed an amended complaint. The district court dismissed that suit as well—which brings us to the decision handed down by the three appellate justices today, and if one thing is clear about the fracas surrounding this latest lawsuit, it's a complicated mess.
As AVN reported in June, U.S. District Judge Thomas Thrash dismissed the latest suit on two grounds: 1) The court determined that Tokyo Valentino lacked standing to bring claims related to the repealed ordinances, and 2) that the reason the store supposedly lacked standing is because there was an earlier state court enforcement proceeding against the store that was still pending while the store was appealing the first dismissal of its case.
As AVN previously noted, Judge Thrash agreed with Gwinnett that under the county's 1996 adult business ordinance, Tokyo Valentino should not have been granted a business license in the first place, and despite the fact that the store did open and continued doing business and that the county took no action to shut down the store or its arcade booths, the judge used that supposedly improper license grant against the store in its current lawsuit—a move the Eleventh Circuit called "bullshit" on.
But not all is rosy. The Eleventh Circuit panel upheld the district court's dismissal of the store's claim for compensatory damages relating to losses it suffered as a result of the repealed ordinances, stating that the store could not show that it "suffered a cognizable injury in fact for which compensatory damages might be warranted." The 57-page appeals court opinion goes into great detail regarding what damages might have been incurred and why they're not compensable.
On the other hand, the appeals panel reinstated 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judgment regarding whether its sale of sexual devices constitutes a lawful prior nonconforming use authorized under the repealed ordinances, and whether the new ordinances’ failure to include provisions grandfathering in prior lawful uses violates federal and state law.
The grandfathering question apparently revolves around the fact that after the county revamped its zoning code, it added what the appeals court described as "a previously unmentioned provision" of the code that established a "table of permitted uses" and included such categories as "Convenience Store," "Department Store," "Recreation and Entertainment Facility (indoor)" and several others—but since that list didn't include "sexual device store," the County took the position that Tokyo Valentino's business should not have been permitted to operate where it was.
Tokyo Valentino, on the other hand, has long argued that it is a "Novelty Store," which is on the list of approved uses, and while the store never challenged that section of the zoning code, the county also never attempted to enforce it—until Tokyo Valentino's second lawsuit came before Judge Thrash, and he ruled that because of the prior ordinance "violation," the store's lawsuit should be dismissed.
Specifically, according to the appeals opinion, Judge Thrash's basis for dismissal was because it found that "(1) Tokyo Valentino challenged only a specific subset of the original adult entertainment ordinances, (2) zoning ordinance Section 230-100 [the 'table of permitted uses' list] was not among the challenged provisions, and (3) Section 230-100 independently barred Tokyo Valentino from selling sexual devices."
"As explained below, we think the record was insufficient to support the last of those findings," the appeals panel ruled. "Although the County relied on a provision of law in seeking to undermine Tokyo Valentino’s claim to standing, its challenge was at bottom a factual one. The County argued Tokyo Valentino could not call its planned sexual device store a 'Novelty Shop' or any of the more than 100 permitted land uses. Instead, according to the County, the zoning ordinance would only recognize Tokyo Valentino’s operation as an unpermitted 'sexual device store.' We think the District Court too easily revolved this question in the County’s favor."
The court also noted that the county's approved use list was woefully deficient in defining its terms, and saw no reason "why a common or ordinary definition of 'Novelty Shop' necessarily excludes sexual devices... the County’s ordinances, as originally enacted, did not bar sexual devices or require additional permitting in order to sell them. In fact, the County explicitly acknowledged before this Court that 'Tokyo[] [Valentino’s] premise—that the original adult codes did not specifically mention sexual devices—is correct.'"
The bulk of the appeals decision is taken up discussing why Judge Thrash was wrong to dismiss the suit because of the prior allegedly improper grant of a business license, though one of the appeals judges, Julie Carnes, dissented from that finding. In the end, however, Tokyo Valentino will now be able to continue its suit against Gwinnett County for its right to exist—and it's anyone's guess how many months or years it will take to finally resolve this matter.
The store has been represented by prominent First Amendment attorney Cary Wiggins of Wiggins Law Group, and the appeal of the dismissal was handled by the equally prominent Gary Edinger and Daniel Aaronson of Benjamin, Aaronson, Edinger & Patanzo, who have been responsible for ddefending many adult businesses in the Southeast.
