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Tokyo Gwinnett, LLC v. Gwinnett County, Georgia

United States Court of Appeals, Eleventh Circuit

October 11, 2019

TOKYO GWINNETT, LLC, d.b.a. Tokyo Valentino Plaintiff - Appellant,

          Appeal from the United States District Court for the Northern District of Georgia D.C. Docket No. 1:15-cv-02606-TWT

          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         The District Court first dismissed Tokyo Valentino's amended complaint on mootness grounds after the County repealed and replaced the challenged ordinances.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 On remand, Tokyo Valentino filed a second amended complaint, challenging both the repealed ordinances and the County's new, replacement ordinances.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         Tokyo Valentino appeals the District Court's finding that it lacks standing to bring claims related to the repealed ordinances.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 (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argument, we affirm the District Court's dismissal of Tokyo Valentino's claim for compensatory damages relating to the repealed ordinances.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judgment regarding whether its sale of sexual devices constitutes a lawful prior nonconforming use authorized under the repealed ordinances and whether the new ordinances' failure to include provisions grandfathering in prior lawful uses violates federal and state law.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.


         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 of the zoning code establishes that "[w]henever a conflict of definitions is considered to exist or an interpretation of these definitions is necessary, the Director shall resolve the conflict and interpret the definition." Id. § 110.20.5.

         According to the County, because Section 230-100 did not list "sexual device store" as a permitted land use in the zone in which Tokyo Valentino operated, the land use was presumptively prohibited. Tokyo Valentino did not challenge the zoning provision, so the County contended it independently barred the sale of sexual devices. This being the case, the County argued that the District Court could not redress injuries that purportedly stemmed from the original adult entertainment ordinances.

         Regarding the replacement ordinances, the County invoked Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746 (1971), which held that federal courts should abstain from hearing suits aimed at restraining pending state criminal prosecutions. Id. at 41, 95 S.Ct. at 749. The County contended the District Court should abstain from hearing Tokyo Valentino's challenges because the pending Superior Court action concerned the same subject matter.

         The District Court agreed with the County in all regards and granted its motion to dismiss. Relying on Unified Development Ordinance § 230-100, the District Court found Tokyo Valentino's challenges to the original ordinances were not redressable. The District Court reasoned that the zoning provision prohibited the sale of sexual devices and found Tokyo Valentino had not challenged that provision.

         Tokyo Valentino argued it was not a sexual device store, but instead a novelty store, which was a permitted land use. The District Court rejected this argument. According to the District Court, Section 230-100 "clear[ly]" defined each land use listed in the table by the "primary type of good or service being sold or marketed." Because "there [was] no doubt that Tokyo Valentino is attempting to, at least in some respect, operate a sexual device store" and "the sale of adult sexual devices is fundamentally distinct from the sale of other novelties," the District Court sided with the County. After offering its own interpretation of the zoning ordinance, the District Court observed:

Regardless of what the Court thinks, the authority to discern and distinguish between different land uses would seem to rest squarely in the hands of the Zoning Director. In this case, the Director made the decision that selling sexual devices was not covered by any land use listed in the table.

         Additionally, the District Court found Tokyo Valentino's complaint did not show it suffered an injury related to the repealed ordinances. Specifically, the District Court declared there was no threat of future harm stemming from the ordinances because they were already repealed, and Tokyo Valentino's second amended complaint had not asserted it suffered any actual harm under the repealed ordinances, dooming its request for damages.

         As for claims relating to the current ordinances, the District Court deemed it appropriate to abstain under the Younger doctrine. The Court explained the state-court enforcement proceeding was ongoing at the time Tokyo Valentino filed its second amended complaint, which first asserted claims concerning the new ordinances. Furthermore, in the District Court's view, it had only decided procedural issues regarding the new ordinances while the state court held a substantive proceeding when it considered the County's motion for interlocutory injunction.

         Tokyo Valentino now appeals, contesting the District Court's dismissal of its second amended complaint.


         Tokyo Valentino first contests the District Court's finding that it lacks standing to bring claims challenging the County's now-repealed adult entertainment ordinances. To establish Article III standing, a prerequisite to invoking federal jurisdiction, a plaintiff must have "(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins, 578 U.S. ___, 136 S.Ct. 1540, 1547 (2016). "When the defendant challenges standing via a motion to dismiss, 'both . . . trial and reviewing courts must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party.'" Region 8 Forest Serv. Timber Purchasers Council v. Alcock, 993 F.2d 800, 806 (11th Cir. 1993) (quoting Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 2206 (1975)). But even at the pleading stage, "a plaintiff must 'clearly allege facts demonstrating each element,' and we evaluate standing on a motion to dismiss based on the facts alleged in the complaint." Aaron Private Clinic Mgmt. LLC v. Berry, 912 F.3d 1330, 1336 (11th Cir. 2019) (internal citation omitted) (quoting Spokeo, 136 S.Ct. at 1547). This Court reviews a district court's standing determination de novo. Hollywood Mobile Estates Ltd. v. Seminole Tribe of Fla., 641 F.3d 1259, 1264 (11th Cir. 2011).

         Tokyo Valentino requests two primary types of relief as to the repealed ordinances: (1) an award of "damages for infringing on its rights," and (2) a "declar[ation] that it is a lawful prior nonconforming use under the County's existing ordinances."[2] Because a plaintiff must establish standing for each type of relief sought, Summers v. Earth Island Inst., 555 U.S. 488, 493, 129 S.Ct. 1142, 1149 (2009), we must separately assess these forms of relief. As set out below, we affirm the District Court's dismissal of Tokyo Valentino's request for damages but reverse the dismissal of its request for declaratory relief.


         We first consider Tokyo Valentino's argument that the District Court erred in finding it lacks standing to bring its claim for compensatory damages relating to the County's original ordinances. We agree with the District Court's finding that Tokyo Valentino's second amended complaint does not contain factual allegations that establish it suffered a cognizable injury in fact for which compensatory damages might be warranted.

         "To establish injury in fact, a plaintiff must show that he or she suffered an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical." Spokeo, 136 S.Ct. at 1548 (quotation marks omitted). Tokyo Valentino contends it met this requirement, pointing to several injuries alleged in its second amended complaint. These include: (1) the County adopted the adult entertainment ordinances in "bad faith" in a "thinly-veiled effort[] to thwart or eliminate a business that purveys erotic media and sells sexual devices"; (2) "[i]f the County's efforts continue, Tokyo Valentino will suffer additional costs, lost profits and increased damage to its goodwill"; (3) the County applied its original ordinances in a way that "restrained [Tokyo Valentino] from enjoying benefits of its contractual relationships" and "providing to the adult public [s]exual [d]evices"; and (4) Tokyo Valentino "suffered damages when the County enforced [the now-repealed ordinances] against it." However, none of these alleged injuries suffices to establish Tokyo Valentino's standing to seek damages.

         The first alleged injury-the County's past "bad faith" efforts to thwart Tokyo Valentino's business-is wholly abstract. To be cognizable, an injury must be "concrete"; "that is, it must actually exist." Spokeo, 136 S.Ct. at 1548. "[C]laims of injury that are purely abstract . . . do not provide the kind of particular, direct, and concrete injury that is necessary to confer standing to sue in the federal courts." ASARCO Inc. v. Kadish, 490 U.S. 605, 616, 109 S.Ct. 2037, 2045 (1989). Tokyo Valentino's perception that the County acted in bad faith isn't a cognizable Article III injury; it's simply an allegation regarding the County's motives.

         Tokyo Valentino's second purported injury concerns its fears that in the future the business "will suffer" harm "[i]f the County's efforts continue." But this alleged injury relates to future or prospective harm, not imminent or actual harm. See Spokeo, 136 S.Ct. at 1548. Because the old ordinances were repealed and replaced, these alleged injuries stemming from those ordinances will never materialize and cannot support Article III standing. Cf. Elend v. Basham, 471 F.3d 1199, 1205 (11th Cir. 2006) ("If an action for prospective relief is not ripe because the factual ...

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