Posted by: Patricia Salkin | June 27, 2019

11th Circuit Court of Appeals Finds Res Judicata Did Not Apply in First Amendment Zoning Claims Arising from Adult Videoplexx and Swingers Club

This post was authored by Matthew Loeser, Esq.

Cheshire Bridge Holdings, LLC and Cheshire Visuals, LLC owned and operated Tokyo Valentino, an adult toy and video store connected to an adult videoplexx and swingers club. In this case, Cheshire appealed the district court’s summary judgment order dismissing their federal civil rights complaint against the City of Atlanta and its individual co-defendants. Cheshire alleged violations of the First Amendment’s Free Speech Clause and a petition for writ of certiorari under Georgia law arising from the City’s application of its zoning ordinances to Cheshire’s adult-oriented business. The City filed counterclaims seeking an injunction to prevent operation of an adult club. The district court granted summary judgment to the City based in part on res judicata and lack of redressability, and issued a permanent injunction to stop Cheshire from operating its swingers club and adult novelty shop.

As to whether res judicata applied, the court noted the primary right asserted in the state court litigation was to have the correct version of the Code applied to Cheshire’s business license application. Here, the primary right Cheshire asserted was to renovate the property and freely express itself under the First Amendment by operating a social club as part of its business at the property. The earlier litigation also never touched on Cheshire’s operations, including whether it illegally operated the videoplexx “from the beginning.” Additionally, the issuance and reissuance of building permits in 1997, were likewise not within the relevant nucleus of operative facts for either prior case. Conversely, the nucleus of operative facts in this case was the events surrounding the investigation and withholding of Cheshire’s application for a building permit and the City’s subsequent issuance of a “cease and desist” notice in 2014. As the court found that the primary rights and duties were different, the nuclei of operative facts were different, and the pre-enforcement claim that theoretically could have been brought was different than the new post-enforcement claim, it held that no aspect of Cheshire’s Overbreadth Claim was precluded under res judicata. Accordingly, the district court’s holding to the contrary was reversed.

Since the court reversed the res judicata holding as to “adult mini-motion picture theater” it found that there would be a live claim involving that definition on remand. The court further found that there could be a redressable harm at the end of the litigation from the challenge to “adult entertainment establishment.” The record reflected that because Cheshire operated various types of “adult entertainment establishments” at the property there was an actual injury resulting from the definition of “adult entertainment establishment,” or at least a credible threat of enforcement under that sub-definition of “adult business.” The court therefore held Cheshire could litigate the Overbreadth Claim against the “adult entertainment establishment” definition. Similarly, since the district court relied upon the definition of “adult business” and its various sub-definitions to issue the injunction, the court held the injunction could not stand. Thus, the court vacated the district court’s injunction.

Cheshire Bridge Holdings, LLC v City of Atlanta, 2019 WL 2406502 (11th Cir CA 6/7/2019)

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