Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-5_13-cv-00505/USCOURTS-alnd-5_13-cv-00505-0/pdf.json

Parties Involved:
The City of Huntsville
Defendant
Volcano 256
Plaintiff
Volcano Enterprises, Inc
Plaintiff
Daryl Williams
Plaintiff

Document Text:

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ALABAMA

NORTHEASTERN DIVISION

VOLCANO ENTERPRISES,

INC., doing busine ss as

VOLCANO 256, and DARYL

WILLIAMS,

Plaintiffs,

vs.

THE CITY OF HUNTSVILLE, 

Defendant.

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Civil Action No. CV-13-S-505-NE

MEMORANDUM OPINION AND ORDER

Plaintiffs, Volcano Enterprises, Inc., doing business as “Volcano 256,” and its

owner, Daryl Williams, allege that defendant, the City of Huntsville Alabama, denied

their application for a retail liquor license for use in the operation of an adult

entertainment venue on the basis of race. In a pleading styled “Petition for Writ of 1

Certiorari to the City Council of the City of Huntsville, Alabama and Complaint

Pursuant to 42 U.S.C. § 1981,” plaintiffs request two forms of relief. First, plaintiffs

bring a state-law petition for writ of certiorari to obtain judicial review of defendant’s

denial of the liquor license. Second, plaintiffs assert a federal-law claim for racial 2

 Doc. no. 1-1 (Petition for Writ of Certiorari and Complaint) ¶¶ 1-22. 1

Id. ¶¶ 23-26. 2

FILED

 2013 Apr-12 PM 03:57

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 5:13-cv-00505-CLS Document 8 Filed 04/12/13 Page 1 of 13
discrimination under 42 U.S.C. § 1981. This action is before the court upon 3

defendant’s motion to dismiss the Section 1981 claim. Upon consideration, the court

will grant the motion and dismiss the Section 1981 claim, but with leave to amend.

I. LEGAL STANDARDS

Federal Rule of Civil Procedure 12(b) permits a party to move to dismiss a

complaint for “failure to state a claim upon which relief can be granted.” Fed. R. Civ.

P. 12(b)(6). That rule must be read together with Rule 8(a), which requires that a

pleading contain only a “short and plain statement of the claim showing that the

pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While that pleading standard

does not require “detailed factual allegations,” Bell Atlantic Corp. v. Twombly, 544

U.S. 544, 550 (2007), it does demand “more than an unadorned, the-defendantunlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

(citations omitted). 

To survive a motion to dismiss, a complaint must contain

sufficient factual matter, accepted as true, to “state a claim to relief that

is plausible on its face.” [Bell Atlantic Corp., 550 U.S.] at 570. A claim

has facial plausibility when the plaintiff pleads factual content that

allows the court to draw the reasonable inference that the defendant is

liable for the misconduct alleged. Id., at 556. The plausibility standard

is not akin to a “probability requirement,” but it asks for more than a

sheer possibility that a defendant has acted unlawfully. Ibid. Where a

complaint pleads facts that are “merely consistent with” a defendant’s

Id. ¶¶ 27-31. 3

2

Case 5:13-cv-00505-CLS Document 8 Filed 04/12/13 Page 2 of 13
liability, it “stops short of the line between possibility and plausibility

of ‘entitlement to relief.’” Id., at 557 (brackets omitted). 

Iqbal, 556 U.S. at 678 (alteration supplied). 

II. FACTS AS ALLEGED

As always is the case in the context of ruling upon a motion to dismiss, the

district court is required to assume that

the facts set forth in the plaintiff’s complaint are true. See Anza [v. Ideal

Steel Supply Corp.], 547 U.S. 451, [453,] 126 S. Ct. [1991,] 1994

[(2006)] (stating that on a motion to dismiss, the court must “accept as

true the factual allegations in the amended complaint”); Marsh v. Butler

County, 268 F.3d 1014, 1023 (11th Cir. 2001) (en banc) (setting forth

the facts in the case by “[a]ccepting all well-pleaded factual allegations

(with reasonable inferences drawn favorably to Plaintiffs) in the

complaint as true”). Because we must accept the allegations of

plaintiff’s complaint as true, what we set out in this opinion as “the

facts” for Rule 12(b)(6) purposes may not be the actual facts.

Williams v. Mohawk Industries, Inc., 465 F.3d 1277, 1281 n.1 (11th Cir. 2006)

(alterations supplied). 

Plaintiff Daryl Williams is an African-American who owns and operates

plaintiff Volcano Enterprises, Inc., and who intends to open an adult entertainment

venue called “Volcano 256” at 4320 University Drive NW #A in Huntsville,

Alabama. Williams has twenty years of experience in owning, managing, and

4

Id. ¶¶ 1-2. 4

3

Case 5:13-cv-00505-CLS Document 8 Filed 04/12/13 Page 3 of 13
operating comparable adult entertainment venues. He has held retail liquor licenses

5

in the State of Alabama for the past thirteen years without incident, suspension, or

revocation. 

6

Before Williams purchased the premises at which he proposesto open Volcano

256, the premises were held by several white persons, and, were used for

approximately thirty yearsto operate a “lounge, with entertainment” called the “Silver

Dollar.” Because the Silver Dollar’s use of the premises predated the Zoning

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Ordinances adopted by the City of Huntsville in 1989, that use was “grandfathered”:

i.e., permitted despite any change in the zoning rules. While the Silver Dollar

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remained in business, it was continually issued a retail liquor license by the City of

Huntsville. 

9

The premises ofthe prospectiveVolcano 256 entertainment venue are currently

located adjacent to an adult book store, a bar, and a state liquor store. Williams

10

intends for Volcano 256 to feature non-nude dancing, in which the breasts and

bottoms of the dancers are covered. Williams’s business, plaintiff Volcano

11

Id. ¶ 12. 5

Id. ¶ 13. 6

 Doc. no. 1-1 (Petition for Writ of Certiorari and Complaint) ¶¶ 14, 19. 7

Id. ¶ 14. 8

Id. ¶ 19. 9

Id. ¶ 18. 10

Id. ¶ 14. 11

4

Case 5:13-cv-00505-CLS Document 8 Filed 04/12/13 Page 4 of 13
Enterprises, Inc., is health code-complaint, holds a proper business license, and has

no history of legal or any other problems. 

12

As part of the process of opening Volcano 256, Williams obtained a retail

liquorlicense for the premisesfromthe State of Alabama Alcoholic Beverage Control

Board. After Williams received the license, Huntsville Police Sergeant Mark

13

Roberts personally supervised the building code inspection and permitting of the

premises: something that Roberts did not do for the Silver Dollar or adjacent

businesses. 

14

SergeantMarkRoberts then enlisted various Huntsville municipal departments

to investigate the premises, and informed Williams that the premises did not comply

with the City’s building code. Williams was, nevertheless, “assured that he would 15

be issued his certificate of occupancy and allowed to operate his lounge as soon as

he obtained the necessary permits, hired properly licensed contractors, and brought

the premises up to code.” As a result of those representations, Williams spent in 16

Id. ¶ 1. 12

 Doc. no. 1-1 (Petition for Writ of Certiorari and Complaint) ¶¶ 6-7. 13

Id. ¶ 15. In the complaint, plaintiffs also refer to Huntsville Police Sergeant Mark Roberts 14

as Sergeant Mark Walker and Officer Mark Roberts. See id. ¶¶ 8, 15-17. This court will refer to him

as “Sergeant Mark Roberts,” with apologies if that is not the individual’s correct name.

Id. ¶ 8. 15

Id. ¶ 19. 16

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Case 5:13-cv-00505-CLS Document 8 Filed 04/12/13 Page 5 of 13
excess of $80,000 on renovations and upgrades to the premises. After consulting 17

with the Huntsville City Department of Buildings and Permits, Williams obtained a

Certificate of Occupancy. Upon receiving the certificate, Williams faced one last 18

hurdle: to secure a retail liquor license from the City of Huntsville. 

19

The license review committee of the Huntsville City Council was the first

municipal bodyto reviewWilliams’s application. No communitymembers attended 20

the meeting to voice opposition. Even so, the license review committee denied the

21

request. 

22

Williams properly appealed the decision to the Huntsville City Council, and

informed the Council of the preceding facts surrounding his application. Only

23

Sergeant Mark Roberts raised objections to the granting of the license: something

that he did not do when the premises previously were held by several white persons.24

Nevertheless, Roberts did not present any specific facts connecting the nature of the

Id. ¶¶ 9, 20. 17

Id. 18

 Doc. no. 1-1 (Petition for Writ of Certiorari and Complaint) ¶ 9. 19

Id. ¶ 10. 20

Id. 21

Id. 22

Id. ¶¶ 11, 21. 23

Id. ¶ 16. 24

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proposed use to an increased number of police calls. The Huntsville City Council

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denied Williams’s appeal on December 6, 2012. A white person was a granted a

26

liquor license for an adjacent business during the same application period. 

27

III. DISCUSSION

Title 42, United States Code, Section 1981 provides, in part, that: 

All persons within the jurisdiction of the United States shall have

the same right in every State and Territory to make and enforce

contracts, to sue, be parties, give evidence, and to the full and equal

benefit of all laws and proceedings for the security of persons and

property as is enjoyed by white citizens, and shall be subject to like

punishment, pains, penalties, taxes, licenses, and exactions of every

kind, and to no other.

42 U.S.C. § 1981(a). Plaintiffs’ complaint alleges that:

28

The negligent, intentional, and/or malicious actions of the

defendant which led up to and included the denial of the application for

 Doc. no. 1-1 (Petition for Writ of Certiorari and Complaint) ¶ 17. 25

Id. ¶ 21. 26

Id. ¶ 20. 27

The statutory language now codified at 42 U.S.C. § 1981(a) was originally enacted as part 28

of the Civil Rights Act of 1866. It was amended in minor respects in 1870, and recodified in 1874. 

See Runyon v. McCrary, 427 U.S. 160, 168-69 n.8 (1976); Jones v. Alfred H. Mayer Co., 392 U.S.

409, 436-37 (1968). Congress most recently amended the statute in 1991. Prior to that year, § 1981

contained only one paragraph, reading as follows:

All persons within the jurisdiction of the United States shall have the same

right in every State and Territory to make and enforce contracts, to sue, be parties,

give evidence, and to the full and equal benefit of all laws and proceedings for the

security of persons and property as is enjoyed by white citizens, and shall be subject

to the like punishment, pains, penalties, taxes, licenses, and exactions of every kind,

and to no other.

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the Alcoholic Beverage License were arbitrary and capricious,

discriminatory on the basis of race and color, and in violation of 42

U.S.C. § 1981, resulting in damages to the plaintiffs.

29

The United States Supreme Court announced in Jett v. Dallas Independent

School District, 491 U.S. 701 (1989), that 42 U.S.C. § 1983 “provides the exclusive

federal damagesremedy for the violation of the rights guaranteed by § 1981 when the

claim is pressed against a state actor.” Id. at 735. In accordance with Jett, the

Eleventh Circuit has squarely held that § 1981 does not itself provide a remedy for

redressing violations of that statute against state actors; instead, § 1983 constitutes

30

the exclusive remedial vehicle for asserting claims for monetary damages against

state actors who (or which) allegedly violated the rights secured by § 1981, which

was enacted in aid of the rights secured by the Fourteenth Amendment to the United

States Constitution. Butts v. County of Volusia, 222 F.3d 891, 894 (11th Cir. 31

2000). 

32

Defendant argues that, “[b]ecause the [City of Huntsville] is undisputedly a

 Doc. no. 1-1 (Petition for Writ of Certiorari and Complaint) ¶ 22 (emphasis supplied). 29

Unlike § 1981, which explicatesrights secured bythe Fourteenth Amendment to the United 30

States Constitution, § 1983 is not “itself a source of substantive rights, but merely provides a method

for vindicating federal rights elsewhere conferred.” Albright v. Oliver, 510 U.S. 266, 271 (1994)

(citations and internal quotation marks omitted, emphasis supplied). 

See supra note 28. 31

See also Rioux v. City of Atlanta, 520 F.3d 1269, 1273 n.3 (11th Cir. 2008) (citing Butts 32

for the proposition that § 1983 provides the exclusive remedy for redressing violations of § 1981

against state actors); Johnson v. City of Tampa, No. 8:11-CV-2372-T-33EAJ, 2012 WL 3243608,

*4 (M.D. Fla. Aug. 9, 2012) (citing Butts to dismiss a § 1981 claim against a municipality). 

8

Case 5:13-cv-00505-CLS Document 8 Filed 04/12/13 Page 8 of 13
state actor, yet plaintiffs have nonetheless sued it directly and solely under section

1981, their claim in Count II fails as a matter of law.” Plaintiffs “agree that section

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1983 provides the appropriate remedy to vindicate a violation of section 1981 by a

state actor,” and “propose to amend the complaint to reference both sections 1981 and

1983.” Accordingly, this court must determine whether to dismiss plaintiffs’ § 1981 34

claim with or without leave to amend. 

A. Whether Plaintiffs’ Claim is Plausible on its Face

Defendant’s motion alleges that “the sum total of [plaintiffs’] allegations

suggest nothing ‘more than a sheer possibility’ of race discrimination[.]” Research

35

reveals that multiple courts have permitted plaintiffs to litigate claims arising from

the discriminatory denial of a liquor license. For example, in Calhoun v. Alabama

Alcoholic Beverage Control Board, 705 F.2d 422 (11th Cir. 1983), an AfricanAmerican couple who sought to open a social club applied for a restaurant liquor

license and retail beer license. Id. at 423. One year after denying their request, the

county granted the licenses to a white couple who sought to open a club/lounge at the

same location. Id. at 424. The Eleventh Circuit reversed an order dismissing the

 Doc. no. 4 (Brief in Support of Motion to Dismiss), at 3 (alterations supplied). 33

 Doc. no. 6 (Response to Motion to Dismiss), at 1. 34

Doc. no. 4 (Brief in Support of Motion to Dismiss), at 6 (alterations supplied) (quotingBell 35

Atlantic Corp. v. Twombly, 544 U.S. 544, 555 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). 

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plaintiffs’ complaint, albeit on grounds of untimeliness. Id. at 425.

Likewise, in Flores v. Pierce, 617 F.2d 1386 (9th Cir. 1980), the plaintiffs

sought a liquor license for a restaurant catering primarily to Mexican-Americans. Id.

at 1389. The police chief, mayor, and city councilmen opposed their application,

which delayed the issuance of the license until after the opening of the restaurant. Id.

at 1388. In doing so, the defendants “deviated from previous procedural patterns,”

“adopted an ad hoc method of decision making without reference to fixed standards,”

based their decision “on reports that referred to explicit racial characteristics,” and

“used stereotypic references to individuals from which the trier of fact could infer an

intent to disguise a racial animus.” Id. The Ninth Circuit affirmed a judgment in the

plaintiffs’ favor. Id. at 1392.

Similarly, in Quarterman v. City of Springfield, 716 F. Supp. 2d 67 (D. Mass.

2009), the plaintiff was a self-described “Mulato[sic]/Bi-racial” person who owned

a lounge catering predominantly to Hispanics and African-Americans, and who

alleged that the city denied his application for a liquor license transfer on the basis

of his race. Id. at 70. The district court denied summary judgment on the plaintiff’s

disparate treatment claim, holding that: 

Plaintiffs have produced evidence indicating that Defendants were more

harsh in judging and punishing alleged violations oflicensing-disclosure

rules by [the lounge] than by similarly situated white-owned licensees. 

10

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Plaintiffs have also produced evidence that suggests Defendants

scrutinized [the lounge] more strictly than they scrutinized white-owned

businesses applying for a liquor license transfer. These allegations are

sufficient to suggest disparate treatment.

Quarterman, 716 F. Supp. 2d at 75.

Indeed, federal courts have even refused to dismiss complaints which alleged

that the plaintiffs were targeted for the denial of a liquor license for reasons unrelated

to race. See Esmail v. Macrane, 53 F.3d 176, 179 (7th Cir. 1995) (reversing the

dismissal of an equal protection claim for the denial of a liquor license in which “the

unequal treatment [was] alleged to have been the result solely of a vindictive

campaign by the mayor”) (alteration supplied); see also Arrington v. Dickerson, 915

F. Supp. 1516, 1526 (M.D. Ala. 1996) (holding that “clearly the plaintiff would be

entitled to relief” if he could prove that a city councilman persuaded city officials to

block his liquor license application in retaliation for the plaintiff’s complaints about

certain fees).

Here, plaintiff alleges that when the property located at 4320 University Drive

NW #A was owned by white persons, Huntsville Police Sergeant Mark Roberts did

not personally oversee the building code inspection and permitting of the premises,

or oppose the issuance of a retail liquor license for use in the operation of a lounge

11

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with entertainment at that location. Thus, the white owners had no problems

36

obtaining a liquor license over the course of approximately thirty years. When the

37

premises were purchased by an African-American, however, Roberts reversed his

practice, and the City Council denied plaintiffs’ application. Based on the officials’

38

alleged “deviat[ion] from previous procedural patterns,” Flores, 617 F.2d at 1389

(alteration supplied), this court holds that plaintiff’s claim of discrimination is

plausible on its face.

B. Whether Plaintiffs Must Identify an Impaired Contractual Relationship

Upon Which their Claim is Based

Defendant also argues that plaintiffs have failed to state a claim because they

“have not identified any impaired contractual relationship upon which their claim is

based.” Title 42 U.S.C. § 1981 provides that “[a]ll persons within the jurisdiction 39

of the United Statesshall have the same right in every State and Territory to make and

enforce contracts . . . and shall be subject to like . . . licenses . . . of every kind, and

to no other.” 42 U.S.C. § 1981(a) (alteration and emphasissupplied). Thus, the plain

 Doc. no. 1-1 (Petition for Writ of Certiorari and Complaint) ¶ 15. 36

Id. ¶ 19. 37

Id. ¶¶ 15-16, 21. 38

Doc. no. 4 (Brief in Support of Motion to Dismiss), at 6. To support its arguments, 39

defendant’s motion cites heavily to Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470 (2006), which

involved a contractual relationship between private parties, not a license issued by a state actor. See

id.

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language of § 1981 suggests that the right “to make and enforce contracts” is distinct

from the right to “be subject to like . . . licenses.” Plaintiffs need not establish the

existence of an impaired contractual relationship to show that they were subjected to

different licensing requirements.

IV. CONCLUSION AND ORDER

For the reasons explained above, this court was prepared to grant defendant’s

motion, and to dismiss plaintiffs’ § 1981 claim, but without prejudice and with leave

to amend. As the foregoing order was being proof-read for the final time, however,

plaintiffs filed an amended complaint, asserting plaintiffs’ § 1981 rights under 42

U.S.C. § 1983. (See doc. no. 7.) Accordingly, defendant’s motion to dismiss is

DENIED as moot. Defendant is further directed to answer or otherwise respond to

plaintiffs’ amended complaint within seven days.

DONE and ORDERED this 12th day of April, 2013.

______________________________

United States District Judge

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