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Volcano Enterprises, Inc. v. City of Huntsville

United States District Court, N.D. Alabama, Northeastern Division

September 29, 2014

VOLCANO ENTERPRISES, INC., et al., Plaintiffs,


C LYNWOOD SMITH, Jr., District Judge.

This action was commenced in the Circuit Court for Madison County, Alabama, on February 14, 2013, and removed here on March 15, 2013.[1] The plaintiffs are Volcano Enterprises, Inc., doing business as "Volcano 256, " and its majority stockholder, Daryl Williams.[2] They seek judicial review of the denial of their application for a liquor license by the Huntsville City Council by means of a petition for common-law writ of certiorari. They also assert a claim for damages under 42 U.S.C. §§ 1981 and 1983.[3] The case now is before the court on defendant's motion for summary judgment.[4] Upon consideration of the pleadings, briefs, and oral arguments of counsel, the court concludes the motion should be granted.[5]


Daryl Williams is an African-American resident of Birmingham, Alabama, who owns and operates an adult lounge ("Club Volcano") within that city.[6] He leased space located in a business plaza at 4320 University Drive in Huntsville ("the subject property") on February 1, 2011, [7] with the intention of opening another adult lounge to be named "Volcano 256."[8] Other tenants occupying spaces within the same business plaza included a liquor store, an adult bookstore, and the "Cat and Mouse Club" (which was owned by a Caucasian).[9]

A club named "The Silver Dollar Lounge" had occupied the subject property for more than thirty years before Williams leased the same space.[10] It opened for business on some undisclosed date in the 1970s, and closed on December 31, 2010.[11] During its years of operation, the Silver Dollar Lounge served alcohol and featured female dancers.[12] Its owners were Caucasian.[13]

Williams leased the subject property with the intention of operating the "exact same business as Silver Dollar did."[14] Thus, his August 15, 2012 application sought the same classification of liquor license previously held by the owners of the Silver Dollar: i.e., "Lounge Retail (With Entertainment)."[15]

A. The License Review Committee's Decision

Huntsville's ordinances vest the members of a License Review Committee with the responsibility of assisting the City Council in reviewing and investigating liquor license applications.

There is created, for the purpose of assisting the city council in reviewing and approving applications for licenses and performing other matters specifically assigned to the committee by this chapter, a committee to be known as the license review committee. The committee shall assist the city council in the consideration and special investigation of all applications for licensing under this chapter. The committee shall be composed of the city clerk-treasurer or an administrative officer of the clerk-treasurer's office designated by the city clerk-treasurer; the chief of police or an officer of the police department designated by the chief of police; and the director of planning or an employee of the planning department designated by the director of planning.

HUNTSVILLE, ALA., ORDINANCE NO. 11-654, § 3-87(a) (2011).[16] The factors to be considered when reviewing an application were listed as follows:

(a) In considering the application for a city license, whether by the liquor license review committee or the city council on appeal, all relevant factors may be considered, which includes, among others and without limitation, the following:
(1) Compliance with this chapter and the state alcoholic beverage control laws, which includes classification specific requirements or qualifications for licensing;
(2) Compliance with other city ordinances, rules, and regulations, which includes the city's zoning laws and any variances or special exceptions granted pursuant thereto;
(3) Suitability of the applicant and persons having ownership, control, or management of or an interest in the establishment to be licensed;
(4) Any required security plan and suitability of security personnel;
(5) Location of the premises, which includes adjacent or nearby uses;
(6) Information contained in the application, which includes criminal history;
(7) Results of the investigation conducted in accordance with section 3-86;
(8) Testimony presented at any hearings conducted on the application, which includes testimony of the owners or occupants of nearby property as well as the general public; and
(9) Impact upon the welfare, health, peace, temperance, morals, and safety of the public.
(b) In an appeal to the city council, the city council may consider the decision of the license review committee and any reasons given therefor.
(c) No applicant shall be deemed eligible for a license under this chapter nor shall an application be approved without having first obtained all required permits from the health department, and without fully meeting applicable requirements of the technical codes of the city, the fire prevention codes of the state and of the city, the zoning laws of the city, and other applicable city laws which regulate the business or the premises.

Id., § 3-89.[17]

Sergeant Mark Roberts, who had represented the Chief of Police on the License Review Committee for more than a decade, was present at the September 20, 2012 meeting when plaintiffs' application was discussed.[18] He had conducted the required investigation into the application.[19] The minutes record the following discussion:

The application for Volcano was read by Chairman Cole and turned over to Sergeant Roberts for his comments. He stated this application had come up for the third time. The first time it was denied on 9-1-11 by the Fire Department. On 4-19-12 it was denied by the Zoning Department, and on 8-15-12 it was submitted again. On this date it was denied again and Sergeant Roberts stated that he would give a history but Mr. Lucian Blankenship, attorney for the applicant, Mr. Williams, stated Mr. Williams was not present at this time but was en[-] route and was caught up in traffic. Whereupon, Chairman Cole proceeded with the other business and came back to this application last with Mr. Williams still not present.
[Between the foregoing entry in the Committee's minutes and the following report by Sergeant Mark Roberts, two persons appeared before the Committee and spoke in favor of Williams's application, but neither individual indicated that he lived (or worked) in the area near the property.[20]
Sergeant Roberts stated the application was denied regarding the impact of the area and the history on the site activity at 4320A University Drive.
Sergeant Roberts further stated on March 25, 2011 Huntsville Police found employees from Birmingham doing construction work and not licensed, and they were bootlegging electricity. The police brought in the landlord, and he was advised and agreed he would lock up everything until it was all taken care of.
On 3-31-11 doors were open and Mr. Williams was inside and still had no license, and the Inspection Department issued a Stop Work Order.
On 4-26-11 the police get a call and find several workers inside doing demolition, and these were employees again from Birmingham with no license and permit. Two workers were arrested and pled guilty, and Mr. Williams pled guilty to violation of the City Code. One worker possessed a handgun and drugs and is on the run for 2 outstanding arrest ...

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