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Eleventh Circuit Trims Fee Award for South Beach Liquor Store

September 21, 2021 | Posted in : Fee Award, Fee Issues on Appeal, Fee Reduction

A recent Law 360 story by Carolina Bolado, “11th Circ. Shaves Fee Award in Miami Beach Liquor Store Row,” reports that the Eleventh Circuit ruled Tuesday that an attorney fee award for the city of Miami Beach in a dispute with a South Beach liquor store owner should be reduced, because while the business' due process claims against the city were frivolous, its First Amendment retaliation claim was not.

The appeals court said the closure of Ocean 9 Liquor came one day after its owner, Doron Doar, met with the deputy city attorney to discuss concerns about local regulations restricting alcohol sales in the city's mixed use entertainment, or MXE, district that encompasses the famed Ocean Drive.

That close temporal relation between Doar's protected First Amendment conduct and the challenged closure of his store is enough to make the claim "not wholly without foundation," according to the Eleventh Circuit. This is especially true when the deputy city attorney told counsel for Doar a few days later that the closure of the liquor store was not a coincidence and was a long time coming, according to the opinion.

"It was not unreasonable for Beach Blitz to believe that the city shut down its store as a response to Beach Blitz's protected First Amendment conduct," the appeals court said. "The claim, while properly rejected by the district court, was not frivolous."

The First Amendment retaliation claim was the only one that U.S. District Judge Ursula Ungaro allowed Doar to amend, but when he opted not to amend the claim, the judge dismissed the case. On appeal, Doar argued that voluntary dismissal does not warrant an award of fees to a defendant.

But the Eleventh Circuit said the dismissal was involuntary, as it was done in response to the city's motion to dismiss, which Doar opposed. The appeals court said it had "little difficulty concluding" that this involuntary dismissal made the city a prevailing party.

The Eleventh Circuit remanded the case to Judge Ungaro to determine which part of the $132,785 fee award was attributable to the First Amendment retaliation claim and excise it.

Doar, who operates Ocean 9 Liquor and Ocean 11 Market through his company Beach Blitz Co., sued the city in October 2017, alleging that city commissioners engaged in a campaign to put him out of business by passing ordinances restricting alcohol sales in the MXE district.

An October 2016 ordinance blocked packaged sales of alcoholic beverages for consumption off premises in the MXE district. The four existing liquor stores, including Ocean 9 and Ocean 11, were grandfathered in, according to court documents.

In subsequent ordinances, Miami Beach limited the hours in which alcohol could be sold in the MXE district.

The move was ostensibly an effort to combat crime and rowdiness in the area, but Doar says his business and others like it were unfairly blamed for the area's problems. He pointed to an October 2016 interview with the Miami Herald in which then-Mayor Philip Levine called certain South Beach businesses that sold liquor "malignant tumors."

As the city commissioners were passing these local regulations, Doar had failed to pay his required business tax receipt for Ocean 9 for the 2016-2017 fiscal year, according to court documents. He did not discover the oversight until eight months after it was due.

The city says Doar — who was also embroiled in a fight over several citations for selling alcohol after the approved hours — did not pay the business tax until more than a year after the business' license had expired. Because the license had not been renewed within the fiscal year, it was deemed closed and a new license application was required. But new licenses for liquor stores in the MXE district were not allowed under the new ordinance.

U.S. Circuit Judges Jill Pryor, Kevin Newsom and Stanley Marcus sat on the panel for the Eleventh Circuit.