Flava Works, Inc. v. CITY OF MIAMI, FL

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 09-11264 JUNE 25, 2010
________________________ JOHN LEY
CLERK
D. C. Docket No. 07-22370-CV-MGC

FLAVA WORKS, INC.,
a Florida corporation d.b.a. Cocodorm.com,
ANGEL BARRIOS,

Plaintiffs-Appellees,

versus

CITY OF MIAMI, FL,
a Florida municipal corporation,
CITY OF MIAMI, CODE ENFORCEMENT BOARD,

Defendants-Appellants.

________________________

Appeal from the United States District Court
for the Southern District of Florida
_________________________

(June 25, 2010)
Before PRYOR and FAY, Circuit Judges, and QUIST,* District Judge.

FAY, Circuit Judge:

This appeal arises out of a zoning dispute between an online adult

entertainment business and the City of Miami regarding the use of a privately

owned residence. Angel Barrios and Flava Works, Inc. seek to quash the Miami

Code Enforcement Board’s final administrative ruling that they were engaged in

“adult entertainment” in an inappropriate zone and “illegally operating a business

in a residential zone.” Their lawsuit, brought in federal court, included a state law

petition for writ of certiorari as well as constitutional claims. On cross-motions for

summary judgment, the district court granted the writ of certiorari, quashed the

decision of Code Enforcement Board, and held that Flava Works was neither

operating an adult entertainment establishment nor a business at the residence. We

reverse and render a partial judgment in favor of the City of Miami on the state law

claim that Flava Works was operating a business at the residence. We remand for

further proceedings on the constitutional claims.

I. BACKGROUND

A. Factual Background

Flava Works, Inc. is a Florida corporation doing business as

*
Honorable Gordon J. Quist, United States District Judge for the Western District
of Michigan, sitting by designation.

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CocoDorm.com, which operates an internet-based website of the same name. The

CocoDorm website transmits images, via webcam, of the residents of 503

Northeast 27th Street, Miami, Florida, over the internet. This residence, which is

zoned multifamily high-density residential (R-4), is owned by Angel Barrios and

leased to Flava Works, Inc. The persons residing at the 27th Street residence are

independent contractors of Flava Works, and, in exchange for $1,200 per month

plus free room and board, are expected to engage in sexual relations which are

captured by the webcams located throughout the house. Individual subscribers pay

Flava Works, through the CocoDorm website, for access to live or recorded video

feeds, including sexually explicit conduct, from the webcams in the 27th Street

residence.

Flava Works’s principal place of business, as designated with the Florida

Secretary of State, is 2610 North Miami Avenue, where the accounting and

financial aspects of the business are conducted. Flava Works holds city and county

occupational licenses to operate a video and graphics business at this address. In

addition to distributing digital content through the internet, Flava Works distributes

physical media, such as videos and magazines, to locations around the world. The

computer servers, which house the digital content and provide access to the

CocoDorm website, are not located at either the 27th Street residence or the Miami

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Avenue office.

Flava Works does not disclose the location of the 27th Street residence on its

website or in any of its videos or magazines. None of the webcams are located

outside of the residence and no external images of the home are broadcast over the

internet. Neither customers nor vendors ever physically go to the 27th Street

residence.

B. Procedural Background

In June 2007, the City of Miami posted a notice of violation on the 27th

Street residence, informing the owner, Angel Barrios, that Flava Works was, inter

alia, engaged in adult entertainment not permitted in that zone and illegally

operating a business in a residential zone. The City of Miami Code Enforcement

Board held several hearings and on August 13, 2007 found Barrios and Flava

Works guilty of violating the following zoning ordinances:

-1537 Adult entertainment not permitted in C-1 zone property.
-1572 Illegally operating a business in a residential zone.

On August 23, 2007, the Code Enforcement Board entered a Final Administrative

Enforcement Order.

In September 2007, Barrios and Flava Works filed the underlying action in

federal district court. The lawsuit included a state law petition for writ of

certiorari, as well as constitutional claims, seeking to quash the administrative

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decision of the Code Enforcement Board. In ruling on the City of Miami’s motion

to dismiss, the district court concluded that Barrios and Flava Works have standing

to raise the claims alleged and that the exercise of supplemental jurisdiction

pursuant to 28 U.S.C. § 1367 was appropriate. Thereafter, the parties filed cross-

motions for summary judgment.

On consideration of the motions for summary judgment, the district court

addressed the City of Miami’s argument that it should decline to exercise

supplemental jurisdiction pursuant to the Pullman abstention doctrine. The district

court held that, although the question of state law is dispositive, it has been

previously settled, making abstention inappropriate. Furthermore, the district court

found that abstaining so far into the proceedings would be a waste of judicial

resources, as well as the parties’ time and money.

In January 2009, the district court granted Barrios and Flava Works’s motion

for summary judgment finding the facts to be “materially indistinguishable” from

this Court’s opinion in Voyeur Dorm, L.C. v. City of Tampa, Fla., 265 F.3d 1232

(11th Cir. 2001). Consequently, the district court denied the City of Miami’s

motion for summary judgment. The district court held that “since the Miami

zoning ordinance is designed to restrict establishments that offer adult

entertainment services to the public at their physical location, that ordinance cannot

5
be ‘applied to a particular location that does not, at that location, offer adult

entertainment’ or services to the public.” Flava Works, Inc. v. City of Miami, Fla.,

595 F. Supp. 2d 1341, 1347 (S.D. Fla. 2009) (quoting Voyeur Dorm, 265 F.3d at

1236). The district court also held that “the activities taking place at [the 27th

Street] residence do not amount to the unlawful operation of a business in a

residential zone.” Id. The City of Miami filed this timely appeal.

II. STANDARD OF REVIEW

We review the district court's grant of summary judgment de novo,

considering all the evidence and factual inferences in the light most favorable to

the non-moving party. See Schwarz v. City of Treasure Island, 544 F.3d 1201,

1211 (11th Cir. 2008). Under Fed. R. Civ. P. 56(c), a motion for summary

judgment is properly granted when “the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that the moving party is

entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317,

322, 106 S. Ct. 2548, 2552 (1986). In the instant case, the material facts are

undisputed and the district court was not called upon to make any factual

determinations. We review the district court’s determinations of state law de novo.

See Salve Regina College v. Russell, 499 U.S. 225, 231, 111 S. Ct. 1217, 1221

6
(1991).

III. DISCUSSION

On appeal, the City of Miami does not challenge the district court’s

conclusion that the Miami zoning ordinance regarding “adult entertainment” does

not apply to the activities taking place at the 27th Street residence. The City of

Miami confines its arguments to whether Flava Works was illegally operating a

business in a residential zone. It is undisputed by the parties that the 27th Street

residence is zoned R-4, a residential zoning category of the Miami Zoning

Ordinance. Thus, the issue on appeal is whether the activities taking place at the

27th Street residence amount to the operation of a business.

The City of Miami makes two arguments. First, it contends that the district

court incorrectly applied the state law standard of review by re-weighing the

evidence rather than merely determining whether the administrative findings and

judgment were supported by competent substantial evidence. Second, the City of

Miami asserts that the district court erroneously relied on this Court’s decision in

Voyeur Dorm, which does not address a prohibition against operating a business in

a residential zone.

A. Did the district court correctly apply the standard of review?

Flava Works maintains that the district court correctly applied the state law

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standard of review by finding that the Code Enforcement Board failed to observe

the essential requirements of law. While the parties disagree on whether the

district court correctly applied the standard of review, both agree that Florida’s

standard of review for writs of certiorari should be applied.

In Florida, “[o]nce the local agency has ruled . . . the parties may seek

review in the court system, twice. First, a party may seek certiorari review in

circuit court, i.e., ‘first-tier’ certiorari review. Although termed ‘certiorari’ review,

review at this level is not discretionary but rather is a matter of right and is akin in

many respects to a plenary appeal.” Dusseau v. Metropolitan Dade County Bd. of

County Com'rs, 794 So. 2d 1270, 1274 (Fla. 2001). “Next, a party may seek

certiorari review of the circuit court decision in the district court, i.e., ‘second-tier’

certiorari review. Review at this level is circumscribed and is similar in scope to

true common law certiorari review.” Id.1

These two standards of review were clarified by the Florida Supreme Court

in City of Deerfield Beach v. Vaillant:

Where a party is entitled as a matter of right to seek review in the
circuit court from administrative action, the circuit court must
determine [1] whether procedural due process is accorded, [2] whether
the essential requirements of the law have been observed, and [3]
whether the administrative findings and judgment are supported by
competent substantial evidence. The district court, upon review of the
1
In the state courts of Florida, the circuit courts are the trial courts and the district courts
are the courts of appeal.

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 circuit court's judgment, then determines whether the circuit court [1]
afforded procedural due process and [2] applied the correct law.

419 So. 2d 624, 626 (Fla. 1982).

In Florida Power & Light Co. v. City of Dania, the Florida Supreme Court

concluded that “[t]he first prongs of both standards (i.e., the due process prongs)

are the same, and the second prongs (i.e., the ‘essential requirements of the law’

and ‘applied the correct law’ prongs) also are equivalent. However, the Court noted

a key difference: The third prong in the circuit court standard (i.e., the ‘competent

substantial evidence’ prong) is absent from the district court standard. 761 So. 2d

1089, 1092-93 (Fla. 2000). “Competent substantial evidence is tantamount to

legally sufficient evidence.” Dusseau, 794 So. 2d at 1274.

In the instant case, the district court exercised supplemental jurisdiction over

the petition for writ of certiorari, pursuant to 28 U.S.C. § 1367. As such, state law

applies to any issue not governed by the Constitution or treaties of the United

States or Acts of Congress. See 28 U.S.C. § 1652; Erie R. Co. v. Tompkins, 304

U.S. 64, 78, 58 S. Ct. 817, 822 (1938). According to the parties, this not only

includes Florida substantive law but Florida law regarding the standard of review.

Thus, the district court must apply “first-tier” certiorari review and we are limited

to “second-tier” certiorari review under Florida law. Under this “second-tier”

certiorari review we review the local ordinance de novo. See City of Deerfield

9
Beach v. Vaillant, 419 So. 2d 624, 626 (Fla. 1982); see also Allstate Ins. Co. v.

Kaklamanos, 843 So. 2d 885, 890-91 (Fla. 2003); City of Coral Gables Code

Enforcement Bd. v. Tien, 967 So. 2d 963, 965-66 (Fla. Dist. Ct. App. 2007).

We find no merit in the City of Miami’s argument that the district court re-

weighed the evidence. The district court neither re-weighed the evidence nor

challenged the factual determinations of the Code Enforcement Board. In fact,

there was no need for fact-finding by either the agency or the reviewing court

because the facts were undisputed by the parties. Instead, the district court found

that the Code Enforcement Board’s ruling was legal error. Under Florida’s first-

tier certiorari review, the district court was required to ask in the second-prong of

that standard whether the essential requirements of the law have been observed.

While we disagree with the district court’s conclusion, it did not exceed its

authority under the state standard of review.

B. Did the district court erroneously rely on Voyeur Dorm?

In Voyeur Dorm, this Court held that section 27-523 of Tampa’s City Code,

which defines “adult entertainment establishments,” did not apply to a residence

engaged in activities that were nearly identical to the activities taking place in the

instant case. See 265 F.3d at 1237. The only difference was the gender of the

residents. This Court found that section 27-523 only applied to locations where

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adult entertainment is actually offered to the public. See id. at 1236. Because the

public did not physically attend the Tampa residence to enjoy the adult

entertainment, the residence was not a business establishment and section 27-523

did not apply. See id. On a second appeal after remand, this Court addressed the

attack by Voyeur Dorm on the constitutionality of the city code and held that there

was no standing because “[Voyeur Dorm, L.C.] cannot allege injury-in-fact

because it is not an adult business . . . .” Voyeur Dorm, L.C. v. City of Tampa, Fla.,

2003 WL 23208270 (11th Cir. Feb 19, 2003).

The City of Miami has abandoned any argument that the district court erred

when it concluded that Voyeur Dorm is controlling authority over the issue of

whether Flava Works was operating an “adult entertainment establishment.” On

appeal, the City of Miami only contends that Voyeur Dorm does not address the

operation of a generic business in a residential zone. The City of Miami argues

that Voyeur Dorm is distinguishable because it was limited to a determination of

whether or not the appellant had operated an adult business establishment in a

residential zone.

Conversely, Flava Works insists that “Voyeur Dorm controls every aspect of

the case.” Flava Works argues that it “cannot be an adult business without first

being a business” and “[i]f Voyeur Dorm had been operating something which

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could be considered a business, there is no question that it would also have been

considered an adult business given the undisputed nature of the communications

streaming over the internet.”

Relying on Voyeur Dorm, the district court held that Flava Works was not

operating a business at the 27th Street residence. In reaching its conclusion, the

district court reasoned that “the Tampa ordinance, which defined an adult

entertainment establishment as ‘[a]ny premises . . . on which is offered . . . for a

consideration,’–otherwise known as a business–did not apply.” Flava Works, 595

F. Supp. 2d at 1348 (quoting Voyeur Dorm, 265 F.3d at 1235). Furthermore, the

district court noted that neither the financial and accounting activities nor the

computer systems necessary to transmit images to subscribers are located at the

27th Street residence. The district court conceded that “the business . . . would not

likely exist without the activities taking place within the [27th Street] residence”

but concluded “that does not make the activities into a business . . . .” Id.

The district court’s reliance on Voyeur Dorm in concluding that Flava Works

was not operating a business at the 27th Street residence is misguided. Just

because the Tampa ordinance defining “adult entertainment establishments” limits

its application to businesses does not mean the ordinance applies to all businesses.

Furthermore, Voyeur Dorm did not hold that the Tampa residence was not a

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business, it merely held that the residence was not an adult business establishment

(where there was no public offering of adult entertainment), which is a much

narrower conclusion. We agree with Flava Works that an adult business is always

a business. However, the opposite is not necessarily true. The vast majority of

businesses are not adult businesses but are nevertheless prohibited within

residential zones. As such, we decline to apply such an expansive reading of

Voyeur Dorm and find that it does not address a prohibition against the operation

of all businesses within a residential zone.

C. Is Flava Works operating a business at the 27th Street residence?

We are careful to distinguish the activities taking place at the 27th Street

residence from a home occupation, which is incidental and subordinate to a

dwelling’s use for residential purposes. The Miami Zoning Ordinance allows for a

variety of home occupations in residential zones. These exceptions to the general

prohibition against operating a business in a residential zone are strictly defined by

the zoning ordinance. In the R-4 zoning district, home occupations may not be

conducted by more than three persons and are limited to certain enumerated

occupations, such as: architect, broker, or lawyer. The activities taking place at the

27th Street residence do not fall within the zoning ordinance’s limited exception

for home occupations.

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 Flava Works argues that no business was being conducted at the 27th Street

residence because no goods were bought or sold and nothing was manufactured on

the premises. However, it can be reasonably asserted that raw video images, which

were later sold over the internet, were created at the 27th Street residence. While

these images are not tangible goods, they have a commercial value and enable

Flava Works to earn a profit. This seems to comport with the common definition

of a business, which is “[a] commercial enterprise carried on for profit.” Black's

Law Dictionary 211 (8th ed. 2004).

The activities taking place at the 27th Street residence are part and parcel to

Flava Work’s business operations. The fact that certain aspects of the business are

performed at other locations does not alter this analysis. Business objectives are

the sole reason individuals are paid to live and engage in sexual activities at the

27th Street residence. Flava Works would be unable to deliver content to its

subscribers without these endeavors. The activities taking place at the 27th Street

residence are a clear violation of the prohibition against operating a business in a

residential zone.

IV. CONCLUSION

For the foregoing reasons, we reverse the district court’s grant of summary

judgment to Flava Works and its denial of summary judgment to the City of

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Miami. In reviewing this matter and hearing the arguments of counsel, the court

considered simply holding that the district court erred in applying the law and

remanding for further consideration. However, because there is no dispute in the

facts, and in the interest of judicial economy, we have ruled as a matter of law that

the City of Miami Code Enforcement Board's Final Administrative Order is due to

be reinstated as to that part of the order holding that there was a violation of zoning

ordinance 1572–Illegally operating a business in a residential zone. Consequently,

we REVERSE AND RENDER PARTIAL JUDGMENT in favor of the City of

Miami on the state law claim that Flava Works was operating a business at the

residence, and REMAND for further proceedings on the constitutional claims.

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