Revocation of special exemption not enjoined

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Where a city council revoked a restaurant’s special exception to operate as a nightclub, the restaurant’s petition to enjoin the revocation is denied.

The revocation has already taken place and, “equity does not counsel for the temporary restoration of the status quo ante litem.”

Overview

California Burrito initially operated as a restaurant. Mr. Babineau is the landlord. Attorney Adam Melita represents the city of Norfolk.

The restaurant applied for a special exemption to operate as an entertainment establishment.

The Norfolk City Council approved the special exemption with an occupancy limit of 49 people. Later, a fire marshal found 130 people inside, and on another occasion, 108 people.

California Burrito was cited for exceeding the occupancy limit but … the city council asked that the summons be dismissed. The council later denied the application for increased occupancy.

Shortly after, “three people were murdered late at night outside a night club across Granby Street from California Burrito.” Several days later, California Burrito was cited for overcrowding. The fire marshal did not appear in court and the summons was dismissed.

About four months later, California Burrito was cited for having 56 people in the building. The city then sought to revoke California Burrito’s special exemption. After a hearing, the city council revoked the special exemption by a 6-2 vote.

“California Burrito closed as a result of the revocation of its special exception. In answer to questions I asked, Mr. Melita stated that California Burrito could obtain a permit from the zoning administrator rather quickly to operate as a restaurant without being able to sell alcoholic beverages.

“This would not require City Council’s approval. He stated that Mr. Babineau filed for such a permit, but withdrew it. However, to be allowed to sell alcoholic beverages it would have to apply for a new special exception through the planning commission and obtain approval from City Council.

“That takes about three months, but because it has had a special exception revoked, it would be subject to a six month ‘blackout’ before it could apply.

“Thus California Burrito could not hope to be able to operate as a restaurant selling alcoholic beverages before July of 2023, and this assumes that City Council, which revoked one special exception, would grant a second.”

California Burrito appealed. “In its petition for appeal, California Burrito asks the Court for ‘Entry of an order enjoining Norfolk from revoking the Petitioners (sic) SE.’ As that has already occurred, the Court cannot enjoin it. In its brief in support of its motion for a preliminary injunction, it asks the Court to enjoin the enforcement of Ordinance No. 48,941[which rescinded the special exemption].

Injunction standards

“The Supreme Court of Virginia has never adopted a particular formula for the use of the circuit courts in deciding whether to grant preliminary injunctions.” The court has stated that, “‘No single test is to be mechanically applied, and no single factor can be considered alone as dispositive.

“‘Instead, a court must consider the totality of the circumstances and decide whether equity counsels for the temporary preservation of the status quo.’”

Judge Stuart Raphael, in a recent law review article, explored standards for preliminary injunctions in Virginia. “[T]he considerations under Virginia law must be gleaned from several cases.”

From these cases, “a plaintiff must first establish it has no adequate remedy at law and that it will suffer irreparable harm without the injunction.

“If the plaintiff establishes these, then, and only then, the court considers if the plaintiff has a fair prima facie case, the comparative convenience and inconvenience to the parties in granting or denying the injunction, and the effect of granting the injunction on public policy.

“No one of these three considerations is dispositive, and upon considering all of them, the court is to decide ‘whether equity counsels for the temporary preservation of the status quo.’”

No adequate remedy

“California Burrito claims that any action for damages it could bring against the city would be met with the defense of sovereign immunity.

“Mr. Melita could think of none when I asked him what Virginia common law or statutory right of action California Burrito could bring against the city for damages that would not be subject to this defense. I find California Burrito has no adequate remedy at law.”

Irreparable harm

“California Burrito could have gone to the zoning administrator and probably received approval to operate a restaurant, albeit without the ability to sell alcoholic beverages. It has not done so.

“Mr. Roldan, the owner of California Burrito, testified the restaurant could not operate profitably without the sale of alcoholic beverages. Thus the harm California Burrito has suffered is loss of profit, which is not ordinarily a basis for equity jurisdiction.”

Fair prima facie case

“The Supreme Court has never defined what it means by” a fair prima facie case. “I will assume it means simply that the plaintiff has a fair chance of prevailing at trial. …

“I do not find California Burrito has such a chance.

“California Burrito … complains that the procedure used in Norfolk does not allow the development of a record. …

“California Burrito has cited no authority that a record must be developed before a local governing body can revoke a special exception, and the City Attorney’s written ‘Statement of Proposed Special Exception Revocation’ stated the grounds upon which it sought revocation. …

“California Burrito next claims that Ordinance 38,746 [which provides procedures for special exemption revocations] does not allow holders of special exceptions sufficient time to be heard. It allows twenty minutes. …

“I did not time California Burrito’s presentation to City Council, but its landlord and Mr. Babineau were allowed to say all they wished to say.”

California Burrito complains that the council’s revocation was arbitrary and capricious but admitted that it violated occupancy limits, which provided grounds for the revocation.

 Effect on parties

“If I grant the injunction, California Burrito will be able to operate profitably and City Council will suffer no economic harm. However, it will be frustrated in executing a policy it has chosen to reduce violence in downtown Norfolk. The wisdom of this policy is not a proper concern of the court.

“If I deny the injunction, California Burrito could operate at a loss, if it chooses to reopen, and City Council will be free to pursue its policy of vigorous enforcement. …

“At this early stage of the suit, equity does not counsel for the temporary restoration of the status quo ante litem.”

California Burrito v. Norfolk City Council, Case No. CL22-14467, Nov. 29, 2022. Circuit Court of the City of Norfolk (Martin). Timothy Anderson, Adam D. Melita, Katherine A. Taylor for the parties. VLW 023-8-008, 8 pp.