Hotboxxx, LLC v. City of Gulfport, Mississippi
154 So. 3d 21
| Miss. | 2015Background
- Hotboxxx (Barry Artz/co-owner) sought a City of Gulfport business privilege license (Sept. 17, 2009) to operate an adult-entertainment retail business at leased premises on 1820 Pass Road.
- Gulfport placed a temporary moratorium and later enacted Ordinance Case #1006PC088 (June 22, 2010) imposing zoning restrictions that prevented Hotboxxx from using the leased location for an adult business.
- Hotboxxx sued in chancery court challenging the ordinance; the case was removed to federal district court, which dismissed without prejudice for lack of federal standing because Hotboxxx’s license application was incomplete.
- Hotboxxx refiled in chancery court; Gulfport moved to dismiss on res judicata and standing grounds. The chancery court held a bench hearing, found the submitted application (Exhibit 4) was incomplete (unsigned and not notarized), and dismissed with prejudice for lack of standing.
- The Mississippi Supreme Court affirmed: federal dismissal without prejudice did not bar refiling, but the state court correctly found the application invalid and, because the lease was voided by failure to obtain a license, Hotboxxx lacked the state-law “colorable interest” required for standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether chancery court erred in basing standing solely on validity of license application | Hotboxxx: standing should be judged by Mississippi’s liberal “colorable interest” test (lease + business plan suffice) | Gulfport: standing requires a completed application; incomplete app precludes injury and thus standing | Held: Court upheld reliance on application validity; application was incomplete and fatal to standing |
| Whether federal court’s dismissal without prejudice operated as res judicata | Hotboxxx: dismissal without prejudice does not bar new suit; Mississippi standing differs from federal standing | Gulfport: prior adjudication bars relitigation | Held: Dismissal without prejudice is not res judicata; refiling was permitted |
| Whether chancery court erred by not adjudicating summary-judgment standards under Miss. R. Civ. P. 56 | Hotboxxx: chancery court should have applied Rule 56 standards | Gulfport: merits depend on application completeness and standing, properly addressed | Held: Court reviewed chancellor’s factual finding for clear error and found no reversible error (application incomplete) |
| Whether Hotboxxx could proceed on newly discovered federal civil-rights claims despite prior dismissal | Hotboxxx: should be allowed to litigate newly discovered federal claims | Gulfport: prior lack of standing and invalid application preclude relief; lease voided | Held: No standing regardless; void lease removes colorable interest so claims cannot proceed |
Key Cases Cited
- Fordice v. Bryan, 651 So. 2d 998 (Miss. 1995) (Mississippi uses "colorable interest" standard for standing in state courts)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (federal standing requires injury in fact)
- ASARCO Inc. v. Kadish, 490 U.S. 605 (U.S. 1989) (state courts not bound by Article III case-or-controversy constraints when deciding federal law issues)
- In re City of Biloxi, 113 So. 3d 565 (Miss. 2013) (standing must exist at commencement and continue through litigation)
- City of Picayune v. South Regional Corp., 916 So. 2d 510 (Miss. 2005) (definition of colorable interest requires a present, existent actionable interest)
- Belhaven Improvement Ass'n v. City of Jackson, 507 So. 2d 41 (Miss. 1987) (property owners or persons with interests affected by permits/variances are aggrieved parties)
- Boston v. Hartford Accident & Indemn. Co., 822 So. 2d 239 (Miss. 2002) (dismissal without prejudice is not an adjudication on the merits for res judicata purposes)
- Van Slyke v. Board of Trustees of State Insts. of Higher Learning, 613 So. 2d 872 (Miss. 1993) (discusses citizen standing to challenge governmental action; limited application where parties with direct interests exist)