Cary Wiggins, Wiggins Law Group, Atlanta. (Photo: John Disney/ ALM)

The U.S. Court of Appeals for the Eleventh Circuit revived some of a lawsuit alleging DeKalb County officials were motivated by racial bias in targeting an Ethiopian restaurant and nightclub with enforcement actions and ultimate closure, finding those claims were improperly dismissed by a trial judge.

The complaint against the county officials asserted several claims, including that the now-closed Queen of Sheba Ethiopian Restaurant and other establishments largely catering to Ethiopian, Eritrean and other east African nationals were the victims of a concerted effort to shut them down.

Even as it revived Sheba's claims of discrimination and conspiracy against the county and officials, including Commissioners Jeff Rader and Kathie Gannon, the appellate panel agreed with the district court that several other claims were barred because they had already been litigated.

"We're just delighted that we can finally proceed on the merits," said Wiggins Law Group principal Cary Wiggins, who represents the restaurant. 

"I think [the opinion] just shows that the panel understands the nature of the case very well, and why the previous state court proceedings wouldn't preclude our claims for discrimination," he said. 

The county defendants are represented by Senior Assistant County Attorney Bennett Bryan— who argued the appeal—and Supervising Attorney John Jones Jr. DeKalb County Attorney Viviane Ernstes did not respond to a request for comment.

As detailed in the opinion and court documents, Sheba had been in operation for more than 10 years when the county passed a zoning amendment in 2008 setting new requirements for "late night establishments and night clubs" within 1,500 feet of a residential property.

The county required such businesses to obtain a "special land use permit" if they stayed open past 12:30 a.m. but grandfathered Sheba in as a legal nonconforming establishment, or LNE. 

In 2016 the county set up a Late Night Task Force that randomly selected businesses to submit a letter outlining their operations when applying for their annual business licenses. Sheba did so, indicating that it was an LNE, and the county approved its license. 

Over the next few months, according to the complaint, task force members conducted multiple code inspections and cited Sheba repeatedly for violations such as overcrowding, "use of sparklers and open flames, failure to comply with orders given, failure to obtain a permit for construction, and operating outside the purposes" Sheba specified in its letter.

In 2017, after being cited for fire hazard violations, Sheba closed and made several repairs but was denied permission to reopen. The restaurant was ultimately stripped of its business license and certificate of occupancy. 

"Sheba alleged that its interactions with the county leading to its closure were not unique," the appellate ruling said, but "were tied to 'heightened enforcement of facially-neutral ordinances regulating commercial establishments' to 'cripple or terminate' the Ethiopian restaurants" in District 2, represented by Rader.

Sheba filed a motion for a restraining order and injunction against the county in DeKalb County Superior Court and appealed to the country's Certificate Review Board and Zoning Board of Appeals, which turned it down.

Sheba voluntarily dismissed its state court action before filing another appeal of the ZBA ruling, as well as a petition for writ of certiorari, mandamus and declaratory judgment action and a claim for due process violations under the Georgia Constitution. 

The restaurant subsequently dismissed all the claims except for mandamus, which the court dismissed with prejudice in 2018. 

While those claims were still pending, Sheba filed a federal complaint in the U.S. District Court for the Northern District of Georgia in November 2017 asserting claims for multiple violations of its rights under the federal and state constitutions, racial discrimination and conspiracy to interfere with its civil rights. 

The county filed a motion to dismiss, arguing among other things that all the claims had already been litigated and discharged at the state court level and were barred by the principle of res judicata, which blocks courts from reviewing claims which another court had decided on the merits.

District Judge William Ray II agreed, writing that Sheba's federal claims were based on the "same set of facts" that underpinned the state court actions in dismissing the case.

On July 9, an appellate panel featuring Chief Judge William Pryor and Judges Jill Pryor and Robert Luck said otherwise.

In a per curiam opinion, the panel agreed with the county that the counts alleging violations of Sheba's First Amendment civil rights, due process and equal protection, "which are focused on whether the county should have reinstated Sheba's legal nonconforming use status or approved its various applications, arose from the same set of facts" as the state court claims. 

But two other counts "alleged different wrongs—discrimination based on race and a conspiracy to interfere with civil rights based on racial animus—and relied on a different, broader set of facts than Sheba's other claims," the opinion said. 

It quoted the complaint's assertion that "Rader, acting in concert with the other defendants and certain citizens of the county, began targeting District 2's Ethiopian restaurants" to "severely cripple or terminate those businesses," even as those with "predominately white late-night clientele" were not subjected to such enforcement.

"Even though all of Sheba's claims relate to its attempts to regain its legal nonconforming use status," the opinion said, the cause of action in those two counts did not exist in the state court cases. 

This meant, the judges wrote, "the district court erred in dismissing these counts based on res judicata."

The judges also said Ray should reconsider his ruling denying Sheba's motion to amend its complaint "to add allegations concerning communications between a DeKalb County resident and several government officials that it contends support its allegations of racial discrimination" in the reinstated counts.

Wiggins said the Queen of Sheba had been open and operating under restricted hours—it had to close at 12:30 a.m. — before the COVID-19 outbreak forced its closure earlier this year.