RILEY, COMMISSIONER v. GEORGIA ASSOCIATION OF CLUB EXECUTIVES, INC.; And Vice Versa

A group representing adult entertainment club owners, the Georgia Association of Club Executives, sued Lynnette Riley, then the State Revenue Commissioner, in her individual capacity, challenging an annual tax the state imposes on such businesses under the Safe Harbor/Rachel's Law Act. A Fulton County judge partially sided with each party, striking down part of the definition of a covered business as unconstitutionally vague while upholding other parts of the tax scheme. Both sides appealed to the Supreme Court of Georgia. Before reaching those arguments, the Supreme Court noticed that Riley had left the Revenue Department in May 2019, months before the trial court's April 2020 ruling, and no one had substituted her successor into the lawsuit. Because the club owners sued Riley personally rather than by her office, and she no longer had power to collect the tax, the court found the case moot. It vacated the lower court's rulings and sent the case back with instructions to dismiss Riley.

Because Riley was no longer Revenue Commissioner, and thus no longer capable of enforcing or collecting the challenged tax, when the trial court ruled, the case against her in her individual capacity was moot and the trial court should have dismissed it instead of deciding the merits.

The decision means the constitutional questions about the adult entertainment tax remain unresolved for now, leaving businesses and the state without a final answer. It also signals that plaintiffs suing government officials personally must keep the lawsuit current as officeholders change or risk losing on procedural grounds.

Judgments vacated and cases remanded with direction to dismiss Riley

1. The court explained that because the club association sued Riley personally rather than in her official capacity as Revenue Commissioner, her successor could not be automatically substituted into the case under Georgia's substitution rule (OCGA § 9-11-25), which applies only to officials sued in their official roles.
2. The court took judicial notice, a process where a court accepts a well-documented public fact without requiring formal proof, that the Governor had appointed a new Revenue Commissioner in May 2019, replacing Riley before the trial court ever ruled.
3. Applying prior Georgia precedent, the court reasoned that an injunction against a private individual only works if that person is still the one carrying out the challenged conduct, and since Riley no longer had authority to collect the disputed tax, an injunction against her personally could not give the club association the relief it wanted.
4. Because mootness is a jurisdictional issue, meaning a court must resolve it before considering the substance of any claim, the court held it could not reach the constitutional arguments about the adult entertainment tax at all.
5. The court concluded that the proper remedy was to vacate the trial court's summary judgment and final judgment and send the case back with instructions to dismiss Riley as a party, rather than deciding who was right about the tax's constitutionality.

• adult entertainment tax
• Safe Harbor Rachel's Law Act
• mootness
• judicial notice
• Revenue Commissioner lawsuit