Starship Enterprises of Atlanta, Inc. v. Gwinnett County

Starship Enterprises, which runs two adult stores in Gwinnett County, sued the county in 2017 challenging a 2015 ordinance that limited how many sexual devices it could sell. Starship dropped that lawsuit, but the county kept pursuing its own counterclaim and won a permanent injunction forcing Starship to comply with the ordinance, a result upheld on appeal. In 2022 Starship sued again, this time relying on a 2020 amendment to the Georgia Constitution that waives county governments' immunity from certain lawsuits for acts occurring after January 1, 2021. A Gwinnett County superior court dismissed the new suit, and the case reached the Supreme Court of Georgia to decide what counts as a qualifying 'act' under the new amendment. The court held that the county's ongoing enforcement of the ordinance counted as a prospective act, so the immunity waiver applied. But it still dismissed the case because Starship's constitutional arguments could have been raised while defending against the county's earlier injunction lawsuit, making the new suit barred by res judicata, the rule against relitigating claims that already could have been resolved.

The court held that Gwinnett County's continuing enforcement of its 2015 ordinance qualifies as a 'prospective act' occurring after January 1, 2021, so the sovereign immunity waiver in Paragraph V applies to Starship's lawsuit; however, the suit is barred by res judicata because Starship could have raised its constitutional arguments while defending against the county's earlier injunction lawsuit.

The ruling clarifies that Georgia's 2020 sovereign immunity waiver reaches ongoing government enforcement of old laws, not just brand-new actions, which could open more suits against counties and the state. It also warns businesses that they must raise constitutional challenges when first sued, or lose the chance permanently.

Affirmed

1. The court first addressed sovereign immunity, a threshold jurisdictional issue meaning the case cannot proceed at all unless immunity is waived, before turning to res judicata, a separate defense barring relitigation of claims.
2. The court interpreted the word 'act' in the constitutional waiver (Article I, Section II, Paragraph V) broadly, using dictionary definitions to conclude it covers any 'thing done' by a county, not just the original passage of an ordinance.
3. Applying that broad definition, the court found Starship's complaint sought relief from the county's ongoing and future enforcement of the ordinance, which counts as a 'prospective act' occurring after January 1, 2021, so the immunity waiver applies and the trial court erred in dismissing on that ground.
4. Turning to res judicata, the court explained Georgia's rule (O.C.G.A. § 9-12-40) bars claims that were, or could have been, raised in an earlier case between the same parties that ended in a judgment on the merits.
5. The court found that although Starship voluntarily dismissed its own 2017 claims, the county's counterclaim in that earlier case was decided on the merits, and Starship could have raised its constitutional arguments as a defense to that counterclaim.
6. Because the 'wrong' at issue, the county's enforcement of the ordinance, and the underlying facts were the same in both lawsuits, the court concluded the new suit involved the same 'cause of action' and was therefore barred by res judicata.

• adult store regulation
• sovereign immunity waiver
• res judicata
• Gwinnett County ordinance
• Georgia Constitution amendment