Flava Works, Inc. v. CITY OF MIAMI, FL
609 F.3d 1233, 2010 WL 2539759, 2010 U.S. App. LEXIS 13033 (2010)
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Rule of Law:
The creation of commercially valuable intangible goods, such as video content, within a residence for a for-profit enterprise constitutes 'operating a business' at that location, making it subject to residential zoning prohibitions, even if administrative functions, customer interactions, and sales occur elsewhere.
Facts:
- Flava Works, Inc. operated an internet website, CocoDorm.com, which transmitted live and recorded video images from a residence located at 503 Northeast 27th Street in Miami, Florida.
- The residence, owned by Angel Barrios and leased to Flava Works, was located in an area zoned for multifamily high-density residential use (R-4).
- Flava Works paid independent contractors to live in the residence and engage in sexual relations, which were captured by webcams placed throughout the house.
- Subscribers paid Flava Works for access to the live and recorded video feeds via the CocoDorm.com website.
- Flava Works's designated principal place of business, where accounting and financial operations were conducted, was at a separate commercial address.
- The computer servers hosting the website were not located at the residence.
- The residence's address was not disclosed to the public, and no customers or vendors ever physically visited the property.
Procedural Posture:
- The City of Miami issued a notice of violation to Angel Barrios and Flava Works, Inc., for illegally operating a business in a residential zone.
- The City of Miami Code Enforcement Board conducted hearings and found the parties guilty of violating the zoning ordinance.
- The Code Enforcement Board entered a Final Administrative Enforcement Order against Barrios and Flava Works.
- Barrios and Flava Works filed a lawsuit in the U.S. District Court for the Southern District of Florida, including a petition for a writ of certiorari to quash the administrative order.
- On cross-motions for summary judgment, the district court granted summary judgment for Barrios and Flava Works, finding they were not operating a business at the residence and thereby quashing the Board's order.
- The City of Miami, as the losing party, appealed the district court's judgment to the U.S. Court of Appeals for the Eleventh Circuit.
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Issue:
Does the production of sexually explicit video content within a residence by paid performers for sale to online subscribers constitute 'operating a business' in a residential zone in violation of a city zoning ordinance?
Opinions:
Majority - Fay, Circuit Judge
Yes, the production of video content constitutes operating a business at the residence. A commercial enterprise carried on for profit is considered a business, and the creation of raw video images at the residence, which possess commercial value and are essential for the company's profit, squarely falls within this definition. The court distinguished this case from its precedent in Voyeur Dorm, explaining that Voyeur Dorm only decided that a similar operation was not an 'adult entertainment establishment,' a specific and narrow category, not whether it was a 'business' in general. The court reasoned that while an adult business is always a business, the reverse is not true, and the failure to qualify as the former does not preclude being classified as the latter. Because the activities at the residence were 'part and parcel' to Flava Works's commercial enterprise and the sole reason for the performers' presence, they constituted a clear violation of the zoning ordinance prohibiting businesses in a residential zone.
Analysis:
This decision clarifies that the scope of 'operating a business' under zoning laws extends to the creation or production phase of a commercial product, even if that product is intangible, like digital content. It significantly narrows the applicability of the Voyeur Dorm precedent, preventing online businesses from using it as a shield against general zoning prohibitions simply because they lack a physical customer-facing 'establishment.' The ruling has broad implications for modern internet-based businesses and the gig economy, establishing that if a key part of the value-creation process occurs in a residential location, that location can be deemed a place of business subject to local zoning ordinances.
