U.S. District Senior Judge Dudley H. Bowen Jr. reached the decision after hearing from witnesses about what income and profit Augusta Video X-Mart could have made.
Augusta taxpayers might also be liable for the X-Mart's legal bills. Attorney Gary S. Edinger estimated they might be in the range of $250,000.
If the attorney bills are submitted, Augusta's attorney might challenge the amount. The judge would hear from both sides before ruling.
Taxpayers are liable for the X-Mart's damages because city commissioners rushed to pass a new adult entertainment ordinance to keep the store from opening in April 2002 without proper notice for a public meeting.
Though Judge Bowen found the city's second effort to create a new ordinance constitutional, the 11th U.S. Circuit Court of Appeals reversed him, saying the X-Mart was entitled to grandfather status.
X-Mart owner Evgueni Souliaguine, of North Miami Beach, sought damages from the point he intended to open in April 2002 to the present. Earlier this year, Judge Bowen ruled that because X-Mart could not have gotten a business license after new city ordinances were enacted in July 2002, the damages were limited from April 11 to July 18, 2002.
Representing the city, attorney James Wall argued that the X-Mart owner intentionally inflated his earnings in 2003. The city estimated damages at about $30,000. The store was open for 11 months in 2003 on Gordon Highway.
Judge Bowen said he doubted Mr. Souliaguine would have falsified his federal tax returns.
According to the X-Mart's business records and Mr. Souliaguine's tax returns for 2003, the store's income was nearly $1.46 million. After expenses, he cleared more than $460,000 in profit.
"I'm looking for lost profits," Judge Bowen said in explaining his findings. "Here we have a business that not only succeeded but flourished."
Judge Bowen calculated what he considered the baseline profit by subtracting some expenses and adding others. For the 99 days X-Mart was closed, he awarded $1,323 for each day.
Reach Sandy Hodson at (706) 823-3226 or email@example.com.