725 Eatery Corp. v. City of N.Y.

408 F.Supp.3d 424

725 EATERY CORP. d/b/a "Lace", and 689 Eatery, Corp. d/b/a "Satin Dolls", Plaintiffs,

v.CITY OF NEW YORK, Bill De Blasio, as Mayor of the City of New York, and Rick D. Chandler, as Commissioner of Buildings of the City of New York, Defendants.

59 Murray Enterprises, Inc. a/k/a 59 Murray Corp. d/b/a "New York Dolls", AAM Holding Corp. d/b/a "Private Eyes", West 20th Enterprises Corp. d/b/a "VIP Club New York", and JNS Ventures Ltd. d/b/a "Vixen", Plaintiffs,

v.City of New York, Bill De Blasio, as Mayor of the City of New York, and Rick D. Chandler, as Commissioner of Buildings of the City of New York, Defendants.

Club at 60th St., Inc., and Jacaranda Club, LLC d/b/a "Sapphire", Plaintiffs,

v.City of New York, Defendant.

336 LLC d/b/a "The Erotica", Chelsea 7 Corp., Gotham Video Sales & Distribution Inc., Rainbow Station 7 Inc., Video Lovers Inc., Vishara Video, Inc., Explore DVD LLC, Vishans Video, Inc., 725 Video Outlet Inc., Jaysara Video, Inc., DCD Exclusive Video Inc., and 557 Entertainment Inc., Plaintiffs,

v.City of New York, Hon. Bill De Blasio, as Mayor of the City of New York, and Rick D. Chandler, as Commissioner of Buildings, Department of Buildings of the City of New York, Defendants.

02cv4431

02cv4432

02cv8333

18cv3732

United States District Court, S.D. New York.

Signed September 30, 2019

Daniel Alan Silver, Silver & Silver LLP, New Britain, CT, Jennifer Marie Kinsley, Kinsley Law Office, Cincinnati, OH, for Plaintiffs 725 EATERY CORP. d/b/a "Lace", and 689 Eatery, Corp. d/b/a "Satin Dolls."

Edward S. Rudofsky, Zane and Rudofsky, New York, NY, for Plaintiffs 59 Murray Enterprises, Inc. a/k/a 59 Murray Corp. d/b/a "New York Dolls", AAM Holding Corp. d/b/a "Private Eyes", West 20th Enterprises Corp. d/b/a "VIP Club New York", and JNS Ventures Ltd. d/b/a "Vixen."

John H. Weston and G. Randall Garrou, Weston, Garrou & Mooney, Los Angeles, California, Alan M. Abramson, Abramson & Morak, New York, NY, for Plaintiffs Club at 60th St., Inc., and Jacaranda Club, LLC d/b/a "Sapphire."

Erica T. Dubno, Fahringer & Dubno, New York, NY, for Plaintiffs 336 LLC d/b/a "The Erotica", Chelsea 7 Corp., Gotham Video Sales & Distribution Inc., Rainbow Station 7 Inc., Video Lovers Inc., Vishara Video, Inc., Explore DVD LLC, Vishans Video, Inc., 725 Video Outlet Inc., Jaysara Video, Inc., DCD Exclusive Video Inc., and 557 Entertainment Inc.

Robin Binder, Sheryl Rebecca Neufeld, Kerri Ann Devine, Mark W. Muschenheim, NYC Law Department, Office of the Corporation Counsel, New York, NY, for Defendants.

OPINION & ORDER

WILLIAM H. PAULEY III, Senior United States District Judge:

Plaintiffs—the owners and operators of gentlemen's cabarets (or in lay terms, strip clubs) and adult bookstores primarily located in Manhattan—challenge the constitutionality of amendments to sections of the Zoning Resolution of the City of New York (the "Zoning Resolution," and the "City") that define and apply to adult establishments. Tracing its origins to the City's early 1990s crusade against adult entertainment businesses, this litigation has been ensnared in a time warp for a quarter century. During that interval, related challenges to the City's Zoning Resolution have sojourned through various levels of the state and federal courts.

Plaintiffs seek to preliminarily enjoin the City, the Mayor of the City, and the City's Commissioner of Buildings from enforcing the amendments, which would subject them to the City's stringent zoning and permitting scheme for adult establishments. In connection with Plaintiffs' motions, the parties have offered a Homeric record of affidavits, documentary evidence, and stipulations. Having reviewed the briefing and evidentiary submissions by the parties, this Court makes the following findings of fact and conclusions of law pursuant to Rules 52(a)(2) and 65 of the Federal Rules of Civil Procedure. Plaintiffs' motions for preliminary injunctions are granted, as specified in the conclusion of this Opinion & Order.

BACKGROUND

While a far cry from political speech "entitled to the fullest possible measure of constitutional protection," Members of the City Council v. Taxpayers for Vincent, 466 U.S. 789, 816, 104 S.Ct. 2118, 80 L.Ed.2d 772 (1984), nude dancing and erotic materials nevertheless fall within the ambit of the First Amendment's free speech guarantees, see City of Erie v. Pap's A.M., 529 U.S. 277, 289, 120 S.Ct. 1382, 146 L.Ed.2d 265 (2000) (plurality opinion) (explaining that nude dancing may constitute expressive conduct that "falls only within the outer ambit of the First Amendment's protection"); Young v. Am. Mini Theatres, Inc., 427 U.S. 50, 70, 96 S.Ct. 2440, 49 L.Ed.2d 310 (1976) (plurality) ("[E]ven though we recognize that the First Amendment will not tolerate the total suppression of erotic materials that have some arguably artistic value, it is manifest that society's interest in protecting this type of expression is of a wholly different, and lesser, magnitude than the interest in untrammeled political debate ....").

These consolidated actions represent the latest installment in a decades-long dispute between purveyors of adult entertainment and the City that pits the First Amendment rights of private citizens against the government's interest in regulating the harmful secondary effects that may be engendered by that speech. The plaintiffs in these actions are part of an adult entertainment industry boom that began in the mid-1960s. The City—like many other municipalities across the United States—sought to contain the fallout of increased crime, lowered property values, and decreased quality of life by regulating where adult establishments could be located. Consequently, in 1995, the City adopted regulations that barred adult establishments from certain districts, prohibited them from being located near sensitive receptors such as schools and churches, and sought to disperse them.

The kaleidoscopic litigation that ensued ultimately upheld the constitutionality of the City's efforts. But it also resulted in a determination by New York's highest court that the regulatory scheme did not apply to adult establishments so long as they limited their adult component to less than 40 percent of their floor area and stock-in-trade. Unsurprisingly, many adult establishments did just that. In response to what it viewed as a naked attempt to skirt the adult-use regulations through nothing more than formalistic compliance, the City amended its regulations in 2001. According to the City, these amendments more faithfully effectuate the regulations, which it maintains were always intended to apply to establishments with a predominant, ongoing focus on sexually explicit content. On the other hand, the adult establishments principally argued that the City needed to—but did not—demonstrate some nexus between the reconfigured adult establishments and the negative secondary effects it identified in the early 1990s.

At center stage in these actions is the constitutionality of the City's 2001 amendments to its adult-use regulations. The plaintiffs may generally be cleaved into two groups. The first set of challengers to the City's adult-use regulations are owners and operators of gentlemen's clubs that present exotic dancing in at least part of their establishments (collectively, the "Club Plaintiffs"). The second set of challengers own and operate bookstores that contain private booths for patrons to view adult films (collectively, the "Bookstore Plaintiffs," and together with the Club Plaintiffs, the "Plaintiffs"). For background, this Court describes the City's iterative efforts to regulate adult establishments and the legal challenges mounted by those establishments before turning to the facts of this case.

I. Adult Entertainment Regulation in New York City

The events underlying these actions begin in the early 1990s, when the City undertook efforts to regulate where adult businesses could be located.¹ (Second Amended Complaint of Plaintiff 725 Eatery, Corp. and Initial Complaint of 689 Eatery, Corp., ECF No. 77, 02cv4431 ("4431 Compl."), ¶¶ 11-13; Amended Complaint, ECF No. 20, 18cv3732 ("3732 Compl."), ¶¶ 43-47.) Before that time, the City's Zoning Resolution did not distinguish between adult establishments and non-adult commercial establishments for zoning purposes. In late 1993, however, the City's Department of City Planning ("DCP") undertook an "Adult Entertainment Study," which was completed in September 1994. (See Declaration of Kerri A. Devine, ECF No. 101, 02cv4431 ("Devine Decl."), Ex. J (the "DCP Study").)

A key question in these actions (and parallel challenges to the City's adult-use regulations) is whether the DCP Study may be used to justify the City's 2001 amendments. Thus, this Court reviews the DCP Study in considerable—though not exhaustive—depth.

A. The 1994 Adult Entertainment Study

The purpose of the DCP Study was to evaluate the nature and extent of adverse impacts that adult establishments have on surrounding communities. (DCP Study at 1.) To that end, the DCP Study focused on three types of adult uses, defined generally as commercial establishments dealing in materials or activities of a sexual nature: adult video and bookstores; adult theaters showing film or live entertainment; and topless or nude bars. (DCP Study at 1-2.)

1. The Experience of Other Municipalities

The DCP Study briefly canvassed impact studies from several other municipalities—namely, Islip, New York; Los Angeles, California; Indianapolis, Indiana; Whittier, California; Austin, Texas; Phoenix, Arizona; Manatee County, Florida; New Hanover County, North Carolina; and the State of Minnesota. (See DCP Study at 3-9.) The DCP Study also reviewed methods other municipalities employed to regulate where adult establishments could be located, generally by concentrating adult uses in specified locations or by dispersing adult establishments throughout the municipality. (See DCP Study at 9-15.) Most of the impact studies from other...