J.L. Spoons, Inc. v. Ohio Dep't of Pub. Safety

J.L. SPOONS, INC., dba Christie's Cabaret of Brunswick; ENTERTAINMENT U.S.A. OF CLEVELAND, INC. dba Christie's Cabaret of Cleveland; SSY, INC., dba Christie's Cabaret of Youngstown BUCKEYE ASSOCIATION OF CLUB EXECUTIVES, Plaintiffs-Appellants, v. OHIO DEPARTMENT OF PUBLIC SAFETY; ROCCO J. COLONNA, in his official capacity as a member of the Ohio Liquor Control Commission; KEITH MCNAMARA, in his official capacity as Chairman of the Ohio Liquor Control Commission; OHIO LIQUOR CONTROL COMMISSION; NANCY J. DRAGANI Acting-Director of the Ohio Department of Public Safety; ROBERT A. GARDNER Ohio Liquor Control Commission, Defendants-Appellees.

No. 10-4060

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Dated: December 27, 2012

File Name: 12a1308n.06

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

ON APPEAL FROM THE

UNITED STATES DISTRICT

COURT FOR THE NORTHERN

DISTRICT OF OHIO

BEFORE: CLAY and WHITE, Circuit Judges; HOOD, District Judge.^*

HELENE N. WHITE, Circuit Judge. This First Amendment case is before us for a second time. Plaintiffs-Appellants, three Ohio strip clubs and a strip-club association (Plaintiffs), challenge the district court's determination on remand that our prior decision in this case precludes Plaintiffs'as-applied challenge to certain provisions of Ohio Liquor Control Commission Rule 52, Ohio Admin. Code 4301:1-1-52 §§ (A)(2), (B)(2), and (B)(3) (Rule 52 or the regulation), that proscribe nudity and sexual activity at liquor-licensed establishments. They also appeal the district court's denial of their renewed facial challenge to Rule 52 based on a recent Supreme Court decision. Because Plaintiffs' as-applied challenge has yet to be decided on the merits, we REVERSE the district court's dismissal of their as-applied claim and REMAND for further proceedings. We AFFIRM the district court's dismissal of Plaintiffs' renewed facial challenge to Rule 52.

I.

From the start, Plaintiffs have asserted that in addition to being facially overbroad, Rule 52 is unconstitutional as applied to their establishments on the basis that the Ohio Liquor Control Commission (the Commission) adopted the regulation without sufficient evidence showing that Ohio strip clubs cause adverse secondary effects and, alternatively, that Plaintiffs' evidence successfully refuted the evidence on which the Commission relies for the regulation's secondary-effects rationale. In the first round of proceedings, the district court sustained Plaintiffs' facial challenge to Rule 52 and enjoined enforcement of the regulation. Having so ruled, the district court found it unnecessary to reach Plaintiffs' as-applied challenge. On appeal, this court held that Rule 52 is not facially overbroad and reversed. See J.L. Spoons, Inc. v. Dragani, 538 F.3d 379 (6th Cir. 2008) (J.L. Spoons I). There was no need to address the as-applied challenge, the district court having decided the case on other grounds.

On remand, Plaintiffs sought decision on their as-applied challenge and also renewed their facial challenge, asserting that the Supreme Court's intervening decision in United States v. Stevens, -- U.S. --, 130 S. Ct. 1577 (2010), changed the law and supported their facial challenge. The district court¹ held that Stevens did not change the applicable law and was not inconsistent with our first decision in this case, and further concluded that our first decision effectively decided Plaintiffs' as-applied challenge and foreclosed further litigation of that claim on remand.

II.

The prior panel summarized the first round of this litigation, including the history of Rule 52:

In July 2000, the district court permanently enjoined enforcement of several sections of old Rule 52[,²] finding them invalid under the First and Fourteenth Amendments. As a result, . . . the Commission . . . commenced proceedings for the enactment of a new version of Rule 52. In September 2003, the Commission received evidence and testimony regarding the validity of proposed new language for Rule 52. At this hearing, Mark Anderson, Executive Director of the Commission, testified that the earlier version of Rule 52 had been rescinded and that all of the filing requirements imposed by state law for the new version of Rule 52 had been met.

The Commission heard extensive testimony from Bruce Taylor, an attorney from Fairfax, Virginia. Throughout his career he prosecuted vice crimes, including obscenity, prostitution, and liquor violations. He spoke at length about his understanding of precedent in this area and the constitutionality of liquor regulations. He testified that "nude dancing does contribute to its own types of secondary effectsand to a greater degree than other liquor bars that don't have nude dancing." Specifically, prostitution, drug trafficking, and fights occur more frequently in and around bars that allow nude dancing than those that do not permit nude dancing. Taylor expressed his opinion that the language under consideration for the new Rule 52 would be held constitutional by the courts.

The new version of Rule 52 was finalized and filed on February 9, 2004. It was scheduled to take effect on February 20, 2004. On February 20, [Plaintiffs] filed [this] suit[, pursuant to 42 U.S.C. § 1983 and other laws, against the Commission, the Ohio Department of Public Safety, and several officials associated with these two agencies (collectively, Defendants),] after learning of plans for enforcement agents to investigate strip clubs to determine compliance with Rule 52. They claimed that the Rule 52 provisions concerning "nudity" and "sexual activity" were broadly restrictive of protected expression [and unconstitutional as applied to adult establishments]. They sought a declaratory judgment that these sections were unconstitutional and a permanent injunction barring their enforcement. The district court granted the request for a temporary restraining order and scheduled a preliminary injunction hearing.

At the preliminary injunction hearing, . . . [P]laintiffs called Dr. Judith Hanna, Ph.D., a cultural anthropologist and sociologist who researches and writes about arts, dance, and society. She stated that exotic and erotic dance has artistic value and conveys a range of potential messages. She also discussed a variety of "mainstream" ballet, modern dance, and theater performances that allegedly involve types of nudity and sexual contact that could be prohibited by Rule 52. [Plaintiffs] also presented testimony from Dr. Daniel Linz, Ph.D., a sociologist and psychologist, who stated that his research showed no positive correlation between the presence of liquor-serving establishments featuring nude or semi-nude dancing and the types of crimes cited by the Commission in support of its decision to adopt Rule 52. Dr. Linz stated that in some cases there was a negative correlation, meaning that nude dancing establishments actually decreased crime in the surrounding community.

The Commission then presented testimony from Scott Pohlman of the Ohio Department of Safety in support of Rule 52. He described numerous occasions where he personally observed illicit behavior in and around liquor-serving establishments that feature nude or semi-nude dancing. He stated that Rule 52 was needed to limit illicit behavior.

Following the hearing, the Commission agreed to refrain from enforcing Rule 52 until at least April 1, 2004, in order to grant the district court enough time to enter a ruling on [Plaintiffs]' motion for a preliminary injunction. On April 1, the districtcourt granted [P]laintiffs' motion for a preliminary injunction against the Commission. It enjoined . . . [enforcement of Rule 52's challenged provisions] anywhere in Ohio. In January 2007, it granted . . . a permanent injunction and declared [the challenged provisions] unconstitutionally overbroad.

J.L. Spoons I, 538 F.3d at 381-82. The district court declined to resolve Plaintiffs' as-applied claim.³

In August 2008, a divided panel of this court reversed. Before addressing the facial challenge at issue, the majority observed that "Rule 52 is almost identical to the regulation upheld by the Supreme Court in City of Erie v. Pap's A.M., 529 U.S. 277 (2000)," where the ordinance made it "a summary offense to knowingly or intentionally appear in public in a 'state of nudity.'" Id. at 382 (internal citation altered). After reviewing the Supreme Court cases analyzing laws targeting adverse secondary effects of nude dancing, the majority stated that "Pap's A.M. would be directly on-point and would decide [this case] were it not for the fact that the district court struck down Rule 52 on the grounds that it was overbroad," while Pap's A.M. was decided on First Amendment grounds under the intermediate scrutiny standard set forth in United States v. O'Brien, 391 U.S. 367 (1968). Id. at 382-83.

Turning to the facial challenge, the majority found "that Rule 52 is a constitutional, content-neutral regulation of the undesirable secondary effects, including prostitution, drug trafficking, and assault, associated with nude dancing in an environment serving alcohol. It is not overbroad." Id. at 382. Specifically, the majority concluded that Plaintiffs had failed to show that Rule 52 involved a substantial amount of "impermissible applications" relative to its "plainly legitimate sweep." Id. at 383-86. The regulation's arguably impermissible applications to artistic expression did not render it substantially overbroad, since such applications amounted to only a fraction of Rule 52's reach. Id. at 384-86. The dissenting panel member—while opining "that Rule 52 as applied to nude-dancing establishments would be constitutional"—disagreed with the majority's analysis primarily on the basis that the regulation applied to all Ohio liquor permit holders, half of which could potentially present live entertainment, and did not exempt persons engaging in performances with literary, artistic, or political value. Id. at 386-93 (Cole, J., dissenting).

We denied en...