Mdk, Inc. v. Village of Grafton

345 F.Supp.2d 952

MDK, INC., Plaintiff, v. VILLAGE OF GRAFTON, Defendant.

No. 03-C-0026.

United States District Court, E.D. Wisconsin.

November 18, 2004.

COPYRIGHT MATERIAL OMITTED

Jeff Scott Olson, Madison, WI, for Plaintiff.

Jennifer J. Kopp, Barbara Janaszek, Milwaukee, WI, for Defendant.

DECISION AND ORDER

ADELMAN, District Judge.

Plaintiff MDK, Inc. ("MDK") brings this action under 42 U.S.C. § 1983 alleging that defendant Village of Grafton's ordinance regulating sexually oriented businesses, Ch. 9.35, is facially invalid under the First Amendment. Plaintiff contends that the ordinance effectively prohibited it from offering erotic dancing at a tavern that it owned in the Village and that as a result it is entitled to damages. Before me now are the parties' cross-motions for summary judgment on the issue of liability.¹

I. THE ORDINANCE

Under Ch. 9.35, "sexually oriented businesses" include "an adult arcade, adult bookstore, adult video store, adult cabaret, adult motel, adult motion picture theater, adult theater, escort agency, or sexual encounter center." § 9.35.020(v). Businesses subject to the ordinance must obtain licenses to operate, may operate only in specified locations and must comply with other requirements. Had plaintiff offered erotic dancing, it would have been subject to the ordinance as an "adult cabaret."²

Defendant states that prior to enacting Ch. 9.35, its board members reviewed studies concerning the adverse secondary effects of adult entertainment. Defendant has not made such materials part of the record but states that they establish a correlation between adult entertainment establishments and negative secondary effects such as unlawful sexual activity, sexually transmitted diseases, urban blight, increased crime and reduced property values.

II. SUMMARY JUDGMENT STANDARD

Summary judgment is required "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The mere existence of some factual dispute does not defeat a summary judgment motion; "the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). For a dispute to be genuine, the evidence must be such that a "reasonable jury could return a verdict for the nonmoving party." Id. For the fact to be material, it must relate to a disputed matter that "might affect the outcome of the suit." Id. In evaluating a motion for summary judgment, the court must draw all inferences in a light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). However, it is "not required to draw every conceivable inference from the record — only those inferences that are reasonable." Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir.1991). When both parties have moved for summary judgment, both are required to show that no genuine issues of fact exist, taking the facts in the light most favorable to the party opposing each motion. If issues of fact exist, neither party is entitled to summary judgment. Lac Courte Oreilles Band of Lake Superior Chippewa Indians v. Voigt, 700 F.2d 341, 349 (7th Cir.1983).

III. DISCUSSION

The Free Speech Clause of the First Amendment made applicable to states and municipalities through the Fourteenth Amendment, Fiske v. Kansas, 274 U.S. 380, 47 S.Ct. 655, 71 L.Ed. 1108 (1927), provides that "Congress shall make no law ... abridging the freedom of speech. U.S. Const. amend. I. The Clause applies to Ch. 9.35 because erotic dancing is a form of expression protected by the First Amendment." See, e.g., City of Erie v. Pap's A.M., 529 U.S. 277, 289, 120 S.Ct. 1382, 146 L.Ed.2d 265 (2000); Barnes v. Glen Theatre, Inc., 501 U.S. 560, 565-66, 111 S.Ct. 2456, 115 L.Ed.2d 504 (1991); Schultz v. City of Cumberland, 228 F.3d 831, 839 (7th Cir.2000).

Plaintiff challenges Ch. 9.35 insofar as it regulates adult cabarets and also challenges its clothing restrictions, locational requirements and licensing scheme. I conclude that the sections of Ch. 9.35 that regulate adult cabarets are facially unconstitutional because they are not narrowly tailored to serve a substantial government interest. Thus, I need not address plaintiff's other challenges. In explaining my conclusion, I will first explain the standard of review to which Ch. 9.35 is subject. Second, I will explore why the sections of Ch. 9.35 that regulate adult cabarets do not satisfy that standard. Finally, I will address why the failure of such sections to satisfy the applicable standard of review renders them facially invalid.

A. Standard of Review

Although it is sometimes unclear how to analyze an ordinance regulating adult entertainment, see, e.g., Ben's Bar, Inc. v. Vill. of Somerset, 316 F.3d 702, 707-22 (7th Cir.2003) (surveying standards potentially applicable to regulation of adult entertainment and devising "road map" to navigate them), the parties in the present case agree that the restrictions in Ch. 9.35 should be evaluated under the standards set forth in Renton v. Playtime Theatres, Inc., 475 U.S. 41, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986), and its progeny. In Renton, the Supreme Court held that if a time, place and manner restriction is content-neutral rather than content-based,³ the restriction is subject to intermediate rather than strict scrutiny.⁴ Id. at 46-50, 106 S.Ct. 925. Under the Renton intermediate scrutiny standard, a regulation is constitutional if it is designed to serve a substantial government interest, is narrowly tailored to serve such interest, and allows for reasonable alternative avenues of communication.⁵ Id. at 50-52, 106 S.Ct. 925.

In City of Los Angeles v. Alameda Books, Inc., 535 U.S. 425, 122 S.Ct. 1728, 152 L.Ed.2d 670 (2002), Justice Kennedy authored a concurring opinion that slightly modified the Renton framework.⁶ In Renton, the Court classified a content-based adult entertainment zoning ordinance as content-neutral on the ground that the ordinance was targeted at the negative secondary effects of adult entertainment, such as crime and depressed property values, rather than the entertainment itself. 475 U.S. at 47, 106 S.Ct. 925. In Alameda Books, Justice Kennedy agreed that a regulation targeting the negative secondary effects of adult entertainment rather than the entertainment itself should be treated as if it were content-neutral. 535 U.S. at 448, 122 S.Ct. 1728. However, he stressed that referring to such regulations as content-neutral was "something of a fiction," and he joined the dissenting justices in characterizing laws targeting the negative secondary effects of adult entertainment as content-based. Id. at 448-49, 122 S.Ct. 1728. Thus, Justice Kennedy's concurrence replaces the Renton inquiry into whether a regulation of adult entertainment is content-neutral with an inquiry into whether the regulation is designed to decrease the negative secondary effects of adult entertainment. This change appears to be one of phrasing rather than a real alteration of the Renton standard. See Ben's Bar, 316 F.3d at 721 n. 26.

Under the Renton standard as modified by Alameda Books, a regulation of adult entertainment is constitutional if it: (1) is a time, place and manner restriction rather than a total ban on adult entertainment; (2) targets the negative secondary effects of adult entertainment rather than the entertainment itself; (3) is narrowly tailored to serve a substantial government interest; and (4) allows for reasonable alternative channels of communication. Prongs one and two determine whether the regulation receives intermediate rather than strict scrutiny, and prongs three and four determine whether the regulation survives intermediate scrutiny. See Dream Palace v. County of Maricopa, 384 F.3d 990, 1013 (9th Cir.2004).

B. Application of Standard

Plaintiff argues that the sections of Ch. 9.35 that regulate adult cabarets are not narrowly tailored to serve a substantial government interest because they subject to regulation businesses that offer erotic dancing that have not been shown to generate negative secondary effects.⁷ Specifically, plaintiff argues that the effect of § 9.35.020(c) (defining "adult cabaret") and §§ 9.35.020(t) & (w) (defining "semi-nude and specified anatomical areas"), is to subject to regulation establishments in which dancers perform with almost all of the buttocks covered and most of the breast below the top of the areola covered, and that defendant has not shown that such establishments generate negative secondary effects.

A regulation is narrowly tailored when it "promotes a substantial government interest that would be achieved less effectively absent the regulation." Ward v. Rock Against Racism, 491 U.S. 781, 799, 109 S.Ct. 2746, 105 L.Ed.2d 661 (1989) (internal quotation marks and citation omitted). A law is not narrowly tailored when the regulation burdens "substantially more speech than is necessary to further the government's legitimate interests." Id. In short, "[g]overnment may not regulate expression in such a manner that a substantial portion of the burden on speech does not serve to advance its goals." Id. In the present case, defendant justifies the provisions of Ch. 9.35 relating to adult cabarets on the ground that the regulations serve its legitimate interest in reducing the negative secondary effects associated with erotic dancing. Thus, to determine whether such provisions are narrowly tailored, I must determine whether they regulate a substantial amount of erotic expression that has not been shown to be associated with negative secondary effects.

It is undisputed that at least some of the businesses that Ch. 9.35 defines as adult cabarets generate...