Zebulon Enters., Inc. v. Dupage Cnty., No. 19 C 5165

438 F.Supp.3d 881

ZEBULON ENTERPRISES, INC., Plaintiff,

v.DUPAGE COUNTY, ILLINOIS, an Illinois Governmental Entity, Defendant.

No. 19 C 5165

United States District Court, N.D. Illinois, Eastern Division.

Signed April 16, 2020

Clyde DeWitt, Law Offices of Clyde DeWitt, a Nevada Professional Corporation, Las Vegas, NV, Wayne B. Giampietro, Poltrock & Giampietro, Chicago, IL, Jeffrey B. Fawell, Fawell & Associates, Wheaton, IL, for Plaintiff.

Anthony Edward Hayman, DuPage County States Attorney's Office, Conor Patrick McCarthy, DuPage County State's Attorney Civil Bureau, Wheaton, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

Elaine E. Bucklo, United States District Judge In this action, plaintiff Zebulon Enterprises, Inc. ("Zebulon"), an adult bookstore, sues DuPage County, Illinois, ("DuPage") to challenge DuPage's recently-enacted adult entertainment ordinance, Ordinance AHAB-O-0031-19 ("the Ordinance"), as impermissibly burdening Zebulon's rights under the First, Fourth, Fifth, and Fourteenth Amendments and analogous portions of the Illinois Constitution. After this suit was filed, the DuPage County Board adopted amendments to the Ordinance in Ordinance AHAB-O-0031A-19 ("the Amended Ordinance").¹ Due in part to the passage of the Amended Ordinance, the parties entered a stipulation to streamline multiple pending dispositive motions. Dkt. Nos. 41, 42. Three such motions remain. In two motions, DuPage challenges Zebulon's pleadings under various provisions of Rule 12 of the Federal Rules of Civil Procedure. Dkt. Nos. 17, 38. Zebulon also seeks partial summary judgment on its second claim and part of its ninth claim, which challenge the Ordinance's site inspection provision. Dkt. No. 22. For the reasons that follow, DuPage's motions are granted in part and denied in part and Zebulon's motion is denied.

I.

I first address DuPage's motions. In its first motion² DuPage seeks to dismiss Zebulon's entire first, third, and fifth claims and parts of its eighth and ninth claims pursuant to Rule 12(b)(6) for a failure to state a claim and lack of standing. DuPage also seeks judgment on the pleadings under Rule 12(c) for Zebulon's second and fourth claims, or in the alternative, to dismiss those claims pursuant to Rule 12(b)(6). And DuPage seeks to strike certain pleadings under Rule 12(f). DuPage's second motion, as thinned by the parties' stipulation, seeks dismissal of Zebulon's second claim and part of its ninth claim.

Next, I must address procedural issues raised by DuPage's motions. As the operative complaint has not been answered, it is not appropriate to grant judgment on the pleadings. See Fed. R. Civ. P. 12(c) ("After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings."). Accordingly, I will address DuPage's challenge to Zebulon's second and fourth claims as a motion to dismiss those claims pursuant to Rule 12(b)(6). In either event, a Rule 12(c) motion for judgment on the pleadings is governed by the same standard that is used for a Rule 12(b)(6) motion. Adams v. City of Indianapolis , 742 F.3d 720, 727-28 (7th Cir. 2014) (citation omitted).

DuPage's arguments that certain claims lack standing "would have been more appropriately brought as a 12(b)(1) motion, based on lack of subject matter jurisdiction" rather than a Rule 12(b)(6) motion. Thomas ex rel. Smith v. Cook Cty. Sheriff , 401 F. Supp. 2d 867, 870 n. 2 (N.D. Ill. 2005) (citations omitted). As such, I will consider DuPage's challenges to Zebulon's standing under Rule 12(b)(1).

A.

To survive a motion to dismiss under Rule 12(b)(6), Zebulon must allege "a short and plain statement of [each] claim showing that [it] is entitled to relief." Fed. R. Civ. P. 8(a)(2). That is, it must state a claim "that is plausible on its face" after I disregard conclusory allegations. W. Bend Mut. Ins. Co. v. Schumacher , 844 F.3d 670, 675 (7th Cir. 2016) (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678–79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ; Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). In resolving a motion to dismiss under Rule 12(b)(6), I accept Zebulon's well-pled factual allegations as true and draw all reasonable inferences in its favor. Id. Likewise, facial challenges to standing under Rule 12(b)(1) are assessed using the same " Twombly – Iqbal facial plausibility requirement for pleading a claim[.]" Silha v. ACT, Inc. , 807 F.3d 169, 174 (7th Cir. 2015).

B.

The following allegations are common to all of Zebulon's claims. Since 1983, Zebulon's business has operated at 24W777 Lake Street in unincorporated DuPage County. That business consists of a retail section and two video arcade rooms. The retail section sells sexually oriented products. The video arcade sections contain booths in which individuals can lock the doors and "view sexually oriented motion pictures by way of a currency-activated mechanism." Dkt. No. 32 at ¶ 43. Zebulon typically operates with a single clerk at a counter adjacent to the front entrance of the store, where retail sales occur. Cleaning and maintenance employees are also intermittently present.

Zebulon is presently the last remaining adult business in DuPage's jurisdiction. Zebulon has a history of hostile relations with DuPage and local law enforcement, namely, a 1984 lawsuit in which Zebulon successfully challenged a DuPage zoning ordinance,³ and a series of early-1990's obscenity cases.⁴ More recently but before the Ordinance was passed, the DuPage County Board of Commissioners established an ad hoc committee. Dan Cronin, the Chairman of that board, articulated that committee's mission:

I also propose the creation of an Ad Hoc Committee on Adult Businesses. The purpose of this committee – the Adult Businesses Committee – is to examine the issues – the difficult issues and troubling issues – related to adult businesses in the unincorporated areas of DuPage County, then utilize that information and testimony offered to the committee to propose reasonable licensing regulations designed to mitigate the negative secondary impacts these businesses have on the community. We'll do the best we can to get these businesses out of our community.

Dkt. No. 32 at ¶ 21 (emphasis added in the complaint).

The ad hoc committee held hearings and collected "what appears to be all of the available information justifying secondary-effects regulations of adult businesses." Id. at ¶ 22. Citizens and social service professionals present as witnesses expressed hostility to Zebulon's wares and the existence of any adult business in the community. Other hearing witnesses indicated that private real estate developers have targeted Zebulon's neighborhood, "a meaningful tax base," for gentrification, which, Zebulon believes, provides a further motive for DuPage's animus against it. Id. at ¶ 24. For example, the Mayor of the nearby Village of Roselle testified in favor of the Ordinance, "believing that [it] would destroy the profitability of Zebulon's business." Id. Nevertheless, "the hearings did not produce any concrete evidence that Zebulon's operation over the course of the past decades in DuPage County had caused any particular problems." Id. at ¶ 25.

The Ordinance, which is attached to the Second Amended Complaint, imposes new licensing and operational requirements on Zebulon, "its only extant target." Id. at ¶ 26. It requires annual licensing of Zebulon's business and of each of its employees. It also contains requirements for the physical layout, signage, and lighting of Zebulon's business. Zebulon contends that compliance with these requirements would result in a loss of revenue by reducing the number of viewing booths in its arcades by 73% and an increase in costs in having to construct and staff a manager station in each of its arcades.

C.

1. First Claim

Zebulon's first claim alleges that the Ordinance, as applied and threatened to be applied, would abridge its free speech rights under the First and Fourteenth Amendments and is designed and intended to "restrict free expression by eradicating all adult businesses from the jurisdiction[.]" Id. at ¶¶ 54-55. DuPage argues that this claim lacks requisite factual allegations and is comprised only of legal conclusions, generic information about the parties, and irrelevant, inaccurate allegations about DuPage's pretextual motives.

The First Amendment protects non-obscene, sexually explicit speech, such as that allegedly offered in Zebulon's adult video arcade. See FW/PBS, Inc. v. City of Dallas , 493 U.S. 215, 224, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990), holding modified by City of Littleton, Colo. v. Z.J. Gifts D-4, L.L.C. , 541 U.S. 774, 124 S.Ct. 2219, 159 L.Ed.2d 84 (2004) (collecting cases). Regulations on sexually explicit speech are typically evaluated under one of two frameworks. Zoning ordinances are considered "time, place, and manner restrictions" and are consequently evaluated under the framework set out in City of Renton v. Playtime Theatres, Inc. , 475 U.S. 41, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986), and City of Los Angeles v. Alameda Books , Inc., 535 U.S. 425, 122 S.Ct. 1728, 152 L.Ed.2d 670 (2002). Andy's Restaurant & Lounge, Inc. v. City of Gary , 466 F.3d 550, 552–53 (7th Cir. 2006). Statutes that impact expressive conduct, like prohibitions on public indecency, are evaluated under the framework set out in United States v. O'Brien, 391 U.S. 367, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968). Id. at 553.

Zebulon's challenge to the whole of the Ordinance does not fit neatly within either framework. It involves restrictions on where Zebulon can conduct its business—in a building that complies with certain interior configuration requirements—and prohibitions that may impact expressive conduct—e.g. , forbidding the possession of open alcohol containers. However, the central thrust of Zebulon's claim is that it is being regulated out of existence through the combination of the Ordinance's new building layout...