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City of Elko v. Abed

April 13, 2004

CITY OF ELKO, RESPONDENT,
v.
EMAD ABED, ET AL., APPELLANTS, ALBERT LAFONTAINE, DEFENDANT.



Scott County District Court File No. C-02-23468

Considered and decided by Anderson, Presiding Judge; Stoneburner, Judge; and Hudson, Judge.

SYLLABUS BY THE COURT

I. Nude dancing is "expressive conduct" that falls only within the outer ambit of the First Amendment's protection.

II. A municipal ordinance establishing licensing requirements for nude dancing establishments is constitutional where it is (1) a content-neutral time, place, and manner regulation; (2) designed to serve a substantial governmental interest; and (3) which does not unreasonably limit alternative avenues of communication.

III. Evidence showing the negative secondary effects of adult establishments is sufficient to support an ordinance establishing licensing requirements for nude dancing establishments unless a prospective licensee casts direct doubt on the reliability of the evidence.

IV. In ordinances establishing licensing requirements for nude dancing establishments, a disqualification provision based on prior criminal convictions is valid where it: (1) has a substantial relationship between the information required and the government interest; (2) sufficiently limits the decision-maker's discretion; and (3) provides a specific time period within which individuals who have committed enumerated offenses cannot receive a license to operate a sexually oriented business.

V. Disclosure provisions in ordinances establishing licensing requirements for nude dancing establishments are valid where there is a significant governmental interest that is furthered by the required disclosures.

VI. A prospective licensee has the burden to show that license and investigation fees contained in an ordinance establishing licensing requirements for nude dancing establishments are unreasonable.

VII. Distance restrictions and prohibitions against gratuities in an ordinance establishing licensing requirements for nude dancing establishments are permissible where the restrictions and prohibitions are reasonable, content-neutral time, place and manner restrictions, and where the distance restriction is well defined.

The opinion of the court was delivered by: Hudson, Judge

Affirmed

Anderson, Judge, concurring specially

OPINION

In 2001, the City of Elko City Council adopted Ordinance No. 92 establishing licensing requirements for sexually oriented businesses. In 2002, the City of Elko served and filed a summons and complaint seeking an injunction to enforce the ordinance against appellants, Sphinx Properties, L.L.C., and Circus Circus, L.L.C., who were operating an adult establishment that offered nude dancing. Both parties moved for summary judgment and the district court granted summary judgment to respondent City of Elko on all claims. On appeal, appellants challenge the constitutionality of the ordinance and argue that the ordinance is a licensing scheme that is a prior restraint on speech in violation of the First Amendment. Likewise, appellants argue that the disqualification and disclosure provisions, the license and investigation fees, the distance restrictions, and the prohibition against gratuities are all impermissible prior restraints on speech. We affirm.

FACTS

On November 19, 1999, the Elko City Council adopted Ordinance No. 79, imposing a temporary moratorium on new adult establishments in the city. The city council directed the city planner, Stephen Grittman, to review studies relating to the adverse effects of sexually oriented businesses. Grittman reviewed several studies relating to the impact of sexually oriented businesses on communities, including a report that contained information from studies conducted in Minneapolis, St. Paul, Phoenix, and Indianapolis. Copies of these studies were disseminated to both the planning commission and the city council. Grittman prepared a draft resolution and findings for the City of Elko planning commission and city council that outlined and summarized conclusions relating to the potential adverse secondary effects*fn1 that sexually oriented businesses would have within the city.

Based on findings in the draft resolution, on November 21, 2000, the planning commission recommended that the city council establish zoning and license controls to minimize secondary effects of sexually oriented businesses and provide those businesses a reasonable opportunity to locate and operate in the city. On December 4, 2000, the city council accepted that recommendation and adopted Grittman's draft resolution. Based on the findings in the resolution, on August 6, 2001, the city council adopted Ordinance No. 92, establishing licensing requirements for sexually oriented businesses.

Ordinance No. 92 prohibits the operation of a sexually oriented business within the city without first obtaining a sexually oriented business license. The ordinance sets forth the procedure for obtaining a license and also provides that individuals convicted of certain crimes are disqualified from licensure for a period of time. The ordinance authorizes the city council to set an annual license and investigation fee; the license fee was set at $5,000 and the investigation fee at $1,500. The ordinance also contains a distance requirement for dancers, and a requirement that no gratuity may be given to any semi-nude dancer or performer.

On December 21, 2001, appellant Sphinx Properties, L.L.C. (Sphinx), purchased a restaurant/bar in the city. Sphinx leased the property to appellant Circus Circus, L.L.C. (Circus Circus). Appellant Emad Abed (Abed) is the president and sole shareholder of both companies. Natalie Brisson (Brisson) is the vice president in charge of dance operations for Circus Circus. Brisson has been convicted of misdemeanor prostitution, thus the ordinance disqualifies her and Circus Circus from licensure for a period of time as long as she remains an officer of Circus Circus.

In September 2002, Sphinx and Circus Circus sued the city in federal district court alleging that the ordinance is unconstitutional. In October 2002, Albert LaFontaine acquired an interest in the property and claimed it was sovereign tribal land exempt from local ordinances and regulations and began offering nude dancing at the property. On November 1, 2002, the Elko police issued citations to three female dancers for dancing nude in violation of the ordinance, and issued a citation to a manager for serving alcohol while nude dancing was occurring, in violation of a separate ordinance. On November 8, 2002, the federal district court denied the city's motion for a temporary restraining order and suggested that any alleged violations of the ordinance should be heard in state court. On November 12, 2002, the city revoked Circus Circus's liquor license for non-payment of license fees and delinquent property taxes. On November 14, 2002, special agents of the Minnesota Alcohol and Gambling Enforcement Division observed alcohol continuing to be served at the property.

On November 19, 2002, the city served and filed a complaint seeking an injunction to enforce Ordinance No. 92. On November 26, 2002, the district court issued a temporary injunction prohibiting appellants from, inter alia, operating a sexually oriented business without a license. At some point after the temporary injunction was issued, LaFontaine ceased to have an interest in the property.

On December 13, 2002, appellants filed an answer and counterclaim challenging the constitutionality of Ordinance No. 92. On February 25, 2003, appellants moved to dissolve the temporary injunction and sought an injunction prohibiting the city from enforcing the ordinance. The district court treated the motion and city's response as cross-motions for summary judgment on the merits.

On June 3, 2003, the district court denied appellants' motion for summary judgment and granted the city's motion, thereby concluding that Ordinance No. 92 is constitutional. This appeal follows.

ISSUES

I. Did the district court err in holding that Ordinance No. 92 is a content-neutral time, place and manner regulation?

II. Did the district court err in holding that the provision providing for license disqualification based on prior criminal ...


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