Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-05-04053/USCOURTS-ca8-05-04053-0/pdf.json

Parties Involved:
American Civil Liberties Union
Amicus on Behalf of Appellant
Jay Nixon
Appellee
Steele Retail 37
Appellant

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 05-3847

___________

Passions Video, Inc., a Missouri *

corporation; Gala Entertainment *

of KC, Inc., a Missouri corporation, *

*

Appellants, *

* Appeals From the United States

v. * District Court for the

* Western District of Missouri.

Jay Nixon, Attorney General of the *

State of Missouri, in his official *

capacity, *

*

 Appellee. *

___________

No. 05-4053

___________

Steele Retail 37, doing business *

as Lion's Den, LLC, *

*

Appellant, *

*

v. *

*

Jay Nixon, Attorney General of the *

State of Missouri, in his official *

capacity, *

*

 Appellee, *

-------------------- *

Appellate Case: 05-4053 Page: 1 Date Filed: 08/21/2006 Entry ID: 2080383
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American Civil Liberties Union of *

Kansas and Western Missouri, *

*

 Amicus on Behalf of Appellant. *

 

Submitted: June 14, 2006

Filed: August 21, 2006

___________

Before SMITH, HEANEY, and GRUENDER, Circuit Judges.

___________

HEANEY, Circuit Judge.

In this case we consider two consolidated appeals challenging the

constitutionality of a Missouri criminal statute that regulates advertising by Missouri

businesses that offer sexually explicit entertainment and materials. The district court

found the statute to be a constitutional regulation of commercial speech. We reverse.

BACKGROUND

Missouri statute section 226.531 restricts on- and off-premises advertising

within one mile of a state highway, by any business classified as “adult cabaret” or

“sexually oriented business” (affected business). Mo. Rev. Stat. § 226.531. The

statute includes an exception that allows affected businesses located within a mile of

state highways to display two exterior, on-premises signs, but restricts the content of

these signs. Business owners who violate the statute are subject to criminal

prosecution. § 226.531.4. 

The material facts in these appeals are not in dispute. All appellants are located

within one mile of a state highway. The appellants have all erected, or intend to erect,

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1

Gala Entertainment and Passions Video jointly filed the suit below. Gala has

apparently closed since the commencement of the suit. Subsequent references to the

Passions Video suit include by reference the Gala Entertainment suit.

2

Appellee is the named defendant in his official role as Missouri State Attorney

General.

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on- and off-premises signs and billboards that violate the location, size, and content

restrictions of section 226.531. 

Passions Video qualifies as a sexually oriented business because it devotes

more than ten percent of its interior display space to non-obscene, sexually oriented

materials. See § 226.531.1(3) (defining “sexually oriented business”). Gala

Entertainment of KC, Inc.1

 was a nightclub classified as an adult cabaret. See §

226.531.1(1) (defining “adult cabaret”). In August 2004, Passions Video and Gala

Entertainment jointly filed suit against the state,2

 in the United States District Court

for the Western District of Missouri, challenging the constitutionality of section

226.531. In its prayer for relief, Passions Video sought preliminary and permanent

injunctions enjoining enforcement of section 226.531, a declaration that section

226.531 was unconstitutional, and fees and costs. On February 18, 2005, the district

court issued an amended order denying Passions Video’s Motion for Temporary

Restraining Order and Preliminary Injunction. Passions Video and the state

subsequently filed cross-motions for summary judgment. On August 2, 2005, the

district court denied Passions Video’s motion for summary judgment, and granted

summary judgment on behalf of the state. Passions Video now appeals the district

court’s August 2, 2005 order.

Steele Retail 37, L.L.C. (Steele Retail), operates a gas station and convenience

store that receives the majority of its income from gas and other traditional

convenience store items, but devotes more than ten percent of its interior display space

to non-obscene, sexually oriented materials. Thus, it too qualifies as a sexually

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oriented business. See § 226.531.1(3). On August 10, 2005, Steele Retail filed suit

in the United States District Court for the Western District of Missouri, seeking a

declaration that section 226.531 violated the United States Constitution and seeking

preliminary and permanent injunctions enjoining its enforcement. The Steele Retail

suit was assigned to the same district court judge that presided over the Passions

Video suit. The district court denied Steele Retail’s motion for preliminary and

permanent injunctions, relying primarily on its reasoning regarding the

constitutionality of section 226.531 in its August 2005 order granting summary

judgment against Passions Video. The district court additionally interpreted the scope

of section 226.531, finding that it prohibited advertising only for sexually oriented

materials. Steele Retail filed this appeal which was subsequently consolidated with

Passions Video’s earlier appeal.

ANALYSIS

“We review the district court’s grant of summary judgment de novo, using the

same standard under Federal Rule of Civil Procedure 56(c) as applied by the district

court.” Excalibur Group, Inc. v. City of Minneapolis, 116 F.3d 1216, 1219 (8th Cir.

1997). A party is entitled to summary judgment “when ‘there is no genuine issue as

to any material fact and . . . the moving party is entitled to judgment as a matter of

law.’” Id. (quoting Fed. R. Civ. P. 56(c)). We review the denial of a motion for a

preliminary injunction for abuse of discretion. Safety-Kleen Sys., Inc. v. Hennkens,

301 F.3d 931, 935 (8th Cir. 2002). 

The First Amendment provides that “Congress shall make no law . . . abridging

the freedom of speech.” U.S. Const. amend I. The amendment applies to state and

local governments through the Fourteenth Amendment. Central Hudson Gas & Elec.

Corp. v. Public Serv. Comm’n, 447 U.S. 557, 561 (1980). Although one may find

sexually explicit material tasteless and even immoral, it is constitutionally protected

so long as it is not obscene. United States v. Playboy Entm’t Group, Inc., 529 U.S.

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3

The statute includes an exception for affected businesses located within a mile

of a state highway, which is discussed below. 

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803, 811 (2000). “The history of the law of free expression is one of vindication in

cases involving speech that many citizens may find shabby, offensive, or even ugly.”

Id. at 826. 

At issue here is a Missouri statute that restricts advertising by “sexually oriented

businesses” and “adult cabarets” that offer sexually explicit materials and

entertainment for adults. Any business with more than ten percent of its display space

dedicated for sexually oriented materials is presumed to be a “a sexually oriented

business.” Mo. Rev. Stat. § 226.531.1(3). An “adult cabaret” is “a nightclub, bar,

restaurant, or similar establishment in which persons appear in a state of nudity, as

defined [by the statute], or seminudity, in the performance of their duties[.]” §

226.531.1(2). 

The advertisement restriction provides that, “[n]o billboard or other exterior

advertising sign for an adult cabaret or sexually oriented business shall be located

within one mile of any state highway. . . .” § 226.531.2.3

 Accordingly, if a business

fits the definition of a “sexually oriented business” or “adult cabaret,” it is prohibited

from erecting any “billboard or other exterior advertising sign,” regardless of the

sign’s content. Id. Violation of this statute is a class C misdemeanor, § 226.531.4,

punishable by a term of incarceration of up to fifteen days, § 558.011.1(7), and a fine

of up to $300, § 560.016.1(3). 

I.

As a threshold issue, we determine the scope of the statute’s advertising

restriction. In its denial of Steele Retail’s motion for permanent and preliminary

injunctions, the district court interpreted 226.531 to “prohibit only advertising for the

sexually oriented aspects of sexually oriented businesses.” (Steele Retail J.A. at 295.)

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At oral argument, the state took the position that the mere inclusion of the

affected business’s name or address on the advertisement would subject the business

owner to criminal prosecution under section 226.531. 

5

The plaintiffs argue that the statute is subject to strict scrutiny because it

potentially prohibits political speech. Because the regulation does not survive scrutiny

under the more discretionary Central Hudson commercial speech test, we need

consider the application of stricter tests. See Bd. of Trustees v. Fox, 492 U.S. 469,

485-86 (1989) (stating that further constitutional analysis is unnecessary if statute is

found to be invalid in the commercial speech context).

6

The district court applied a novel hybrid analysis that combined the

commercial speech and the time, place, and manner tests. We reject this approach

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We hold that the district court erred in concluding that section 226.531

prohibited only advertising for sexually oriented products or “aspects” of the affected

businesses. This interpretation contradicts the plain language of the statute as well as

the state’s own interpretation.4

 The regulation makes no reference to the content of

the off-premises advertising signs. Rather, it states that “[n]o billboard or other

exterior advertising sign for an adult cabaret or sexually oriented business shall be

located within one mile of any state highway.” Mo. Rev. Stat. § 226.531.2. Thus, if

a business is classified as an adult cabaret or sexually oriented business, it is

prohibited from erecting any billboard or other exterior advertising sign, without

regard to the content of the billboard. Although we adopt, where possible, an

interpretation that renders a statute constitutional, the plain language of section

226.531 precludes a constitutional interpretation. Postscript Enters. v. Whaley, 658

F.2d 1249, 1253 (8th Cir. 1981).

II.

We next determine whether the statute is constitutional as interpreted. The

Missouri statute regulates outdoor advertising, therefore we apply the four-step

commercial speech analysis5

 outlined by the Supreme Court in Central Hudson6 to

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because no federal precedent exists to support its application.

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determine whether the statute is constitutionally sound. Missouri v. Am. Blast Fax,

Inc., 323 F.3d 649, 653 (8th Cir. 2003); see also Central Hudson, 447 U.S. at 561

(defining “commercial speech” as “expression related solely to the economic interests

of the speaker and its audience”). Although the Constitution “accords a lesser

protection to commercial speech than to other constitutionally guaranteed expression,”

Central Hudson, 447 U.S. at 563, commercial speech is protected “from unwarranted

governmental regulation,” id. at 561. Regulations on commercial speech are subject

to intermediate scrutiny under the framework set forth in Central Hudson. Florida Bar

v. Went For It, Inc., 515 U.S. 618, 623 (1995). 

To determine whether the regulation on commercial speech is constitutionally

valid we determine whether: (1) the affected speech concerns lawful activity and is

not misleading, therefore protected by the First Amendment; (2) the government’s

asserted interest in regulating the speech is substantial; (3) the regulation directly

advances the asserted interest; and (4) the regulation restricts no more speech than

necessary to serve the asserted interest. Central Hudson, 447 U.S. at 566. The state

“bears the burden of identifying a substantial interest and justifying the challenged

restriction.” Greater New Orleans Broad. Assoc., Inc. v. United States, 527 U.S. 173,

183 (1999).

There is no dispute here that the speech in question is commercial speech that

contains no misleading statements or concerns unlawful activity, and is therefore

constitutionally protected. See id. at 184. Therefore, the first Central Hudson step is

satisfied. 

We next consider whether the state’s asserted interest is substantial. The statute

includes a list of several interests it seeks to protect with the regulation. These

include: mitigating “the adverse secondary effects of sexually oriented businesses,

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[improving] traffic safety, [limiting] harm to minors, and [reducing] prostitution,

crime, juvenile delinquency, deterioration in property values, and lethargy in

neighborhood improvement projects.” Mo. Rev. Stat. § 226.531.5. 

Here, the affected businesses dedicate at least ten percent of their interior

display space to products “subject [to] intense public debate in many communities.”

Greater New Orleans Broad., 527 U.S. at 184. Our court has recognized that

“regulations aimed at minimizing the secondary effects of sexually oriented

businesses serve a significant and substantial governmental interest.” Excalibur

Group v. City of Minneapolis, 116 F.3d 1216, 1221 (8th Cir. 1997). The state’s

asserted interest in regulating sexually oriented businesses and products is

“substantial” and therefore satisfies the second step of the Central Hudson test.

Central Hudson, 447 U.S. at 566.

Next, we turn to the third step of the Central Hudson analysis, which requires

the restriction to directly advance the state’s asserted interest. Central Hudson, 447

U.S. at 566. This step “concerns the relationship between the harm that underlies the

State’s interest and the means identified by the State to advance that interest.”

Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 555 (2001). To survive scrutiny, the

regulation must advance the stated governmental interest “directly and materially.”

Id. (quoting Greater New Orleans Broad. Assoc., 527 U.S. at 188). 

The state argues that its ultimate goal is to reduce the adverse secondary effects

of sexually oriented businesses by limiting the presence of sexually oriented

businesses. Under that theory, restricting the amount of advertising by the affected

businesses would reduce the number of customers that patronize the affected business,

thus reducing profits, and ultimately forcing the affected business to close. Although

there may be some evidence that the statute directly and materially advances the

state’s asserted interest, the statute fails under the final Central Hudson step because

it is not narrowly tailored to meet its asserted goals. 

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In the final step, the “critical inquiry” is whether the regulation’s “complete

suppression of speech ordinarily protected by the First Amendment is no more

extensive than necessary to further [Missouri’s] interest in” reducing the secondary

effects of adult businesses. Central Hudson, 447 U.S. at 569-70. While the state need

not pursue the least restrictive means, it must enact a statute that is “reasonable” and

“narrowly tailored to achieve the desired objective.” Lorillard Tobacco, 533 U.S. at

556 (additional citations and quotations omitted). The statute cannot “curtail

substantially more speech than is necessary to accomplish its purpose.” Krantz v. City

of Fort Smith, 160 F.3d 1214, 1222 (8th Cir. 1998). The availability of obvious and

numerous less-burdensome alternatives to the restriction factors into the consideration

of whether the “fit” is reasonable. Went For It, 515 U.S. at 632. 

It is clear that section 226.531 regulates the affected business’s speech; it

threatens criminal prosecution for the mere inclusion of the name or address of an

affected business on billboards within one mile of a state highway. The Missouri

statute “sacrifices an intolerable amount of truthful speech about lawful conduct.”

Greater New Orleans Broad. Assoc., 527 U.S. at 194. The prohibition is directed at

speech beyond that which would lead to the stated secondary effects, and is not

narrowly tailored to achieve Missouri’s stated goal. See State v. Café Erotica, Inc.,

507 S.E.2d 732, 735 (Ga. 1998) (holding “The absolute proscription against any form

of off-site advertising impedes the free flow of information and far exceeds the State’s

legitimate interest, is an unconstitutional infringement on free speech.”). 

In our view, the state has “failed to make a showing that a more limited speech

regulation would not have adequately served the State’s interest.” 44 Liquormart, Inc.

v. Rhode Island, 517 U.S. 484, 500 (1996) (Op. of Stevens, J. for four members of the

Court) (citing Central Hudson, 447 U.S. at 571). Accordingly, we find that Missouri

statute section 226.531 fails to satisfy the Central Hudson test for regulations on

commercial speech. 

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The exterior sign restrictions here are unlike those found to be “modest” in

Excalibur Group, where this court found the exterior sign zoning restrictions did “not

reach substantially more speech than necessary,” under the reasonable time, place, and

manner analysis. Excalibur Group, 116 F.3d at 1221-22. There, the restrictions

regulated the exterior appearance of adult-only businesses. Id. Those restrictions

prohibited the obscuring of windows, limited the size of exterior signs, and required

exterior signs to be flat. Id. Finally, the regulation there included no restrictions

regarding the content of the exterior signs. Id. at 1218-19.

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III.

Finally, we turn to the provision restricting the content of on-premises signs for

affected businesses located within one mile of state highways. The exception provides

that:

[I]f such business is located within one mile of a state highway then the

business may display a maximum of two exterior signs on the premises

of the business, consisting of one identification sign and one sign solely

giving notice that the premises are off limits to minors. The

identification sign shall be no more than forty square feet in size and

shall include no more than the following information: name, street

address, telephone number, and operating hours of the business. 

Mo. Rev. Stat. § 226.531.2.

The statute specifically prohibits all expression, other than the name, address,

telephone number, operating hours, and language giving notice that minors are not

allowed. § 226.531.2. In our view, this provision is not narrowly drawn to meet the

state’s asserted goals, and thus fails to meet the fourth step of the Central Hudson

test.7 Lorillard Tobacco, 533 U.S. at 556. Should an affected business owner choose

to post a sign with the price of gasoline, or a sign advertising a nationally-known soft

drink on the exterior of the business, he or she would be subject to criminal

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prosecution. Thus, Missouri statute section 226.531, in its entirety, is unconstitutional

because it fails to survive scrutiny under the Central Hudson test for regulations on

commercial speech.

CONCLUSION

We reverse the district court’s grant of summary judgment and its denial of the

appellants’ motions for injunctive relief and remand to the district court for

proceedings consistent with this opinion.

______________________________

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