In the

United States Court of Appeals

For the Seventh Circuit ____________

Nos. 05-2225, 05-2287 & 05-2288

ANDY’S RESTAURANT & LOUNGE, INC.,

and RUSBEN CORP. d/b/a/ TRUCKER’S

WORLD BOOK & VIDEO STORE,

Plaintiffs-Appellants,

PANDORA’S SHOWCLUB, K.K.S., INC. d/b/a

VARIETY VIDEO, J.A. SALES, INC. d/b/a

VIDEO HEAVEN, TERRENCE L. CROSSLEY

d/b/a/ JOKERS CLUB, PLAYERS CLUB,

AND CORVETTE CLUB,

Plaintiffs-Intervenors/Appellants,

v.

CITY OF GARY,

Defendant-Appellee.

____________

Appeals from the United States District Court

for the Northern District of Indiana, Hammond Division.

Nos. 01 C 327, 01 C 397 and 01 C 525—

Andrew P. Rodovich, Magistrate Judge.

____________

ARGUED FEBRUARY 21, 2006—DECIDED OCTOBER 11, 2006

____________

Before BAUER, KANNE, and ROVNER, Circuit Judges.

KANNE, Circuit Judge. This appeal concerns the constitutionality of an ordinance enacted by the City of Gary

(“City”) affecting “sexually oriented businesses.” In a
2 Nos. 05-2225, 05-2287 & 05-2288

thorough and well reasoned opinion, Magistrate Judge

Rodovich granted summary judgment for the City on the

declaratory judgment action filed by some of the businesses

affected by the ordinance. We affirm.

I. HISTORY

The City adopted the challenged Ordinance No. 2000-83

(“the Ordinance”) on December 19, 2000. Its preamble

states the City’s concern that “sexually oriented businesses,” among other things, “have a deleterious effect on

both the existing businesses around them and the surrounding residential areas adjacent to them.” By enacting

the Ordinance, the City “desire[d] to minimize and control these adverse effects and thereby protect the health,

safety, and welfare of the citizenry . . . and deter the spread

of urban blight.” The intent of the Ordinance, the preamble

states, is “to enact a content neutral ordinance which

address the secondary effects of sexually oriented business”

while not “suppress[ing] any speech activities protected by

the First Amendment of the U.S. Constitution.” In support

of its findings, the Ordinance cites a number of federal

cases dealing with similar laws affecting sexually oriented

businesses and eighteen reports detailing the secondary

effects of these businesses.

The Ordinance defines “sexually oriented business”

broadly, including a number of businesses separately defined by the Ordinance, which, generally speaking, means

all manner of adult bookstores, arcades, novelty stores,

theaters, and dancing establishments. It includes operating

hours of 10:00 a.m. to 11:00 p.m., seven days a week, and a

prohibition on any physical contact between employees

appearing in a semi-nude condition (i.e., dancers) and

customers. It also has an open-booth requirement, which

prohibits the placement of doors, curtains or other materials on viewing booths so that an employee of the business
Nos. 05-2225, 05-2287 & 05-2288 3

is able to look into it at all times. The Ordinance also

contains numerous sanitation provisions, including a

prohibition on rugs or carpet, a requirement of “nonporous, easily cleanable surfaces,” and waste disposal

procedures, as well as other obligations for employees, such

as ensuring that no sexual activity occurs on the premises.

All sexually oriented businesses covered by the Ordinance

are required to obtain a license. Once an application is filed,

“the City Comptroller shall immediately issue a Temporary

License to the applicant,” which only “expire[s] upon the

final decision of the City to deny or grant the license.” The

Ordinance requires that a permanent license be issued,

unless (1) the applicant is below the age of 18, (2) the

applicant fails to provide, or provides false information on

the application, (3) the fee is not paid, (4) the applicant has

committed certain violations of the Ordinance within the

last year, or (5) the physical premises of the business do not

comply with the Ordinance’s requirements. A license can be

suspended on the basis of a knowing violation of the

Ordinance, and revoked if a knowing violation occurs within

twelve months of a suspension.

Denial, suspension, or revocation of a license only occurs

after a hearing at which the aggrieved party has the

opportunity to be heard. If any adverse action is taken, the

party must be notified of the right to appeal to a court of

competent jurisdiction. During the pendency of any

such appeal, the City must issue the aggrieved party a

provisional license, which allows the business to stay

open until final judgment is rendered by a court.

II. ANALYSIS

We review the district court’s summary judgment ruling

de novo, viewing all material disputes of fact in the light

most favorable to the plaintiff. Moser v. Ind. Dep’t of Corr.,

406 F.3d 895, 900 (7th Cir. 2005). The plaintiffs’ arguments
4 Nos. 05-2225, 05-2287 & 05-2288

on appeal rely upon the First Amendment, Fourth Amendment, and Indiana law.

A. First Amendment

The plaintiffs’ argument can be organized as follows: the

Ordinance discriminates on the basis of content, and,

therefore, should be analyzed under strict scrutiny; even

when analyzed under lesser, intermediate scrutiny, the City

has not met its burden of justifying the Ordinance; and that

the Ordinance acts as an impermissible prior restraint on

speech.

To assess whether the Ordinance violates the First

Amendment, both parties echo the district court’s analysis

by relying on the analytical framework set forth by City of

Los Angeles v. Alameda Books, Inc., 535 U.S. 425 (2002),

and City of Renton v. Playtime Theatres, Inc., 475 U.S. 41,

47-50 (1986). The Alameda Books/Renton line of cases

deal with zoning ordinances aimed at dispersing adult

entertainment businesses throughout a community, which

are considered time, place, and manner restrictions.

Alameda Books, 535 U.S. at 434 (plurality opinion). Another

line of Supreme Court cases, however, uses the intermediate scrutiny test of United States v. O’Brien, 391 U.S. 367

(1968), to review public indecency statutes, which are

considered laws affecting expressive conduct. See City of

Erie v. Pap’s A.M., 529 U.S. 277, 289 (2000) (plurality

opinion); Barnes v. Glen Theatre, Inc., 501 U.S. 560, 565-66

(1991) (plurality opinion).

There is some confusion about which line of cases should

be used in evaluating laws like the Ordinance, which do not

fall neatly into either category. See Ben’s Bar, Inc. v. Village

of Somerset, 316 F.3d 702, 714 (7th Cir. 2003) (expressing

uncertainty as whether to analyze an adult entertainment

liquor regulation “as a time, place, and manner restriction
Nos. 05-2225, 05-2287 & 05-2288 5

1 Without any elaboration, the plaintiffs do state in the middle of

their brief, “Moreover, the District Court has completely ignored

the fact that [the Ordinance] is not a ‘land use’ regulation, as was

the regulation in Renton.” We do not, and cannot, read this mere

sentence as an argument that it is improper to apply, as the

district court did, the Alameda Books/Renton line of cases to the

(continued...)

[under Alameda Books/Renton] or as a regulation of

expressive conduct under [Pap’s A.M./Barnes]”) (citing

LLEH, Inc. v. Wichita County, Texas, 289 F.3d 358, 365 (5th

Cir. 2002)). And for most cases, it may not matter which

test is employed. Id. (noting that the analysis between the

two lines of cases may be “entirely interchangeable”). The

crucial analytical step of both tests is the same; which is to

say, that under both lines of cases, intermediate scrutiny is

applied if the challenged law is found to be either content

neutral or for the purpose of decreasing secondary effects.

See Alameda Books, 535 U.S. at 448 (Kennedy, J. concurring) (“A zoning restriction that is designed to decrease

secondary effects and not speech should be subject to

intermediate rather than strict scrutiny.”); R.V.S., L.L.C. v.

City of Rockford, 361 F.3d 402, 408 (7th Cir. 2004) (“[O]nly

after confirming that a zoning ordinance’s purpose is to

combat the secondary effects of speech do we employ

Renton’s intermediate scrutiny test.”). Cf. Pap’s A.M. 529

U.S. at 289 (plurality opinion) (“We now clarify that

government restrictions on public nudity such as the

ordinance at issue here should be evaluated under the

framework set forth in O’Brien for content-neutral restrictions on symbolic speech.”).

We need not choose between either line of cases (nor need

we rule that the differences between them are immaterial)

because both parties proceed under the general framework

of Alameda Books/Renton, which we will employ, while

referring to other case law as appropriate, as the parties

do.1

 Moreover, all of the issues raised by plaintiffs are
6 Nos. 05-2225, 05-2287 & 05-2288

1 (...continued)

Ordinance. Kramer v. Banc of Am. Sec., LLC, 355 F.3d 961, 964

n.1 (7th Cir. 2004) (“We have repeatedly made clear that perfunctory and undeveloped arguments that are unsupported by

pertinent authority, are waived (even where those arguments

raise constitutional issues).”) (quoting United States v. Berkowitz,

927 F.2d 1376, 1384 (7th Cir. 1991)).

2 The plaintiffs concede that the Ordinance passes the first

step of the Alameda Books/Renton analysis in that it does not ban

all speech. See Alameda Books, 535 U.S. at 434-35.

clearly controlled by the Court’s precedents or ours, and,

therefore, our resolution of the issues would be same under

either line of cases.

1. Secondary Effects/Content Neutrality

The plaintiffs argue that the Ordinance does not regulate the secondary effects of speech, but, rather, directly

regulates speech.2

 This determination is crucial, because if

the Ordinance only combats secondary effects of otherwise

protected speech, then it is considered the equivalent of

content neutral, and, therefore, need only survive intermediate scrutiny. See Alameda Books, 535 U.S. at 448 (Kennedy, J. concurring); R.V.S., 361 F.3d at 408. Cf. Pap’s A.M.

529 U.S. at 289 (plurality opinion) (explaining that restrictions on public nudity are content neutral and should be

analyzed under O’Brien intermediate scrutiny).

Our inquiry in this regard “is best conceived as [one] into

the purpose behind an ordinance.” R.V.S., 361 F.3d at 407-

08 (citations omitted). Our task is “to verify that the ‘predominant concerns’ motivating the ordinance ‘were with the

secondary effects of the adult [speech], and not with the

content of adult [speech].’ ” Alameda Books, 535 U.S. at 440-

41 (plurality opinion) (quoting Renton, 475 U.S. at 47).

“Federal courts evaluating the ‘predominant concerns’
Nos. 05-2225, 05-2287 & 05-2288 7

behind the enactment of a[n] . . . ordinance . . . may do so by

examining a wide variety of materials including, but not

limited to, the text of the . . . ordinance . . ., any preamble

or express legislative findings associated with it, and

studies and information of which legislators were clearly

aware.” R.V.S., 361 F.3d 409 n.5 (citing Ben’s Bar, 316 F.3d

702, 723 n.28).

A review of those materials makes clear that the Ordinance is directed toward secondary effects. The Ordinance

emphasizes that its purpose is to control the “adverse

effects” of sexually oriented businesses and the reports

before the council primarily addressed secondary effects.

Plaintiffs provide nothing of relevance in response. One

argument they do make is that the Ordinance contains a

shocking admission that it is not concerned with secondary

effects—the City’s belief that sexually oriented businesses,

because of their very nature, downgrade the quality of life.

There is no such admission in the Ordinance; plaintiffs

merely infer that this must be the City’s thought process.

More importantly, plaintiffs fail to grasp that the concept of

“secondary effects,” as developed in Renton and Alameda

Books, assumes that the properly regulated externalities

are caused by protected speech. See Alameda Books, 535

U.S. at 445-48 (Kennedy, J. concurring) (explaining that an

ordinance is content neutral and addresses secondary

effects “even if [it] identifies the [secondary effects] by

reference to the speech . . . that is, even if the measure is in

that sense content based”).

Plaintiffs also posit that a city council cannot rely on

reports and studies when creating an ordinance because

such things are hearsay, or, it might be that the argument

is a city council can rely on these documents in creating

an ordinance, but cannot later use the fact of its reliance on

such reports in warding off a constitutional challenge

in court because such reports are hearsay. Plaintiffs

finish this argument by telling us we cannot look to the
8 Nos. 05-2225, 05-2287 & 05-2288

preamble of the ordinance because it is hearsay. Nevertheless, we feel comfortable relying on the findings and

preamble of the statute and the reports cited therein to

determine that the Ordinance is content neutral. See, e.g.,

Pap’s A.M., 529 U.S. at 296-97 (plurality opinion) (explaining that the city could “reasonably rely on the evidentiary foundation set forth in Renton,” as well as examining

the findings and preamble of the city’s ordinance to determine content neutrality); Ben’s Bar, 316 F.3d at 723-24

(examining the preamble and findings of the challenged

statute to determine whether the challenged statute should

be analyzed under intermediate scrutiny).

2. Intermediate Scrutiny

Laws pass this lower level of scrutiny “so long as they are

designed to serve a substantial government[al] interest and

do not unreasonably limit alternative avenues of communication.” R.V.S., 361 F.3d at 408 (quoting Renton, 475 U.S.

at 47, citing Alameda Books, 535 U.S. at 434); see also Pap’s

A.M., 529 U.S. at 296, 301-02 (plurality opinion) (explaining

that under O’Brien, a content-neutral restriction must

“further[ ] an important or substantial government interest”

and be “no greater than is essential to the furtherance of

the government interest”).

Laws are designed to serve a substantial government

interest when the “municipality can demonstrate a connection between the speech regulated by the ordinance and the

secondary effects that motivated the adoption of the ordinance.” R.V.S., 361 F.3d at 408 (quoting Ben’s Bar, 316 F.3d

at 724). “In evaluating the sufficiency of this connection,

courts must ‘examine evidence concerning regulated speech

and secondary effects.’ ” Id. (quoting Alameda Books, 535

U.S. at 441). “The First Amendment does not require a city,

before enacting such an ordinance, to conduct new studies

or produce evidence independent of that already generated
Nos. 05-2225, 05-2287 & 05-2288 9

by other cities, so long as whatever evidence the city relies

upon is reasonably believed to be relevant to the problem

that the city addresses.” Renton, 475 U.S. at 51-52; see also

Alameda Books, 535 U.S. at 451 (Kennedy, J. concurring)

(“[W]e have consistently held that a city must have latitude

to experiment, at least at the outset, and that very little

evidence is required.”). A city may rely upon previous

judicial opinions evaluating secondary effects the city

desires to regulate. Pap’s A.M. 529 U.S. at 297 (plurality

opinion) (explaining that the city could “reasonably rely on

the evidentiary foundation set forth in Renton and American Mini Theatres to the effect that secondary effects are

caused by the presence of even one adult entertainment

establishment in a given neighborhood”).

The evidence relied upon by the City is more than

adequate to establish the secondary effects regulated by the

Ordinance. The record contains numerous studies evidencing the secondary effects of sexually oriented businesses.

Moreover, we have previously affirmed the only two

portions of the Ordinance plaintiffs specifically attack—the

hour regulation and open-booth requirement. In Schultz v.

City of Cumberland, an hour regulation similar to that

imposed by the Ordinance was upheld by this court against

a First Amendment challenge. 228 F.3d 831, 846 (7th Cir.

2000) (upholding a portion of an ordinance “limiting the

business hours for sexually oriented businesses to between

10 a.m. and midnight, Monday through Saturday.”). And we

have also upheld open-booth requirements similar to the

one in the Ordinance. See Pleasureland Museum, Inc. v.

Beutter, 288 F.3d 988, 1003-04 (7th Cir. 2002) (explaining

that the open-booth requirement was a valid time, place,

and manner restriction); Matney v. County of Kenosha, 86

F.3d 692 (7th Cir. 1996) (same).

To counter these decisions the plaintiffs simply nitpick at

the relevance and reliability of the City’s studies, claiming

that they are either too old or inapplicable because they
10 Nos. 05-2225, 05-2287 & 05-2288

discuss problems in other cities and not Gary. All of these

arguments are without merit. Renton, 475 U.S. at 51-52;

G.M. Enterprises, Inc. v. Town of St. Joseph, 350 F.3d 631,

639-40 (7th Cir. 2003); Ben’s Bar, 316 F.3d at 725.

Faced with our precedent and the City’s substantial

evidentiary record, the plaintiffs present nothing of relevance. “Instead, [they] have simply asserted that the

council’s evidentiary proof is lacking. In the absence of any

reason to doubt it, the city’s expert judgment should be

credited.” Pap’s A.M., 529 U.S. at 298 (plurality opinion);

see also Alameda Books, 535 U.S. at 438-39 (plurality

opinion) (“If plaintiffs fail to cast direct doubt on [the city’s]

rationale, either by demonstrating that the municipality’s

evidence does not support its rationale or by furnishing

evidence that disputes the municipality’s factual findings,

the municipality meets the standard set forth in Renton.”).

We also reject plaintiffs’ argument that the Ordinance

is not sufficiently narrow. See Alameda Books, 535 U.S. at

434 (plurality opinion) (explaining that a content neutral

ordinance designed to serve a substantial government

interest must still leave “reasonable alternative avenues of

communication.”); Pap’s A.M., 529 U.S. at 301-02 (plurality

opinion) (noting that the fourth factor of the O’Brien test is

“that the restriction is no greater than is essential to the

furtherance of the government interest”). We have previously held that similar hour restrictions and open-booth

requirements are narrowly tailored, and we stick to those

rulings here. Pleasureland Museum, Inc., 288 F.3d at 1004

(“[W]e have repeatedly held that regulations like the Open

Booth Restrictions leave open ample alternative channels

of communication.”) (citations omitted); Schultz, 228 F.3d at

846 (explaining that an hour restriction similar to that of

this case was “not ‘substantially broader than necessary,’

even if more restrictive than absolutely necessary”) (quoting

Ward v. Rock Against Racism, 491 U.S. 781, 800 (1989)).
Nos. 05-2225, 05-2287 & 05-2288 11

3. Prior Restraint/Prompt Judicial Review

Plaintiffs argue that the Ordinance is invalid because

it does not demand prompt judicial review of a decision to

deny, suspend, or revoke a license. Plaintiffs also concede

that this argument is foreclosed by our decision in Graff

v. City of Chicago, but nevertheless ask us to reconsider. 9

F.3d 1309 (7th Cir. 1993) (en banc) (holding that common

law review of a licensing decision was sufficient). We see no

reason to reconsider Graff on this record, especially where

the Ordinance requires continuous operation under a

provisional license until the culmination of judicial review.

See also City of Littleton v. Z.J. Gifts D-4, L.L.C., 541 U.S.

774, 781-84 (2004) (explaining that ordinary judicial review

of a licensing decision was sufficient where the ordinance

was content neutral and only conditioned operation on

neutral, nondiscriminatory criteria).

B. Fourth Amendment and Indiana Law

Plaintiffs argue that the Ordinance allows for searches in

violation of the Fourth Amendment and that the Ordinance

is preempted by Indiana Law. Both of these arguments are

waived because the plaintiff failed to raise them before the

district court. See Estremera v. United States, 442 F.3d 580,

587 (7th Cir. 2006) (“arguments not raised in the district

court are waived on appeal”) (quoting Belom v. National

Futures Ass’n, 284 F.3d 795, 799 (7th Cir. 2002)). When

moving for summary judgment, the City defended an

inspection provision in the Ordinance against a possible

Fourth Amendment challenge by arguing first, that sexually oriented businesses have no reasonable expectation of

privacy in the public areas of their premises during business hours; and, second, that if plaintiffs were able to

establish a privacy interest implicating the Fourth Amendment that the businesses were “closely-regulated indus-
12 Nos. 05-2225, 05-2287 & 05-2288

3 The inspection provision states:

(A) Sexually oriented business operators and sexually

oriented business employees shall permit officers or agents of

the City of Gary who are performing functions connected with

the enforcement of this Chapter to inspect the portions of the

sexually oriented business premises where patrons

are permitted, for the purpose of ensuring compliance with

this Chapter, at any time the sexually oriented business is

occupied by patrons or open for business.

(B) The provisions of this Section do not apply to areas of an

adult motel which are currently being rented by a customer

for use as a permanent or temporary habitation.

tries” for which no warrant is necessary.3 See New York v.

Burger, 482 U.S. 691, 702-03 (1987) (applying the “closelyregulated industry” exception to the Fourth Amendment).

In response, the plaintiffs simply assumed that the inspection provision implicated the Fourth Amendment, and only

argued that sexually oriented businesses are not closelyregulated industries— despite the fact that the Ordinance

only allows inspections in areas open to the public during

business hours.

As the district court explained, plaintiffs “simply ignore[d]

the law’s clear mandate” that the inspection provision did

not implicate a privacy interest. Finding persuasive the

City’s unrebutted argument on this point, the district court

did not address the plaintiffs’ argument that adult businesses were not “closely-regulated industries.” Plaintiffs’

failure to argue the existence of a privacy interest implicated by the Ordinance below waives the issue on appeal. In

any event any concerns about privacy violations are abated

by the language of the statute that limits inspection to

assuring compliance with the specific requirements of the

Ordinance—that is the open booth requirement, the hours

of operation restrictions, the prohibition of physical contact,

and other requirements as specifically listed in the Ordi-
Nos. 05-2225, 05-2287 & 05-2288 13

nance. Ordinance at § 7(A). In other words, as counsel

assured the panel at oral argument, officers or agents of the

City cannot enter non-public areas of the premises, cannot

enter when the business is closed to the public, cannot

remove anything from the premises, cannot take pictures or

videos, cannot ask patrons to disclose their names, or do

anything other than check for compliance with the requirements of the Ordinance. (Oral argument at 25-30 min).

Accordingly, we will not disturb the district court’s ruling that the Ordinance does not violate the Fourth Amendment.

Plaintiffs also attempt to raise a preemption argument

relying on Indiana law. Before the plaintiffs filed their brief

in the district court, the Indiana Attorney General asked for

permission, which was granted, to file an amicus brief with

the district court addressing the issue “that state alcoholic

beverage statutes preempt local regulation of adult entertainment establishments.” See Ind. Code § 7.1-3-9-6 (prohibiting certain local interference with liquor licenses provided

by the state).

The plaintiffs then filed their brief opposing summary

judgment without raising this issue. The very next day

the Indiana Attorney General informed the district

court that no amicus brief would be filed because no state

law issues had been raised by the briefing.

Plaintiffs now attempt to argue that the Ordinance is

preempted by Indiana law. But their earlier approach in the

district court has deprived us of an analysis by the magistrate judge (and the views of the Indiana Attorney General),

and, therefore, plaintiffs have waived the issue. See

Estremera, 442 F.3d at 587.

III. CONCLUSION

Accordingly, the grant of summary judgment in favor of

the City of Gary is AFFIRMED.
14 Nos. 05-2225, 05-2287 & 05-2288

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—10-11-06