In the

United States Court of Appeals

For the Seventh Circuit

No. 05-1286

NEW ALBANY DVD, LLC,

Plaintiff-Appellee,

v.

CITY OF NEW ALBANY, INDIANA,

Defendant-Appellant.

Appeal from the United States District Court for the

Southern District of Indiana, New Albany Division.

No. 4:04-cv-00052-SEB-WGH—Sarah Evans Barker, Judge.

ARGUED SEPTEMBER 26, 2005—DECIDED SEPTEMBER 10, 2009

Before EASTERBROOK, Chief Judge, and RIPPLE and

ROVNER, Circuit Judges.

EASTERBROOK, Chief Judge. New Albany DVD operates

an adult store in New Albany, Indiana. It does not provide live or recorded entertainment on site. Customers

buy books, magazines, or videos, which they read or

watch at home. Plaintiff bought land for this operation

in 2003, secured all necessary licenses, and renovated the

site’s store to meet its requirements. The land was

properly zoned for the business it proposed to operate. A
2 No. 05-1286

final inspection was scheduled for February 19, 2004. But

the City refused to carry out that inspection, so plaintiff

could not obtain the certificate of occupancy needed to

open its doors.

That very day the City Council enacted a six-month

moratorium on new adult businesses. In March 2004

the Council amended the zoning rules to forbid any

“sexually oriented business” at plaintiff’s site. (This

phrase includes a book or video retailer if more

than 30% of its inventory meets the City’s definition of

“sexually oriented”; plaintiff’s inventory qualifies.) The

law prohibits a sexually oriented business from

operating within 1,000 feet of a church or any tract

zoned for residential use. Plaintiff’s store is 175 feet

from the nearest church and 115 feet from the site of a

proposed residential building.

In this suit under 42 U.S.C. §1983, plaintiff contends

that New Albany’s ordinance violates the first amendment (applied to the states by the fourteenth) because it

is based on the books’ and videos’ content or subject

matter; because it is inadequately justified by proof of

adverse secondary effects and therefore cannot find

shelter under the holdings of Los Angeles v. Alameda

Books, Inc., 535 U.S. 425 (2002), and Renton v. Playtime

Theatres, Inc., 475 U.S. 41 (1986); and because it is not

narrowly tailored to the City’s justification. Plaintiff

also argues that, as a matter of Indiana law, it is entitled

to operate for two years as a nonconforming use,

because the renovations were completed before the

zoning ordinance was amended and the store would
No. 05-1286 3

have opened before the zoning change had the City

conducted the final inspection on schedule. The district

court held that the ordinance likely is unconstitutional

because not narrowly tailored to its purpose. 362 F. Supp.

2d 1015 (S.D. Ind. 2005). The court also concluded that

Indiana law entitles plaintiff to the two-year grace period. An injunction issued in January 2005 allowing

plaintiff to open its store.

The parties have devoted considerable attention to

the state-law question on appeal, but it has no continuing import because the two years have expired.

Plaintiff has been able to operate its store under the

protection of the district court’s holding that the zoning

rules likely violate the Constitution; it makes no difference whether state law also would have allowed

the store to operate for two years.

The injunction should not have issued, however—at

least, it should not have issued on the ground that the

district court gave. Although Alameda Books and Playtime

Theatres hold that regulation of adult businesses must

be tailored to the justification for the regulation, these

decisions also sustain laws that are no better tailored, and

may well be more restrictive, than New Albany’s. See

also, e.g., Richland Bookmart, Inc. v. Knox County, 555

F.3d 512 (6th Cir. 2009); Fantasyland Video, Inc. v. San Diego,

505 F.3d 996 (9th Cir. 2007); Matney v. Kenosha, 86 F.3d 692

(7th Cir. 1996). See also Ben’s Bar, Inc. v. Somerset, 316

F.3d 702 (7th Cir. 2003). Plaintiff does not contend that a

1,000-foot dispersal requirement leaves too little space

for it (and other adult establishments) to operate in por-
4 No. 05-1286

tions of the City suited to bookstores. See Illinois One

News, Inc. v. Marshall, 477 F.3d 461 (7th Cir. 2007). New

Albany maintains, and plaintiff does not deny, that more

land is available for adult establishments than is put off

limits by this ordinance.

The district court faulted New Albany for banning

adult establishments within 1,000 feet of land zoned for

housing and suggested that a more appropriately

tailored ordinance would limit the rule to occupied

residences. But there is no doubt that plaintiff’s premises

are within 200 feet of a church, so it is unaffected by

the distance-to-residential-land rule. It is unaffected, for

that matter, by the difference between a 1,000-foot dispersal rule and a 250-foot dispersal rule. The district

judge next suggested that New Albany allow the bookstore to be near a church but require it to close while

services are being held. Such a privileged position for

religious worship would cause problems of its own, see

Larkin v. Grendel’s Den, Inc., 459 U.S. 116 (1982), unless

there were similar closing requirements when schools

and other secular establishments were open.

No appellate court has required a city to adopt a rule

of the kind that the district court thought necessary.

“Narrow tailoring” does not mean that the ordinance

must be the least restrictive possible regulation. See Ward

v. Rock Against Racism, 491 U.S. 781 (1989). When some

regulation is justified, a city has considerable discretion

on matters of detail. The sort of zoning rule that

New Albany enacted has been too widely used, and too

often sustained, to be upset as “not narrowly tailored.”
No. 05-1286 5

This does not mean, however, that the injunction must

be reversed, for a prevailing litigant is entitled to defend

its judgment on any ground preserved in the district

court, even if the district judge rejected that argument.

Plaintiff defends its judgment with the argument that

New Albany has not established that book and video

stores offering only take-home items cause any

untoward secondary effects. The Supreme Court in

Alameda Books and Playtime Theatres held that proof of

such effects is essential if municipalities regulate adult

establishments differently from the way they regulate

other similar businesses—for the sellers of books and

movies enjoy constitutional protections that sellers of

snow shovels, shoes, and parakeets do not.

In the district court, New Albany relied on studies

conducted in cities across the country. Many of these

show that a concentration of adult businesses in a part

of a city is associated with higher crime and lower

property values nearby. As we observed in Annex Books,

Inc. v. Indianapolis, No. 05-1926 (7th Cir. Sept. 3, 2009),

however, these studies principally reflect the effects of

adult businesses that offer live entertainment or

peep shows; they do not necessarily demonstrate that

businesses selling books and DVDs have the same consequences for morals offenses (prostitution, lewd exhibition) or other kinds of crime. New Albany’s own

expert “conceded that he knows of no research that

shows . . . effects for various subclasses of businesses,”

such as plaintiff’s retail-only store. 362 F. Supp. 2d at 1021.

Recognizing that prior studies had lumped bookstores,

peep shows, and exotic dancing establishments together,
6 No. 05-1286

New Albany offered some anecdotal justifications in

the district court. It cited testimony in some earlier cases

by people complaining about pornographic litter near

adult bookstores, and it suggested that these stores

may expose their customers to thefts. The former line of

argument rests on the fact that some customers are

bound to throw away wrappers, which may have

images inappropriate for children. The “theft” line of

argument starts with the premise that many customers

of adult establishments pay in cash, which makes them

a target for thieves.

The theft argument is paternalistic. Why can’t customers

make their own assessments of risk? The norm under

the first amendment is that government must combat

harm to readers with disclosures rather than prohibitions

of speech. See, e.g., Virginia State Board of Pharmacy v.

Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976);

American Booksellers Ass’n v. Hudnut, 771 F.2d 323 (7th

Cir. 1985), aff’d mem., 475 U.S. 1001 (1986). Just as there

is no hecklers’ veto over speech, there is no “thieves’

veto.” The police must protect the readers from the hecklers or thieves, rather than ease their workload by forbidding the speech.

Anyway, if an adult bookstore located 200 feet from

a church attracts thieves, won’t a bookstore located

1,500 feet from a church do the same? Maybe the City’s

concern is for the worshippers, who may become the

thieves’ targets when video buyers are unavailable. But

if that’s so, the City needs some evidence that thefts

from passers by are a serious problem—and a more
No. 05-1286 7

severe problem for outlets near churches than for

outlets father away. As the plurality opinion in Alameda

Books put it:

[A] municipality [cannot] get away with shoddy

data or reasoning. The municipality’s evidence

must fairly support the municipality’s rationale

for its ordinance. If plaintiffs fail to cast direct

doubt on this 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 [Playtime Theatres]. If plaintiffs succeed in

casting doubt on a municipality’s rationale

in either manner, the burden shifts back to the

municipality to supplement the record with evidence renewing support for a theory that justifies

its ordinance.

535 U.S. at 438–39. New Albany has not supplied evidence

that “fairly supports” the idea that adult bookstores

located near churches or residences attract thieves who

then steal from the local denizens as well as the stores’

customers. We don’t say that the City will be unable

to produce this evidence, but the lack of good evidence

to this effect in the record—coupled with evidence implying that take-home adult stores do not have adverse

secondary effects—is enough to require an evidentiary

hearing. Our opinion in Annex Books expands on this

reasoning, which need not be repeated here.

Pornographic litter is the City’s other principal basis. The

printed word often is tossed away, but litter-control
8 No. 05-1286

justifications have fared poorly as reasons to regulate

pamphlets and other written materials. Compare

Schneider v. State, 308 U.S. 147 (1939), with Los Angeles

v. Taxpayers for Vincent, 466 U.S. 789, 808–10 (1984).

Perhaps smutty litter should be judged by different

standards, but first it is necessary to know how serious

the problem is. That one pedodontist in Spokane complained about litter from one bookstore, see World Wide

Video of Washington, Inc. v. Spokane, 368 F.3d 1186, 1197 (9th

Cir. 2004), does not do much to establish that this is a

serious problem in New Albany (or even in Spokane).

The volume of complaints exceeds the number of

genuine problems. There are thousands of adult bookstores; it should be easy to find out how much litter

they generate, how much of this litter falls into the

hands of minors, and whether this is a materially

greater problem when one store carries 40% adult books

than when lots of stores carry 10% apiece. (Many a convenience store, newsstand, or video rental outlet has an

adult nook, which escapes regulation under New

Albany’s statute.) Plaintiff has been in operation for a

while now; is sexually themed litter a problem near

its store?

If litter is a problem, can it be curtailed without an

equal curtailment of speech? Justice Kennedy, whose

vote was essential to the judgment in Alameda Books, and

whose views therefore constitute the holding of that

case, stated that the reduction in adverse secondary

effects may not be achieved just by curtailing speech. “A

city may not assert that it will reduce secondary effects by

reducing speech in the same proportion.” 535 U.S. at 449.

New Albany’s “litter” justification comes perilously
No. 05-1286 9

close to this, because the amount of pornographic

litter may depend linearly on the volume of adult

materials sold. The only way to cut litter by 10% may be

to reduce sales by 10%, and such a justification would

fail under Justice Kennedy’s approach.

New Albany may be able to resuscitate its anti-litter

rationale by showing that the zoning law moves litter to

where children (and sensitive pedodontists) won’t see it.

Placing businesses where they will be equally productive

but less harmful is a lawful objective of zoning. Alameda

Books, 535 U.S. at 446–47 (Kennedy, J., concurring). But,

for this justification to work, it will be necessary to establish (a) how much sex-oriented litter an adult bookstore generates; (b) who is likely to see that litter in the

parts of New Albany where adult bookstores are

allowed to operate; and (c) how much adult litter will

remain in New Albany’s central business area (generated

by adult corners of other businesses) if plaintiff is exiled

to an industrial district or highway. Otherwise evidence about litter cannot support the sort of regulation

that New Albany has enacted.

The district court needs to take evidence and apply

intermediate scrutiny to New Albany’s ordinance. The

case is remanded for proceedings consistent with this

opinion and Annex Books. The injunction should remain

in place pending the outcome of this hearing.

9-10-09