Opinion ID: 1853815
Heading Depth: 1
Heading Rank: 1

Heading: licensing

Text: Central raises two primary issues regarding Ordinance No. 2337, the licensing ordinance. Central argues that the fees imposed for licenses to operate the motion-picture booths are confiscatory in nature. Central's second complaint regarding Ordinance No. 2337 is that the official charged with executing the provisions of that ordinance is vested with too much discretion in that capacity and that this problem is aggravated by the ordinance's lack of procedural guarantees of prompt judicial review of the official's actions. The First Amendment to the Federal Constitution provides: Congress shall make no law ... abridging the freedom of speech, or of the press. The fundamental right of free speech, which is protected from Federal action by the First Amendment, is afforded the same protection from State action through application of the Due Process Clause of the Fourteenth Amendment. Grosjean v. American Press Co., 297 U.S. 233, 56 S.Ct. 444, 80 L.Ed. 660 (1936). A State may not impose a charge for the enjoyment of a right granted by the Federal Constitution. Murdock v. Pennsylvania, 319 U.S. 105, 63 S.Ct. 870, 87 L.Ed. 1292 (1943). However, a governmental authority is not strictly forbidden from imposing some financial burden incidental to the exercise of First Amendment rights. Grosjean, supra . Licensing fees levied on practices or businesses the nature of which revolves around the exercise of First Amendment rights will withstand a constitutional attack only if they are nominal and imposed only as a regulatory measure to defray the expenses of policing the activities in question. Murdock, supra . While Central concedes that the City may impose a licensing fee to defray the cost of policing the operation of amusement devices, it nevertheless maintains that the fee may not exceed the expenses for what it calls the routine processing. Presumably, Central is referring to the bureaucratic mechanics involved in the actual issuance of a license and concludes that all expenses cease once a license has been issued. We are not convinced that the Supreme Court had in mind such a narrow construction of the concept of policing in Murdock, supra . Indeed, the closing language in Murdock, where the Court once again refers to the range of expenses which may be defrayed by the licensing fees, includes as permissible the cost of protecting those on the streets and at home against the abuses of solicitors. [7] 319 U.S. at 116, 63 S.Ct. at 876, 87 L.Ed. at 1300, citing Cox v. New Hampshire, 312 U.S. 569, 61 S.Ct. 762, 85 L.Ed. 1049 (1941). Central also argues that Minot has failed in its burden of proof that the $300-per-device fee is reasonable. The essence of Central's argument is that because Minot has not yet administered the licensing ordinance over an extended period of time it is impossible for the City to do anything more than speculate that $300 is a reasonable fee. Thus Central concludes that Minot's burden of proving the reasonableness of the fee has not and cannot be met. Central is correct in its assertion that where a city ordinance imposes a fee which threatens to interfere with the right guaranteed by the First Amendment, the burden of proving the reasonableness of that fee falls on the City. NAACP v. Chester, 253 F.Supp. 707 (E.D.Pa. 1966). However, Central does not point to, nor has our own research unearthed, authority to the effect that a city must, before implementing a licensing scheme with a fee, demonstrate what the administrative costs would have been in the past had the licensing scheme been in effect. Moreover, we believe that Central's reliance upon Bayside Enterprises, Inc. v. Carson, 450 F.Supp. 696 (M.D.Fla. 1978), to support its contention is misplaced. In Bayside, the licensing fee in question was struck down not because it was speculative, but because the City of Jacksonville's projected costs of enforcing a newly enacted licensing ordinance for adult bookstores were unreasonable. Thus, regarding the licensing fee at issue in the instant case, we are left to determine only its reasonableness. Testimony at trial by the Minot city manager indicates that the cost of issuing a license required by Ordinance No. 2337 would generally be the same as the cost for issuing any other license required by law. However, as has already been pointed out, licensing-fee schedules such as the one at issue here may be designed to defray not only the cost of issuing the license but also the reasonable cost of policing the activity being licensed. It is beyond question that the police departments of North Dakota cities stand on the front line regarding enforcement of Chapter 12.1-27.1, N.D.C.C., the State Obscenity Control Act. It is further indisputable that with the presence in the city of amusement devices used for exhibiting sexually explicit films, the level of vigilance required for the enforcement of the Obscenity Control Act is substantially increased. Further, it does not defy reason to conclude that any expenses associated with increased enforcement should be borne by those who profit from the devices rather than being spread among the taxpayers or other owners of more innocuous amusement devices. These propositions constitute what Minot offers as its basis for the $300-per-device license fee required by Ordinance No. 2337. Minot's chief of police testified at trial as to the anticipated level of law-enforcement activities that will be required, including both the anticipated cost of the routine policing of Central's amusement devices as well as the anticipated cost of proceeding on a suspected violation of the Obscenity Control Act. Using one amusement device such as Central's movie booths as an example, the chief of police testified that even one visit per month by an officer could occupy an hour's time. The chief testified that a regular officer's pay rate is approximately eight to ten dollars per hour. At a pay rate of nine dollars per hour this would amount to approximately $108 per year per amusement device to be expended by the City just to determine whether or not to proceed further on a suspected violation of the Obscenity Control Act. The chief testified that should the investigating officer suspect a violation, the time spent in preparation for court action would be approximately 12 hours per violation. This, of course, would mean another $108 dollars. The chief further testified that his projected figures did not include costs for clerical and other support services related to such enforcement. Central places strong emphasis on the fact that Minot was unable to demonstrate that since the bookstore has opened, additional personnel, equipment, and supplies have been required by the police department which are attributable to the presence of the adult entertainment center. However, the chief of police testified that during this time officers have been called away from other duties or have worked overtime on the increased enforcement duties brought about by the adult entertainment center's presence. Our review of the record does not lead us to the conclusion that the projected costs associated with increased enforcement activities brought on by the particular amusement devices here involved are facially unreasonable. We believe $300 per year does not exceed what Minot could reasonably expect to expend while administering and policing the licensed activity of operating these amusement devices. Central's next argument regarding Ordinance No. 2337 is twofold. Central argues that the licensing ordinance allows for too much discretion on the part of the official charged with the authority to issue a license and that the ordinance fails to provide for a speedy review of an alleged abuse of that discretion. Regarding the first element of this argument we believe that Central has presumed something which simply does not exist. We do not believe that the cases relied upon by Central, as well as other cases dealing with the issue of discretion in a licensing scheme, support Central's contention that Ordinance No. 2337 provides for unfettered discretion on the part of the person responsible for issuing licenses. Those cases can be categorized in one of two ways: (1) the ordinance or regulation at issue expressly provided that the official or officials in whose power the issuance of the license rested could issue a license when they personally believed the activity to be licensed was acceptable; or (2) the ordinance or regulation at issue simply provided, without more, that before the activity desired could be carried out a license must be obtained from a certain official or body of officials. See, e.g., Southeastern Promotions, Ltd. v. Conrad, supra ; Shuttlesworth v. Birmingham, 394 U.S. 147, 89 S.Ct. 935, 22 L.Ed.2d 162 (1969); Freedman v. Maryland, supra ; Kunz v. New York, 340 U.S. 290, 71 S.Ct. 312, 95 L.Ed. 280 (1951); Bayside Enterprises, Inc. v. Carson, supra ; Saia v. New York, 334 U.S. 558, 68 S.Ct. 1148, 92 L.Ed. 1574 (1948). In all of these cases the issuance of the license was not a matter of routine; instead, it encompassed the consideration of facts, the exercise of judgment, and the formation of an opinion by the official or officials responsible for issuing the license in question. In the instant case, our examination of Ordinance No. 2337 leads us to conclude that not only does it not place too much discretion in the hands of the issuing authority; it places no discretion whatever in those hands. Ordinance No. 2337 provides for three conditions to be met before a license will be issued: (1) $300 per amusement device must be paid to the City; (2) identification and location of each amusement device must be provided to the licensing authority; and (3) the license fee is payable on July 1 of each year. We believe that these three conditions constitute narrow, objective, and definite standards and preclude the exercise of discretion on the part of the licensing official. Shuttlesworth v. Birmingham, supra . We will not presume that the city official in Minot who has the responsibility of issuing the licenses will not obey the law, will not do what his duty requires him to do, and will not perform his duty correctly and in good faith. Schell v. Collis, 83 N.W.2d 422 (N.D. 1957); Harding v. City of Dickinson, 76 N.D. 71, 33 N.W.2d 626 (1948). If a license applicant believes that he has been denied a license because the licensing official has introduced an impermissible element of discretion into the licensing process, the proper remedy would lie in an application for a writ of mandamus. Ordinance No. 2337 need not specifically point that out in order to be valid.