Court Opinion

ID: 9614250
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:23:47.334467+00
Date Added: 2024-06-11T18:03:34.627743
License: Public Domain

CLAY, Circuit Judge,
dissenting in part and concurring in part.
Kenton County Ordinance No. 451.12 purports to address the “secondary effects” of adult entertainment establishments by imposing a licensing scheme that requires businesses to apply for business licenses, pay annual fees, and abide by restrictions on the conduct of employees. I respectfully dissent from the majority opinion because Ordinance No. 451.12 is insufficiently narrowly-tailored to survive intermediate scrutiny, fails to provide prompt judicial review, and imposes excessive licensing fees. However, I agree with the majority’s analysis of the Contracts Clause issue in Section IV of its opinion.
I.
Kenton County Ordinance No. 451.12 attempts to target the negative “secondary effects” of adult entertainment establishments such as prostitution and other illicit sexual conduct by requiring entertainers to “maintain a minimum distance of five (5) feet from areas on the establishment’s premises being occupied by customers, for a minimum of one (1) hour after the entertainer appears semi-nude on the establishment’s premises.” Ordinance No. 451.12 § 14(a)(10).
A restriction on adult entertainment that affects protected expression and is designed to decrease the secondary effects of such expression is subject to intermediate scrutiny. City of Los Angeles v. Alameda Books, Inc., 535 U.S. 425, 448, 122 S.Ct. 1728, 152 L.Ed.2d 670 (2002) (Kennedy, J., concurring).1 The interme*506diate scrutiny test is governed by United States v. O’Brien, 391 U.S. 367, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968). According to the O’Brien court, “a government regulation is sufficiently justified if it is within the constitutional power of the Government; if it furthers an important or substantial governmental interest; if the governmental interest is unrelated to the suppression of free expression; and if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.” O’Brien, 391 U.S. at 377, 88 S.Ct. 1673. Accord Hamilton’s Bogarts, Inc. v. Michigan, 501 F.3d 644, 653 (6th Cir.2007). Although legislatures may regulate adult entertainment establishments in order to address secondary effects such as crime and prostitution, this regulation must be crafted so that “the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.” O’Brien, 391 U.S. at 377, 88 S.Ct. 1673.
Ordinance No. 451.12 falls far short of this objective. The ordinance forbids entertainers from coming within five feet of customer-occupied areas for an hour after the entertainers’ performances. As the majority notes, this provision would “leave few, if any, gaps during which entertainers who dance semi-nude on a given night could commingle with customers.” Maj. Op. at 492. At the very least it would “reduce both the number of entertainers available to mingle and the amount of time they can spend mingling.” Maj. Op. at 492. One cannot credibly assert that this stringent restriction leaves “the quantity and accessibility of speech substantially intact.” Alameda Books, 535 U.S. at 449-50, 122 S.Ct. 1728 (Kennedy, J., concurring).
As a result of the ordinance’s restrictions, patrons and entertainers are prohibited not only from physical contact or solicitation of prostitution, but also from conversation on any subject. Although the County has a legitimate interest in decreasing the incidence of prostitution, it may not go to any length to achieve this goal. Regardless of whether entertainers and customers wish to continue to develop the erotic fantasy created on stage or whether they wish to talk about an upcoming political election or any other topic, Ordinance No. 451.12 severely limits their ability to do so. An ordinance that restricts interaction to such a degree that the most viable options for conversation between patrons and entertainers include communication “via cellular phone, closed-circuit television, or electronic chat,” Maj. Op. at 493, clearly decreases and substantially interferes with the quantity and accessibility of speech.
The contradictions between the majority’s discussion of the effectiveness of the regulation and its discussion of the narrow-tailoring requirement reveal the fatal weakness in Ordinance No. 451.12’s regulatory scheme. Although the language of the ordinance highlights the need to prevent illicit sexual contact and prostitution, the regulation purports to attempt to decrease the incidence of prostitution by decreasing the opportunities for entertainers and customers to talk to each other. (J.A. 136, 141 (a drafter of the ordinance discussing the desire to decrease the “opportunity for negotiations”).) Thus, the potential effectiveness of this ordinance in deterring prostitution is directly proportional to its effectiveness at foreclosing opportunities for speech. The Supreme Court has expressly stated that a regulation that works in this way is unconstitu*507tional. In his concurring opinion in Alameda Books, Justice Kennedy repeatedly emphasized that “[a] city may not assert that it will reduce secondary effects by reducing speech in the same proportion.” Alameda Books, 535 U.S. at 449, 122 S.Ct. 1728 (Kennedy, J., concurring). See id. at 450, 122 S.Ct. 1728 (Kennedy, J„ concurring) (“It is no trick to reduce secondary effects by reducing speech or its audience; but a city may not attack secondary effects indirectly by attacking speech.”).
A key factor in many of the ordinances that courts have determined to be narrowly tailored is the ordinances’ regulation of conduct and not the expression of the entertainers. For example, in City of Erie v. Pap’s A.M., 529 U.S. 277, 120 S.Ct. 1382, 146 L.Ed.2d 265 (2000), the Supreme Court upheld an ordinance that required dancers to wear pasties and G-strings while performing. The Court noted that nudity itself was not the message being expressed in nude dance. Pap’s A.M., 529 U.S. at 289, 120 S.Ct. 1382. Therefore, the Court held that the restrictions contained in the ordinance were narrowly tailored to the government’s interest in public health and safety because “[t]he ordinance regulates conduct, and any incidental impact on the expressive element of nude dancing is de minimis.” Id. at 301, 120 S.Ct. 1382.
Under some circumstances, this Court has upheld statutes that require buffer zones between semi-nude entertainers and patrons while the entertainers are dancing. In DLS, Inc. v. City of Chattanooga, 107 F.3d 403 (6th Cir.1997), the ordinance at issue required dancers to remain six feet away from customers during performances. Id. at 408. The buffer zone was found to be narrowly tailored to address disease transmission and violent crime concerns. Id. at 413. However, the ordinance challenged in DLS was found to be narrowly tailored because it addressed problems that occurred due to the near nudity of dancers during the up-close performances, such as dances involving the licking of whipped cream from dancers’ bodies and the potentially violent propensities of men desiring to be in close proximity with near-nude dancers. Id. These concerns are not at issue here since the entertainers are fully clothed while conversing with patrons.
The effect of buffer zones on the ability to converse with patrons was not discussed in DLS; however, it was at issue in Deja Vu of Nashville, Inc. v. Metropolitan Government of Nashville and Davidson County, Tennessee, 274 F.3d 377 (6th Cir.2001), in which this Court upheld an ordinance that imposed a three-foot buffer zone between entertainers and customers during performances. The plaintiffs contended that the ordinance violated entertainers’ First Amendment rights by limiting conversation, but, despite its recognition of entertainers’ rights to free expressive association, the court upheld the buffer zone in part because customers and entertainers could still converse from a three-foot distance. Id. at 396. The court held that the governmental interest in preventing prostitution and the spread of disease through transfer of bodily fluids justified the distance requirement between customers and semi-nude performers. Id. at 396-97. In the instant case, the provision restricting patron-entertainer interaction goes farther than the regulation at issue in Deja Vu of Nashville by requiring fully-clothed entertainers who are not dancing to remain five feet away from customer-occupied areas, well outside of a range within which normal conversation could occur.
As demonstrated by DLS and Deja Vu of Nashville, ordinances that impose a distance requirement while an entertainer is *508performing semi-nude are on firmer constitutional ground than the ordinance at issue in this case. The ordinances previously upheld by this Court targeted the real danger of immediate illicit sexual contact instead of targeting speech that purportedly could lead to future prostitution. The ordinances involved regulation of physical contact which is incidental to the entertainer’s erotic message. To the extent physical contact is a part of the erotic message, the ordinances attempted to narrowly tailor restrictions to the goal of preventing illicit sexual contact by prohibiting contact while nude or semi-nude entertainers are dancing. However, Ordinance No. 451.12’s effective prohibition on virtually all communication, including innocuous conversations, is not narrowly tailored to these goals.
II.
Ordinance No. 451.12’s licensing scheme acts as an unconstitutional prior restraint on protected speech. “A ‘prior restraint’ exists when the exercise of a First Amendment right depends on the prior approval of public officials.” Deja Vu of Nashville, Inc., 274 F.3d at 400. This Court has recognized that “any system of prior restraint carries a heavy presumption against its validity.” Id. at 391. “Licensing schemes in a city ordinance regulating sexually oriented businesses constitute a prior restraint that must incorporate at least the first two Freedman [v. Maryland, 380 U.S. 51, 59, 85 S.Ct. 734, 13 L.Ed.2d 649 (1965)] procedural safeguards” in order to avoid being deemed an impermissible prior restraint. Id. at 400-01. The first Freedman safeguard requires the issuance of a license within a “specified and reasonable time period during which the status quo is maintained.” Deja Vu of Cincinnati, L.L. C. v. Union Township Board of Trustees, 411 F.3d 777, 786 (6th Cir.2005) (en banc) (quoting FW/ PBS Inc. v. City of Dallas, 493 U.S. 215, 228, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990)). The second Freedman safeguard requires the assurance of a “prompt final judicial decision” when an applicant appeals an adverse licensing action. Freedman, 380 U.S. at 59, 85 S.Ct. 734. The Supreme Court has recently clarified that this second factor will in most cases be satisfied by allowing applicants to appeal license denials through a state’s ordinary judicial review process. City of Littleton v. Z.J. Gifts D-4, L.L.C., 541 U.S. 774, 124 S.Ct. 2219, 159 L.Ed.2d 84 (2004). Thus, in order for a licensing ordinance regulating sexually oriented businesses to be constitutional, it must ensure the maintenance of the status quo until a prompt final judicial decision is reached regarding an adverse licensing decision. Deja Vu of Cincinnati, 411 F.3d at 786. Accord Odle v. Decatur County, Tennessee, 421 F.3d 386, 389 (6th Cir.2005).
Kenton County Ordinance No. 451.12 acts as an unconstitutional prior restraint on speech inasmuch as it does not allow for prompt judicial review of license suspensions and revocations and does not provide for the maintenance of the status quo in some cases. Section 17 governs hearings regarding violations of the ordinance. Ordinance No. 451.12 § 17. These hearings are distinct from hearings governed by Section 16 to determine whether points should be assessed for ordinance violations. Section 17 provides that when a License Inspector receives credible information regarding a violation of the ordinance she must schedule a hearing to occur ten to thirty days later. After the hearing, the Hearing Officer must issue an order “dismissing] the complaint, or suspending] or revoking] a license or permit previously issued, or renewing] or refusing] to renew a license previously issued.” § 17(b)(3). However, no time limits *509are placed on the issuance of this order, and as a result, the administrative decision can be delayed for an indeterminate period. In addition, a party may only seek judicial review after receiving the decision of the Hearing Officer. § 17(d). Thus, license holders may wait an indeterminately long time for an administrative decision.
License holders are also deprived of the maintenance of the status quo under Ordinance No. 451.12. Section 19 of the ordinance states that the status quo will be maintained while an applicant seeks judicial review, but the ordinance makes no such provision for license holders seeking to renew their licenses or defending against alleged licensing infractions. Because the ordinance does not provide prompt judicial review to all license holders and does not maintain the status quo for those license holders who seek judicial review, Ordinance No. 451.12 does not contain the first Freedman safeguard and should thus be declared unconstitutional.
In its discussion of the constitutionality of Ordinance No. 451.12’s judicial review provisions, the majority claims that the ordinance is ambiguous regarding the rights of licensees when licenses are suspended or revoked. The majority also concedes that the omissions causing this “ambiguity” were probably intentional. Maj. Op. at 497. The majority attempts to support its contention that the status quo is maintained during the review process for all categories of licensees by invoking the government’s unclear and entirely equivocal concessions at oral argument. Maj. Op. at 498. This Court has expressly stated that “assurances offered by the relevant local authorities that the ordinance will not be put to [unconstitutional] effect in the future” are not sufficient to save an ordinance that is unconstitutional on its face. Odle, 421 F.3d at 397. See Nightclubs, Inc. v. City of Paducah, 202 F.3d 884, 891 n. 6 (6th Cir.2000) (“First Amendment rights would rest on a very thin reed indeed if the promises of a city attorney at oral argument were alone sufficient to authoritatively limit the meaning of an ordinance.”). When statutes have a possible constitutional and unconstitutional interpretation, courts are to give them a reasonable interpretation in order to save them from unconstitutionality. Odle, 421 F.3d at 396. But there are no competing reasonable interpretations in this case, and to insert language in the statute in order to rewrite it would go beyond this Court’s role of interpretation. See Eubanks v. Wilkinson, 937 F.2d 1118, 1122 (6th Cir.1991) (“[T]he general federal rule is that courts do not rewrite statutes to create constitutionality.”). Thus, Ordinance No. 451.12 should be declared unconstitutional because it fails to provide prompt judicial review and the maintenance of the status quo for license holders faced with the revocation or suspension of their licenses.
III.
Kenton County Ordinance No. 451.12 requires adult entertainment establishments as well as their employees to procure licenses. According to the ordinance, the business license fee is $3000 annually, with a 50% refund to be made if the license is denied. Additionally, managers and entertainers must pay $155 annually for individual licenses. Licenses are to be issued to applicants who can satisfy a background check and submit a completed application with the required fees. The record demonstrates that these license fees are unconstitutionally excessive.
Generally, a state may not impose a fee upon the exercise of a constitutionally guaranteed right. “A license tax applied to activities guaranteed by the First Amendment would have [a] ... destructive effect.” Murdock v. Pennsylvania, *510319 U.S. 105, 113, 63 S.Ct. 870 (1943). Despite this rule, the Supreme Court has held that a license fee may be imposed as long as the fee is “a nominal one, imposed as a regulatory measure and calculated to defray the expenses of protecting those on the streets and at home against the abuses of solicitors.” Id. at 116, 63 S.Ct. 870. As this Court has explained, “an ordinance requiring a person to pay a license or permit fee before he can engage in a constitutionally protected activity does not violate the Constitution so long as the purpose of charging the fee is limited to defraying expenses incurred in furtherance of a legitimate state interest.” Northeast Ohio Coalition for the Homeless v. City of Cleveland, 105 F.3d 1107, 1109-1110 (6th Cir.1997). The fee will be upheld so long as it is “reasonably related to the expenses incident to the administration of the ordinance.” Id. at 1110.
The Eleventh Circuit has applied this rule specifically in the context of adult entertainment establishments and concluded that “a licensing fee on adult entertainment establishments ... must be reasonably related to recouping the costs of administering the licensing program.” Fly Fish, Inc. v. City of Cocoa Beach, 337 F.3d 1301, 1315 (11th Cir.2003). Accordingly, “it is the City’s burden to establish that its licensing fee is justified by the cost of processing the application.” Id. The record must support the contention that the city has made reasonable efforts to ascertain the costs associated with the licensing program.
The Supreme Court has further noted that the amount of any fee cannot be tied to the content of speech. Importantly, the Court was confronted with an ordinance that required speakers to pay a fee in order to use public lands. Forsyth County v. Nationalist Movement, 505 U.S. 123, 134, 112 S.Ct. 2395, 120 L.Ed.2d 101 (1992). In Forsyth County the fee increased depending on “the amount of hostility likely to be created by the speech based on its content.” Id. Those speakers with more controversial messages would have to pay more because they would require increased police presence. Id. The Court determined that such a rule was unconstitutional because it increased the fee a speaker had to pay based on the content of the speech. Id. at 136-37, 112 S.Ct. 2395. As Justice Kennedy reiterated in Alameda Books:
A city may not, for example, impose a content-based fee or tax. See Arkansas Writers’ Project, Inc. v. Ragland, 481 U.S. 221, 230, 107 S.Ct. 1722, 95 L.Ed.2d 209 (1987) (“[Ojfficial scrutiny of the content of publications as the basis for imposing a tax is entirely incompatible with the First Amendment’s guarantee of freedom of the press”). This is true even if the government purports to justify the fee by reference to secondary effects.
Alameda Books, 535 U.S. at 445, 122 S.Ct. 1728 (Kennedy, J., concurring).
In the instant case, Kenton County has given a detailed explanation of its rationale for the license fees. The County’s cost estimates include an initial cost of over $15,000 and an annual cost of over $2,500 for the creation and maintenance of a database for the licensing scheme. The County also claims that background cheeks will cost $150 per person because of an extensive investigation of each applicant. However, the County has not accounted for the difference between this cost and the substantially lower costs of background checks in nearby jurisdictions. In addition, the County has given no basis for its retention of fifty percent of the license fee for those applicants who are denied licenses. Thus, the County has not shown that the fee is based upon its reasonable costs *511for the administration of the licensing program. Northeast Ohio Coalition for the Homeless, 105 F.3d at 1110.
The majority opinion attempts to address the issue of excessive licensing fees and remands to the district court for further consideration of whether these fees are narrowly tailored to the purpose of reducing the secondary effects of adult entertainment. The majority claims that “there are genuine issues of material fact that preclude granting summary judgment to the County.” Maj. Op. at 503. Yet there is already evidence that the County used exorbitant cost estimates to justify levying high fees on license applicants and no countervailing evidence on the record to suggest that the amount of the fees are justifiable. These excessive costs render the licensing fee portion of the statute unconstitutional, and we should so hold.
CONCLUSION
Kenton County Ordinance 451.12 substantially diminishes the quantity and accessibility of protected expression, imposes a prior restraint on the exercise of protected expression without the opportunity for prompt judicial review, and imposes excessive fees on license applicants. As a result, this ordinance should be held to be unconstitutional.

. Justice Kennedy’s concurring opinion has precedential authority inasmuch as his opinion concurred in the judgment of the plurality on the narrowest basis. See Marks v. United *506States, 430 U.S. 188, 193, 97 S.Ct. 990, 51 L.Ed.2d 260 (1977). Accord Triplett Grille, Inc. v. City of Akron, 40 F.3d 129, 132 (6th Cir.1994).