Court Opinion

ID: 2996686
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:30:45.057001+00
Date Added: 2024-06-11T15:03:12.712342
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                         ____________

No. 03-1428
G.M. ENTERPRISES, INC.,
                                            Plaintiff-Appellant,
                               v.

TOWN OF ST. JOSEPH, WISCONSIN,
                                           Defendant-Appellee.
                         ____________
           Appeal from the United States District Court
              for the Western District of Wisconsin.
           No. 02-C-0396-S—John C. Shabaz, Judge.
                         ____________
 ARGUED SEPTEMBER 16, 2003—DECIDED NOVEMBER 25, 2003
                         ____________

 Before FLAUM, Chief Judge, and DIANE P. WOOD and
WILLIAMS, Circuit Judges.
  FLAUM, Chief Judge. G.M. Enterprises, Inc., owner of the
Cajun Club of the Town of St. Joseph, Wisconsin, appeals
the District Court’s grant of summary judgment to the
Town upholding the constitutionality of two town ordi-
nances. G.M. argues that Ordinance 2001-02, which
regulates the manner in which nude dancers perform in any
“sexually oriented business,” and Ordinance 2001-03, which
prohibits establishments licensed to sell alcoholic beverages
from permitting nude dancing on the premises, violate the
First and Fourteenth Amendments. We conclude that the
record supports the Town’s claim that the ordinances are
2                                              No. 03-1428

not an attempt to regulate the expressive content of nude
dancing, but that the Town had a reasonable basis for
believing that the ordinances will reduce the undesirable
“secondary effects” associated with sexually oriented
businesses, and therefore, we affirm.

                     I. Background
   In 1999, the Town Board (“Board”) of the Town of
St. Joseph (“Town”), an unincorporated town in Wisconsin,
began to consider whether to regulate sexually oriented
businesses located within its borders. The Board collected
sixteen studies regarding the relationships between sexu-
ally oriented businesses and property values, crime statis-
tics, public health risks, illegal sexual activities such as
prostitution, and organized crime. These studies, under-
taken in various communities throughout the country,
demonstrated a correlation between sexually oriented busi-
nesses and negative secondary effects. The Board also
consulted a number of judicial opinions from other jurisdic-
tions that address adverse secondary effects associated with
sexually oriented businesses. Further, the Board considered
police reports of calls made in regards to each licensed
liquor establishment in St. Joseph for the period of 1989
through 1999, furnished by the St. Croix County Sheriff’s
Department. The sheriff informed the Board that the sheriff’s
department had “received far more calls regarding the
Cajun Club [the Town’s sole sexually oriented business
licensed to sell alcoholic beverages] than we have for the
other liquor establishment in the Town of St. Joseph that
do[es] not offer sexually oriented entertainment such as
nude dancing.” The studies, judicial opinions, and police
reports were available to members of the Board for their
consideration.
 In June 2001, the Board adopted Ordinance 2001-02,
which was codified under the town code, Chapter 153, en-
No. 03-1428                                                  3

titled “Sexually Oriented Businesses.” “Sexually oriented
businesses,” as defined by § 153-4, include “business[es]
featuring adult entertainment.” “Adult entertainment,” as
defined by § 153-4, is any “live performance, display or
dance of any type which has as a significant or substantial
portion . . . characterized by an emphasis on . . . viewing of
specified anatomical areas.” § 153-4. According to § 153-4,
“[s]pecified anatomical areas” include:
    A. The human male genitals in a discernible turgid
       state, even if fully and opaquely covered; or
    B. Less than completely and opaquely covered human
       genitals, pubic region, anus, anal cleft or cleavage;
       or
    C. Less than completely and opaquely covered nipples
       or areolas of the human female breast.
  Ordinance 2001-02, published in Section 153-3(A), pro-
hibits sexually oriented businesses from allowing any:
    person, employee, entertainer or patron . . . to have any
    physical contact with any entertainer on the premises
    of a sexually oriented business during any performance
    . . . all performances shall occur on a stage or table that
    is elevated at least 18 inches above the immediate floor
    level and shall not be less than 5 feet from any area
    occupied by any patron.
Further, § 153-5(B) prohibits the “sale, use or consumption
of alcoholic beverages on the premises of a sexually oriented
business.”
  The Board stated in § 153-1 that its motivation for pass-
ing this ordinance was that it:
    finds that sexually oriented businesses are frequently
    used for unlawful sexual activities . . . and . . . concern
    over sexually transmitted diseases is a legitimate
    health concern of the Town Board . . . there is convinc-
4                                                No. 03-1428

    ing documented evidence that sexually oriented busi-
    nesses have a deleterious effect on both the existing
    businesses around them and the surrounding residen-
    tial areas adjacent to them, causing increased crime
    and the downgrading of property values; and, whereas,
    the Town Board desires to minimize and control these
    adverse secondary effects. . . and, whereas it is not the
    intent of this chapter to suppress any speech activities
    protected by the First Amendment, but to . . . address[ ]
    the negative secondary effects of sexually oriented
    businesses.
  Concurrent with the adoption of Ordinance No. 2001-02,
the Board adopted Ordinance No. 2001-03, codified under
Chapter 114, Article VI of the town code, entitled “Nude
Dancing in Licensed Establishments Prohibited.” Ordinance
No. 2001-03 applies to “[a]ny establishment licensed by the
Town Board . . . to sell alcohol beverages.” § 114-19. Under
Ordinance No. 2001-03,
    [i]t is unlawful for any person to perform or engage in . .
    . any live act, demonstration, dance or exhibition on the
    premises of a licensed establishment which:
    A. Shows his/her genitals, pubic area, vulva, anus,
       anal cleft or cleavage with less than a fully opaque
       covering.
    B. Shows the female breast with less than a fully
       opaque covering of any part of the nipple and
       areola.
    C. Shows the human male genitals in a discernibly
       turgid state, even if fully and opaquely covered.
§ 114-17. The Board expressed its intent in regards to
Ordinance 2001-03 by stating in Section 114-16 that:
    the Town Board is aware, based on the experiences of
    other communities, that bars and taverns, in which live,
No. 03-1428                                                 5

    totally nude, non-obscene, erotic dancing occurs may
    and do generate secondary effects which the Town
    Board believes are detrimental to the public health,
    safety and welfare . . . the Town Board desires to mini-
    mize, prevent and control these adverse effects . . . the
    Town Board has determined that the enactment of an
    ordinance prohibiting live, totally nude, non-obscene,
    erotic dancing in bars and taverns licensed to serve
    alcoholic beverages promotes the goal of minimizing,
    preventing and controlling the negative secondary
    effects associated with such activity.
  The plaintiff in this action, G.M. Enterprises, operates the
Cajun Club (“Club”) of St. Joseph. The Club enjoys a St.
Joseph liquor license and, for 16 years, has served alcohol
and offered semi-nude, topless dance entertainment. It is
uncontested that G.M. is a “sexually oriented business”
subject to Ordinances Nos. 2001-02 and 2001-03, as its
dancers expose “specified anatomical areas.” G.M. filed a
complaint in the United States District Court, Western
District of Wisconsin, pursuant to 42 U.S.C. § 1983, seeking
declaratory and injunctive relief and alleging that the
ordinances are unconstitutional. The complaint alleged that
the Board did not rely on adequate evidence to demonstrate
the necessity of the ordinances to combat adverse secondary
effects; that the ordinances prohibit more expression than
is necessary to combat any adverse secondary effects that
might be caused by adult entertainment; and further that
Ordinance No. 2001-03 expressly conditions the grant of a
liquor license, a government benefit, on the surrender of the
constitutional right to freedom of expression.
  The Town moved for summary judgment, arguing that the
Board relied on an adequate evidentiary foundation to
reasonably believe that the ordinances would reduce ad-
verse secondary effects. In support of its motion, the Town
submitted an affidavit by the city clerk attesting to the
6                                               No. 03-1428

Board’s access to the studies, cases, and police reports re-
lied upon in its deliberations, and further that every mem-
ber of the Board “spent time reviewing the materials.” The
Town also submitted an affidavit by the county sheriff
attesting to the fact that more police calls were made in
regards to the Club than any other liquor establishment in
the Town.
  In its opposition to the Town’s motion, G.M. questioned
the Board’s conclusion that the ordinances would have the
effect of minimizing adverse secondary effects. G.M. argued
that the Board did not actually review or rely on the studies
and cases that it gathered. G.M. presented a study by
Bryant Paul, Daniel Linz & Bradley Shafer that finds the
majority of the studies the Board collected “fundamentally
unsound,” and methodologically flawed, and also submitted
an affidavit of Daniel Linz that discusses the study. G.M.
further argued that the Board’s findings are contrary to the
locality’s actual experience, and, in support, referred to a
1993 study of the county where the Club is located that
states that “St. Croix county has not experienced any major
problems with adult entertainment establishments.” In
addition, G.M. submitted an affidavit stating that the
property values near the Club have increased over time.
G.M. contested the Town’s inference that the Club’s enter-
tainment generates secondary effects by submitting an
affidavit of the president of G.M. Enterprises which stated
that the majority of calls to the police regarding incidents
at the Club were generated during the hours when no nude
or semi-nude dancing entertainment was offered. G.M. also
submitted a statement by the sheriff that the volume of
police calls generated by the Club were unrelated to nude
dancing.
  The district court entered judgment in favor of the Town,
finding that the ordinances do not impermissibly infringe
on G.M.’s constitutional rights, and further that G.M.’s
challenge to the Town’s secondary effects rationale did not
No. 03-1428                                                    7

raise an issue of material fact to allow the case to proceed
to trial. G.M. now appeals.

                       II. Discussion
  We review the District Court’s grant of summary judg-
ment de novo, construing the facts in the record in favor
of G.M., the non-moving party. Ben’s Bar v. Village of
Somerset, 316 F.3d 702, 707 (7th Cir. 2003).
  Nude dancing is expressive conduct “within the outer
ambit of the First Amendment’s protection.” City of Erie
v. Pap’s A.M., 529 U.S. 277, 289 (2000). The ordinances
at issue regulate nude dancing in two ways. If a dancer
exposes any “specified anatomical area,” then the establish-
ment where he or she performs must (1) not sell any alco-
holic beverages, § 153-3(B), § 114-17, and (2) require that he
or she perform on a stage at least eighteen inches above and
five feet away from patrons, as required by § 153-3(A).
However, neither requirement is implicated if dancers cover
all “specified anatomical areas” during performances, and
neither ordinance prohibits nude dancing outright.
  Still, plaintiff argues that Ordinances Nos. 2001-02 and
2001-03 regulate constitutionally protected activity. We
disagree. The requirement that dancers wear pasties and G-
strings has only a “de minimis” effect on the expression
conveyed by nude dancing. Pap’s A.M., 529 U.S. at 294;
Ben’s Bar, 316 F.3d at 708. Further, the “First Amendment
does not entitle . . . dancers, or . . . patrons, to have alcohol
available during a ‘presentation’ of nude or semi-nude
dancing.” Ben’s Bar, 316 F.3d at 726. And, while the con-
stitutionality of a restriction prohibiting physical contact
between nude dancers and their patrons is an issue of first
impression in this circuit, the Fifth Circuit has twice had
the occasion to consider similar restrictions and has found
8                                                No. 03-1428

them to be constitutional on the grounds that physical con-
tact is beyond the scope of the protected expressive activ-
ity of nude dancing. Hang On, Inc. v. City of Arlington,
65 F.3d 1248, 1253 (5th Cir. 1995); Baby Dolls Topless
Saloons, Inc. v. City of Dallas, 295 F.3d 471, 484 (5th Cir.
2002). Yet, as these regulations do have an incidental effect
on protected expression, they must meet constitutional
standards to be upheld.
   The parties submit that, in order to determine the correct
constitutional analysis to apply to the ordinances at issue,
this Court must first decide whether the ordinances intend
to regulate the expressive element of nude dancing, or
whether they are neutral as to content. In the Town’s view,
the ordinances seek to regulate only the adverse secondary
effects associated with nude dancing, and are thus content
neutral. In support, the Town cites City of Renton v.
Playtime Theatres, 475 U.S. 41 (1986). In Renton, the
Supreme Court held that an adult entertainment zoning
ordinance was a “ ‘content-neutral’ regulation of speech
because while ‘the ordinance treats theaters that specialize
in adult films differently from other kinds of theaters . . .
.[it] is aimed not at the content of the films shown . . . but
rather at the secondary effects of such theaters on the
surrounding community.’ ” Ben’s Bar, 316 F.3d at 716
(quoting Renton, 475 U.S. at 47) (emphasis in original). In
contrast, the plaintiff argues that the secondary effects
rationale of Renton is no longer good law, and further that
the ordinances are content based and therefore subject to
strict scrutiny.
  In light of the Supreme Court’s divided ruling in City
of Los Angeles v. Alameda Books, Inc., 535 U.S. 425 (2002),
we need not decide whether the ordinances are content
based or content neutral, so long as we first conclude that
they target not “the activity, but . . . its side effects,” see
Alameda Books, 535 U.S. at 447 (Kennedy, J., concurring in
No. 03-1428                                                  9

the judgment), and then apply intermediate scrutiny.
In Alameda Books, the plurality upheld at summary judg-
ment a Los Angeles ordinance that prohibited multiple
adult entertainment businesses from operating in the same
building. The plurality assumed the ordinance to be content
neutral, but did not consider the issue directly due to the
fact that the Ninth Circuit had not addressed it below.
Alameda Books, 535 U.S. at 434, 441. However, the plural-
ity reaffirmed that the first step of the Renton analysis is to
verify that the “predominate concerns motivating the
ordinance were with the secondary effects of adult speech,
and not with the content of the adult speech.” Alameda
Books, 535 U.S. at 440-41 (internal quotations omitted). In
his concurring opinion, Justice Kennedy agreed that the
Renton test provided the appropriate level of scrutiny for a
regulation that is “targeted not at the activity, but at its
side effects.” Alameda Books, 535 U.S. at 447. And, employ-
ing an approach similar to the plurality’s, Justice Kennedy
insisted that a municipality first “advance some basis to
show that its regulation has the purpose and effect of
suppressing secondary effects, while leaving the quantity
and accessibility of speech substantially intact,” before a
court applies intermediate scrutiny. Id. at 449. Although,
unlike the plurality, Justice Kennedy wrote that zoning
ordinances of adult businesses are “content based,” see id.,
he agreed with the plurality that “[n]evertheless, . . . the
central holding of Renton is sound: A zoning ordinance that
is designed to decrease secondary effects and not speech
should be subject to intermediate rather than strict scru-
tiny.” Id. at 448. As Justice Kennedy’s concurrence is the
narrowest opinion joining the judgment of the Court, it is
the controlling authority under Marks v. United States, 430
U.S. 188, 193 (1976). Ben’s Bar, 316 F.3d at 722.
  Under the first step of the analysis set forth by both
Justice Kennedy and the plurality, we must first determine
10                                               No. 03-1428

whether the ordinances at issue are motivated by an
interest in reducing the secondary effects associated with
the speech, rather than an interest in reducing the speech
itself, before turning to Renton. See Alameda Books, 535
U.S. at 440-41, 450. To survive this step of the analysis,
“the rationale of the ordinance must be that it will suppress
secondary effects—and not by suppressing speech.” Id. at
450. The Town has met this burden. Neither of the ordi-
nances prohibit nude dancing; rather, they merely seek to
minimize the factors that the Board believed would
heighten the probability that adverse secondary effects
would result from nude dancing: physical proximity be-
tween the dancers and patrons, and the consumption of
alcohol by patrons. Requiring that adult entertainment
establishments maintain a minimal physical buffer between
patrons and dancers does not reduce the availability of
nude dance entertainment. And, “alcohol prohibition is, as
a practical matter, the least restrictive means of furthering
the . . . interest in combating the secondary effects resulting
from the combination of adult entertainment and alcohol
consumption.” Ben’s Bar, 316 F.3d at 725. Further, if all
dancers choose to wear the de minimus clothing necessary
to cover all “specified anatomical parts,” then neither the
physical proximity nor alcohol prohibition requirements are
implicated. Thus, as the ordinances will leave the availabil-
ity of nude dance entertainment substantially the same,
under Justice Kennedy’s test of “how speech will fare under
the city’s ordinance[s],” Alameda Books, 535 U.S. at 450,
the Town has demonstrated that its goal is to minimize
secondary effects, rather than the speech itself.
  Therefore, we move to the second step of the Renton
analysis. In Renton, the Court set forth the intermediate
scrutiny test for zoning regulations of adult businesses
aimed at suppressing secondary effects. Such regulations
are constitutional “so long as they are designed to serve a
No. 03-1428                                                11

substantial government interest and do not unreasonably
limit alternative avenues of communication.” Renton, 475
U.S. at 47, reaffirmed in Alameda Books, 535 U.S. at 434.
Regulations of public nudity, however, are analyzed under
the intermediate scrutiny test of United States v. O’Brien,
391 U.S. 367 (1968). Pap’s A.M., 529 U.S. at 289. The
O’Brien test asks (1) whether the regulating body had the
power to enact the regulation; (2) whether the regulation
furthers an important or substantial governmental interest;
(3) whether that interest is unrelated to the suppression of
free expression; and (4) whether the regulation’s incidental
impact on expressive conduct is no greater than is essential
to the furtherance of that interest. O’Brien, 391 U.S. at 377.
  Ordinances Nos. 2001-02 and 2001-03 are neither public
indecency nor zoning regulations. They regulate the manner
in which patrons view nude dancing; specifically, the
patron’s physical proximity to the nude dancer and the
patron’s access to alcoholic beverages in establishments
where nude dancing is provided. Because this case concerns
only the “substantial government interest” prong that is
found in both the O’Brien and Renton tests, we need not
decide which test of intermediate scrutiny provides the
correct analytical framework for these ordinances. Indeed,
this Court has held that the constitutional standard for
“evaluating adult entertainment regulations, be they zoning
ordinances or public indecency statutes, are virtually in-
distinguishable.” Ben’s Bar, 316 F.3d at 714.
  The issue before this Court is what quality and quantum
of evidence a regulating body must consider in order to
demonstrate that it has a reasonable basis for believing
that the regulated activity generates adverse secondary
effects, the reduction of which is a “substantial government
interest” under the Renton or O’Brien tests. This issue was
most recently before the Supreme Court in Alameda Books;
in the plurality’s words, the case required the court to
12                                                    No. 03-1428

“clarify the standard for determining whether an ordinance
serves a substantial government interest under Renton.”
Alameda Books, 535 U.S. at 433. In Alameda Books, the
plurality reaffirmed that “a municipality may rely on any
evidence that is ‘reasonably believed to be relevant’ for
demonstrating a connection between speech and a substan-
tial, independent government interest.” Alameda Books at
438, (quoting Renton, 475 U.S. at 51-52). The plurality
upheld an ordinance that prohibited the operation of
multiple adult entertainment business in the same build-
ing, even though the regulating body did not rely upon a
study that specifically addressed whether the concentration
of such establishments in a single building would result in
a higher incidence of adverse secondary effects. Id. at 437.
According to the plurality, it was reasonable for the regulat-
ing body to infer—from a somewhat dated study that
concluded that the concentrated growth of adult entertain-
ment establishments in a particular neighborhood led to
increased crime there—that the concentration of adult
establishments in a single building would lead to a similar
increase in crime. Id. at 435-38. The plurality did not
require that a regulating body rely on research that tar-
geted the exact activity it wished to regulate, so long as the
research it relied upon reasonably linked the regulated
activity to adverse secondary effects.
  However, the plurality cautioned that:
     a municipality’s evidence must fairly support the mu-
     nicipality’s rationale . . . . If plaintiffs fail to cast direct
     doubt on this rationale, either by demonstrating that
     the municipality’s evidence does not support its ration-
     ale or by furnishing evidence that disputes the munici-
     pality’s factual findings, the municipality meets the
     standards set forth in Renton. If plaintiffs succeed in
     casting doubt on a municipality’s rationale in either
     manner, the burden shifts back to the municipality to
No. 03-1428                                                13

    supplement the record with evidence renewing support
    for a theory that justifies its ordinance.
Id. at 438-39. Plaintiff argues that it has “substantially
challenged the validity of the town’s determination that its
regulation was justified by the need to combat adverse
secondary effects of adult entertainment,” and has therefore
precluded summary judgment by shifting the burden back
to the Town to supplement the record. We disagree. Plain-
tiff submitted some evidence that might arguably under-
mine the Town’s inference of the correlation of adult
entertainment and adverse secondary effects, including a
study that questions the methodology employed in the
numerous studies relied upon by the Board; evidence of an
increase of property values near the Club; and evidence that
the majority of police calls in regards to the Club originated
during periods of time when no semi-nude dancing oc-
curred. Although this evidence shows that the Board might
have reached a different and equally reasonable conclusion
regarding the relationship between adverse secondary
effects and sexually oriented businesses, it is not sufficient
to vitiate the result reached in the Board’s legislative
process.
  Alameda Books does not require a court to re-weigh the
evidence considered by a legislative body, nor does it em-
power a court to substitute its judgment in regards to
whether a regulation will best serve a community, so long
as the regulatory body has satisfied the Renton requirement
that it consider evidence “reasonably believed to be relevant
to the problem” addressed. See Renton, 475 U.S. at 51-52,
see also Alameda Books, 535 U.S. at 445 (Kennedy, J.,
concurring in the judgment) (“in my view, the plurality’s
application of Renton might constitute a subtle expansion,
with which I do not concur.”). Wrote Justice Kennedy, “as
a general matter, courts should not be in the business of
second-guessing fact-bound empirical assessments of city
14                                               No. 03-1428

planners . . . the Los Angeles City Council knows the streets
of Los Angeles better than we do.” Alameda Books, 535 U.S.
at 451. The plurality expressed similar support for judicial
deference to local lawmakers: “we must acknowledge that
the Los Angeles City Council is in a better position than the
Judiciary to gather and evaluate data on local problems.”
Id. at 440.
  Plaintiff argues that its complaint must survive summary
judgment because the evidence relied upon by the Board
does not meet the standards of Daubert v. Merrell Dow
Pharmaceuticals, 509 U.S. 579 (1993). Under the plaintiff’s
view, the Town cannot demonstrate a reasonable belief in
a causal relationship between the activity regulated and
secondary effects, as required by Alameda Books and
Renton, unless the studies it relied upon are of sufficient
methodological rigor to be admissible under Daubert. This
argument is completely unfounded. The plurality in
Alameda Books bluntly rejected Justice Souter’s suggestion
that the municipality be required to present empirical data
in support of its contention: “such a requirement would go
too far in undermining our settled position that municipali-
ties must be given a ‘reasonable opportunity to experiment
with solutions’ to address the secondary effects of protected
speech.” Alameda Books, 535 U.S. at 439. Further, the
purpose of the evidentiary requirement of Alameda Books is
to require municipalities to demonstrate reliance on some
evidence in reaching a reasonable conclusion about the
secondary effects. The municipality need not “prove the
efficacy of its rationale for reducing secondary effects prior
to implementation.” Ben’s Bar, 316 F.3d at 720. A require-
ment of Daubert-quality evidence would impose an unrea-
sonable burden on the legislative process, and further
would be logical only if Alameda Books required a regulat-
ing body to prove that its regulation
would—undeniably—reduce adverse secondary effects.
Alameda Books clearly did not impose such a requirement.
No. 03-1428                                           15

                   III. Conclusion
  For the reasons discussed, the judgment of the district
court is AFFIRMED.

A true Copy:
      Teste:

                      ________________________________
                      Clerk of the United States Court of
                        Appeals for the Seventh Circuit

                 USCA-02-C-0072—11-25-03