DLS, Inc. v. City of Chattanooga

• Citation: 107 F.3d 403
• Decision Date: 15 April 1997
• Docket Number: No. 95-5971,95-5971
• Parties: DLS, INC., d/b/a Diamonds and Lace Showbar, a Tennessee corporation; Ann Martin; Kim Tyndall; and Karen Chadwick, Plaintiffs-Appellants, v. CITY OF CHATTANOOGA; City Council of Chattanooga, Tennessee; Mayor Gene Roberts; Chairman Don Eaves; Councilpersons Mai Bell Hurley, David Crockett, David Distefano, Yusef Hakeem, John Lively, Leamon Pierce, Marti Rutherford, Ron Swafford; and Chief of Police Ralph Cothran, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 403

107 F.3d 403

65 USLW 2588

DLS, INC., d/b/a Diamonds and Lace Showbar, a Tennessee corporation; Ann Martin; Kim Tyndall; and Karen Chadwick, Plaintiffs-Appellants, v. CITY OF CHATTANOOGA; City Council of Chattanooga Tennessee; Mayor Gene Roberts; Chairman Don Eaves Councilpersons Mai Bell Hurley, David Crockett, David Distefano, Yusef Hakeem, John Lively, Leamon Pierce, Marti Rutherford, Ron Swafford; and Chief of Police Ralph Cothran, Defendants-Appellees.

No. 95-5971.

United States Court of Appeals Sixth Circuit.

Argued Oct. 7, 1996.

Decided Feb. 20, 1997.

Rehearing and Suggestion for Rehearing

En Banc Denied April 15, 1997.

Jerry H. Summers (argued and briefed), Jimmy F. Rodgers, Jr., Summers, McCrea & Wyatt, Chattanooga, TN, for Plaintiffs-Appellants.

William S. Parker, Jr., Philip A. Noblett (argued and briefed), Nelson, McMahan, Parker & Noblett, Chattanooga, TN, for Defendants-Appellees.

Before: LIVELY, BOGGS, and NORRIS, Circuit Judges.

BOGGS, Circuit Judge.

The plaintiffs below--a corporation operating a nightclub devoted to erotic dancing, the corporation's sole shareholder, and two of its employees--brought suit under 42 U.S.C. § 1983 to challenge the constitutionality of the City of Chattanooga's ordinance that regulates such facilities. After a bench trial, the district court enjoined the City from enforcing portions of its licensing system, but upheld the ordinance in all other respects. The plaintiffs appeal from that judgment, and we affirm.

I. The History of the Ordinance

In 1986, the Chattanooga Board of Commissioners enacted an ordinance to regulate "adult-oriented establishments," which were defined to include, inter alia, both "adult cabarets," or public facilities that feature employees who expose their breasts, buttocks, or genitals to public view, and "adult bookstores," or bookstores that also offer films or live entertainment that depict certain defined "sexual activities" or "anatomical areas." Chattanooga, Tenn., Ordinance No. 8601 § 2 (Mar. 4, 1986), codified at Chattanooga, Tenn., City Code § 11-422. The City made a number of legislative findings, most of which referred to the health risks inherent in the sexual activities that it believed to be commonplace in adult bookstores within Chattanooga. However, it did not limit its findings to adult bookstores, but instead found that all adult-oriented establishments posed health risks, and that such facilities "create[ ] conditions that generate prostitution and other crimes." Ordinance No. 8601 § 1(a)(2). Accordingly, the ordinance established a regulatory system applicable to both adult bookstores and adult cabarets. It required such facilities to be licensed by the City, id. § 3, and employees of such facilities to obtain permits from the City, id. § 6. It also imposed a series of other obligations on adult-oriented establishments, including a ban on "sexual intercourse or oral or anal copulation or other contact stimulation of the genitalia," id. § 15(a), and a ban on the touching or exposure of certain defined parts of the body, id. § 15(b)-(c).

After the enactment of the ordinance, several proprietors of adult-oriented establishments brought suit to challenge it on First Amendment grounds. Judge R. Allan Edgar of the United States District Court for the Eastern District of Tennessee upheld most of the ordinance. Broadway Books, Inc. v. Roberts, 642 F.Supp. 486, 490-94 (E.D.Tenn.1986). Judge Edgar applied Renton v. Playtime Theatres, Inc., 475 U.S. 41, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986), to hold that the ordinance was directed to the content-neutral goals of the prevention of crime and disease, and that most of the ordinance's provisions were narrowly tailored. However, Judge Edgar found that the City had failed to provide a sufficient rationale for the requirements that a licensee be a resident of Chattanooga, see Ordinance No. 8601 § 5(a)(1)(iii), (2)(iii), (3)(iii), and be "of good moral character and reputation in the community in which he or she resides," id. §§ 4(15), 5(a)(1)(i), (2)(i), 3(i), and enjoined the City from enforcing those provisions. Broadway Books, 642 F.Supp. at 494-95. The City responded to the district court's order by amending the ordinance to strike the offending requirements for licensees, and also to strike the corresponding requirements for permit holders. Ordinance No. 8838 (Sept. 8, 1987). ¹

In 1995, the City Council enacted an amendment to the ordinance, which sparked the litigation before us. The amendment changed the ordinance in four respects. First, it revised the definition of "adult cabaret" to mean

an establishment which features as a principle [sic] use of its business, entertainers and/or waiters and/or bartenders who expose to public view of the patrons within said establishment, at any time, the bare female breast below a point immediately above the top of the areola, human genitals, pubic region, or buttocks, even if partially covered by opaque material or completely covered by translucent material; including swim suits, lingerie or latex covering. Adult cabarets shall include commercial establishments which feature entertainment of an erotic nature including exotic dancers, strippers, male or female impersonators, or similar entertainers.

Chattanooga, Tenn., Ordinance No. 10178 § 1 (Mar. 7, 1995), codified at Chattanooga, Tenn., City Code § 11-422(e). Second, whereas the ordinance originally only required entertainers to obtain permits, the amendment expanded that requirement to all employees of adult-oriented establishments. Ordinance No. 10178 § 2 (Mar. 7, 1995), codified at Chattanooga, Tenn., City Code § 11-426. Third, the amendment revised the wording of the ban on sexual intercourse. Ordinance No. 10178 § 3 (Mar. 7, 1995), codified at Chattanooga, Tenn., City Code § 11-435(a). Finally, and most importantly for this appeal, the amendment added a new provision:

No entertainer, employee or customer shall be permitted to have any physical contact with any other [sic] on the premises during any performance and all performances shall only occur upon a stage at least eighteen inches (18"') above the immediate floor level and removed at least six feet (6') from the nearest entertainer, employee and/or customer.

Ordinance No. 10178 § 4 (Mar. 7, 1995), codified at Chattanooga, Tenn., City Code § 11-435(d).

II. The Proceedings Below

Shortly after the amendment was enacted, the plaintiffs filed a complaint in the United States District Court for the Eastern District of Tennessee challenging the constitutionality of the ordinance in its entirety. Judge Edgar was assigned again to hear the case. On July 12, 1995, following a five-day bench trial, the district court again upheld the ordinance in most respects, finding that the ordinance was directed to content-neutral purposes and that most of the provisions were narrowly tailored. DLS, Inc. v. City of Chattanooga, 894 F.Supp. 1140, 1145-47 (E.D.Tenn.1995). However, the court held that the license and permit procedures established by the ordinance were unconstitutional in four particulars. These were: (1) a disclosure requirement for all persons who hold more than 5% of a licensee's stock, Chattanooga, Tenn., City Code § 11-424(b); (2) the failure to include a mechanism for judicial review for denials of permits, id. § 11-428; (3) the failure to provide for judicial review of, or any time limits on, the consideration of applications to renew licenses or permits, id. § 11-431; and (4) the failure to provide for judicial review of, or for maintenance of the status quo pending the resolution of, proceedings to revoke a license or a permit, id. § 11-432. Accordingly, the district court enjoined the City from enforcing those provisions. DLS, 894 F.Supp. at 1147-49.

On July 19, 1995, the plaintiffs filed a notice of appeal from the judgment of July 12. The defendants did not cross-appeal. Subsequently, the City Council amended the ordinance to limit the disclosure requirements to majority shareholders, to provide for judicial review and decisional time limits in all proceedings, and to provide for maintenance of the status quo in revocation proceedings. Chattanooga, Tenn., Ordinance No. 10270 (Aug. 1, 1995). The defendants filed a motion to dissolve the injunction, which the plaintiffs did not oppose. The district court granted that motion on September 5, 1995. The plaintiffs have not appealed from that order.

Two of the plaintiffs in this case--DLS, Inc., and Ann Martin, its sole shareholder--and two other employees of DLS have filed a separate suit against the City to challenge the constitutionality of Tennessee's anti-nudity law, Tenn.Code § 39-13-511, the City's ordinance barring public nudity, Chattanooga, Tenn., City Code § 25-85, and the portion of the adult-oriented establishment ordinance that bars the exposure of the breasts, buttocks, or sex organs "with the intent to arouse or gratify the sexual desires of the operator, entertainer, employee, or customer." Chattanooga, Tenn., City Code § 11-435(c). The district court--again, Judge Edgar--granted the plaintiffs a preliminary injunction against the enforcement of the last-named enactment. DLS, Inc. v. City of Chattanooga, 914 F.Supp. 193, 197 (E.D.Tenn.1995). That case was then transferred by the Judicial Panel on Multidistrict Litigation to the Middle District of Tennessee for consolidation with a series of other suits that challenged the constitutionality of the Tennessee statute. After that transfer, Judge Robert Echols dismissed the complaint in its entirety. In re Tennessee Public Nudity Statute Litig., MDL No. 1031, slip op. at 41-46 (M.D.Tenn. Sept. 30, 1996). Only Judge Edgar's 1995 judgment is before us in this appeal, and we do not consider the merits of plaintiffs' other lawsuit.

III. Issues on Appeal

The complicated nature of the proceedings below and of the arguments before us have rendered it necessary for us to clarify the issues that we...