1995 Venture I, Inc. v. Orange County, Texas

• Decision Date: 14 November 1996
• Docket Number: No. 1:96-CV-375.,1:96-CV-375.
• Citation: 947 F.Supp. 271
• Parties: 1995 VENTURE I, INC., d/b/a Frenchies, Plaintiff, v. ORANGE COUNTY, TEXAS, Defendant.
• Court: U.S. District Court — Eastern District of Texas

947 F.Supp. 271

1995 VENTURE I, INC., d/b/a Frenchies, Plaintiff, v. ORANGE COUNTY, TEXAS, Defendant.

No. 1:96-CV-375.

United States District Court, E.D. Texas, Beaumont Division.

November 14, 1996.

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Louis Dugas, Jr, Orange, TX, for Plaintiff.

John Kimbrough, Connie Wilhite and John McElroy, Orange, TX, Paul W. Gertz, Larry Germer, Tonya Connell Adams of Germer & Gertz, Beaumont, TX, for Defendant.

MEMORANDUM OPINION AND ORDER DENYING DEFENDANT'S RULE 12(b)(1) MOTION TO DISMISS AND GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

SCHELL, Chief Judge.

This matter is before the court on Defendant's Rule 12(b)(1) Motion to Dismiss and, in the alternative, Motion for Summary Judgment, filed on September 27, 1996. Plaintiff filed a response on October 11, 1996. Upon consideration of the motion, response, and applicable law, the court is of the opinion that Defendant's Motion to Dismiss should be DENIED and Defendant's Motion for Summary Judgment should be GRANTED.

INTRODUCTION

1995 Venture I, Inc., d/b/a Frenchies ("Plaintiff"), filed suit on June 17, 1996, under 28 U.S.C. §§ 1331, 1343(a)(3), and 1367, and 42 U.S.C. §§ 1983 and 1988, seeking declaratory relief, preliminary and permanent injunctive relief, and attorney's fees. Plaintiff claims that the adoption and application of Orange County's ("Defendant") regulations governing sexually oriented businesses violates (1) Plaintiff's right to freedom of expression under the First Amendment to the United States Constitution and Article 1, § 8 of the Texas Constitution and (2) its rights to substantive and procedural due process under the Fourteenth Amendment to the United States Constitution and Article 1, § 19 of the Texas Constitution. Plaintiff also claims that Defendant's regulations were not adopted in accordance with the Texas Open Meetings Act¹ or the enabling statute, Chapter 243 of the Texas Local Government Code. Furthermore, Plaintiff seeks declaratory relief that the enabling statute is invalid as an attempt to confer sovereignty upon counties insofar as it grants to counties the power to treat a violation of county regulations as a Class A misdemeanor.²

Attached to its complaint, Plaintiff filed a motion for preliminary injunction. Pursuant to the court's order dated June 18, 1996, Plaintiff filed a brief in support of its motion for preliminary injunction on June 28, 1996. Defendant filed its response in opposition to Plaintiff's motion for preliminary injunction on July 5, 1996. In the court's order dated September 10, 1996, the court consolidated the hearing on Plaintiff's motion for preliminary injunction with the trial on the merits. In a September 17, 1996 pretrial hearing, the court set this cause for trial on October 23, 1996, and set the filing deadlines for any and all dispositive motions. Since the timely receipt of Defendant's motion and Plaintiff's response, the court has found it necessary to postpone the trial from its original setting.³ Because the court now GRANTS Defendant's Motion for Summary Judgment, the resetting of this case for trial is unnecessary.

FACTS

Plaintiff contends that it contacted Defendant on January 23, 1996 to inquire as to whether a permit was required to operate a sexually oriented business in the county. Defendant admits that it did not have regulations governing sexually oriented businesses or permit requirements for such businesses on that date, but Defendant neither admits nor denies conveying that information to the Plaintiff. Subsequently, Plaintiff contends it purchased a building for $100,000 and spent in excess of $104,300 in remodeling the building for use as a sexually oriented business.⁴ Further, Plaintiff contends that these steps were taken with the understanding that no permit was needed to operate such a business.

According to Defendant, it posted public notice on March 22, 1996, indicating that the County Commissioners Court would discuss and take possible action regarding regulation of sexually oriented businesses in Orange County at the March 25, 1996 meeting. Defendant then enacted an ordinance regulating sexually oriented businesses at the March 25th meeting. According to Plaintiff, Defendant then adopted an application form for a permit to operate a sexually oriented business on March 29, 1996. Defendant contends that notice of possible action concerning the adoption of the application form was posted on March 29th, but formal adoption did not occur until April 1, 1996, at a special court session allegedly attended by Plaintiff's counsel. Defendant further contends that since the enactment of the regulations, Plaintiff has neither attempted to open nor applied for the required permit.⁵ Plaintiff contends that applying for a permit would be an exercise in futility.

DISCUSSION

I. RULE 12(B)(1) MOTION TO DISMISS

Federal Rule of Civil Procedure 12(b)(1) authorizes a court to dismiss a claim for lack of subject matter jurisdiction. "It is axiomatic that a district court may inquire into the basis of its subject matter jurisdiction at any stage of the proceedings." Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir.1980) (citation omitted). In this case, Plaintiff's claims under the First and Fourteenth Amendments to the United States Constitution are sufficient to establish federal question jurisdiction⁶ and withstand a "facial attack" on the complaint.⁷ See id. Defendant, however, has launched a "factual attack" on the existence of subject matter jurisdiction, which "challenges the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits, are considered." Id. (citation omitted). "[A] factual attack under Rule 12(b)(1) may occur at any stage of the proceedings, and plaintiff bears the burden of proof that jurisdiction does in fact exist." Id. (citations omitted).

A. Plaintiff's Standing

Defendant contends that Plaintiff has no standing to challenge Defendant's regulations governing the operation of sexually oriented businesses because Plaintiff has suffered no injury, i.e., denial of a requested permit or a criminal conviction resulting from a violation of the regulations. According to Defendant, "[b]ecause Plaintiff has never made an application, it has never been denied such a permit, and because Plaintiff has never attempted to open, Defendant has never taken any action against [Plaintiff] under the regulations." Def.'s Mot. to Dismiss, and in the Alternative, Mot. for Summ.J. at 7. Assuming Plaintiff is a proper party as owner of the "Frenchies" property, Defendant's standing argument amounts to a contention that this dispute is not ripe for adjudication. In other words, is the court faced with a live "case or controversy"?

"The ripeness doctrine deals with the time, if any, at which a party may seek pre-enforcement review of a statute or regulation." Triple G Landfills v. Board of Commissioners, 977 F.2d 287, 288 (7th Cir.1992) (citing Regional Rail Reorganization Act Cases, 419 U.S. 102, 140, 95 S.Ct. 335, 356-57, 42 L.Ed.2d 320 (1974)). "It seeks to avoid the premature adjudication of cases when the issues posed are not fully formed or when the nature and extent of the statute's application are not certain." Triple G, 977 F.2d at 288-89 (citing Abbott Laboratories v. Gardner, 387 U.S. 136, 148, 87 S.Ct. 1507, 1515, 18 L.Ed.2d 681 (1967); American Booksellers Association, Inc. v. Hudnut, 771 F.2d 323, 327 (7th Cir.1985), aff'd without opinion, 475 U.S. 1001, 106 S.Ct. 1172, 89 L.Ed.2d 291 (1986)). "Inquiries into ripeness generally address two factors: first, whether the relevant issues are sufficiently focused so as to permit judicial resolution without further factual development; and, second, whether the parties would suffer any hardship by the postponement of judicial action." Triple G, 977 F.2d at 289 (citing Abbott Laboratories, 387 U.S. at 149, 87 S.Ct. at 1515-16; General Finance Corp. v. FTC, 700 F.2d 366, 371 (7th Cir.1983)).

The first ripeness factor weighs heavily in favor of finding this case ripe for adjudication. Admittedly, Plaintiff has not submitted a permit application to the county. However, the court finds that forcing Plaintiff to go through the application process would be an exercise in futility undoubtedly resulting in the denial of its application. See Pl.'s Resp. to Def.'s Mot. to Dismiss Ex. A at 5-6 (Aff. of Russell Keeton) (restating County Judge Thibodeaux's comments that indicate that Plaintiff's permit application would be denied); Def.'s Mot. to Dismiss Exs. L-P (Affs. of County Judge and County Commissioners) (emphasizing the close proximity of Plaintiff's sexually oriented business to a public park and the negative effect such business would have on the park and its visitors). Since the only questions remaining for the court are purely legal, i.e., the validity of Defendant's regulations and not their applicability to Plaintiff, this case is fit for judicial decision. See Triple G, 977 F.2d at 289 (determining that the case was fit for judicial decision because the issues posed were purely legal and would not be clarified by administrative proceedings or any other type of factual development).

The second ripeness factor, hardship to the parties in delaying review, also favors a finding of ripeness. Plaintiff has allegedly expended over $200,000 on a business it cannot open without fear of a criminal conviction for violating the county's regulations. This investment demonstrates that Plaintiff has a direct, tangible, and not merely a hypothetical interest in the subject matter of this litigation because the regulations will effectively and definitely prohibit Plaintiff from following through with its plans to open a sexually oriented business at its current location. Cf. Oriental Health Spa v. City of Fort Wayne, 864 F.2d 486, 488-89 (7th Cir.1988) (challenge to massage parlor...