G & V Lounge, Inc. v. Michigan Liquor Control Com'n
| Decision Date | 12 May 1994 |
| Docket Number | No. 93-1447,93-1447 |
| Citation | 23 F.3d 1071 |
| Parties | G & V LOUNGE, INC., a Michigan corporation, Plaintiff-Appellant, v. MICHIGAN LIQUOR CONTROL COMMISSION, a state agency; Maxine Perry, chairwoman of the Michigan Liquor Control Commission; and City of Inkster, a Michigan municipal corporation, Defendants- Appellees. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Robert A. Sedler (argued), Wayne State University Law School, Detroit, MI, Robert D. Horvath (briefed), Southfield, MI, for G & V Lounge, Inc.
Thomas J. Emery (argued), Office of the Atty. Gen., Michigan Liquor Control Com'n, Lansing, MI, Arthur E. D'Hondt (briefed), Office of Atty. Gen., Habeas Corpus Div., Lansing, MI, for Michigan Liquor Control Com'n and Maxine Perry.
Milton Spokojny (argued and briefed), Farmington Hills, MI, for City of Inkster.
Before: JONES, NELSON, and SUHRHEINRICH, Circuit Judges.
JONES, Circuit Judge, delivered the opinion of the court, in which SUHRHEINRICH, Circuit Judge, joined. NELSON, Circuit Judge (pp. 1079-80), delivered a separate opinion concurring in judgment.
Plaintiff-Appellant, a corporation that operates the "Mustang Lounge" in Inkster, Michigan, alleges that Defendant-Appellee, the City of Inkster, violated Plaintiff 's First Amendment rights when it threatened to seek revocation of Plaintiff 's liquor license and entertainment permit if Plaintiff presented topless dancing at the bar. Plaintiff further alleges that Defendant-Appellee, the Michigan Liquor Control Commission ("MLCC"), has declared that it will revoke the license and permit at the municipality's request so long as the municipality affords Plaintiff rudimentary due process, and that this policy of deferring to a municipality also violated Plaintiff 's First Amendment rights. The district court denied Plaintiff 's request for a temporary restraining order and preliminary injunction, and dismissed the action for lack of a present case or controversy. We reverse this dismissal, holding that there is a present case or controversy, and we remand the matter for reconsideration of whether a preliminary injunction should issue.
Under the Michigan Constitution and the Michigan Liquor Control Act, the MLCC is vested with complete control over alcoholic beverage sales in Michigan. Mich. Const., art. 4, Sec. 40; Mich.Comp. Laws Sec. 436.5. A regulation promulgated by the MLCC provides that no establishment with a liquor license shall permit dancing or other forms of entertainment without a permit, and that no entertainment permit shall be issued without the approval of the chief local law enforcement officer with jurisdiction over the establishment, the local legislative body, and the commission itself. MLCC R. 436.1407. The regulation includes no standards governing local approval of a requested permit. Another MLCC regulation provides that liquor license holders shall not permit within their establishments exposure to the public view of "the pubic region, anus, or genitals or ... displays [of] other types of nudity prohibited by statute or local ordinance." MLCC R. 436.1409. Yet another regulation prohibits within liquor licensed establishments the performance or simulated performance of "sexual intercourse, masturbation, sodomy, bestiality, fellatio, or cunnilingus." MLCC R. 436.1411. Significantly, however, no MLCC regulation or state statute prohibits topless dancing in a licensed establishment, nor does Inkster have an ordinance prohibiting toplessness per se.
In 1979, Soco Enterprises, Inc., entered into an agreement with Inkster providing that, in exchange for the city's approval of Soco's request for a liquor license, Soco agreed that it would not permit any topless entertainment on its premises. J.A. at 69-70. In 1983, Plaintiff applied for a transfer of ownership of the liquor license and dance entertainment permit issued to Soco Enterprises, Inc. Inkster and its police chief recommended the requested transfer, and the MLCC approved it. Since 1983, Plaintiff has offered entertainment in the form of live bands and dancing.
On September 24, 1992, Plaintiff informed the city that it intended to offer topless dancing. On December 7, 1992, Inkster enacted Ordinance 710, section 10 of which lists the criteria upon which the city council will recommend non-renewal or revocation of a liquor license or entertainment permit. Two of these criteria are that:
(i) the operation of the licensee's business or the circumstances and conditions surrounding the licensee's business have changed and/or the type or nature of entertainment conducted by the licensee has changed or is proposed to be changed;
(j) the licensee has failed to comply with any general or specific condition imposed pursuant to the granting of the license and/or has changed or deviated from any of the statements or representations made in the application for license/permit and/or in the investigation for the issuance, renewal or transfer of license/permit....
J.A. at 23 (quoting Ord. 710, Sec. 10(2)(i) and (j)).
On January 5, 1993, the city's attorney wrote a letter to Plaintiff stating in pertinent part that:
if you should attempt to offer any adult entertainment on the premises, the Inkster City Council may recommend to the Michigan Liquor Control Commission that it take action to not renew and/or revoke your current liquor license and/or dance entertainment permit....
Your intentions to change the nature of the type of entertainment to be offered at the Mustang Lounge violates your original stated intentions as well as the provisions of Ordinance No. 710.... Section 10, ... subsections (i) and (j)....
In addition, ... your proposed use violates the provisions of a previously executed agreement dated May 16, 1979 between the City of Inkster and Soco Enterprises, Inc. wherein the Licensee ... agreed not to permit any adult-type entertainment at the establishment. As the transferee of this license, G & V Lounge, Inc. is the successor to this agreement.
In conclusion, if you proceed with your stated intentions of offering any adult-type entertainment at the aforestated location, the City of Inkster will take any and all necessary legal measures to prevent this from occuring [sic].
J.A. at 25-26. The letter explicitly equated "adult entertainment" with topless dancing.
On February 8, 1993, Plaintiff filed its complaint in the instant suit, alleging that it has refrained from presenting topless dancing solely because of Inkster's threats to take action that would jeopardize Plaintiff's liquor license and entertainment permit. Plaintiff sought a declaratory judgment stating that Inkster's threat and the MLCC's policy of revoking a license or permit at the city's request violate Plaintiff's First Amendment rights. Plaintiff also sought a temporary restraining order and a preliminary injunction that would prohibit Defendants from taking the threatened action against Plaintiff's license and permit.
At the preliminary injunction hearing on March 1, 1993, the district court determined that there was no present case or controversy between the parties because Plaintiff had not yet offered topless dancing, and so Defendants had not yet taken any action against Plaintiff. The court denied Plaintiff's motions for a temporary restraining order and preliminary injunction, and dismissed the case. This appeal followed.
We first address the question of whether Plaintiff has standing to bring this action. Article III, Section 2 of the United States Constitution gives the federal courts jurisdiction only over cases and controversies. The Supreme Court has set forth a three prong test for determining Article III standing:
It has been established by a long line of cases that a party seeking to invoke a federal court's jurisdiction must demonstrate three things: (1) "injury in fact," by which we mean an invasion of a legally protected interest that is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical; (2) a causal relationship between the injury and the challenged conduct, by which we mean that the injury fairly can be traced to the challenged action of the defendant, and has not resulted from the independent action of some third party not before the court; and (3) a likelihood that the injury will be redressed by a favorable decision, by which we mean that the prospect of obtaining relief from the injury as a result of a favorable ruling is not too speculative.
Northeastern Florida Contractors Chapter of the Associated General Contractors of America v. Jacksonville, --- U.S. ----, ---- - ----, 113 S.Ct. 2297, 2301-02, 124 L.Ed.2d 586 (1993) (quotations and citations omitted). "The litigant must clearly and specifically set forth facts sufficient to satisfy these Art. III standing requirements." Whitmore v. Arkansas, 495 U.S. 149, 154-55, 110 S.Ct. 1717, 1723, 109 L.Ed.2d 135 (1990).
Plaintiff has specifically alleged three separate injuries-in-fact. First, Plaintiff alleges that the MLCC's policy of deference to local governments with regard to the nonrenewal or revocation of liquor licenses and entertainment permits, and the city's Ordinance 710, Sec. 10(i) and (j), are overbroad and result in a prior restraint of activities protected by the First Amendment. 1 This prior restraint constitutes a concrete and particularized actual injury in fact. It is well established that "when a licensing statute allegedly vests unbridled discretion in a government official over whether to permit or deny expressive activity, one who is subject to the law may challenge it facially without the necessity of first applying for, and being denied, a license." City of Lakewood v. Plain Dealer Publishing Co., 486 U.S. 750, 755, 108 S.Ct. 2138, 2143, 100 L.Ed.2d 771 (1988); see also Doran v. Salem Inn, 422 U.S. 922, 932-33, 95 S.Ct. 2561, 2568, 45 L.Ed.2d 648 (1975) (...
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