285 F.3d 1272 (10th Cir. 2002), 00-1271, Essence, Inc. v. City of Federal Heights

Docket Nº:00-1271, 00-1286.
Citation:285 F.3d 1272
Party Name:ESSENCE, INC., doing business as The Bare Essence, a Colorado corporation; Devona Richelle Lopez and Lisa Easton, Plaintiffs-Appellees/Cross-Appellants, v. The CITY OF FEDERAL HEIGHTS, Defendant-Appellant/Cross-Appellee.
Case Date:April 08, 2002
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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285 F.3d 1272 (10th Cir. 2002)

ESSENCE, INC., doing business as The Bare Essence, a Colorado corporation; Devona Richelle Lopez and Lisa Easton, Plaintiffs-Appellees/Cross-Appellants,

v.

The CITY OF FEDERAL HEIGHTS, Defendant-Appellant/Cross-Appellee.

Nos. 00-1271, 00-1286.

United States Court of Appeals, Tenth Circuit

April 8, 2002

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Bradley J. Reich, (Arthur M. Schwartz, Michael W. Gross, on the briefs), Arthur M. Schwartz, P.C., Denver, CO, for Plaintiffs-Appellees/Cross-Appellants.

Steven J. Dawes, (Brian S. Popp, with him on the briefs), Griffiths, Tanoue & Light, Denver, CO, for Defendant-Appellant/Cross-Appellee.

Before TACHA, ANDERSON, and MURPHY, Circuit Judges.

MURPHY, Circuit Judge.

I. INTRODUCTION

During the middle to late 1990s, the defendant, City of Federal Heights, Colorado, enacted a series of ordinances governing the licensing and operation of adult entertainment businesses. Plaintiffs are Essence, Inc., a corporation that operates a nude dancing establishment, and Devona Richelle Lopez and Lisa Easton, two women denied employment as dancers by Essence, Inc. because they were younger than twenty-one at the time they sought employment. Plaintiffs present First Amendment facial challenges to multiple provisions of the Federal Heights municipal code. The district court, with a few exceptions, rejected the challenges and granted Federal Heights' summary judgment motion. This court has jurisdiction under 28 U.S.C. § 1291 and affirms in part, reverses in part, and remands.

II. BACKGROUND

At least as early as 1994, Federal Heights sought to regulate the location and operation of "adult entertainment establishments." 1 A series of ordinances

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followed throughout the 1990s. The result was a comprehensive licensing and regulatory scheme governing adult entertainment establishments codified in Federal Heights Municipal Code chapter XII, article XII. It requires those seeking to do business as adult entertainment establishments to apply for a license from the City of Federal Heights. See Federal Heights Mun.Code ch. XII, art. XII, §§ 12-12-4 to -6. The code was amended in 1997 to require employees and managers of adult entertainment establishments to obtain licenses before they would be allowed to work. See Federal Heights Ordinance 97-15, § 6, codified at Federal Heights Mun.Code ch. XII, art. XII, § 12-12-10. 2

Plaintiff Essence 3 applied for a business license in November 1996. It was informed by the Federal Heights City Administrator, Roger Tinklenberg, that it had met "all the preliminary requirements for issuance" of a license, but that a license would not issue until permits from the Building and Fire Departments were issued for remodeling of Bare Essence. It is not clear whether Federal Heights ever issued the license. Following the death of the registered agent of Essence, Federal Heights required Essence to reapply for a license. Essence applied for another business license on October 28, 1997. Plaintiffs claim that before Federal Heights would issue the license it required substantial remodeling to ensure that dancers would be kept a minimum distance away from patrons and that there was adequate lighting inside and outside the premises. In addition, Federal Heights required Essence to comply with section 12-12-11(B) of the municipal code, which prohibited individuals under twenty-one from entering nude dancing establishments. As a result, because they were younger than twenty-one, plaintiffs Lopez and Easton were refused employment. 4 Essence was issued a business license on November 4, 1997.

In the meantime, the Federal Heights City Council introduced Ordinance 97-15. The Ordinance amended portions of chapter XII, article XII of the municipal code. Among other provisions, it amended section 12-12-10 to require employees and managers to obtain licenses from the city before they would be allowed to work. Ordinance 97-15 was adopted on December 2, 1997, nearly a month after Federal Heights issued a business license to Essence.

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That same day, the City Council passed Resolution 97-36, which set the application fees for an employee license.

On January 14, 1998, plaintiffs filed a lawsuit challenging the entirety of the Federal Heights adult entertainment regulatory scheme. The plaintiffs mounted a facial attack on numerous provisions of article XII, asking for declaratory and injunctive relief. Essence also claimed that enforcement of the provisions prior to the issuance of its business license caused Essence economic damages. Plaintiffs Lopez and Easton claimed monetary damages stemming from their inability to work as nude dancers at the Bare Essence.

Federal Heights moved for summary judgment, and plaintiffs filed a cross-motion for partial summary judgment. The issues contested were a subset of the claims asserted by plaintiffs. The plaintiffs challenged: (1) the age restriction contained in section 12-12-11(B) 5; (2) the provision dealing with the denial of business licenses, section 12-12-6 6; (3) section 12-12-9, which contained the procedures for suspending or revoking a business license 7; (4) section 12-12-10, the employee licensing provision 8; (5) the fees imposed

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on employee license applicants by Resolution 97-36; (6) requirements contained in section 12-12-4 that owners of an adult entertainment business disclose their ownership share in the business; and (7) sections 12-12-13, -14, and -15, which required certain stage configurations, lighting, and a minimum distance between dancers and patrons.

The district court granted defendant's motion in part and plaintiffs' motion in part. On the issue of the age restriction, the court held section 12-12-11(B) invalid as it applied to dancers, but valid as it applied to anyone else. The court recognized that the age restriction was a content neutral regulation and could thus be upheld if it was narrowly tailored to further a substantial governmental interest. It ruled, however, that Federal Heights had "made no showing that restricting the employment of performers to those over 21 has any relationship to the community's interest in avoidance or mitigation of the secondary effects from the operation of adult entertainment establishments." Dist. Ct. Op. at 6-7. As to patrons under the age of twenty-one, the court ruled that their First Amendment rights were "qualitative[ly] differen[t]" from the rights of the performers, that dancers' rights to express themselves through nude dancing "did not include a right to perform for a particular audience," and that the age restriction was "only an incidental burden on [Essence's] freedom." Id. at 7.

The district court ruled that sections 12-12-6, 12-12-9, and 12-12-10, the provisions dealing with the denial, suspension, and revocation of business and employee licenses, contained all the requisite procedural safeguards. The court ruled that the fourteen day limit on the decision whether to grant an employee license under section 12-12-10 was not so long as to run afoul of the procedural safeguards of Freedman v. Maryland, 380 U.S. 51, 85 S.Ct. 734, 13 L.Ed.2d 649 (1965). See Dist. Ct. Op. at 8. The court did not address whether section 12-12-10 was invalid because it did not require the city to go to court to justify a denial of an employee license, nor did it consider whether 12-12-10 was invalid because it did not contain an adequate judicial review procedure. The court ruled that the judicial review following a denial of an application for a business license under section 12-12-6, or following a suspension or revocation of a business license under section 12-12-9, was adequate, even though the judicial review procedure did not guarantee a swift judicial decision. Id. at 8-10.

The district court also ruled that sections 12-12-6 and 12-12-9, for the most part, did not grant to the officials of Federal Heights impermissible discretion in deciding whether to grant, suspend, or revoke business licenses. The court accepted the city's narrowing construction of several phrases in the ordinance that otherwise seemed to give the City Administrator and City Council wide discretion to deny, suspend, or revoke a business license. See id. at 11. The district court, however, declared invalid the portion of section 12-12-6 allowing the City Council to deny an application for a business license if issuance of the license would result in "serious criminal conduct." See id. at 12.

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The district court upheld portions of sections 12-12-6 and 12-12-10, which allowed denial of applications for business and employee licenses if a principal (in the case of a business license) or employee has been convicted of certain crimes specified in section 12-12-4(F). The court analyzed the disqualification provisions as content neutral restrictions on speech and concluded that they furthered the substantial governmental interest in mitigating the secondary effects of adult businesses. Id. at 13-15.

The district court upheld the licensing fees imposed on applicants for employee licenses, observing that the fees were correlated to the costs of administering the licensing scheme. Id. at 16-17. Since plaintiffs did not prove the fees were excessive, the court declared them valid. Id. at 17.

The district court also ruled on other provisions of the Municipal Code, including the requirements that principals of businesses seeking business licenses disclose their share of the business, that dancers maintain a certain distance from the stage, and that adequate lighting be installed both inside and outside the premises. The court declared invalid the portion of the...

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