Talk of the Town v. Dept Fin. & Bus. Las Vegas

• Decision Date: 10 September 2003
• Docket Number: No. 01-16390.,No. 01-15303.,01-15303.,01-16390.
• Parties: TALK OF THE TOWN; Video Treasures, Inc.; Video Treasures, Ltd.; Raymond Pistol, President, Secretary and Treasurer, Plaintiffs-Appellants, v. DEPARTMENT OF FINANCE AND BUSINESS SERVICES, on behalf of CITY OF LAS VEGAS, Defendant-Appellee. Talk of the Town; Video Treasures, Inc.; Video Treasures, Ltd.; Raymond Pistol, President, Secretary and Treasurer, Plaintiffs-Appellees, v. Department of Finance and Business Services, on behalf of City of Las Vegas, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

343 F.3d 1063

TALK OF THE TOWN; Video Treasures, Inc.; Video Treasures, Ltd.; Raymond Pistol, President, Secretary and Treasurer, Plaintiffs-Appellants, v. DEPARTMENT OF FINANCE AND BUSINESS SERVICES, on behalf of CITY OF LAS VEGAS, Defendant-Appellee.

Talk of the Town; Video Treasures, Inc.; Video Treasures, Ltd.; Raymond Pistol, President, Secretary and Treasurer, Plaintiffs-Appellees, v. Department of Finance and Business Services, on behalf of City of Las Vegas, Defendant-Appellant.

No. 01-15303.

No. 01-16390.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 11, 2003 — San Francisco, California.

Filed September 10, 2003.

Amended December 22, 2003.

Allen Lichtenstein, Las Vegas, Nevada, argued the cause for Talk of the Town and submitted briefs.

Peter M. Angulo, Rawlings, Olson, Cannon, Gormley & Desruisseaux, Las Vegas, Nevada, argued the cause for the City of Las Vegas and filed briefs. Thomas D. Dillard, Jr., also was on the briefs.

Appeal from the United States District Court for the District of Nevada; Lloyd D. George, District Judge, Presiding. D.C. No. CV-98-00910-LDG/RJJ.

Before WILLIAM C. CANBY, JR., DIARMUID F. O'SCANNLAIN, and WILLIAM A. FLETCHER, Circuit Judges.

Opinion by Judge O'SCANNLAIN; Dissent by Judge CANBY.

OPINION

O'SCANNLAIN, Circuit Judge.

We must decide whether the First Amendment is implicated by the suspension of an establishment's erotic dancing license for violations of a city's alcohol licensing laws.

I

In January and early February 1998, officers of the City of Las Vegas' Business License Department conducted some six overt and covert site investigations at Talk of the Town ("TOT"), a business licensed to present erotic dancing.¹ During the course of these investigations, inspectors themselves were allowed to bring onto the premises and consume alcoholic beverages, and witnessed other patrons doing the same, even though TOT did not possess a valid liquor license. On several occasions, upon inquiring of TOT employees about the availability of alcohol, the investigating officers were directed to a nearby liquor store.² On February 6, 1998, TOT was issued a "Notice to Cease & Desist." The notice informed TOT that it was in violation of Las Vegas Municipal Code ("LVMC") § 6.50.170, which forbids the sale or consumption of alcoholic beverages in any establishment lacking a valid alcoholic beverage license.

On March 10, 1998, the Las Vegas Department of Finance and Business Services drafted and served on TOT a "Complaint for Disciplinary Action" pursuant to the nuisance provisions of the LVMC, §§ 6.02.330(H)³ and 6.02.370,⁴ which subject those who operate without the appropriate license to "disciplinary action by the City Council for good cause." The "good cause" alleged in TOT's case was the numerous violations of the City's general liquor license provision, LVMC § 6.50.170, as well as § 6.35.100(F), which forbids the purchase, sale, or consumption of alcohol in any erotic dancing establishment that does not also possess a valid liquor license. The Department further requested that the City Council "[a]pprove the Complaint for Disciplinary Action and order a disciplinary hearing at which the Respondents shall appear and show cause why the licenses⁵ that are the subject of this Complaint should not be suspended or revoked, or other disciplinary action taken...."

TOT's answer to the complaint denied the allegations and offered three affirmative defenses: "[1] Petitioner's Complaint is barred by insufficiency of process. [¶][2] The City of Las Vegas failed to provide the Petitioners adequate notice that the City considered the Respondents to be in violation of City ordinances. [3] The acts of the Respondents were neither willful, wanton, intentionally improper, nor taken in reckless disregard of the ordinances of the City of Las Vegas." In an order dated March 23, 1998, the mayor and City Council informed TOT that the complaint had been approved and that a hearing on the complaint would be held on May 20, 1998.

At the May 20 hearing, TOT was represented by counsel while the City was represented by the deputy city attorney. The proceedings were transcribed verbatim and the witnesses who appeared testified under oath and were subject to cross-examination. TOT was given the opportunity to present its own witnesses but chose not to do so. The City presented as witnesses the licensing officers who investigated the violations at TOT, and, on the basis of their testimony, the council concluded that there was substantial evidence to support the allegations in the complaint. On May 29, 1998, the council issued findings of fact, conclusions of law, and an order imposing a three-week suspension of TOT's license to run an erotic dance establishment.⁶ The order stated that "substantial evidence exists that TALK OF THE TOWN was in violation of Law Vegas Municipal Code §§ 6.50.170 and/or 6.35.100(F) and/or 6.02.330(H)." The order also stated that suspension of the erotic dancing license would go into effect fourteen days after service upon TOT. Service was made on the same day, but before the fourteen days ran, TOT filed suit in Nevada district court seeking declaratory and injunctive relief. TOT also moved for a stay of the suspension of their license. The stay was granted and the City subsequently removed the case to the federal district court.

Both parties filed motions for summary judgment. TOT's motion alleged that (1) the City's procedures in reaching the decision to suspend its license (i.e., its procedure of providing notice and a hearing before the City Council) violated its First and Fourteenth Amendment rights, and (2) the enforcement of the City's suspension of its license violated the First Amendment by failing to follow "well established procedural guidelines set forth by the federal courts for licensing decisions concerning [adult] businesses." With respect to the latter claim, TOT raised both a facial and as-applied challenge to § 6.35.140(D),⁷ the provision of the LVMC that allows for judicial review of any suspension or revocation of a nude dancing license, on the grounds that it "fails to provide for prompt judicial review of a decision to suspend an erotic dance license during which time the status quo must be maintained." The City's opposition and counter-motion for summary judgment asserted that (1) TOT's First Amendment rights were not at issue, and (2) the procedures available were constitutionally adequate.

In due course, the federal district court rejected TOT's constitutional challenge to the procedures the City used in reaching the conclusion that TOT violated the alcohol ordinance.⁸ With respect to TOT's challenge to the constitutionality of LVMC § 6.35.140(D), the district court found the provision lacked "safeguards regarding suspension or revocation of [an erotic dancing] license," and therefore concluded that it "is unconstitutional on its face." In the judgment accompanying its final order, the district court stayed the enforcement of the erotic dance license suspension, giving both parties a fourteen-day window within which to seek judicial review of the City's decision to suspend TOT's license and further held that if either party did seek judicial review, the stay would remain in place "until there is a final determination or decision by a judicial officer." If, however, neither party sought judicial review within that time, the court ordered that the stay would be automatically lifted.

Fourteen days later, on April 27, 2001, TOT filed and served on opposing counsel a "Motion to Amend and Emergency Motion for a Stay Pending Judicial Resolution." TOT contended that, because the district court had declared LVMC § 6.35.140(D) facially unconstitutional, and because that provision could not be severed from the rest of the City's license suspension/revocation scheme, the entire scheme was void. Because of the constitutional infirmity of § 6.35.140(D), TOT contended, the City never had the authority to suspend its license and could not now enforce its decision to do so, regardless of the district court's subsequent ruling and award of injunctive relief.

On April 28, 2001, the day after TOT filed its motion but before the district court ruled on it, the City moved to close the business pursuant to the 1998 decision by the City Council to suspend its erotic dance establishment license. TOT remained closed for three days, until May 1, 2001, when the district court granted the emergency stay and ordered oral argument for May 15, 2001, on the motion to amend.

On June 1, the district court denied the motion to amend judgment. The court entered a stay once again to allow TOT to appeal the court's determination.⁹

TOT, having substantially prevailed in the district court, timely appeals that court's remedy, urging reversal insofar as the ruling allows for any future enforcement of the May 20, 1998, decision by the Las Vegas City Council to suspend Talk of the Town's license. The City cross-appeals, challenging the district court's determination that the First Amendment is implicated in this case.

II

We note at the outset that this case implicates two distinct lines of First Amendment jurisprudence. The first, or O'Brien line — named after the Supreme Court's decision in United States v. O'Brien, 391 U.S. 367, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968)¹⁰ — teaches that "generally applicable regulations of conduct implicate the First Amendment only if they (1) impose a disproportionate burden on those engaged in First Amendment activities; or (2) constitute governmental regulation of conduct with an expressive element." Nunez v. City of San Diego, 114 F.3d 935, 950 (9th Cir.1997). The second line of cases concerns "prior restraints" on speech that arise "when the enjoyment of protected expression is contingent upon the approval of government officials." Baby Tam & Co. v. City of Las Vegas, 154 F.3d 1097, 1100 (9th Cir.1998). The many...