Dream Palace v. County of Maricopa, 00-16531.

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Citation384 F.3d 990
Docket NumberNo. 00-16531.,00-16531.
PartiesDREAM PALACE, an Arizona limited liability company, dba Liberty Entertainment Group, LLC; Edmund Archuleta, Jr.; William Alkire; April Cope; Henry Jenkins; Eugene Williams; Cari Elmore; Jennifer McGrath; Susan Roberts; Rachel Russo; Haley Wheeler; Corina Reville; Jill Amante, Plaintiffs-Appellants, v. COUNTY OF MARICOPA, a political subdivision of the State of Arizona, Defendant-Appellee.
Decision Date27 September 2004

G. Randall Garrou, Weston, Garrou & DeWitt, Los Angeles, CA, argued the cause and filed briefs for appellant Dream Palace, et al. John H. Weston was on the briefs.

Scott E. Boehm, Copple, Chamberlin, Boehm & Murphy, P.C., Phoenix, AZ, argued the cause and filed briefs for appellee Maricopa County. Terry E. Eckhart, Office of Maricopa County Attorney, was on the briefs.

Appeal from the United States District Court for the District of Arizona; Stephen M. McNamee, District Judge, Presiding. D.C. No. CV-97-02357-SMM.

Before: CANBY, O'SCANNLAIN, and W. FLETCHER, Circuit Judges.

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

O'SCANNLAIN, Circuit Judge.

We must decide whether a local ordinance imposing certain licensing requirements and operating restrictions on adult entertainment establishments violates the First Amendment.

I
A

In 1996, the Arizona legislature amended § 11-821 of the Arizona Revised Statutes, to authorize counties to enact zoning ordinances with respect to adult entertainment establishments. See Ariz.Rev.Stat. § 11-821. Acting on its new authority, the Maricopa County Board of Supervisors asked its Planning and Development Department to research and to prepare a draft of what would eventually become Ordinance P-10, at issue in this case.

At the behest of the county board, the planning department prepared a four-page report for board members, addressing the negative effects associated with adult-oriented businesses. In addition to discussing the Supreme Court's decisions in City of Renton v. Playtime Theatres, Inc., 475 U.S. 41, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986), Young v. American Mini Theatres, 427 U.S. 50, 96 S.Ct. 2440, 49 L.Ed.2d 310 (1976), and Barnes v. Glen Theatre, Inc., 501 U.S. 560, 111 S.Ct. 2456, 115 L.Ed.2d 504 (1991), the report cited seventeen studies documenting the negative secondary effects associated with adult-oriented establishments. Summarizing the findings of these studies, the report concluded that adult-oriented businesses were associated with "unlawful and unhealthy activities" and generally lead to illicit sexual behavior, crime, unsanitary conditions, and the spread of sexually-transmitted diseases if not properly regulated. Board members were provided with copies of studies from Phoenix and Los Angeles documenting such negative secondary effects, as well as a fourteen-page summary of eleven other studies.

Public hearings were held with respect to the proposed ordinance on April 23, 1997. Two people spoke against the ordinance at those hearings, a local bookstore owner and John Weston, the attorney for the plaintiffs in this case. Others spoke in favor, including state senator David Peterson and state representatives Marilyn Jarrett and Karen Johnson. Most of the testimony pro and con focused on the legality of the proposed ordinance and the need for regulation in light of the perceived secondary effects associated with adult-oriented businesses. The county planning director, Ms. Herberg-Kusy, also addressed the board at these hearings, urging that the studies provided the necessary empirical data to conclude that adult-oriented businesses have a negative secondary impact on surrounding communities. The board voted unanimously to adopt the ordinance, and it became effective on May 27, 1997.

B

Ordinance P-10 is a comprehensive scheme for the licensing and regulation of businesses which come within its purview: that is, adult entertainment businesses. See Ordinance § 2.1 Businesses, managers and employees that come within the ordinance's sweep are each required to obtain a license or permit prior to operating, or working at, an adult entertainment business. Certain procedural safeguards, at issue in this case, are in place with respect to the county's handling of applications for licenses and permits. In addition, the ordinance contains numerous operating restrictions on adult-oriented businesses, certain of which are also at issue in this litigation.

The plaintiffs in this action are Dream Palace, a live adult nude dancing establishment in Maricopa County, and certain of its managers and employees (collectively "Dream Palace").2 When Ordinance P-10 became effective, Dream Palace and its managers and employees did not apply for a business license or for work permits, as required by the ordinance. Instead, on November 13, 1997, they filed suit in federal district court challenging the ordinance on First Amendment grounds, as well as certain state law grounds.

In 1998, apparently at the instigation of Maricopa County, the Arizona legislature enacted Arizona Revised Statute § 11-821(B). Section 11-821(B) expressly provided Arizona counties with the authority to license and to regulate new or existing adult-oriented business, and to impose work permit requirements on nude dancers and business managers.3

While the state was amending the relevant statute, the county was in the process of amending Ordinance P-10. The proposed amendments were in the nature of minor clarifications; the substance of the ordinance remained unchanged. At a June 17, 1998 board meeting to discuss the amendments, a total of eight further secondary effects studies were made available to board members. On September 2, 1998, the board unanimously voted to approve the amendments. See Maricopa County, Az., Ordinance P-10 (Sept. 2, 1998) (Attached as Appendix to this Opinion).

In the wake of the adopted amendments, Dream Palace filed an amended complaint in district court, renewing Dream Palace's frontal assault on several provisions in the ordinance on First Amendment and state law grounds. Dream Palace simultaneously filed eight separate motions for partial summary judgment. The county filed a single cross-motion for summary judgment on all issues. On September 30, 1999, the district court granted summary judgment in favor of the county on all issues save two. Specifically, with respect to the requirement that an adult entertainment business must obtain a license to operate, the district court held that the procedural safeguards in place were insufficient with respect to pre-existing businesses like Dream Palace, because there was no guarantee that a pre-existing business could continue to operate pending the outcome of an appeals process. The district court also held that the requirement that nude and semi-nude dancers wear identification cards was invalid under Renton. The county has not appealed from either of these two rulings. The district court abstained from addressing the state law claims of preemption and ultra vires.

Dream Palace subsequently filed a motion to alter or to amend the judgment, and asked the district court to explain its decision to abstain from addressing the state law claims. The district court denied the motion. In doing so, it explained that it did not address the state law claims because "the various motions for summary judgment have resolved all of Plaintiffs' federal constitutional claims," and that the "remaining state law claims raise delicate issues involving the interpretation and application of Arizona law." Dream Palace timely appeals.

II

The Supreme Court has ruled that nude dancing of the type performed at Dream Palace is "expressive conduct" which falls "within the outer ambit of the First Amendment's protection." City of Erie v. Pap's A.M., 529 U.S. 277, 289, 120 S.Ct. 1382, 146 L.Ed.2d 265 (2000) (plurality opinion). Therefore, the ordinance must be analyzed to ensure it does not unduly impair the exercise of First Amendment rights. The specific First Amendment tests that may apply, and the determination as to the proper level of scrutiny, depends for the most part on the nature of the provision that Dream Palace seeks to challenge.

Here, Dream Palace challenges several provisions in the ordinance as invalid prior restraints. Those provisions will be upheld only if they provide for a prompt decision during which the status quo is maintained, and there is the opportunity for a prompt judicial decision. FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 228, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990). Dream Palace also challenges several of the ordinance's operating restrictions. We assess the constitutionality of those provisions under the "secondary effects" test enunciated by the Supreme Court in Renton, 475 U.S. at 47-54, 106 S.Ct. 925.

III

Dream Palace first challenges the requirement that adult entertainment businesses obtain a license prior to conducting business in Maricopa County.

A

The district court in this case drew a distinction between pre-existing businesses on the one hand, and new businesses on the other. Specifically, with respect to pre-existing businesses, it found that "there is no guarantee in the ordinance that existing businesses or persons working as managers or adult service providers will be able to continue operating beyond the 180 day period,"4 and for that reason, the licensing scheme was invalid. The district court found, however, that the remaining provisions were valid. Specifically, the district court found that "the County may regulate and license new businesses and does so in this case in as expeditious a manner as possible given administrative realities." The district court held that, with respect to new businesses, the fact that the ordinance "does not provide for a...

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