Executive Arts v. City of Grand Rapids

• Citation: 391 F.3d 783
• Decision Date: 10 December 2004
• Docket Number: No. 02-2183.,02-2183.
• Parties: EXECUTIVE ARTS STUDIO, INC., d/b/a Velvet Touch, Plaintiff-Appellee, v. CITY OF GRAND RAPIDS, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

391 F.3d 783

EXECUTIVE ARTS STUDIO, INC., d/b/a Velvet Touch, Plaintiff-Appellee, v. CITY OF GRAND RAPIDS, Defendant-Appellant.

No. 02-2183.

United States Court of Appeals, Sixth Circuit.

Argued: June 17, 2004.

Decided and Filed: December 10, 2004.

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ARGUED: Scott D. Bergthold, Law Office of Scott D. Bergthold, Chattanooga, Tennessee, for Appellant. Gregory Fisher Lord, Law Office of Gregory Fisher Lord, Sterling Heights, Michigan, for Appellee. ON BRIEF: Scott D. Bergthold, Law Office of Scott D. Bergthold, Chattanooga, Tennessee, Daniel A. Ophoff, Catherine M. Mish, City Attorney's Office for the City of Grand Rapids, Grand Rapids, Michigan, for Appellant. Gregory Fisher Lord, Law Office of Gregory Fisher Lord, Sterling Heights, Michigan, Allan S. Rubin, Draper & Rubin PLC, Southfield, Michigan, for Appellee.

Before: SILER, COLE, and ROGERS, Circuit Judges.

OPINION

SILER, Circuit Judge.

The City of Grand Rapids (City) appeals the district court's denial of motions to both abstain from, and subsequently dismiss, this action. The City also appeals the grant of summary judgment in favor of the plaintiffs, Executive Arts Studio, Inc., and the scope of the resulting injunctive relief. For the reasons stated hereafter, we AFFIRM.

I. BACKGROUND

In August 2000, Executive Arts Studio, Inc. (Executive Arts or Velvet Touch), which operates an adult bookshop under the business name "Velvet Touch," applied to the planning department of the City for a variance from the City's zoning ordinance that regulated adult businesses. City Ordinance 77-31, adopted in 1977 as Article 25 to the existing zoning ordinance, added section 5.284(2) which defined what constituted an adult bookstore. These stores, and certain other regulated businesses such as pool halls and pawn shops, were prohibited from establishing themselves within 1,000 feet of any two other regulated uses or within 500 feet of any area zoned for residential use. Executive Arts had lost its lease in an adjoining municipality and found a desired relocation site in Grand Rapids. However, this site was within 1,000 feet of two other regulated uses and within 500 feet of a residential area. The City had defined an adult bookstore under Article 25 of the ordinance as:

An establishment having as a substantial or significant portion of its stock in trade, books, magazines, and other periodicals which are distinguished or characterized by their emphasis on matter depicting, describing or relating to "specified sexual activities" or "specified anatomical areas," as defined herein, or an establishment with a segment or section devoted to the sale or display of such material.

Executive Arts represented to the City that only three percent of Velvet Touch's inventory consisted of the items specifically enumerated in the ordinance since the most significant portion of its inventory consisted of sexually explicit videos and other sexual paraphernalia. As the City had previously concluded that a "substantial or significant portion" under the statute should be defined as five percent or greater of the enumerated items within a businesses inventory, it concluded that Velvet Touch was not within the definition of an adult bookstore and therefore did not require a variance to conduct business at its chosen location. Shortly thereafter, Executive Arts purchased the building at issue and began operations.

Michael Vredevoogd, an adjacent property owner, appealed the City's decision to the Grand Rapids Zoning Board of Appeals (ZBA), which affirmed the City's conclusion in December 2000. In January 2001, Vredevoogd filed suit in Kent County Circuit Court seeking declaratory and injunctive relief. He claimed that 1) Velvet Touch was an adult bookstore; 2) its location violated the zoning code; and 3) therefore, the court should enjoin Executive Arts's operation of Velvet Touch as a nuisance per se. Treating the complaint as an appeal of the ZBA decision, the circuit court issued a decision on February 22, 2001, agreeing with Vredevoogd that Velvet Touch was an adult bookstore as defined in the ordinance. Although the court described the ordinance as a "dinosaur" because it had never been modernized since the 1970s to include more current adult entertainment staples, such as video discs and tapes, the court found that the ordinance encompassed an establishment with either 1) "a substantial or significant portion" of its inventory in sexually explicit reading material; and/or 2) a "segment or section" of the store exclusively devoted to such material. As Velvet Touch fell into the latter category, the court found that Velvet Touch met the definition of an adult bookstore.

However, the court determined that it was premature to rule on the remaining issues as Executive Arts was entitled to a ruling by the ZBA on the original variance request. After the ZBA developed a record and ruled upon the request, any dissatisfied party would be entitled to appeal the decision to the circuit court, which retained jurisdiction over the matter. The court also noted that "[w]hether the ordinance is invalid because it does not require that any section or segment be substantial or significant, i.e., large" was not a matter for the ZBA to decide, but for the circuit court, if a variance was denied.

A few days after the circuit court's decision, Executive Arts removed all magazines from its store and communicated that fact to the City. On February 27, 2001, the City Commission adopted Ordinance 01-07, which amended the definition of adult bookstore to include the sale, rental, trade, exchange or display of books, magazines, video tapes, video discs and other more recent additions to the adult entertainment industry's stock in trade. This ordinance became effective on March 2, 2001 as Ordinance 01-07.

On March 29, 2001, Executive Arts filed a 42 U.S.C. § 1983 claim in federal district court alleging that the original Ordinance 77-31 violated, both facially and/or as applied, the First, Fifth and Fourteenth Amendments, requesting injunctive and declaratory relief. On May 3, 2001, the ZBA denied the variance request. Executive Arts appealed this decision to the Kent County Circuit Court on May 22, 2001. On June 18, 2001, Executive Arts filed with the Kent County Circuit Court an "Amended Notice of Reservation of Federal Claims/Defenses" stating that Executive Arts had the intention of reserving the right to raise and litigate any federal claims in federal court pursuant to England v. Louisiana Board of Medical Examiners, 375 U.S. 411, 421-22, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964).

On June 7, 2001, the City filed a motion with the district court requesting that it dismiss the complaint on the basis of the Younger abstention doctrine due to the ongoing state litigation.¹ Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). Subsequently, in July 2001, Executive Arts amended its complaint to specify that it challenged both Ordinance 77-31 as a violation of the First and Fourteenth Amendments, and the newly adopted Ordinance 01-07 as violative of the First Amendment, along with a related Fourteenth Amendment due process claim for its prior non-conforming use of the property before the enactment of Ordinance 01-07. The district court denied the City's Younger motion on October 9, 2001, declining to abstain. See Executive Art Studio, Inc. v. City of Grand Rapids, 179 F.Supp.2d 755 (W.D.Mich.2001).

On October 11, 2001, the Kent County Circuit Court issued an opinion finding in logical progression that 1) the amended ordinance applied to Velvet Touch; 2) Executive Arts was therefore required to seek a variance; 3) this variance was properly denied; and 4) Velvet Touch was a public nuisance under Michigan law and would have to either cease operations or remove all the material which caused it to fall into the ambit of the ordinance. The circuit court additionally addressed a federal constitutional overbreadth issue on the basis that Executive Arts raised the issue during oral argument. The circuit court considered itself bound to consider the issue once raised, and therefore, in an exercise of caution, determined a need to address all the possible federal constitutional challenges out of efficiency and the concern that by raising one constitutional issue before the circuit court, Executive Arts potentially would waive any further right to litigate the federal constitutional issues in any forum. The circuit court found against Executive Arts when it addressed these issues, stating its belief that the ordinance was constitutional.

Subsequently, Executive Arts filed a motion for summary judgment in the federal district court, while the City moved to dismiss the case based on the Rooker-Feldman doctrine and claim preclusion under the Full Faith and Credit Statute, 28 U.S.C. § 1738, due to the decisions in the state court. On August 29, 2002, the district court held that Rooker-Feldman was inapplicable and granted Executive Arts's summary judgment motion.² See Executive Arts Studio, Inc. v. City of Grand Rapids, 227 F.Supp.2d 731 (W.D.Mich.2002).

In ruling on the Rooker-Feldman issue, the district court concluded that Executive Arts had presented a valid England reservation of its federal claims to be pursued in federal court when litigating in the state court, particularly since the first time Executive Arts voiced its federal claims was in the federal forum. The district court found that having invoked the jurisdiction of the federal court, Executive Arts was still bound to pursue its state claims in state court. Additionally, the district court examined the statements made by Executive Arts's counsel before the Kent County Circuit Court and failed to find a valid waiver of the England reservation despite some comments in regard to the ordinance's being overbroad, particularly as Executive Arts's counsel clarified himself during the exchange...