396 F.Supp.2d 630 (M.D.N.C. 2005), 1 01CV00115, Giovani Carandola, Ltd. v. Fox

• Docket Number: 1 01CV00115
• Citation: 396 F.Supp.2d 630
• Date: 26 October 2005
• Parties: Giovani Carandola, Ltd. v. Fox

Page 630

396 F.Supp.2d 630 (M.D.N.C. 2005)

GIOVANI CARANDOLA, LTD., a North Carolina Corporation, and Janel D. Ralph, Plaintiffs,

and

Dockside Dolls, Inc., a North Carolina Corporation, d/b/a/ Dockside Dolls; and North Carolina Golf and Travel, Inc., a North Carolina Corporation, d/b/a Pure Gold of Southern Pines; and Elizabeth Gofredi, New Party Plaintiffs

v.

Douglas A. FOX, in his official capacity as acting Chair of the North Carolina Alcohol Beverage Control Commission; Mike A. Joyner and Ricky Wright, in their official capacities as Members of the North Carolina Alcohol Beverage Control Commission; Bryan E. Beatty, in his official capacity as Secretary of the North Carolina Department of Crime Control and Public Safety, Defendants.

No. 1:01CV00115.

United States District Court, M.D. North Carolina.

Oct. 26, 2005

Page 631

[Copyrighted Material Omitted]

Page 632

[Copyrighted Material Omitted]

Page 633

Steven D. Shafron, Berkman Gordon Murray & Devan, Cleveland, OH, J. Michael Murray, Thomas F. Loflin, III, Loflin & Loflin, Durham, NC, Plaintiffs.

John Julian Aldridge, III, Isaac T. Avery, III, Amy L. Yonowitz, N.C. Dept. of Justice, Raleigh, NC, for Defendants.

MEMORANDUM OPINION

TILLEY, Chief Judge.

This suit questions the North Carolina Legislature's amended statute regulating conduct on premises licensed by the North Carolina Alcohol Beverage Control Commission ("Commission" or "ABC"). Plaintiffs' Second Amended Complaint for Declaratory Judgment, Preliminary Injunction and Permanent Injunction [Doc. # 45] seeks both a declaration that North Carolina General Statutes §§ 18B-1005 and 18B-1005.1 are unconstitutional under the First and Fourteenth Amendments and an injunction to prevent the Commission from enforcing the statutes against Plaintiffs. Defendants responded by filing a Motion to Vacate Preliminary Injunction and Dismiss Claims for Mootness [Doc. # 43] seeking to dismiss all of Plaintiffs' claims related to § 18B-1005 and its accompanying regulation N.C. Admin. Code tit. 4, r. 2S.0216 (2000).

I.

Plaintiff Giovani Carandola, Ltd. ("Giovani") operates Christie's Cabaret ("Christie's"), a topless dancing establishment in Greensboro, North Carolina, which holds permits issued by the Commission to sell malt beverages, fortified wines, unfortified wine, and mixed beverages. Plaintiff Janel Ralph is employed as a dancer at Christie's. Her dance routines include theme shows, in which Ms. Ralph dances two to three songs in costume as an exotic character, and at least a portion of these performances involve Ms. Ralph dancing topless or touching her body. The current Defendants are the acting Chair of the North Carolina Alcohol Beverage Control Commission and other members of the Commission.

On November 11, 2000, entertainers at Christie's were allegedly witnessed by Commission officers engaging in acts in violation of N.C. Gen.Stat. § 18B-1005 (2000) and N.C. Admin. Code tit. 4, r. 2S.0216 (2000) ("the Rule"). In pertinent part, § 18B-1005 ¹ provided:

(a) Certain Conduct--It shall be unlawful for a permittee or his agent or employee to knowingly allow any of the following kinds of conduct to occur on his licensed premises:

[Sections (1)(2)(3) omitted]

(4) Any conduct or entertainment by any person whose private parts are exposed or who is wearing transparent clothing that reveals the private parts;

(5) Any entertainment that includes or simulates sexual intercourse or any other sexual act; or

(6) Any other lewd or obscene entertainment or conduct, as defined by the Rules of the Commission.

Page 634

Pursuant to subsection (a)(6) of the statute, the Commission adopted the Rule which provided:

(a) No permittee or his employee shall allow any person to perform acts of or acts that simulate:

(1) sexual intercourse, masturbation, sodomy, bestiality, oral copulation, flagellation, or any sexual acts that are prohibited by law;

(2) the touching, caressing or fondling of the breasts, buttocks, anus, vulva or genitals;

(3) the display of the pubic hair, anus, vulva or genitals.

(b) No permittee or his employee shall allow any person to use artificial devices or inanimate objects to depict any of the prohibited activities described in Paragraph (a) of this Rule.

(c) No permittee or his employee shall allow any person who exposes to public view any portion of his pubic hair, vulva, genitals or anus to remain in or upon the licensed premises.

In December 2000, Christie's received a Notice of Alleged Violation alleging that Christie's violated the aforementioned statute and regulation. This notice was accompanied with a Proposed Stipulation and Offer in Compromise, in which Christie's would be allowed to stipulate to the violations and have its permits suspended for 30 days. Christie's did not agree to the Stipulation and Offer in Compromise. Instead, Christie's filed suit in this Court on January 29, 2001, challenging the statute and regulation as violations of their First Amendment rights. In April 2001, this Court preliminarily enjoined the enforcement of § 18B-1005 and its accompanying regulation finding them unconstitutionally overbroad in violation of the First and Fourteenth Amendments. Giovani Carandola, Ltd. v. Bason, 147 F.Supp.2d 383 (M.D.N.C.2001). On August 30, 2002, the Fourth Circuit affirmed in all material aspects. Giovani Carandola, Ltd. v. Bason, 303 F.3d 507, 512 (4th Cir.2002).

In 2003, the North Carolina General Assembly responded to the Fourth Circuit decision by reenacting § 18B-1005 without subsections (a)(4), (a)(5), and (a)(6). In addition, the General Assembly adopted N.C. Gen.Stat. § 18B-1005.1 which became effective August 1, 2003. The new statute states:

(a) It shall be unlawful for a permittee or his agent or employee to knowingly allow or engage in any of the following kinds of conduct on his licensed premises:

(1) Any conduct or entertainment by any person whose genitals are exposed or who is wearing transparent clothing that reveals the genitals;

(2) Any conduct or entertainment that includes or simulates sexual intercourse, masturbation, sodomy, bestiality, oral copulation, or flagellation, or any act that includes or simulates the penetration, however slight, by any object into the genital or anal opening of a person's body; or

(3) Any conduct or entertainment that includes the fondling of the breasts, buttocks, anus, vulva, or genitals.

(b) Supervision. It shall be unlawful for a permittee to fail to superintend in person or through a manager the business for which a permit is issued.

(c) Exception. This section does not apply to persons operating theaters, concert halls, art centers, museums, or similar establishments that are primarily devoted to the arts or theatrical performances, when the performances that are presented are expressing matters of serious literary, artistic, scientific, or political value.

Page 635

With the consent of the Defendants, a second amended complaint [Doc. # 45] was filed on October 10, 2003. This complaint added two establishments and one dancer as new party plaintiffs ² and retained all claims for declaratory injunctive relief as to the original statute and regulations, and also sought declaratory, preliminary, and permanent injunctive relief as to the newly enacted § 18B-1005.1. Defendants filed a Motion to Vacate Preliminary Injunction and Dismiss Claims for Mootness [Doc. # 43] seeking to vacate all of plaintiffs' claims related to § 18B-1005 and its accompanying regulation N.C. Admin. Code tit. 4, r. 2S.0216 (2000). Plaintiffs challenge the statutes and regulations as being overbroad and vague, both as applied and on its face. All parties to this action agree that there are no factual issues left to try before a jury.

II.

Article III of the Constitution limits the Court's power to hear only those cases involving an actual case or controversy. Nebraska Press Ass'n v. Stuart, 427 U.S. 539, 546, 96 S.Ct. 2791, 49 L.Ed.2d 683 (1976). A dispute must continue to exist at each successive stage of litigation because a federal court is not permitted to "render advisory opinions nor decide questions that cannot affect the rights of litigants in the case before them." Preiser v. Newkirk, 422 U.S. 395, 402, 95 S.Ct. 2330, 45 L.Ed.2d 272 (1975). Furthermore, litigation challenging the validity of legislation ordinarily is rendered moot if during the pendency of the action the legislation is repealed or amended in a significant way so that the offensive provision ceases to exist. U.S. Dep't of Treasury v. Galioto, 477 U.S. 556, 559-60, 106 S.Ct. 2683, 91 L.Ed.2d 459 (1986). However, litigation challenging a law is not moot if a party shows that the law could be reenacted after the case is dismissed. City of Mesquite v. Aladdin's Castle, Inc., 455 U.S. 283, 289, 102 S.Ct. 1070, 71 L.Ed.2d 152 (1982).

Plaintiffs argue that the original § 18B-1005 was not repealed but merely amended in such a way that the offensive provision still exists. Plaintiffs argue that they remain at risk of being charged with the violation of the original statute and its accompanying administrative Rule, and in the alternative, that the General Assembly's repeal of § 18B-1005 constitutes nothing more than a voluntary cessation and therefore falls within an exception to the mootness doctrine. Plaintiffs' argument fails to account for the unique facts of this case. In this case § 18B-1005 and its accompanying administrative Rule were repealed. There is no threat that they will be reenacted or that the General Assembly will pass a similar statute at some future date because the General Assembly has already passed a new, amended version of the old statute--N.C. Gen.Stat. § 18B-1005.1 (2003). There is no need to address the old statute when the newer version is also before the Court. If the new statute survives the challenges against it, the General Assembly would have no...