Independence News, Inc. v. City of Charlotte

• Decision Date: 03 June 2009
• Docket Number: No. 08-1654.,No. 08-1655.,08-1654.,08-1655.
• Citation: 568 F.3d 148
• Parties: INDEPENDENCE NEWS, INCORPORATED, a North Carolina Corporation; Polo South, Incorporated, Plaintiffs-Appellants, and Central Avenue Video, Incorporated, a North Carolina Corporation, Plaintiff, O'Sheilds Entertainment, Incorporated; Riverside Video Plus, Intervenors/Plaintiffs, v. CITY OF CHARLOTTE, a North Carolina Municipal Corporation, Defendant-Appellee. Independence News, Incorporated, a North Carolina Corporation; Polo South, Incorporated, Plaintiffs-Appellants, and Central Avenue Video, Incorporated, a North Carolina Corporation, Plaintiff, O'Sheilds Entertainment, Incorporated; Riverside Video Plus, Intervenors/Plaintiffs, v. City of Charlotte, a North Carolina Municipal Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

568 F.3d 148

INDEPENDENCE NEWS, INCORPORATED, a North Carolina Corporation; Polo South, Incorporated, Plaintiffs-Appellants, and Central Avenue Video, Incorporated, a North Carolina Corporation, Plaintiff, O'Sheilds Entertainment, Incorporated; Riverside Video Plus, Intervenors/Plaintiffs, v. CITY OF CHARLOTTE, a North Carolina Municipal Corporation, Defendant-Appellee.

Independence News, Incorporated, a North Carolina Corporation; Polo South, Incorporated, Plaintiffs-Appellants, and Central Avenue Video, Incorporated, a North Carolina Corporation, Plaintiff, O'Sheilds Entertainment, Incorporated; Riverside Video Plus, Intervenors/Plaintiffs, v. City of Charlotte, a North Carolina Municipal Corporation, Defendant-Appellee.

No. 08-1654.

No. 08-1655.

United States Court of Appeals, Fourth Circuit.

Argued: March 27, 2009.

Decided: June 3, 2009.

Joseph L. Ledford, Charlotte, North Carolina, for Appellants. Robert Erwin Hagemann, Office Of The City Attorney, Charlotte, North Carolina, for Appellee.

Before WILLIAMS, Chief Judge, and SHEDD and AGEE, Circuit Judges.

Affirmed by published opinion. Chief Judge Williams wrote the opinion, in which Judge Agee concurred. Judge Shedd wrote a separate concurring opinion.

OPINION

WILLIAMS, Chief Judge:

In 1994, the City of Charlotte ("City") enacted an Adult Zoning Ordinance ("AZO") to protect certain sensitive uses from the "secondary effects" associated with adult establishments. The ordinance contains an amortization provision that required covered adult establishments to close or relocate to a conforming location by January 18, 2002. Independence News, Inc. ("Independence News") and Polo South, Inc. ("Polo South") (collectively, "Appellants"), which own and operate sexually oriented adult establishments subject to the AZO, filed this lawsuit in the District Court for the Western District of North Carolina seeking to avoid enforcement of the amortization provision against their establishments. Appellants claimed, inter alia, that enforcement of the AZO would strip them of their First Amendment protections because their adult establishments had not produced any unwanted secondary effects in the years since the AZO's enactment.

The district court dismissed the Appellants' as-applied challenge to the secondary effects rationale of the AZO, and it also granted summary judgment in favor of the City on Appellants' facial challenge to the AZO's variance provision, which does not require the Charlotte Zoning Board of Adjustment ("ZBA") to consider the absence of "secondary effects" when deciding whether to grant a variance.

On appeal, Appellants challenge both of these rulings. For the following reasons, we affirm.

I.

A.

On January 18, 1994, the City adopted the AZO, a text amendment to the Charlotte Zoning Ordinance. Charlotte, N.C., Ordinance 3782 (Jan. 18, 1994), current version codified at Charlotte, N.C., Code, app. A §§ 2.201, 9.8503, 9.903, 9.1103, and 12.518 (2008). The AZO defined the term "adult establishment" and limited the location of adult establishments to several zoning districts: B-2 (Business), UMUD (Uptown Mixed Use District), and I-1 and I-2 (Industrial). Id. It also included a section, Section 12.518, which required, and continues to require, that adult establishments be located at certain distances from any protected use—that is, any residential district, school, church, child care center, park or playground. Id. Specifically, section 12.518(a) provides that adult bookstores and adult mini-motion picture theaters must be at least 1,500 feet from any protected use, and section 12.518(b) requires that adult live entertainment establishments be at least 1,000 feet from any protected use. Id. Also, section 12.518(c) provides that adult bookstores and adult mini-motion picture theaters must be at least 1,000 feet from any other adult establishment, and section 12.518(d) provides that adult live entertainment establishments be at least 500 feet from any other adult establishment. Id. No more than one adult establishment may be located in the same building. Id.

Section 12.518 was added in an effort to "establish reasonable regulations to prevent a concentration of adult establishments within the City of Charlotte and to separate adult establishments from ... sensitive uses" because "[s]tudies ... show[ ] that lowered property values and increased crime rates tend to accompany and are brought about by the concentration of adult establishments." Id. In the City's view, such "[r]egulation ... [wa]s necessary to insure that [the effects from adult establishments] do not contribute to the blighting of surrounding neighborhoods and to protect the integrity of the City's schools, churches, child care centers, parks and playgrounds which are typically areas in which juveniles congregate." Id.

Through the amortization provision, the AZO gave preexisting adult establishments not in compliance with the protected use separation requirements of sections 12.518(a) and (b) until January 18, 2002— eight years from the date of the AZO's adoption—to either close or relocate to a conforming location. Id.

Initially, section 12.518 did not allow the ZBA to authorize a variance from the protected use separation requirements, but on March 18, 1996, the City granted the ZBA that authority by adding section 12.518(g), which provides:

[B]efore granting a variance from the separation requirements ..., the Board of Adjustment shall find that thoroughfares, traffic circulation patterns, structures or other natural or man-made geographic or topographic features are likely to provide an adequate measure of protection for the protected zoning or use from any secondary effects of the adult establishment.

Charlotte, N.C., Ordinance 489 (Mar. 18, 1996), codified at Charlotte, N.C., Code, app. A § 12.518(g) (2008).

B.

Independence News has operated an adult bookstore at its present location in the City since 1993.¹ In October of 2001, the Charlotte-Mecklenburg Zoning Administrator sent Independence News a notice, advising that Independence News's adult uses were in violation of the protected use separation requirements of section 12.518(a) and reminding Independence News that the AZO's amortization provision required Independence News to close or relocate to a conforming location by January 18, 2002.

Similarly, Polo South has operated a live adult entertainment establishment known as the "Carousel Club" at its present location in the City since 1993. In October of 2001, the Charlotte-Mecklenburg Zoning Administrator likewise sent Polo South a notice, advising that Polo South's adult uses were in violation of the protected use separation requirements of section 12.518(b) and reminding Polo South that the AZO's amortization provision required Polo South to close or relocate to a conforming location by January 18, 2002.

One week before the amortization deadline, Independence News and another affected business filed this action in federal district court, challenging certain provisions of the City's Zoning Ordinance. A few days later, in another case challenging the AZO, the district court entered a preliminary injunction enjoining the City from enforcing the amortization provision against any affected business pending final resolution. See Queen City Video & News, Inc. v. City of Charlotte, No. 3:00CV618, 2002 WL 32952238 (W.D.N.C. Jan. 16, 2002) (order granting motion for preliminary injunction). The district court held this case in abeyance pending the disposition of the Queen City case.

Ultimately, the district court granted summary judgment in favor of the City in Queen City on all claims except one, and the parties in Queen City entered into a Stipulation of Voluntary Dismissal with Prejudice. The district court then activated this case, and the City consented to the intervention of Polo South and two other affected businesses, agreeing that it would not enforce the amortization provision until the matters before the court were resolved.

The amended complaints filed by Independence News and Polo South demanded a permanent injunction prohibiting the City from enforcing the amortization provision against the Appellants, a declaratory judgment that section 12.518 of the City's Zoning Ordinance violated their First Amendment rights both facially and as-applied, and an order directing the ZBA to consider whether the Appellants' establishments actually generate adverse secondary effects against protected uses when determining whether or not to grant a variance.

Relevant to this appeal, Independence News and Polo South claimed that section 12.518 of the AZO is "unconstitutional as applied against [Appellant]s based upon the evidence ... concerning the history of [Appellant]s' businesses over a nine year period which clearly shows that no adverse secondary effects to protected zoning and uses can be attributed to [Appellant]s' constitutionally protected adult business uses." (J.A. at 30, 64.) In particular, Independence News and Polo South alleged that, during the nine year period following the AZO's enactment, property values had held steady or generally increased in the area surrounding their establishments; no sex related crimes had occurred in the area, and crime in general had not increased in the area as of result of their adult establishments; a number of businesses had located within the area surrounding the Appellants' adult establishments; and residential construction was currently taking place within the area surrounding Appellants' establishments.

On June 3, 2004, the district court granted the City's motion for partial judgment on the pleadings and dismissed the as-applied challenge to the secondary effects rationale of the AZO, concluding that "it is ... settled that [Appellants] can not maintain an `as-applied challenge' to [the] secondary effects rationale of the AZO's time, place, and manner restrictions." (J.A. at 85.) Then, on September 6, 2006, the district...