Images v. Evans

• Decision Date: 15 July 2010
• Docket Number: No. 09-1199.,09-1199.
• Parties: IMAGINARY IMAGES, INCORPORATED, d/b/a Paper Moon; BTF3, L.L.C., d/b/a Paper Moon; Papermoon-Springfield, Incorporated, d/b/a Paper Moon, Plaintiffs-Appellants,v.Pamela O'Berry EVANS, in her official capacity as Chair of the Virginia Alcohol Beverage Control Board; Susan R. Swecker, in her official capacity as Member of the Virginia Alcohol Control Board; Esther H. Vassar, in her official capacity as Member of the Virginia Alcohol Control Board, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

612 F.3d 736

IMAGINARY IMAGES, INCORPORATED, d/b/a Paper Moon; BTF3, L.L.C., d/b/a Paper Moon; Papermoon-Springfield, Incorporated, d/b/a Paper Moon, Plaintiffs-Appellants,v.Pamela O'Berry EVANS, in her official capacity as Chair of the Virginia Alcohol Beverage Control Board; Susan R. Swecker, in her official capacity as Member of the Virginia Alcohol Control Board; Esther H. Vassar, in her official capacity as Member of the Virginia Alcohol Control Board, Defendants-Appellees.

No. 09-1199.

United States Court of Appeals Fourth Circuit.

Argued: May 13, 2010.

Decided: July 15, 2010.

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ARGUED: J. Michael Murray, Berkman, Gordon, Murray & Devan, Cleveland, Ohio, for Appellants. Mikie F. Melis, Office of the Attorney General, Richmond, Virginia, for Appellees. ON BRIEF: Steven D. Shafron, Berkman, Gordon, Murray & Devan, Cleveland, Ohio, for Appellants. William C. Mims, Attorney General of Virginia, Stephen R. McCullough, Solicitor General of Virginia, Catherine Crooks Hill, Assistant Attorney General, Office of the Attorney General, Richmond, Virginia, for Appellees.

Before TRAXLER, Chief Judge, WILKINSON, Circuit Judge, and SAMUEL G. WILSON, United States District Judge for the Western District of Virginia, sitting by designation.

Affirmed by published opinion. Judge WILKINSON wrote the opinion, in which Chief Judge TRAXLER and Judge WILSON joined.

OPINION

WILKINSON, Circuit Judge:

Plaintiffs are three nightclubs where women give erotic dance performances wearing only g-strings and pasties. The clubs brought First Amendment, vagueness, and overbreadth challenges to Virginia's alcohol licensing program, which allows the clubs to serve beer and wine but not mixed beverages. Under the standard of intermediate scrutiny applicable to policies aimed at the harmful secondary effects of sexually oriented entertainment, Virginia's policy passes constitutional muster. The public interest served by the policy is substantial, the restriction on the clubs mild and the burden on First Amendment values slight. Moreover, legislatures must have some leeway to draw a regulatory middle ground and Virginia's is a policy of moderation. Judicial invalidation of carefully drawn distinctions risks chasing lawmakers from the paths of compromise and into absolutes. We thus decline to overturn the classifications here, and accordingly affirm the judgment of the district court.

I.

The sale and consumption of alcohol within the Commonwealth of Virginia is governed by the comprehensive regulatory scheme established by the Alcoholic Beverage Control (“ABC”) Act, Va.Code §§ 4.1-100 et seq. , and by regulations adopted by the ABC Board, the regulatory body created by the Act. See Va.Code §§ 4.1-101, -103. Under this regime, establishments where performers offer striptease routines may obtain licenses to sell beer, wine, or both. Such facilities are not eligible, however, for mixed beverage licenses, which permit the sale of distilled spirits. See Va.Code §§ 4.1-226(2)(i), -325(12), (13); 3 Va. Admin. Code § 5-50-140.

The current shape of these provisions stems in part from earlier litigation. In Giovani Carandola, Ltd. v. Bason, 303 F.3d 507 (4th Cir.2002) ( “ Carandola I ”), this court struck down as overbroad certain North Carolina limitations on the availability of alcohol at establishments hosting sexually oriented performances. The offending provisions were then amended and the court upheld the revised scheme against overbreadth and vagueness challenges. See Giovani Carandola, Ltd. v. Fox, 470 F.3d 1074 (4th Cir.2006) ( “ Carandola II ”). At the time, the Virginia ABC statutes and relevant ABC regulation used language similar to that which Carandola I had invalidated, leading to an injunction in 2007 against enforcement of certain portions of the Virginia program. See Norfolk 302, LLC v. Vassar, 524 F.Supp.2d 728, 742 (E.D.Va.2007). The Virginia General Assembly promptly amended the challenged statutes to bring them into compliance and the ABC Board similarly amended its regulation, after which this court issued an order dismissing the ABC Board's pending appeal and vacating the injunction as moot.

During the period when Virginia's rules were suspended, mixed beverage licenses were issued to the plaintiffs in this case. Plaintiffs are three Virginia nightclubs belonging to the Papermoon chain-two in Richmond and one in Springfield-where dancers perform wearing only g-strings and pasties. In June 2008, with the revised licensing program about to take effect and their mixed beverage licenses in jeopardy, plaintiffs, whom we shall refer to as Papermoon, sued the ABC Board's members to block enforcement. Papermoon argued that the scheme violated the First Amendment, was unconstitutionally vague, and was facially overbroad.

An evidentiary hearing was held a few months later at which the ABC Board offered the testimony of W. Curtis Coleburn, its chief operating officer. Coleburn testified that he and the Board had reviewed at least forty-two studies and numerous cases dealing with the negative effects on the surrounding community of sexually oriented businesses. He explained that Virginia's decision to limit establishments offering sexually oriented entertainment to beer and wine reflected the fact that distilled spirits more readily lead to intoxication because of their higher alcohol content. He also stated that Virginia's policy had been modified to incorporate the teachings of the Carandola decisions.

In response, Papermoon offered various evidence meant to show that its clubs did not produce secondary effects. This consisted chiefly of testimony from its expert, Professor Daniel Linz of the University of California at Santa Barbara. Linz explained that he had reviewed crime data for the Papermoon locations and found that there was no increase in crime near the clubs after they obtained mixed beverage licenses and that sexually oriented businesses in Richmond generally were not “hot spots” for crime.

In December 2008, the district court rejected the bulk of Papermoon's claims holding, with exceptions not relevant here, that Virginia's policy prohibiting distilled spirits at establishments like the Papermoon clubs was constitutional. See Imaginary Images, Inc. v. Evans, 593 F.Supp.2d 848, 863 (E.D.Va.2008). Papermoon now appeals.

II.

Although it is a far cry from political speech, “nude dancing is not without its First Amendment protections.” Schad v. Borough of Mount Ephraim, 452 U.S. 61, 66, 101 S.Ct. 2176, 68 L.Ed.2d 671 (1981). Regulations of sexually oriented entertainment “receive intermediate scrutiny if they are not premised on a desire to suppress the content of such entertainment, but rather to address the harmful secondary effects” it produces-higher crime rates, lower property values, and unwanted interactions between patrons and entertainers such as public sexual conduct, sexual assault, and prostitution. Carandola I, 303 F.3d at 513. Under this standard, the government must show that its regulation materially advances its substantial interest in reducing negative secondary effects and that reasonable alternative avenues of communication remain available. City of Los Angeles v. Alameda Books, Inc., 535 U.S. 425, 434, 122 S.Ct. 1728, 152 L.Ed.2d 670 (2002) (plurality); Carandola I, 303 F.3d at 515; see also Ward v. Rock Against Racism, 491 U.S. 781, 799, 109 S.Ct. 2746, 105 L.Ed.2d 661 (1989) (government must show its interest “would be achieved less effectively absent the regulation.”).

But while the government must “fairly support” its policy, it need not settle the matter beyond debate or produce an exhaustive evidentiary demonstration. Alameda Books, 535 U.S. at 438, 122 S.Ct. 1728 (plurality); see also id. at 451, 122 S.Ct. 1728 (Kennedy, J., concurring in the judgment) (“[V]ery little evidence is required.”).¹ Moreover, its policy expertise is entitled to “deference,” and it may demonstrate the efficacy of its method of reducing secondary effects “by appeal to common sense,” rather than “empirical data.” Id. at 439-40, 122 S.Ct. 1728 (plurality); see also id. at 451-52, 122 S.Ct. 1728 (Kennedy, J., concurring in the judgment). It may also rely on the experiences of other jurisdictions and on findings expressed in other cases. See City of Renton v. Playtime Theatres, Inc., 475 U.S. 41, 51-52, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986). Once the government makes this showing, the matter is at an end unless the plaintiff “produces clear and convincing evidence” to rebut it. Carandola I, 303 F.3d at 516.

Papermoon argues that Virginia's policy is unconstitutional because a ban on mixed beverages at its clubs is pointless when beer and wine are still allowed. It asserts that the ABC Board produced no studies to support such a restriction, while Papermoon offered social science evidence undermining it. In assessing Papermoon's challenge, we first examine the nature of the regulation and its burden on expressive interests. We next consider whether the ABC Board sufficiently demonstrated the necessary relationship between the mixed beverage restriction and its interest in reducing negative secondary effects. Finally, we turn to Papermoon's rebuttal evidence.

A.

We begin by noting that Virginia's policy regarding alcohol at erotic dancing locales is about as tame as one could imagine. Virginia “has not forbidden these performances across the board. It has merely proscribed such performances in establishments that it licenses to sell liquor by the drink.” California v. LaRue, 409 U.S. 109, 118, 93 S.Ct. 390, 34 L.Ed.2d 342 (1972); see also Carandola I, 303 F.3d at 513 n. 2 & 519.

Indeed, Virginia does not even prohibit all alcohol at sexually oriented businesses, only mixed beverages. Wine and beer are as available at the Papermoon clubs as at any other Virginia bar. And as Papermoon itself notes, beer remained the drink of choice for its patrons even...