Midvale City Corp. v. Haltom

• Citation: 2003 UT 26,73 P.3d 334
• Decision Date: 16 May 2003
• Docket Number: No. 20010794.,20010794.
• Parties: MIDVALE CITY CORPORATION, Plaintiff and Appellee, v. John HALTOM, an individual, and Doctor John's, Inc., dba Doctor John's Lingerie and Novelty Boutique, Defendants and Appellants.
• Court: Supreme Court of Utah

73 P.3d 334

2003 UT 26

MIDVALE CITY CORPORATION, Plaintiff and Appellee, v. John HALTOM, an individual, and Doctor John's, Inc., dba Doctor John's Lingerie and Novelty Boutique, Defendants and Appellants.

No. 20010794.

Supreme Court of Utah.

May 16, 2003.

Rehearing Denied July 2, 2003.

Peter Stirba, Corbin B. Gordon, Benson L. Hathaway, Salt Lake City, for plaintiff.

John Fahle, San Antonio, Texas, and W. Andrew McCullough, Midvale, for defendants.

JACKSON, Judge:

¶ 1 Defendants John Haltom and Doctor John's, Inc. (Dr. John's) appeal the trial court's issuance of a permanent injunction prohibiting Dr. John's from doing business in Midvale City. We affirm. ¶ 2 Associate Chief Justice Durrant, Justice Russon, and Justice Wilkins concur in Judge Jackson's opinion. However, Associate Chief Justice Durrant, joined by Justice Russon and Justice Wilkins, writes separately to set forth an alternative rationale for denying Dr. John's facial challenge, to address Dr. John's "as applied" challenge, and to clarify that the "good cause" exception does not need to be severed or given a limiting construction at this time.

BACKGROUND

¶ 3 The operative facts of this case are undisputed. Defendants, acting primarily through John Haltom (Haltom), commenced business in Midvale City as Dr. John's Lingerie and Novelty Boutique (Dr. John's) in June of 2000, and applied for a commercial business license.

¶ 4 On June 14, 2000, Haltom filled out an application where he described his business as selling "lingerie, swimwear, roses & gifts." On June 15, 2000, Susan Shreeve (Shreeve), the Midvale City Business License Administrator, asked Haltom for a definition of the novelties he intended to sell at his business. Haltom described such items as "candles and lotions." He failed to mention a legion of sexual devices and hundreds of associated products.

¶ 5 On June 28, 2000, Shreeve visited Dr. John's on a business license inspection as scheduled by Haltom, and decided that some of the novelties constituted sexually oriented products as defined by the Midvale City Code. Shreeve admonished Haltom to apply for a sexually oriented business (SOB) license, and revealed that she could not approve his current business license, presumably because he had affirmatively misrepresented the items he was going to sell. On July 29, 2000, Dr. John's began operating without a business license.

¶ 6 On August 8, 2000, the district court entered a Temporary Restraining Order that prohibited defendants from operating. On the same date, the parties appeared, were represented by counsel, and reached a specific agreement, as reflected in the order, that if "Haltom remov[ed] the product lines which [were] considered sexual[ly] oriented as described in the SOB ordinance, ... the City [would] not take further action in terms of the business operating and [would] consider the operation pursuant to the general business license application submitted on June 14, 2000."

¶ 7 For a brief time after the issuance of the Temporary Restraining Order, defendants removed all inventory covered by the ordinance, were issued a license, and continued to operate. On October 2, 20, and 24, and November 7, 2000, Midvale's City Code Enforcement Officer, Vicki Siegal, made inspections of Dr. John's and observed several hundred sexual gratification devices.

¶ 8 On November 21, 2000, the trial court held a hearing wherein it determined that Dr. John's was doing business as an SOB without an SOB license. Since defendants never submitted an application to Midvale City for an SOB license, the trial court issued a permanent injunction prohibiting it from doing business in Midvale City. Dr. John's appeals.

ISSUES AND STANDARDS OF REVIEW

¶ 9 Dr. John's presents four challenges to the trial court's injunction. First, it challenges the trial court's determination that Midvale City's SOB ordinance was not unconstitutionally vague or overbroad. Second, it challenges the trial court's determination that injunctive relief is an available remedy in this case. Third, Dr. John's challenges the trial court's determination that the ordinance in question is a valid time, place, and manner restriction. Fourth, Dr. John's challenges the trial court's determination that the Utah Constitution does not offer broader protection than the United States Constitution.

¶ 10 These are all questions of law that we review for correctness. See Grand County v. Emery County, 969 P.2d 421, 422 (Utah 1998) (holding a trial court's conclusion that a statute or ordinance is constitutional presents a question of law reviewed for correctness); Alta v. Ben Hame Corp., 836 P.2d 797, 804 (Utah Ct.App.1992) (determining availability of injunctive relief as matter of law); Whitmer v. City of Lindon, 943 P.2d 226, 228 (Utah 1997) (reviewing trial court's ruling on state constitutional claims for correctness).

ANALYSIS

¶ 11 We are called upon to decide whether a municipality may classify certain businesses as sexually oriented businesses, and require them to apply for a different license prior to engaging in business. There is no constitutional right to be free from classification. Accordingly, we hold that a city may classify businesses without implicating the First Amendment as long as the licensing process at issue does not adversely affect such businesses.

I. STANDING

¶ 12 We first discuss whether Dr. John's had standing to file suit. The district court made no factual findings that could support standing, and after careful review, it appears that this issue is dispositive. "[I]t is the burden of the `party who seeks the exercise of jurisdiction in his favor' [to clearly allege] facts essential to show jurisdiction. If [it] fail[s] to make the necessary allegations, [it has] no standing." FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231, 110 S.Ct. 596, 608, 107 L.Ed.2d 603 (1990) (citations omitted).

¶ 13 Because of the unique manner in which this case arose, the issue of standing is somewhat complicated. The issuance of an injunction conferred standing on Dr. John's as to licensing, and in effect, the constitutional challenge was bootstrapped in light of the dispute regarding classification. In essence, Dr. John's argues that unbridled discretion as to classification bears some relation to unbridled licensing discretion. We disagree.

¶ 14 A claim of prior restraint, valid or not, properly elicits a court's attention. "[T]he judiciary is vigilant in its oversight of prior restraints because of the fear that they deprive or delay access to information, and because restraints that lack procedural safeguards may lead to content-based discrimination." Graff v. City of Chicago, 986 F.2d 1055, 1063 (7th Cir.1993) (en banc). "While [p]rior restraints are not unconstitutional per se ... [a]ny system of prior restraint ... comes to [the Court] bearing a heavy presumption against its constitutional validity." FW/PBS, Inc., 493 U.S. at 225, 110 S.Ct. at 604 (citations omitted) (first and second alteration in original).

¶ 15 A facial challenge is permitted where the licensing system "is directed narrowly and specifically at expression or conduct associated with expression," City of Lakewood v. Plain Dealer Publ'g Co., 486 U.S. 750, 760, 108 S.Ct. 2138, 2145, 100 L.Ed.2d 771 (1988), because when a licensing scheme implicates protected speech, "applicants [may] be intimidated into censoring their own speech by not applying for a license," Graff, 986 F.2d at 1073.

¶ 16 "[A] facial challenge lies whenever a licensing law gives a government official or agency substantial power to discriminate based on the content or viewpoint of speech by suppressing disfavored speech or disliked speakers." City of Lakewood, 486 U.S. at 759, 108 S.Ct. at 2145. "To a large extent, then, one's ability to mount a facial challenge depends on the resolution of the substantive questions of whether speech is implicated and whether decision makers have excessive authority." Graff, 986 F.2d at 1061.

¶ 17 Even when a licensing scheme does not directly suppress communication, courts may properly entertain a facial challenge "where the licensing scheme vests unbridled discretion in the decisionmaker [or fails to confine the time in which a decision is made] and where the regulation is challenged as overbroad." FW/PBS, Inc., 493 U.S. at 223, 110 S.Ct. at 603 (citing City Council of Los Angeles v. Taxpayers for Vincent, 466 U.S. 789, 798 & n. 15, 104 S.Ct. 2118, 2125 & n. 15, 80 L.Ed.2d 772 (1984)).

¶ 18 Still, courts are reluctant to entertain facial attacks because the statute may be declared unconstitutional in all instances. "The usual approach is to wait until a statute is applied in the suspected and offensive way." Graff, 986 F.2d at 1072 (citing FW/PBS, Inc.,493 U.S. at 223,110 S.Ct. at 603); see also City of Lakewood,486 U.S. at 774,108 S.Ct. at 2153 (White, J., dissenting). "[W]e cannot sustain [a] facial attack unless the ordinance is `substantially overbroad,' judged in relation to the statute's plainly legitimate sweep." FW/PBS, Inc.,493 U.S. at 259,110 S.Ct. at 622 (Scalia, J., dissenting) (citations omitted).

¶ 19 Thus, there are two ways in which an appellant can attain standing: (1) He can raise an overbreadth challenge, alleging either impermissible time restraints or unbridled discretion; or (2) he can raise an as-applied challenge, alleging that the ordinance as applied has harmed or is likely to harm his interests. Both attempts fail in this case.

¶ 20 First, Dr. John's cannot mount a facial challenge because, even in the most restrictive light, the statute only regulates the type of license for which one must apply. To mount a facial attack in a prior restraint case, an appellant must demonstrate that the ordinance at issue restricts, or will restrict, communication in some discernible manner. Dr. John's offers no evidence that the purpose of the ordinance is "to restrict stores, as opposed to addressing the secondary...