SDJ, Inc. v. City of Houston

• Decision Date: 10 February 1988
• Docket Number: No. 86-2735,86-2735
• Citation: 837 F.2d 1268
• Parties: SDJ, INC., d/b/a Sugar Babes, et al., Plaintiffs-Appellants, v. The CITY OF HOUSTON, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1268

837 F.2d 1268

SDJ, INC., d/b/a Sugar Babes, et al., Plaintiffs-Appellants, v. The CITY OF HOUSTON, et al., Defendants-Appellees.

No. 86-2735.

United States Court of Appeals Fifth Circuit.

Feb. 10, 1988.

Rehearing and Rehearing En Banc Denied March 15, 1988.

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Karrie Key, Joel M. Androphy, David H. Berg, Berg & Androphy, Houston, Tex., for SDJ, Inc., et al.

Jack R. Burns, Bellevue, Wash., for M.E.F. Enterprises, Inc. & MKD Enterprises.

Robert J. Collins, Sr. Asst. City Atty., Gilbert D. Douglas, Houston, Tex., for defendants-appellees.

Appeal from the United States District Court for the Southern District of Texas.

Before REAVLEY, WILLIAMS, and HIGGINBOTHAM, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

The City of Houston enacted a detailed ordinance imposing licensing and zoning restrictions upon sexually oriented businesses. The owners of 23 topless bars subject to the regulations filed suit in federal district court lodging a number of facial attacks on the Ordinance. The district court, with three exceptions not complained of here, upheld the Ordinance. See SDJ Inc. v. City of Houston, 636 F.Supp. 1359 (S.D.Tex.1986).

The owners press numerous issues on appeal. First, they challenge the Ordinance on first amendment grounds, claiming that the City failed to prove that it had a substantial interest in regulating their businesses, that the Ordinance is "narrowly tailored" to the City's interest in regulation, and that the Ordinance leaves open ample alternative channels of communication. The owners also claim the Ordinance delegates too much discretion to an administrative officer, and that its signage provisions are impermissibly intrusive. Second, the owners challenge the Ordinance on fifth and fourteenth amendment grounds, arguing that the Ordinance constitutes a taking of property and is overbroad and vague, thus violating plaintiff's due process rights. Third, the owners challenge the Ordinance on equal protection grounds, claiming that the Ordinance is unconstitutional because it regulates only certain forms of sexually oriented businesses, is not gender neutral, and imposes signage regulations that do not apply to the rest of the business community. Finally, the owners challenge the Ordinance on state law grounds, claiming that the Ordinance conflicts with preemptive Texas state statutes regulating businesses at which alcoholic beverages are sold and exceeds the authority of the state enabling act. We reject these contentions and affirm.

I

In 1982, the City of Houston formed a special committee to study the effects of sexually oriented businesses within the City and to determine what regulation was necessary. The committee conducted public hearings, studied the regulations and experiences of other cities, and concluded that sexually oriented businesses can exert a dehumanizing influence on persons attending churches or schools, can contribute to an increase in criminal activity, can contribute to the impairment of character and quality of residential neighborhoods, and, when concentrated in one area, can contribute to a decline in value of surrounding property.

The Houston City Council adopted the committee's report and proposed ordinance in December, 1983. The ordinance, No. 83-1812, regulated the location, decor, and signage of all sexually oriented businesses except adult bookstores, adult movie theatres, and sexually oriented businesses licensed to sell alcoholic beverages. A state enabling statute, TEX.REV.CIV.STAT.ANN. art. 2372w, prohibited the city's regulation of the excepted businesses.

In 1985, however, the Texas legislature amended the enabling statute to delete the prohibition against regulating businesses licensed to sell alcoholic beverages. The prohibition against regulating adult book stores and movie theatres was not changed. After the amendment, the City of Houston reconvened the City Council's Committee on Sexually Oriented Businesses to study whether sexually oriented businesses licensed to sell alcoholic beverages had the same deletorious effects on the community as did those businesses regulated under the original ordinance. Again public hearings were held, and the committee filed with the City Council a supplemental report concluding that sexually oriented businesses serving alcohol had the same effects as the businesses that did not serve alcohol.

In March, 1986, the City Council adopted the supplemental report and enacted Ordinance No. 86-323. The Ordinance subjects certain businesses, including topless bars, to licensing requirements. A business cannot qualify for a license if it is located within 750 feet of a church, school, or licensed day care center, if it is located in an area that is more than 75% residential, or if it is located within 1000 feet of another sexually oriented business. The Ordinance also imposes restrictions on the exterior decor and signage of those businesses, limiting the number and verbiage of signs and requiring buildings to be painted achromatically. The Ordinance also contains detailed provisions delineating application, revocation, suspension, and appeal procedures. Plaintiffs challenge this second Ordinance.

II

In City of Renton v. Playtime Theatres, Inc., ¹ the Supreme Court tested a city zoning provision similar to the Houston ordinance. The City of Renton prohibited sexually oriented businesses from locating near churches, residential zones, schools, and parks. ² The Court upheld the ordinance, finding it to be a valid time, place or manner restriction. The Court submitted the Renton ordinance to the analysis reserved for content-neutral restraints, although the ordinance marked businesses by the content of their product. ³

The Court provided two reasons for applying more deferential scrutiny. First, the ordinance could be treated as content-neutral because its purpose was not to curb speech having a particular content, but was rather to curb the effects of certain businesses. ⁴ As long as the City's "predominant concern" was to control the negative secondary effects of sexually oriented businesses, the Renton ordinance could draw distinctions between kinds of businesses on the basis of their unique effects without engaging in content-based regulation. ⁵

Second, the Court recognized that the conduct of "businesses that purvey sexually explicit materials" receives less first amendment protection than other forms of protected activity. As the Court put it, " 'society's interest in protecting this type of expression is of a wholly different, and lesser, magnitude than the interest in untrammeled political debate....' " ⁶

This reasoning applies equally to the Houston Ordinance. The type of activity it regulates is the same as in City of Renton. Likewise, the findings of the Houston council as to the secondary effects of sexually oriented businesses satisfy us, as they did the district court, that the city's predominant concern was with secondary effects and not the content of expression itself. Thus, we test the constitutionality of the Ordinance, by the time, place, and manner of its regulation.

Applying this test requires the City to prove that the Ordinance is narrowly tailored to serve a substantial interest and that it leaves open alternative channels of communication. ⁷ Plaintiffs contend that the district court erred in finding that the City had met this burden because, although a city can rely on validated studies of other cities to establish its own interest, ⁸ here the City of Houston failed to present any evidence that it had relied on such studies or had conducted its own valid study. They contend that the evidence the City did present consisted of "mere conclusory and speculative findings unsupported by empirical evidence."

In determining the appropriate level of findings here, we note that the "legislative" exercise of police power, in an area such as zoning, is subject to deferential review. ⁹ An inquiry into the actual purposes of a zoning regulation is a difficult and intrusive undertaking for courts. Ordinarily a zoning regulation comports with due process if "there was any possible rational basis for legislation." ¹⁰ This deference serves the interests of federalism and relatedly, reflects the limits of the judicial role.

The first amendment of course alters our role, and our review necessarily becomes more intense to the extent zoning affects protected speech. Under the rigorous scrutiny given content-based speech restrictions, for example, a state's finding that certain speech carries a "clear and present danger" may not alone carry the day; vindication of values secured by the first amendment requires courts to make a fresh inquiry into the likely effect of the speech. ¹¹ While sexually oriented materials are due less protection than other forms of expression, their regulation by zoning nonetheless triggers a more intensive level of scrutiny.

It is true that the effect on speech here is said to be incidental to a regulation aimed at the secondary effects of a business whose activities are within the legitimate scope of the state's police power. Yet, unlike our review under a standard of rationality, we will not hypothesize such an objective or accept a naked assertion. Rather, we intrude into the regulatory decision process to the extent that we insist upon objective evidence of purpose--a study or findings. Insisting upon findings reduces the risk that a purported effort to regulate effect is a mask for regulation of content. That is, evidence of legitimate purpose is supported by proof that secondary effects actually exist and are the result of the business subject to the regulation. At the same time, it is apparent that as we increase the required precision in findings, we increasingly encounter the difficulties we found unacceptable in City of College Station. Our task in setting the level of review is to strike for that point of equilibrium that vindicates first...