Annex Books, Inc. v. City of Indianapolis
| Citation | 333 F.Supp.2d 773 |
| Decision Date | 27 August 2004 |
| Docket Number | No. 1:03-CV-00918-SEB-VS.,1:03-CV-00918-SEB-VS. |
| Parties | ANNEX BOOKS, INC. et al, Plaintiffs, v. CITY OF INDIANAPOLIS, Defendant. |
| Court | U.S. District Court — Southern District of Indiana |
J. Michael Murray, Jeremy A. Rosenbaum, Lorraine R. Baumgardner, Steven D. Shafron, Berkman Gordon Murray & Devan, Cleveland, OH, Richard Kammen, Gilroy, Kammen & Hill, Indianapolis, IN, for Plaintiffs.
April Edwards Sellers, Anthony W. Overholt, Mark Jason Crandley, Office of Corporation Counsel, Teri Jayne Kendrick, Assistant Corporation Counsel, Indianapolis, IN, for Defendant.
ENTRY ON DEFENDANT'S AND PLAINTIFF'S CROSS MOTIONS FOR SUMMARY JUDGMENT
This matter comes before the Court on the parties' cross-motions for summary judgment regarding the constitutionality of Chapters 801 and 807 of the Revised Code of the Consolidated City and County of Indianapolis. Chapter 801 is the general licensing ordinance for businesses in Marion County and Chapter 807 governs the licensing and regulation of adult entertainment establishments. For the reasons that follow, we DENY Plaintiffs' Motion for Summary Judgment and GRANT in part and DENY in part Defendant's Motion for Summary Judgment.
Plaintiffs are Indianapolis retail stores which sell, rent and display adult oriented videos, magazines and other materials: Annex Books, Inc. ("Annex Books"), Keystone Video & Newsstand, Inc. ("Keystone Video"), Lafayette Video & News, Inc. ("Lafayette Video"), New Flicks, Inc. ("New Flicks") and Southern Nights, Inc. ("Southern Nights"). The defendant is the City of Indianapolis ("City").
Under Chapter 807 of the Revised Code of the Consolidated City and County of Indianapolis ("Revised Code"), all adult entertainment establishments,1 including adult bookstores, must be licensed by the City Controller ("Controller"). Am. Compl. ¶¶ 6, 11; Revised Code Sec. 807-202.2 An adult bookstore is an establishment which either (1) devotes at least 25% of its retail floor space to the display of "adult products,"3 (2) has at least 25% of its stock in trade in adult products, or (3) derives at least 25% of its weekly revenue from adult products. Each plaintiff meets the definition of an adult bookstore. Def.'s Br. at 3.
The adult entertainment business ordinance contains provisions which, inter alia, regulate the licensing of adult bookstores, set out premises requirements (such as floor layout, lighting configurations, hours of operation), and authorize inspections of the premises to ensure they are maintained in a sanitary condition.
The licensing procedure is straightforward. An application for an adult entertainment business license is made to the City Controller and requires certain sworn disclosures, the legality of which are not at issue in this case. Sec. 807-204. The applicant must also pay a license fee and submit a diagram of the business premises. Sections 807-203, 301. The Controller has forty-five (45) days in which to determine whether to issue a license. The applicant/business may begin operating within forty-five (45) days of submitting the completing application; in the event the license is denied, a conditional license to operate must issue so long as the applicant seeks judicial review within ten (10) days of receiving notice of the Controller's adverse licensing decision. Sec. 807-204(c).
The Controller may deny a license application or renewal only if the applicant:
(1) Where applicable, is not a corporation organized by law or authorized and qualified to do business in the state;
(2) Has not fully paid the license fee;
(3) Is delinquent to the city, county or state for any taxes, or is indebted to the city, county or state for any other reason unless the delinquency or indebtedness is the subject of pending litigation; or
(4) Has failed to provide all information required by this article or has falsely provided such information.
The City asserts that the general license ordinance, Chapter 801, mandates that whenever any sort of license application is denied, the Controller must provide the applicant with written notice of the denial stating the reason for the denial and informing the applicant of its right to request a Controller's hearing, as well as the right to appeal the decision to the license review board. See Sec. 801-210(a); Def.'s Br. at 5. In addition to the right to request an administrative appeal under Chapter 801, the adult entertainment business ordinance explicitly provides the aggrieved applicant with the right to judicial review of the licensing decision.
Sec. 807-207. Judicial review of denial, suspension or revocation.
(a) A denial of an application for a license or for renewal of a license under this chapter shall not be subject to administrative review under the procedures provided in Chapter 801, Article IV, Divisions 2 and 3 of this Code, but in the alternative may be appealed to the Marion Superior Court.
The "procedures" in Chapter 801 referred to in the above provision are found in the general business license ordinance and pertain to license enforcement and review, specifically the procedures which govern a Controller's hearing (Division 2) and a subsequent appeal to the license review board (Division 3). The City contends that while the adult entertainment business ordinance excludes certain procedures, they are supplanted by the procedures found in "License Regulation of the Controller of the City of Indianapolis 96-5." Def.'s Br. at 5; Def.'s Mot. for SJ, Ex. 9/B. Regulation 96-5 applies to all Controller's hearings regarding the issuance, denial, suspension or revocation of any license. Reg. 96-5, Sec. 1(a); see also Ex. 9; Aff. of Adonna White, ¶ 9. The regulation provides for an informal evidentiary hearing (Section V, Hearing Procedures) at the conclusion of which the Controller "may either announce his decision or take the matter under advisement and reach a decision at a later time." (Section VI, Decision of the Controller). It also expressly states that "[n]othing herein shall require the Controller to conduct a hearing in any instance; unless required by the ordinance, the decision of whether to conduct a hearing remains within the discretion of the Controller." Reg. 96-5, Section 1(B).
Once a business is operating with an adult business entertainment license, it is subject to two primary operational requirements: inspections without notice and hours of operation.4
Sec. 807-302. Operational requirements.
(b) An adult entertainment establishment business shall be kept in a sanitary condition at all times. As a condition of licensure under this chapter, the Controller or Controller's designee shall have the right to enter any licensed premises at any time during business hours without notice to insure compliance with this chapter, and it shall be unlawful for a person to prevent or deny any such entry. The Controller shall have the power to determine if such establishment business is in a sanitary condition. For such purpose, the Controller shall have, upon demand, the assistance of the administrator of the division of compliance of the department of metropolitan development, and the Health and Hospital Corporation of Marion County. If the Controller shall determine, after investigation by the division of development services or the Health and Hospital Corporation of Marion County, that an unsanitary condition exists within an adult entertainment establishment business, the Controller shall suspend the establishment license for such premises until such unsanitary condition is rectified.
A violation of an operational requirement may result in the suspension or revocation of an adult entertainment establishment license. Sec. 807-206(a)(3).
The final, relevant provision of the adult entertainment business ordinance is Section 807-401, addressing the severability of any sections or subsections of Chapter 807 in the event they are found invalid.
Sec. 807-401. Severability.
In the event any section, subsection, clause, phrase or portion of this chapter is for any reason held illegal, invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision, and such holding shall not affect the validity of the remainder of this chapter. It is the legislative intent of the council that this chapter would have been adopted if such illegal provision had not been included or any illegal application had not been made.
This litigation began in June 2003 following Annex Books' unsuccessful attempts to obtain an adult entertainment license under the version of the ordinance then in effect. Annex applied for a license in April 2003, resubmitted the application later in the month with the proper fee, and on June 6, 2003, was notified that, rather than accepting or denying the application for a license, the Controller was initiating an investigation to determine whether Annex met the qualifications for licensure. A hearing was set for June 24, 2003. Compl. ¶¶ 8-10.
Annex Books filed in this court a Complaint and Motion for Preliminary Injunction on June 19, 2003, challenging the constitutionality of the licensing ordinances and enjoining the enforcement of Sections 801 and 807. The City was granted a stay of the proceedings until October 31, 2003, during which time the ordinances at issue were amended.5 Def.'s Br. in Support of Mot. to Dismiss, pp. 2-4. It is the amended adult entertainment business ordinance which is before us here and is the subject of the parties' cross-motions for summary judgment. Additional parties joined the litigation following the adoption of amended Chapter 807, claiming they now fall within the scope of the ordinance and must comply with licensing and regulatory provisions whereas previously they did not. Pls.' Mem. in Supp. of Mot. for T.R.O. at 3.
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