Ass'n of Club Executives of Dall., Inc. v. City of Dall.
| Decision Date | 24 May 2022 |
| Docket Number | Civil Action No. 3:22-cv-00177-M |
| Citation | 604 F.Supp.3d 414 |
| Parties | ASSOCIATION OF CLUB EXECUTIVES OF DALLAS, INC., et al., Plaintiffs, v. CITY OF DALLAS, TEXAS, Defendant. |
| Court | U.S. District Court — Northern District of Texas |
Roger Albright, Kimberly Quirk, Latrice Elder Andrews, T. Craig Sheils, Sheils Winnubst Sanford & Bethune, Richardson, TX, J. Michael Murray, Berkman Gordon Murray & DeVan, Cleveland, OH, for Plaintiffs.
Ana Marie Jordan, Kathleen MacInnes Fones, Stacy Jordan Rodriguez, Dallas City Attorney's Office, Dallas, TX, for Defendant.
Before the Court is the Motion for Preliminary Injunction (ECF No. 3) and the Motion for Leave to Amend (ECF No. 34), filed by Plaintiffs the Association of Club Executives of Dallas, Inc.; AVM-AUS, Ltd. d/b/a New Fine Arts Shiloh; Nick's Mainstage, Inc.–Dallas PT's, d/b/a PT's Men's Club; Fine Dining Club, Inc., d/b/a Silver City; 11000 Reeder, LLC, d/b/a Bucks Wild; and TMCD Corporation, d/b/a The Dallas Men's Club (collectively, "Plaintiffs"). Also pending is the Motion to Dismiss for Failure to State a Claim (ECF No. 17), filed by Defendant the City of Dallas (the "City"). For the following reasons, the Motion for Preliminary Injunction is GRANTED , the Motion for Leave to Amend is GRANTED , and the Motion to Dismiss is DENIED AS MOOT .
In Chapter 41A of the City of Dallas's Code of Ordinances, the City promulgates numerous regulatory obligations and restrictions on sexually oriented businesses ("SOBs")1 operating within City limits. On January 26, 2022, following a public hearing, the Dallas City Council unanimously voted to adopt Ordinance No. 32125 to amend Chapter 41A and add, inter alia , § 41A-14.3, a provision restricting SOBs from operating between the hours of 2 a.m. and 6 a.m.2 ECF No. 19-1 at 2–6 (the "Ordinance").
The Ordinance states the Council's finding that the operation of SOBs between 2 a.m. and 6 a.m. is "detrimental to public health, safety, and general welfare," citing various data in support, including crime data purporting to show an increase in violent crime and drug and gun arrests at or near SOBs between 2 a.m. and 6 a.m.; data from the Dallas Fire-Rescue Department showing an increase in the number of calls for service at SOBs between 2 a.m. and 6 a.m.; a 2012 research study by McCord and Tewksbery,3 analyzing SOBs in Louisville, Kentucky; a 2008 study by McCleary, showing that crime increases when SOBs operate in rural communities; a 2012 study by Weinstein and McCleary, associating SOBs with a higher incidence of crime, regardless of location; and a report from the cities of Beaumont and Amarillo, showing that SOBs promote certain criminal activity, have a deleterious effect on adjacent areas, and increase crime. Ordinance at 1–2.
The Ordinance also references a Dallas Police Department task force (the "Task Force") created in March 2021, at the Council's request, following shootings and other violent crimes that occurred at or near SOBs. Ordinance at 2. On January 5, 2022, the Police Department presented to the Council the Task Force's conclusions, and recommended that SOBs’ hours of operation be reduced to decrease criminal activity, improve safety, and reduce demand on City services. See ECF No. 19-1, at COD-35 ("SOB Briefing").4 On January 14, 2022, the Police Department submitted to the Council a "detailed analysis" of data relating to SOBs, including a list of licensed SOBs, graphs displaying data related to violent crime and associated arrests and emergency calls, and graphs displaying data related to all offenses, arrests, and calls for service. Resp. to Mot. for Preliminary Injunction, Ex. 2 (ECF No. 10 at 46) ("Task Force Report").5
On January 26, 2022, to advance its stated goal "to reduce crime and conserve police and fire-rescue resources by requiring [SOBs] to be closed for business between the hours of 2:00 a.m. and 6:00 a.m.," the City Council unanimously approved of the Ordinance. Ordinance at 2; Item 36, Dall. City Council Meeting (January 26, 2022), https://dallastx.swagit.com/play/01262022-1031. That same day, Plaintiffs filed a Complaint against the City, and moved for a temporary restraining order and preliminary injunction, asserting that the Ordinance violates Plaintiffs’ First Amendment right to freedom of expression. ECF Nos. 1 ("Compl."), 3 ("Mot."). Plaintiffs consist of four adult cabaret businesses and one adult bookstore that qualify as SOBs under the City Code, and a non-for-profit trade association whose members are SOBs and include adult bookstores, arcades, and cabarets located in the City of Dallas. The Complaint alleges that the Ordinance is an unconstitutional content-based restriction of protected expression, does not withstand strict or intermediary scrutiny, and that the data and information relied on by the City in passing the Ordinance is invalid, flawed, and shoddy. Compl. ¶ 48.
On January 28, 2022, the Court denied Plaintiffs’ request for a temporary restraining order based on the City's representation that it would not enforce the Ordinance before the Motion for Preliminary Injunction was decided. ECF No. 11. On February 18, 2022, the City moved to dismiss under Rule 12(b)(6), attaching the Task Force Report, the Police Department's SOB Briefing to the Council, and the research studies referenced in the Ordinance. ECF Nos. 17, 19. On March 7, March 23, and April 6, 2022, the Court held evidentiary hearings in connection with Plaintiffs’ Motion for Preliminary Injunction. On March 31, 2022, Plaintiffs moved for leave to file an amended complaint. ECF No. 34. On April 28, 2022, the Court received supplemental briefing on the recently decided case of City of Austin, Texas v. Reagan National Advertising of Austin, LLC , ––– U.S. ––––, 142 S. Ct. 1464, 212 L.Ed.2d 418 (2022).
The Court will first address the City's Motion to Dismiss and Plaintiffs’ Motion for Leave to File an Amended Complaint. ECF Nos. 17, 34. The Court will then address Plaintiffs’ Motion for Preliminary Injunction.
The City moves to dismiss under Rule 12(b)(6), arguing that the Complaint does not contain facts plausibly alleging that the City's data was flawed, nor that the Ordinance was not narrowly tailored to achieve a compelling government interest, as required to allege a First Amendment violation. See ECF No. 17 at 6–10. In response, Plaintiffs seek leave to amend their pleadings to include additional factual allegations to support their claim that the challenged Ordinance is unconstitutional, in part incorporating evidence gathered in discovery and proffered during the preliminary injunction hearing. ECF No. 34. The City opposes on the grounds that Plaintiffs’ amendments do not satisfy Rule 8 and are futile, and that the City objects to some of the material attached to the proposed Amended Complaint, including the testimony and report of Plaintiffs’ expert, Dr. Daniel Linz. ECF No. 37.
Under Federal Rule of Civil Procedure 15, the Court should "freely give leave" to amend "when justice so requires." Fed. R. Civ. P. 15(a)(2). Here, the Court determines that the proposed amendments are not futile, and that justice requires granting Plaintiffs leave to amend the Complaint. The Court has already ruled on most of the City's objections to materials attached to the Amended Complaint during the hearings, and to the extent other objections remain, they are hereby OVERRULED . Accordingly, Plaintiffs’ Motion for Leave to Amend is GRANTED , and the City's Motion to Dismiss is DENIED AS MOOT.
Plaintiffs move for a preliminary injunction enjoining the enforcement of the Ordinance's restriction of hours of operation of SOBs. To be entitled to a preliminary injunction, the movant must demonstrate: (1) a likelihood of success on the merits; (2) a substantial threat of irreparable injury; (3) that the threatened injury if the injunction is denied outweighs any harm that will result if the injunction is granted; and (4) that the grant of an injunction will not disserve the public interest. Ladd v. Livingston , 777 F.3d 286, 288 (5th Cir. 2015).
As a preliminary matter, the Court need not analyze factors (2) and (4), threat of irreparable injury and whether an injunction would be in the public interest, respectively; because Plaintiffs allege a First Amendment violation, these factors are presumed and weigh in favor of an injunction. See Elrod v. Burns , 427 U.S. 347, 373, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976) (); Texans for Free Enter. v. Tex. Ethics Comm'n , 732 F.3d 535, 539 (5th Cir. 2013) (). Accordingly, the Court addresses only whether Plaintiffs have shown a likelihood of success on the merits and the balance of hardships. Based on the evidentiary record before the Court and for the reasons stated below, the Court concludes that Plaintiffs have established a reasonable likelihood of success on the merits, and the balance of hardships weighs in favor of an injunction.
Plaintiffs contend that the Ordinance's restriction on the hours of operation of SOBs is a content-based law which regulates protected speech, and is unconstitutional under both strict and intermediate scrutiny. The City responds that because the Ordinance regulates SOBs, it is evaluated under the standards established in City of Renton v. Playtime Theatres, Inc. , 475 U.S. 41, 49, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986), and City of Los Angeles v. Alameda Books, Inc. , 535 U.S. 425, 122 S.Ct. 1728, 152 L.Ed.2d 670 (2002) (plurality opinion); under Renton , the City maintains, the Ordinance is content neutral, because it is aimed at addressing the secondary...
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