Billups v. City of Charleston, Civil No. 2:16-cv-00264-DCN

• Court: United States District Courts. 4th Circuit. United States District Court of South Carolina
• Writing for the Court: DAVID C. NORTON, UNITED STATES DISTRICT JUDGE
• Citation: 194 F.Supp.3d 452
• Parties: Kimberly BILLUPS, Michael Warfield, and Michael Nolan, Plaintiffs, v. CITY OF CHARLESTON, South Carolina, Defendant.
• Docket Number: Civil No. 2:16-cv-00264-DCN
• Decision Date: 01 July 2016

194 F.Supp.3d 452

Kimberly BILLUPS, Michael Warfield, and Michael Nolan, Plaintiffs,
v.
CITY OF CHARLESTON, South Carolina, Defendant.

Civil No. 2:16-cv-00264-DCN

United States District Court, D. South Carolina, Charleston Division.

Signed July 1, 2016

194 F.Supp.3d 457

Arif Panju, Austin, TX, Robert James McNamara, Arlington, VA, Sean A. O'Connor, Finkel Law Firm, Charleston, SC, for Plaintiffs.

Brian Quisenberry, Carol B. Ervin, Stephanie N. Ramia, Young Clement Rivers, Charleston, SC, for Defendant.

ORDER

DAVID C. NORTON, UNITED STATES DISTRICT JUDGE

This matter is before the court on plaintiffs Kimberly Billups, Michael Warfield, and Michael Nolan's (collectively, "plaintiffs") motion for preliminary injunction, and defendant City of Charleston's (the "City") motion to dismiss. For the following reasons, the court denies plaintiffs' motion for preliminary injunction and denies the City's motion to dismiss.

I. BACKGROUND

This dispute arises out of a First Amendment challenge to the City's regulation of tour guides. The city of Charleston, South Carolina draws millions of visitors every year and has developed a reputation for being one of the top tourist destinations in the world. Riley Aff. ¶ 3. Given the size and significance of the local tourism industry, the City has long regulated the industry in a number of ways. Id.¶¶ 4–5. Pursuant to Charleston City Code § 29–58, the City prohibits any person from "act[ing] or offer[ing] to act as a tour guide in the city for hire unless he or she has first passed a written examination and is licensed by the [City]." A "tour guide" is defined as a "person who acts or offers to act as a guide for hire through any part of" certain regulated areas of the city. Charleston City Code § 29-2. The City defines a "tour or touring" as "the conducting of or the participation in sightseeing ... for hire or in combination with a request for donations." Id.

The City recently amended the prerequisites to obtaining a tour guide license. ECF No. 26, Def.'s Second Supp. 1. As the regulations currently stand, the City simply requires prospective tour guides to pass the aforementioned written examination and obtain a valid business license before qualifying for a tour guide license. Id. The written examination is designed to "test the applicant's knowledge of the city and its history," Charleston City Code § 29–59(b), and consists of 200 questions drawn from information provided in the Charleston Tour Guide Training Manual (the "Manual"), a 490-page study guide sold by the City's Tourism Management Office. Compl. ¶¶ 16, 20. The stated purpose of the Manual "is to provide a wealth of knowledge for prospective and current licensed tour guides" in an effort to further "the city's goal to provide accurate, factual and updated information to its visitors and residents." Id.¶ 21; ECF No. 5-3, Manual Excerpts. A prospective tour guide must correctly answer 70 percent of the exam questions to pass.¹ Charleston City Code § 29–59(f). Once licensed, tour guides are required to attend four continuing education lectures every three years in order to extend the term of their license.

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Charleston City Code § 29–63. Otherwise, the license will lapse, and the tour guide will be required to retake the written examination.² Id.

Prior to the recent amendments, the City also required prospective tour guides to pass an oral examination, wherein candidates would "act as a guide" before City officials and be evaluated on a "pass or fail basis." Compl. ¶ 18; see also Ordinance § 3 (striking provisions requiring oral examination). Beyond "acting as a tour guide," the pre-amendment Code recognized two additional roles an individual might occupy in a guided tour operation: a "temporary tour guide" and an "escort." Compl. ¶¶ 27–30; see also Ordinance §§ 1, 2, 4, 5, 7–9 (striking provisions dealing with temporary tour guides and removing reference to tour "escorts"). Under certain conditions, individuals could obtain a one-time, temporary tour guide license that lasted for a maximum of six months. Compl. ¶ 27. To obtain such a license, applicants needed to pass a "temporary tour guide examination" and be "sponsored and employed by persons who operate a licensed tour company." Id.¶¶ 28, 29. The sponsoring employer was also required to file a script with the City which the City would "approve for accuracy." Id.¶ 30.

Tour "escorts" were persons employed to satisfy certain size restrictions on walking tour groups. The City requires group walking tours conducted in the public right of way for groups of over 20 persons to be divided into sub-groups of no more than 20 people. Ordinance § 9 (amending limits on size requirements of Charleston City Code § 29–261). The pre-amendment regulations required an "escort," who did not need to be a licensed tour guide, to accompany any sub-groups that were not accompanied by a licensed tour guide. Id. Now, the City requires that each sub-group "be accompanied by a licensed tour guide." Id.

Plaintiffs are individuals who wish to work as tour guides in Charleston, but failed to meet the 80 percent threshold required to pass the written licensing exam when they each took it in 2015. Compl. ¶¶ 38, 52–55, 68. Notably, plaintiffs Kimberly Billups and Michael Warfield each scored over the current 70 percent threshold in November 2015 and August 2015, respectively. Id.¶ 38, 53. Pursuant to the retroactive application of the new 70 percent threshold, Billups and Warfield are now eligible to obtain tour guide licenses. See Ordinance § 10. Plaintiff Michael Nolan, however, remains ineligible for a tour guide license and must still pass the written examination. Compl. ¶ 68 (noting that plaintiff Nolan scored a 64 percent on his only attempt to pass the written exam). Billups and Warfield remain subject to the continuing education requirements and the prospect of future examination if they fail to meet those requirements. Charleston City Code § 29–63.

On January 28, 2016, plaintiffs filed a complaint alleging that the City's tour guide license requirement violated the First Amendment of the United States Constitution, both facially and as applied to them. Compl. ¶¶ 103–06. On February 2, 2016, plaintiffs filed a motion for preliminary injunctive relief prohibiting the City and its agents from enforcing the tour guide licensing requirement and the related provisions of the Charleston City Code. On March 7, 2016, the City filed a response to plaintiffs' motion for a preliminary injunction, as well as a motion to dismiss. On March 14, 2016, plaintiffs filed a reply in support of their motion for

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preliminary injunction, and on March 24, 2016, plaintiffs filed a response to the City's motion to dismiss. On April 4, 2016, the City filed a reply in support of its own motion to dismiss. Shortly thereafter, the City began the process of approving the above-described amendments to the Charleston City Code. On April 15, 2016, the parties each submitted supplemental briefing to address the impact these changes have on the pending motions. The court heard arguments on April 19, 2016, and the amended Code provisions went into effect on April 26, 2016.³ The motions are now ripe for the court's review.

II. STANDARD

A. Motion to Dismiss

Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss for "failure to state a claim upon which relief can be granted." When considering a Rule 12(b)(6) motion to dismiss, the court must accept the plaintiff's factual allegations as true and draw all reasonable inferences in the plaintiff's favor. See E.I. du Pont de Nemours & Co. v. Kolon Indus., 637 F.3d 435, 440 (4th Cir.2011). But "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). On a motion to dismiss, the court's task is limited to determining whether the complaint states a "plausible claim for relief." Id. at 679, 129 S.Ct. 1937. Although Rule 8(a)(2) requires only a "short and plain statement of the claim showing that the pleader is entitled to relief," "a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The "complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ). "Facts pled that are ‘merely consistent with’ liability are not sufficient." A Soc'y Without a Name v. Va., 655 F.3d 342, 346 (4th Cir.2011) (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ).

B. Motion for Preliminary Injunction

Federal Rule of Civil Procedure 65(a) grants discretion to the reviewing court in deciding whether to issue a preliminary injunction. It provides that a court "may issue" a preliminary injunction only upon notice to the adverse party. Fed. R. Civ. P. 65(a). A preliminary...