Billups v. City of Charleston

• Citation: 961 F.3d 673
• Decision Date: 11 June 2020
• Docket Number: No. 19-1044,19-1044
• Parties: Kimberly BILLUPS; Michael Nolan; Michael Warfield, Plaintiffs – Appellees, v. CITY OF CHARLESTON, SOUTH CAROLINA, Defendant – Appellant. Cato Institute; Morris M. Kleiner; Edward J. Timmons, Amici Supporting Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

961 F.3d 673

Kimberly BILLUPS; Michael Nolan; Michael Warfield, Plaintiffs – Appellees,

v. CITY OF CHARLESTON, SOUTH CAROLINA, Defendant – Appellant.Cato Institute; Morris M. Kleiner; Edward J. Timmons, Amici Supporting Appellee.

No. 19-1044

United States Court of Appeals, Fourth Circuit.

Argued: May 8, 2020

Decided: June 11, 2020

ARGUED: Russell Grainger Hines, YOUNG CLEMENT RIVERS, LLP, Charleston, South Carolina, for Appellant. Arif Panju, INSTITUTE FOR JUSTICE, Austin, Texas, for Appellees. Eugene Volokh, UCLA SCHOOL OF LAW, Los Angeles, California, for Amicus Cato Institute. ON BRIEF: Stephen L. Brown, Brian L. Quisenberry, YOUNG CLEMENT RIVERS, LLP, Charleston, South Carolina, for Appellant. Robert McNamara, INSTITUTE FOR JUSTICE, Arlington, Virginia, for Appellees. Ilya Shapiro, CATO INSTITUTE, Washington, D.C., for Amicus Cato Institute. Louis Chaiten, Matthew M. Hilderbrand, JONES DAY, Cleveland, Ohio, for Amici Professors Morris M. Kleiner and Edward J. Timmons.

Before WILKINSON, NIEMEYER, and KING, Circuit Judges.

Affirmed by published opinion. Judge King wrote the opinion, in which Judge Wilkinson and Judge Niemeyer joined.

KING, Circuit Judge:

Kimberly Billups, Michael Nolan, and Michael Warfield (collectively, "the Plaintiffs") are current or aspiring tour guides in Charleston, South Carolina, who have faced a common obstacle — Charleston's Tour Guide Licensing Ordinance (the "Ordinance"). Pursuant thereto, before leading a paid tour through Charleston's historic districts, a prospective guide must obtain a license. And to obtain that license, a prospective guide must pass a 200-question written examination that focuses on Charleston's history, architecture, and historic preservation efforts. If a prospective guide defies the Ordinance by leading a paid tour of Charleston without a license, that person is subject to imprisonment and a fine.

To challenge the Ordinance and its mandatory licensing scheme, the Plaintiffs filed suit in the District of South Carolina against the City of Charleston (the "City"). The Plaintiffs attacked the Ordinance as an unconstitutional restriction of their First Amendment right to free speech.

The district court agreed with the Plaintiffs and declared the Ordinance unconstitutional. In reaching its decision, the court assumed that the Ordinance imposes a content-neutral restriction on speech and thus applied intermediate scrutiny. The court concluded that the City has a significant interest in protecting its tourism industry, but that the Ordinance nevertheless fails intermediate scrutiny because it is not narrowly tailored to serve the City's interest. As explained below, we agree and therefore affirm.

I.

A.

We begin by reciting the Ordinance's history and its relevant provisions. Unquestionably, tourism drives Charleston's economy. In fact, the tourism industry generates nearly $7.37 billion in annual economic impact for the Charleston area because visitors flock to Charleston to explore its historic sites, sample its southern cuisine, and revel in its ghost stories. To help protect Charleston's tourism-based economy, the City decided to regulate the industries that serve visitors. Accordingly, the City enacted the Ordinance as part of its first Tourism Management Plan in 1983. The Ordinance prohibits unlicensed tour guides from giving paid tours on public streets throughout the historic districts of Charleston. More specifically, the Ordinance provides that no "person shall act or offer to act as a tour guide in [Charleston] for hire unless he or she has first passed a written examination and is licensed by the [C]ity's office of tourism management as a registered tour guide." See Code of the City of Charleston § 29-58 (2016).¹ If an individual contravenes the Ordinance by giving a tour without a license, that person faces a fine of up to $500 and a term of imprisonment not exceeding thirty days. See id. § 1-16(a). Importantly, however, the Ordinance does not prescribe topics that guides must discuss during tours and does not empower the City to monitor the speech of guides. In other words, once licensed, a guide may speak freely while giving tours.

The Ordinance also sets forth the process a prospective tour guide must follow to obtain a license. Under the Ordinance, to be eligible to receive a tour guide license, a prospective guide must pass a written examination, acquire a valid business license that must be renewed annually, and pay the attendant fees. The written exam contains 200 questions and is meant to "test the applicant's knowledge of [Charleston] and its history." See Code of the City of Charleston § 29-59(b). The Historic Charleston Foundation — a nonprofit organization that is "vitally interested in tour guides knowing [Charleston's] history" — prepares the questions for the exam, and the City adopts them without amendment. See J.A. 532.² The exam questions are drawn exclusively from a 483-page tour guide manual, which is also prepared by the Foundation and largely focuses on topics relating to Charleston's historic buildings. In the manual, the issues most likely to appear on the exam are marked with a palmetto tree. To take the exam, a prospective tour guide must pay $50; to pass the exam, that individual must answer 70% of the questions correctly. An earlier version of the Ordinance had required answering 80% of the questions correctly to pass, but the City lowered the passing score to 70% in April 2016.

After a three-year period, the tour guide license expires. If during the license term a guide completes four continuing education courses — which must be provided or approved by the City — and annually renews his business license, he is eligible to renew his tour guide license for another three-year term. If, however, a guide declines to take the continuing education courses or to annually renew his business license, he must submit a new application for a tour guide license. Such an application is treated like an initial application, which means that the applicant must, inter alia, retake the written exam. See Code of the City of Charleston § 29-63.³

B.

Having described the history and relevant provisions of the Ordinance, we now discuss the Plaintiffs. Kimberly Billups planned to establish a tour company named Charleston Belle Tours. Billups intended to don an antebellum dress to portray a character — Nancy Bostick de Saussure, a longtime resident of Charleston. Once in character, Billups intended to lead visitors around town while describing Nancy and Charleston, discussing the Civil War, and telling jokes. In preparation for starting Charleston Belle Tours, Billups purchased a telephone business number, an antebellum-period costume, a credit card reader, and a website domain name.

Additionally, to comply with the Ordinance, Billups purchased the tour guide manual, paid the $50 fee to take the written examination, and studied five to six hours each day from September 2015 to November 2015. Despite her efforts, Billups answered only 70% of the exam questions correctly, which was a failing score at that time. Consequently, Billups did not receive her tour guide license until May 2016, one month after the City amended the Ordinance to reduce the passing score to 70%. According to Billups, the Ordinance's mandatory licensing scheme "greatly" affects her business, as she is "unable to hire on very knowledgeable people that have shown interest in working for [Charleston Belle Tours]." See J.A. 159.

Michael Nolan also wanted to lead tours in Charleston. Nolan hoped to work part-time as a tour guide and proposed a tour based on the "Irish-American experience in Charleston." See J.A. 297. Nolan intended to take visitors to the old Irish neighborhoods of Charleston and other historic Irish attractions. To prepare, Nolan purchased the tour guide manual and studied it for hours every day in the eight weeks preceding the written examination. Nolan mostly studied the topics marked with the "little palmetto trees." Id. at 299. Despite his efforts, Nolan answered only 64% of the exam questions correctly. Because Nolan has not yet passed the exam, he does not currently have a tour guide license and cannot offer his Irish-American history tours.

Finally, Michael Warfield, an insurance broker by trade, decided that he wanted to lead pub tours in Charleston. Accordingly, in pursuit of a tour guide license, Warfield twice took the written examination. On his first try, Warfield answered 74% of the questions correctly; on his second try, he answered 68% of the questions correctly. Although both of Warfield's scores were considered failing scores when he received them, he eventually passed the exam when the City lowered the passing score to 70%.

C.

1.

As a result of their encounters with the Ordinance, the Plaintiffs filed their Complaint in the District of South Carolina on January 28, 2016. In the Complaint, the Plaintiffs sought, inter alia, a declaratory judgment stating that certain provisions of the Ordinance run afoul of the First Amendment. The Plaintiffs also requested that the court permanently enjoin the City from enforcing the Ordinance.

On February 2, 2016, the Plaintiffs asked the district court to preliminarily enjoin enforcement of the Ordinance. In support of that request, the Plaintiffs contended that they were likely to succeed on the merits of their claim that the Ordinance burdens protected speech and contravenes the First Amendment. The City opposed the Plaintiffs’ preliminary injunction request and moved to dismiss the Complaint. In that regard, the City asserted that the Ordinance does not burden protected speech and does not contravene the First Amendment.

By its Order of July 1, 2016, the district court denied both the Plaintiffs’ request for a preliminary injunction and the City's motion to dismiss. See Billups v. City of Charleston, S.C., 194 F.Supp.3d 452 (D.S.C. 2016), ECF No. 27 (the "Initial Order").⁴ Although the Initial Order covered many topics,...