City of Chicago v. Pooh Bah Enterprises

• Decision Date: 05 October 2006
• Docket Number: No. 99804.,99804.
• Citation: 865 N.E.2d 133,224 Ill.2d 390
• Parties: The CITY OF CHICAGO, Appellee, v. POOH BAH ENTERPRISES, INC., et al., Appellants.
• Court: Illinois Supreme Court

865 N.E.2d 133

224 Ill.2d 390

The CITY OF CHICAGO, Appellee, v. POOH BAH ENTERPRISES, INC., et al., Appellants.

No. 99804.

Supreme Court of Illinois.

October 5, 2006.

Dissenting Opinion Upon Denial of Rehearing March 5, 2007.

David A. Epstein, Robert J. Weber, Thomas R. Rakowski, Chicago, for appellants.

Mara S. Georges, Corporation Counsel, Chicago (Lawrence Rosenthal, Benna Ruth Solomon, Meera Werth, Jane Elinor Notz, Myriam Zreczny Kasper, of counsel), for appellee.

OPINION

Justice KARMEIER delivered the judgment of the court, with opinion:

Section 4-60-140(d) of the Municipal Code of Chicago prohibits establishments licensed to serve alcoholic beverages from permitting any employee, entertainer or patron to engage in "any live act, demonstration, dance or exhibition * * * which exposes to public view * * * [h]is or her genitals, pubic hair, buttocks * * * or [a]ny portion of the female breast at or below the areola thereof." The issue we are asked to resolve today is whether this ordinance violates the first and fourteenth amendments to the United States Constitution (U.S.Const., amends. I, XIV) and article I, section 4, of the Illinois Constitution of 1970 (Ill. Const.1970, art. I, § 4). The circuit court of Cook County found that it does. The appellate court concluded that it does not. Nos. 1-01-0592, 1-01-1932 cons. (unpublished order under Supreme Court Rule 23). For the reasons that follow, we affirm the judgment of the appellate court.

The events which gave rise to this appeal began in 1993, when the Liquor Control Commission of the City of Chicago initiated administrative proceedings against Pooh Bah Enterprises, Inc. (Pooh Bah), to revoke various municipal licenses which had been issued to the company, including its municipal retail liquor license. The challenged licenses had been issued to the company in connection with its operation of a so-called "gentlemen's club" located at 1531 North Kingsbury Street in the City of Chicago.¹ The basis for the revocation was that the company, by and through its agents, had permitted various female dancers at the club to expose their buttocks or portions of their breasts at or below the areola to public view in violation of section 4-60-140(d) of the Chicago Municipal Code.

The record shows that Pooh Bah was originally owned by an individual named Jim Levin. Under Levin's ownership, Pooh Bah operated the club as the "1531 Club." When Levin began experiencing financial problems, Perry Mandera, owner and president of a Chicago-area-based shipping company known as The Custom Companies, lent him $300,000 in exchange for a security interest in 50% of Pooh Bah's stock. Mandera subsequently lent Levin an additional $500,000 to finance improvements to the club undertaken in connection with its becoming a franchisee of a chain of "strip" clubs operated by Michael J. Peter Club Management, Inc., under the name "Thee Dollhouse."

Prior to the switch to the Thee Dollhouse format, no nude or seminude dancing was performed at the club. Strippers did not appear until the club became affiliated with the Michael J. Peter organization. Unfortunately for Levin, the introduction of strippers did not bring financial solvency, and he was unable to repay Mandera the money he owed. Mandera ultimately took over full ownership of Pooh Bah through an entity he owned called Ace Entertainment.

According to his testimony, Mandera, through Ace Entertainment, became the sole owner of Pooh Bah and thus the strip club in the summer of 1993. After taking over, Mandera terminated the club's connection with the Michael J. Peter organization. In place of that company, Mandera, through Pooh Bah, entered into management and licensing agreements with Frederick John "Rick" Rizzolo, owner of a Las Vegas strip club known as "The Crazy Horse Too." Rizzolo became active in the management of Pooh Bah's club in 1995, while the license revocation proceedings were still pending.² For his services, Rizzolo was paid $20,000 per month, plus travel expenses.

Under Rizzolo's regime, the club dropped the name "Thee Dollhouse" and began operating under the same name as Rizzolo's club in Las Vegas, "The Crazy Horse Too." Mandera explained that he affiliated his club with Rizzolo because, when he came across The Crazy Horse Too in Las Vegas, "[he] liked what they did." He was impressed by the club's success and its desire to expand into other cities. According to Mandera, Rizzolo was willing to give him a far better financial arrangement than the one Pooh Bah had with the Michael J. Peter organization. Being affiliated with Rizzolo also provided Pooh Bah with access to the same pool of dancers Rizzolo used. In addition, Mandera testified that Rizzolo "seemed like a very nice person and operated a nice, upscale operation * * *."³

The club operated under the name The Crazy Horse Too until 2003. According to the briefs and records of the Illinois Secretary of State, the establishment now does business under the name "VIP's" or "VIP's, A Gentlemen's Club." Absent any indication from the parties to the contrary, we assume that its ownership and operations remain unchanged.

At the time the license revocation proceedings against Pooh Bah commenced and throughout the period relevant to this litigation, its club at 1531 North Kingsbury Street has provided something that other licensed establishments selling liquor by the drink in Chicago do not: seminude dancers. Entertainment venues featuring nude and seminude female dancers operate within the City's limits in compliance with municipal ordinances. None of them, however, has a liquor license. Throughout all of Chicago, Pooh Bah's club is the only commercial establishment where the sale of liquor by the drink and dancing by seminude women are combined.

The mix of alcohol sales and nude or seminude dancing was not always so rare. Roger G. O'Brien, a veteran Chicago police officer who has worked in the Department's 18th District vice unit since 1979 testified that the City's Rush Street entertainment district was once home to 12 or 13 strip clubs, all of which served alcohol. During that time, prostitution in and around the clubs was pervasive. According to O'Brien, in the late 1970s and mid-1980s, there were prostitutes on every corner in the Rush Street area, and inside the clubs, waitresses and dancers frequently solicited customers for sex. Antiprostitution campaigns waged by the City during the 1980s ultimately resulted in the closure of all these establishments. O'Brien estimated that when the strip clubs serving alcohol were shut down, the number of prostitution arrests in the area declined by 80%.

Pooh Bah's club is not located in Chicago's Rush Street entertainment area and is not related to any of the City's 1970- and 1980-era strip clubs. The type of entertainment presented at Pooh Bah's club would, however, probably be familiar to patrons of those now-defunct establishments. After paying an admission charge, $15 in the year 2000, customers of the club enter a room containing a bar, an elevated stage area, and tables and chairs.⁴ Female performers take turns going on stage, where they remove their clothing while dancing to prerecorded background music. For the most part, the performers called to testify in this case had not received any formal dance training. One described taking dance lessons when she was a child. Another indicated that while she had never been taught dance steps, she had "either choreographed or hired choreographers" to assist her in her performance.

Over the course of an evening, more than 20 women may perform on stage. During those performances, waitresses take drink orders from patrons and serve them at their tables. When an entertainer has finished on stage, she will circulate through the club and mingle with the customers. Her objective in doing this is twofold. First, she is expected to earn money for the club by encouraging patrons to buy premium-priced drinks for themselves and for her. Alcohol sales are a major source of the club's income, which is substantial. According to testimony given by Mandera in 2000, the club's gross annual revenue was $7 million. By comparison, strip clubs in Chicago that did not serve alcohol had annual revenues of only one or two million dollars.

A performer's second objective when circulating through the club is to earn money for herself through tips.⁵ Dancers receive tips for providing two basic services: (1) sitting and talking with customers⁶ and (2) doing table dances. A table dance is simply a brief striptease which a dancer performs for a customer at the customer's table. An additional fee is charged for this service. At Pooh Bah's club, the basic charge for a table dance is $20, but dancers reported receiving as much as $100.

The dances performed on stage and at customers' tables are intended to be erotic.⁷ Performers typically move in a sexually suggestive fashion, often enhancing the effect by rubbing their breasts and pubic areas. Club policy specifies that dancers are to stay at least one foot away from customers during table dances, but evidence in the record suggests that this restriction is routinely ignored. The same is true of a club policy forbidding dancers to have physical contact with customers. The record shows that performers sometimes do deliberately touch customers during table dances. One report included earlobe nibbling. Dancer Tracey Lynn Sula admitted kissing customers on the cheek.

During both the onstage performances and the table dances, performers become largely, although not totally, nude. By the conclusion of a striptease, whether on stage or at a customer's table, the only item of clothing a dancer will still have on is a thong, sometimes referred to as a "Tbar." That garment consists of a narrow waistband to which is attached a panel of cloth intended to cover the woman's pubic area. A strip of material runs from the front panel, between the woman's...