Deja Vu-Everett-Federal Way, Inc. v. City Of Federal Way

• Decision Date: 28 June 1999
• Docket Number: No. 41818-1-I,VU-EVERETT-FEDERAL,41818-1-I
• Court: Washington Court of Appeals
• Parties: DEJWAY, INC., a Washington corporation, Appellant*Cross-Respondent, v. CITY OF FEDERAL WAY, Respondent*Cross-Appellant.

Page 464

96 Wn.App. 255

979 P.2d 464

DEJ VU-EVERETT-FEDERAL WAY, INC., a Washington corporation, Appellant*Cross-Respondent, v. CITY OF FEDERAL WAY, Respondent*Cross-Appellant.

No. 41818-1-I.

Court of Appeals of Washington,

Division 1.

June 28, 1999.

Jack Ross Burns, Law Offices of Jack R. Burns PS, Bellevue, for Appellant.

Stephen Alan Smith, Robert, Bertelson, Mitchell, Preston, Gates & Ellis, Seattle, for Respondent.

BECKER, J.

A Federal Way ordinance requires erotic dancers in adult cabarets to stay at least four feet away from patrons. A four-foot rule does not violate either the state or federal constitution. Earlier decisions clearly preclude Deja Vu's present challenge to the Federal Way ordinance. The action is frivolous.

FACTS

Deja Vu is in the adult entertainment business. It operates adult cabarets in several locations in King County. In 1994 Deja Vu (Bellevue) along with several other owners of adult cabarets filed suit in King County Superior Court to have certain ordinances declared unconstitutional. One provision at issue required dancers to maintain a minimum distance of four feet from patrons. In April of 1995, after a six-day trial, the superior court upheld the four-foot minimum distance requirement under both the federal and state constitutions.

Inspired by Bellevue's successful defense of its four-foot rule, the City of Federal Way promptly enacted a similar ordinance. The section at issue in this appeal provides:

No employee or entertainer mingling with patrons shall conduct any dance, performance or exhibition in or about the non-stage area of the adult entertainment establishment unless that dance, performance or exhibition is performed at a torso-to-torso distance of no less than four feet from the patron or patrons for whom dance, performance or exhibition is performed.

The Federal Way ordinance immediately became the target of a suit filed in federal court by Deja Vu-Everett-Federal Way, Inc., the only adult entertainment establishment in Federal Way. Federal District Court Judge Thomas Zilly granted Federal Way's motion for summary judgment dismissal in January 1996, giving collateral estoppel effect to the superior court decision on the Bellevue ordinance. As an additional basis for dismissing the claim, Judge Zilly ruled that the Federal Way ordinance is a valid "time, place, or manner" regulation under the federal constitution. Judge Zilly refrained from ruling on Deja Vu's claim that the ordinance violated the state constitution. He dismissed the state constitutional claim solely on the basis of collateral estoppel. Deja Vu did not appeal Judge Zilly's ruling.

Meanwhile, the litigation on the Bellevue ordinance reached the Washington State Supreme Court. In May 1997, the Washington State Supreme Court affirmed the King County Superior Court's decision that the In June 1997, Deja Vu began the present action in King County Superior Court. This suit again sought relief from Federal Way's ordinance, this time solely on state constitutional grounds. Federal Way moved for summary judgment, asserting the preclusive effect of Ino Ino and Judge Zilly's decision. The superior court granted the motion and dismissed the suit. The court denied Federal Way's request for attorney fees for having to defend a frivolous action.

Bellevue four-foot rule was constitutional under both the state and federal constitutions. Ino Ino, Inc., v. City of Bellevue, 132 Wash.2d 103, 937 P.2d 154 (1997), cert. denied, --- U.S. ----, 118 S.Ct. 856, 139 L.Ed.2d 755 (1998).

Deja Vu appeals from the order of dismissal. Federal Way cross-appeals the denial of its motion for attorney fees.

COLLATERAL ESTOPPEL

Federal Way contends that the collateral estoppel effect of the Supreme Court's decision in Ino Ino completely bars Deja Vu, a plaintiff in that action, from relitigating the constitutionality of a four-foot limit. We agree.

The doctrine of collateral estoppel bars relitigation of an issue if (1) the issue presented is identical to the issue presented in a prior suit; (2) there was a final judgment on the merits; (3) the party against whom collateral estoppel is asserted was a party, or in privity with a party, to the former litigation; and (4) no injustice will result from applying the doctrine. Garcia v. Wilson, 63 Wash.App. 516, 518, 820 P.2d 964 (1991). Deja Vu claims to be pursuing a new cause of action expressly recognized in Ino Ino. Deja Vu contends a court can, under Ino Ino, declare a four-foot distance limit invalid under the state constitution if presented with evidence proving that the limit inevitably causes business failure.

In Ino Ino the Court decided that enhanced protection under the state constitution is not warranted for challenges to time, place and manner restrictions in the context of sexually explicit dance. The appropriate analysis of such a claim is found in federal constitutional law. Ino Ino, 132 Wash.2d at 122, 937 P.2d 154. A four-foot rule is a time, place, or manner restriction, not a prior restraint, Ino Ino, 132 Wash.2d at 127, 937 P.2d 154, and under federal constitutional law it is not unduly burdensome. "The provision furthers an important or substantial governmental interest because it facilitates the detection of public sexual contact and discourages contact from occurring in the first place." Ino Ino, 132 Wash.2d at 128, 937 P.2d 154. After stating these basic principles, the Ino Ino court explained more specifically why the four-foot limit is not unduly restrictive. In a paragraph that is central to Deja Vu's present appeal, the court rejected the arguments of the cabaret owners:

However, Respondents argue that the four-foot rule is so restrictive as to deny dancers a reasonable means of earning a living and cause the imminent failure of all adult cabarets in Bellevue. If such a failure was inevitable, then the distance requirement would be unconstitutional. In Gomillion v. Lightfoot, 364 U.S. 339, 340-41, 81 S.Ct. 125, 5 L.Ed.2d 110 (1960), the Supreme Court sustained a complaint which, if true, established that newly drawn municipal boundaries would have the "inevitable effect" of depriving a racial group of their constitutional right to vote. The stated purpose of the legislation in Gomillion was irrelevant because inevitably its provisions violated a constitutional right. Id.; see also [United States v. ] O'Brien, 391 U.S. [367,] at 385, [88 S.Ct. 1673, 20 L.Ed.2d 672, reh'g denied, 393 U.S. 900 [89 S.Ct. 63, 21 L.Ed.2d 188] (1968) ] (finding that the destruction of Selective Service certificates was not necessarily expressive, and thus a statute prohibiting this activity did not inevitably violate a constitutional right). In this case, Respondents presented evidence showing only that financial failure was possible, and thus failed to show an "inevitable effect" such as that in Gomillion.

Ino Ino, Inc. v. City of Bellevue, 132 Wash.2d at 130-31, 937 P.2d 154.

Deja Vu seizes upon the second sentence of the above paragraph from Ino Ino: "If The meaning of the sentence, "If such a failure was inevitable, then the distance requirement would be unconstitutional", was debated by another appellate panel in DCR, Inc. v. Pierce County, 92 Wash.App. 660, 964 P.2d 380 (1998). The DCR court considered the constitutionality of a 10-foot rule enacted by Pierce County. The dissent argued that the sentence is a holding by the Supreme Court, and that it mandates a fact-finding hearing to determine whether the distance limit will inevitably close the business. DCR, Inc., 92 Wash.App. 660, 690-91, 964 P.2d 380 (1998) (Armstrong, J. dissenting). The majority decided to regard the sentence as unsound dicta and refused to follow it, considering federal law to be "paramount". DCR, Inc., 92 Wash.App. at 680, 683, 964 P.2d 380.

                [failure of adult cabarets] was inevitable, then the distance requirement would be unconstitutional."   Deja Vu isolates this sentence and insists it is a holding.  According to Deja Vu, it means that the four-foot rule, although upheld as constitutional in the facial challenge to the Bellevue ordinance, may still be challenged in successive suits with varying outcomes from jurisdiction to jurisdiction and from time to time depending on the actual impact of the restriction on the cabaret business in each community.  Deja Vu submits the declaration of its comptroller, Paul Bern, documenting dramatic decreases in revenue after the Federal Way club complied with the four-foot limit for 19 months.  According to Deja Vu, this "actual economic evidence" distinguishes its claim from the facial challenge to the Bellevue ordinance litigated in Ino Ino, and requires a trial to determine whether economic failure of adult cabarets is an "inevitable effect" of the ordinance in Federal Way
                

We do not regard the sentence as a holding and indeed, it is not even dicta. Read in context, it is simply the Supreme Court's characterization of the argument of the respondents. After stating the respondents' argument, the Supreme Court went on to reject it. The Supreme Court did not intend to leave the door open for lower courts to strike down a dancer-to-patron distance limit whenever an adult cabaret is able to prove adverse economic effects. In the immediately preceding pages of the Ino Ino opinion, the Supreme Court had just finished aligning itself with federal jurisprudence that has consistently rejected economic impact arguments unless the challenged regulation intrinsically operates as an absolute bar to the market. Under the federal constitution, the scope of permissible economic analysis is whether the regulation permits entry or participation in the market for the expressive medium. Colacurcio v. City of Kent, 163 F.3d 545, 557, n. 13 (9th Cir.1998). The four-foot limit satisfies this test because it does not bar market entry and does not restrict the amount of payment erotic...