Eliason v. City of Rapid City

• Decision Date: 29 January 2018
• Docket Number: CIV. 17–5082–JLV
• Citation: 306 F.Supp.3d 1131
• Parties: David ELIASON, an individual; and 1141 LLC, a South Dakota Limited Liability Company, Plaintiffs, v. CITY OF RAPID CITY, a South Dakota Municipality, Defendant.
• Court: U.S. District Court — District of South Dakota

306 F.Supp.3d 1131

David ELIASON, an individual; and 1141 LLC, a South Dakota Limited Liability Company, Plaintiffs,

v.CITY OF RAPID CITY, a South Dakota Municipality, Defendant.

CIV. 17–5082–JLV

United States District Court, D. South Dakota, Western Division, Western Division.

Signed January 29, 2018

Matthew J. Hoffer, Shafer & Associates, P.C., Lansing, MI, Roger A. Tellinghuisen, Michael V. Wheeler, DeMersseman Jensen Tellinghuisen & Huffman, LLP, Rapid City, SD, for Plaintiffs.

John K. Nooney, Robert J. Galbraith, Nooney & Solay, Carla Cushman, Joel Landeen, City Attorney's Office, Rapid City, SD, for Defendant.

ORDER

JEFFREY L. VIKEN, CHIEF JUDGE

Plaintiffs David Eliason and 1141 LLC filed this action against defendant City of Rapid City. The verified complaint alleges constitutional violations and seeks various forms of relief. (Docket 1). Plaintiffs filed a motion for a preliminary injunction based on three arguments claiming violations of the First Amendment. (Docket 14). Plaintiffs seek to open and operate a retail store the City would regulate as a "sexually oriented business" based on the store's inventory. Id. at p. 4. Defendant denied plaintiffs the necessary permit for operation. Id. at p. 6. Because some factual issues were embedded in the preliminary injunction motion, the court entered a briefing schedule that provided a discrete time period for discovery. (Docket 18). The court held a hearing on plaintiffs' motion. (Docket 22). Based on the analysis set forth below, the court grants plaintiffs' motion.

BACKGROUND

In April of 2017, David Eliason met with Vicki Fisher of the Rapid City Community Planning and Development Services Department about opening his business. (Docket 1 at pp. 11–12). They specifically discussed where Mr. Eliason could run a store that the city would regulate as a "sexually oriented business." Id. at p. 12. Plaintiffs intend to name the business they seek to open "Dick & Jane's Naughty Spot" or "Dick & Jane's Super Spot." Id. at p. 10. The business would sell videos and magazines with sexual content.¹ Id. at p. 11. Under Rapid City Municipal Code ("RCMC" or "City Code" or "ordinance"), sexually oriented businesses include adult-only bookstores, adult novelty shops and adult video stores. RCMC § 17.50.186(C). The ordinance states the purpose of regulating these businesses is "to promote the health, safety and general welfare of the citizens of the city, and to establish reasonable and uniform regulations to prevent the concentration of sexually oriented businesses within the city." § 17.50.186(A).

Mr. Eliason, along with his attorney, met with Ms. Fisher and other Rapid City employees in May 2017. (Docket 1 at p. 12). The City employees indicated Mr. Eliason could likely operate his sexually oriented business on Deadwood Avenue. Id. During the meeting, the Deadwood Avenue Business Park was suggested as a viable location not prohibited by the City Code, specifically RCMC § 17.50.186(D). (Docket 1 at p. 12). RCMC § 17.50.186(D) prohibits sexually oriented businesses from operating within 1,000 feet of various facilities such as churches, parks and schools. One category of facilities included in § 17.50.186(D) is defined as follows:

A public or private educational facility including but not limited to child day care facilities, nursery schools, preschools, kindergartens, elementary schools, private schools, intermediate schools, junior high schools, middle schools, high schools, vocational schools, secondary schools, continuation schools, special education schools, junior colleges, and universities; school includes the school grounds, but does not include facilities used primarily for another purpose and only incidentally as a school[.]

RCMC § 17.50.186(D)(1)(b).

Following his meetings with City employees, Mr. Eliason obtained a leasehold interest in a piece of real property at 1141 Deadwood Avenue in Rapid City. (Docket 1 at p. 12). The properly is in one of the City's general commercial zoning districts. Id. at p. 13. The City Code provides, "[a]ny sexually oriented business lawfully operating in a location permitted by this section shall be classified as a conditional use, and authorized by § 17.54.030." RCMC § 17.50.186(E).

Working with Renner Associates LLC, Mr. Eliason arranged the materials necessary to apply to the Rapid City Planning Commission ("the Planning Commission") for a conditional use permit. (Docket 1 at p. 13). RCMC § 17.54.030 sets forth the procedures and criteria the Planning Commission uses for deciding whether to issue a conditional use permit. The criteria the Planning Commission must consider relate to building design, landscaping, parking, signage, public utilities and other matters. RCMC § 17.54.030(E)(1)–(12). The Planning Commission must also determine whether the requirements in § 17.50.186 are met.

In order to secure a conditional use permit, Mr. Eliason and Renner Associates submitted an application for development review to the Planning Commission in July 2017. (Dockets 1 at p. 13 & 1–5). On August 24, 2017, the Planning Commission approved the conditional use permit. (Dockets 1 at pp. 13–14, 1–6 & 1–7). Before voting to approve the permit, the Planning Commission considered whether the proposed business would be in compliance with § 17.50.186(D). (Exhibit 102 at p. 14).

Under § 17.54.030(F), the Planning Commission's decision was appealed to the Rapid City Common Council ("Common Council" or "City Council") by BHT,² a martial arts studio in the area of the location of Mr. Eliason's planned business. (Docket 1 at p. 14). Among other things, BHT has classes teaching martial arts to people as young as age four. (Docket 1–8 at p. 4). BHT argued in its appeal that Mr. Eliason's business should not receive a conditional use permit because BHT, which is within 1,000 feet of Mr. Eliason's proposed location, is an "educational facility" under § 17.50.186(D). Id. at pp. 1–10; (Docket 1 at p. 15). Mr. Eliason filed a response contending BHT should not be viewed as an "educational facility." (Docket 1–9).

On September 18, 2017, Carla Cushman, an Assistant City Attorney in the Office of the City Attorney, wrote a legal memorandum to the Common Council on whether BHT was an educational facility. (Docket 1–10). The memorandum concluded BHT was not an educational facility, stating "Karate for Kids is not an educational facility as contemplated by the sexually-oriented business ordinance, and the 1000 foot buffer zone should not be applied to this situation to deny the [conditional use permit.]" Id. at p. 4. The memorandum provided several grounds for its conclusion: BHT is not regulated by any government as a school; the limited extent to which BHT's purpose is educational; other uses of the term "educational facility" in the City Code; the non-permanent nature of commercial enterprises such as BHT; and the limited frequency and duration of a student's visits to BHT. Id. at pp. 3–4.

On the same date as the City Attorney's memorandum, September 18, 2017, and at a meeting with extensive public input, the Common Council voted to deny Mr. Eliason's conditional use permit in a 6–4 decision. (Dockets 1 at p. 15 & 1–12 at p. 14); (Exhibit 103).

After the Common Council's action, Mr. Eliason met with Fletcher Lacock of the Planning and Development Services Department and Ms. Cushman on September 22, 2017. (Docket 1 at p. 16). They discussed other potential locations for Mr. Eliason's business, but no one at the meeting identified an alternative location in compliance with the City Code. Id. Mr. Eliason and City officials explored whether he could modify his proposed business so it would not be regulated as a sexually oriented business. Id.; (Docket 1–13).

Then plaintiffs filed this lawsuit on October 18, 2017. (Docket 1).

ANALYSIS

"A district court's decision to issue a preliminary injunction ‘depends upon a flexible consideration of (1) the threat of irreparable harm to the moving party; (2) balancing this harm with any injury an injunction would inflict on other interested parties; (3) the probability that the moving party would succeed on the merits; and (4) the effect on the public interest.’ " Richland/Wilkin Joint Powers Auth. v. United States Army Corps of _Engineers, 826 F.3d 1030, 1036 (8th Cir. 2016) (internal quotation marks omitted) (quoting Planned Parenthood Minn., N.D., S.D. v. Rounds, 530 F.3d 724, 729 n.3 (8th Cir. 2008) (en banc) ) (citing Dataphase Systems, Inc. v. C L Systems, Inc., 640 F.2d 109, 113 (8th Cir. 1981) (en banc) ). These are the Dataphase factors.

"A preliminary injunction is an extraordinary remedy, and the burden of establishing the propriety of an injunction is on the movant." Watkins Inc. v. Lewis, 346 F.3d 841, 844 (8th Cir. 2003) (internal citation omitted). "No single factor is dispositive, as the district court must balance all factors to determine whether the injunction should issue." Lankford v. Sherman, 451 F.3d 496, 503 (8th Cir. 2006). "In deciding whether to grant a preliminary injunction, likelihood of success on the merits is most significant." Laclede Gas Co. v. St, Charles Cty., Mo., 713 F.3d 413, 419–20 (8th Cir. 2013) (internal quotation marks omitted). The court begins with the third factor, success on the merits.

I. Probability movant will succeed on the merits

Before evaluating this issue, the court must decide what standard should apply to determine plaintiffs' probability of success on the merits. The first option is the "fair chance" standard adopted in Dataphase, 640 F.2d at 113–14, and second is the "likely to prevail on the merits" standard adopted in Planned Parenthood, 530 F.3d at 732–33.

A party seeking to enjoin government action based on a presumptively reasoned democratic process must make a threshold showing that it is "likely to prevail on the merits." Id. at 733. The United States Court of Appeals for the Eighth Circuit held this "more rigorous standard ‘reflects the idea that governmental policies implemented...