Excalibur Group, Inc. v. City of Minneapolis

• Court: U.S. Court of Appeals — Eighth Circuit
• Writing for the Court: Before FAGG, WOLLMAN and HANSEN; HANSEN
• Citation: Excalibur Group, Inc. v. City of Minneapolis, 116 F.3d 1216 (8th Cir. 1997)
• Decision Date: 20 August 1997
• Docket Number: No. 96-1098,96-1098
• Parties: EXCALIBUR GROUP, INC., a Minnesota Corporation, Plaintiff-Appellant, v. CITY OF MINNEAPOLIS, Defendant-Appellee.

Page 1216

116 F.3d 1216

EXCALIBUR GROUP, INC., a Minnesota Corporation, Plaintiff-Appellant, v. CITY OF MINNEAPOLIS, Defendant-Appellee.

No. 96-1098.

United States Court of Appeals Eighth Circuit.

Submitted Nov. 20, 1996.

Decided June 24, 1997.

Rehearing and Suggestion for Rehearing En Banc Denied Aug.

20, 1997. ^*

Randall Tigue, Minneapolis, MN, argued, for Plaintiff-Appellant.

James A. Moore, Minneapolis, MN, argued, (Surell Brady and Carol Bachun, on the brief), for Defendant-Appellee.

Before FAGG, WOLLMAN and HANSEN, Circuit Judges.

HANSEN, Circuit Judge.

The Excalibur Group, Inc., (Excalibur) operates an adult bookstore, Sex World, in downtown Minneapolis, Minnesota. Excalibur brought this action, seeking declaratory and injunctive relief on the basis that certain portions of Minneapolis Code of Ordinances § 540.410, which regulates adults-only businesses, are unconstitutional under the First and Fourteenth Amendments of the United States Constitution. The district court ¹ granted summary judgment to the City of Minneapolis, and we affirm.

I.

A. General Background of Section 540.410

Over twenty years ago, the City of Minneapolis (the city) enacted Minneapolis Code of Ordinances § 540.410, a zoning ordinance regulating adults-only businesses. In 1986 the city amended the ordinance for the third time, adding the provisions challenged in this case. The creation of section 540.410 and its amendments involved the sensitive balancing of the adults-only businesses' interest in free speech with the city's interest in minimizing the adverse secondary effects caused by those businesses. In the process of enacting the 1986 amendment, the city held several public hearings, giving citizens, business owners, civic leaders, and community organizations an opportunity to voice their opinions about the ordinance.

In addition to conducting the hearings, the city directed its Planning Department Staff (the staff) to study various empirical studies of other cities regarding the effects of adults-only businesses on their surrounding areas. ² The Indianapolis study, the results of which were similar to those in the other studies, found that adults-only businesses adversely impacted the areas surrounding adults-only businesses in numerous ways. The incidence of major crimes in surrounding areas was 23 percent higher than in other areas, and sex-related crimes occurred almost twice as often. Housing values appreciated at only half the rate as values in other areas of the city, and property turnover was substantially higher. The evidence of these and other deleterious effects, as well as the testimony received at the hearings, convinced the staff that the downtown area in Minneapolis was best able to "buffer" the impact of adult businesses on surrounding neighborhoods. The staff recommended enacting the proposed amendment to "control the adverse impacts on residentially zoned areas and the City's fragile strip and neighborhood commercial areas." (Appellant's App. at 85.)

In addition to the restrictions on location, the staff proposed an amendment regulating the signs identifying the adults-only businesses and prohibiting the display of their merchandise in a manner that would be visible from the sidewalk in front of the establishments. The staff felt that controlling the appearance and image of the sexually oriented businesses would make the locational restrictions more effective in minimizing the blighting impact of adults-only businesses.

The staff's findings and recommendations were adopted by the Minneapolis City Planning Commission, and the city ultimately enacted the proposed amendments. Subsection (a) of the amended ordinance states the city's objectives for the restrictions found therein:

In the development and execution of this section, it is recognized that there are some uses which, because of their very nature, are recognized as having serious objectionable operational characteristics, particularly when several of them are concentrated under certain circumstances thereby having a deleterious effect upon the use and enjoyment of adjacent areas. Special regulation of these uses is necessary to insure that these adverse effects will not contribute to the blighting or downgrading of the surrounding neighborhood.... The primary control or regulation is for the purpose of preventing a concentration of these uses in any one area.

Minneapolis, Minn., Code of Ordinances § 540.410(a).

It was not long before the locational restrictions in the ordinance were challenged as unconstitutional abridgments on speech. We upheld those restrictions, finding them to be permissible regulations on the time, place and manner of the adults-only businesses' speech. Alexander v. City of Minneapolis, 928 F.2d 278, 283-84 (8th Cir.1991).

We now address a constitutional challenge to the sign requirements, which are codified in subsection (g) of the ordinance:

(g) Sign requirements for all uses. All new regulated uses, and all existing regulated uses by December 1, 1988, shall comply with the following sign requirements:

(1) All signs shall be flat wall signs.

(2) The amount of allowable sign area shall be one square foot of sign area per foot of lot frontage on a street.

(3) No merchandise or pictures of the products or entertainment on the premises shall be displayed in window areas or any area where they can be viewed from the sidewalk in front of the building.

(4) Window areas shall not be covered or made opaque in any way. No signs shall be placed in any window. A one-square-foot sign may be placed on the door to state hours of operation and admittance to adults only.

Minneapolis, Minn., Code of Ordinances § 540.410(g). Excalibur contends that subsection (g)(3) is overbroad and subsection (g)(4) is unconstitutional on its face and as applied to Excalibur.

B. Procedural Background

After receiving notification from the city zoning inspector that it was in violation of subsections (g)(3) and (g)(4), Excalibur brought this declaratory judgment action in federal court, arguing that subsection (g)(4) of the above ordinance is facially unconstitutional and unconstitutional as applied to Excalibur. ³ Excalibur then filed a motion seeking a temporary restraining order and a preliminary injunction. After conducting a hearing, the district court denied Excalibur's motion, concluding Excalibur was unlikely to succeed on the merits of its claims.

Subsequently, the city filed criminal charges against Dennis Buchanan, who operates Sex World, and the owner of another adult bookstore for violations of sections 541.410(g)(3) and (g)(4). The defendants were found guilty as charged, and the Minnesota Court of Appeals affirmed the convictions. See State v. Holmberg, 545 N.W.2d 65, 74 (Minn.Ct.App.1996).

While the criminal case was still pending, however, the city brought a motion for summary judgment on the merits of the declaratory judgment action. In Excalibur's memorandum in opposition to the city's motion, Excalibur argued the claims submitted in its original complaint, as well as an additional claim that section 540.410(g)(3) is unconstitutionally overbroad. The district court addressed all of Excalibur's claims, found them lacking in merit, and granted the city's motion for summary judgment. This appeal followed.

II.

We review the district court's grant of summary judgment de novo, using the same standard under Federal Rule of Civil Procedure 56(c) as applied by the district court. Toney v. WCCO Television, Midwest Cable & Satellite, Inc., 85 F.3d 383, 386 (8th Cir.1996). Under Rule 56(c), summary judgment is warranted when "there is no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).

The material facts in this case are undisputed. Further, the parties agree that Sex World is an adults-only bookstore and therefore subject to the regulations in section 540.541. See Minneapolis, Minn., Code of Ordinances § 540.410(a), (b)(1). The parties also agree that Excalibur is entitled to free-speech protections under the First and Fourteenth Amendments. See Schad v. Borough of Mt. Ephraim, 452 U.S. 61, 65-66, 101 S.Ct. 2176, 2180-81, 68 L.Ed.2d 671 (1981) (recognizing First Amendment protection for sexually explicit speech that is not "obscene"); 44 Liquormart, Inc. v. Rhode Island, --- U.S. ----, ----, 116 S.Ct. 1495, 1515, 134 L.Ed.2d 711 (1996) (noting that the Fourteenth Amendment extends First Amendment protection to state and local levels). Thus, we limit our inquiry to the legal question of whether the challenged portions of the ordinance are unconstitutional restrictions on free speech.

A. Section 540.410(g)(4)

Excalibur contends that section 540.410(g)(4) unconstitutionally infringes on Excalibur's First Amendment rights. Because the ordinance does not create an absolute ban on speech, it is " 'properly analyzed as a form of time, place, and manner regulation.' " ILQ Invs., Inc. v. City of Rochester, 25 F.3d 1413, 1416 (8th Cir.) (quoting City of Renton v. Playtime Theatres, Inc., 475 U.S. 41, 46, 106 S.Ct. 925, 928, 89 L.Ed.2d 29 (1986)), cert. denied, 513 U.S. 1017, 115 S.Ct. 578, 130 L.Ed.2d 493 (1994). Time, place, and manner regulations are constitutional under First Amendment jurisprudence if (1) they "are justified without reference to the content of the regulated speech," (2) "they are narrowly tailored to serve a significant governmental interest," and (3) "they leave open ample alternative channels for communication of the information." Ward v. Rock Against Racism, 491 U.S. 781, 791, 109 S.Ct. 2746, 2753, 105 L.Ed.2d 661 (1989) (internal quotations omitted).

We first consider whether section 540.410(g)(4) is content-neutral. A regulation is content-neutral if it is "justified without reference to the content of the regulated speech." Id. (...