Fantasy Ranch Inc. v. City of Arlington, Tex.

• Citation: 459 F.3d 546
• Decision Date: 02 August 2006
• Docket Number: No. 04-11337.,04-11337.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Parties: FANTASY RANCH INC., doing business as Fantasy Ranch, Plaintiff-Appellant, Cowtown Exposition, Inc., doing business as X.T.C. Tan; Tazz Man Inc., doing business as Hardbody's of Arlington, Texas, doing business as Peep-N-Tom's; Harry Freeman, doing business as Flash Dancer, Intervenor-Plaintiffs-Appellants, v. CITY OF ARLINGTON, TEXAS, Theron Bowman, Chief of Police, Defendants-Appellees.

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459 F.3d 546

FANTASY RANCH INC., doing business as Fantasy Ranch, Plaintiff-Appellant Cowtown Exposition, Inc., doing business as X.T.C. Tan; Tazz Man Inc., doing business as Hardbody's of Arlington, Texas, doing business as Peep-N-Tom's; Harry Freeman, doing business as Flash Dancer, Intervenor-Plaintiffs-Appellants, v. CITY OF ARLINGTON, TEXAS, Theron Bowman, Chief of Police, Defendants-Appellees.

No. 04-11337.

United States Court of Appeals, Fifth Circuit.

August 2, 2006.

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Arthur F. Selander (argued), Quilling, Selander, Cummiskey & Lownds, Dallas, TX, for Cowtown Exposition, Inc. and Tazz Man Inc.

Thomas Phillip Brandt (argued), Robert Harris Fugate, Stephen Douglas Henninger, Joshua Alan Skinner, Fanning, Harper & Martinson, Dallas, TX, for Defendants-Appellees.

Paul J. Cambria, Jr., Roger W. Wilcox, Jr. (argued), Lipsitz, Green, Fahringer, Roll, Salisbury & Cambria, Buffalo, NY, for Fantasy Ranch, Inc. and Harry Freeman.

Appeals from the United States District Court for the Northern District of Texas.

Before GARWOOD, BENAVIDES and OWEN, Circuit Judges.

GARWOOD, Circuit Judge:

Appellants challenge the City of Arlington's recently enacted Sexually Oriented Business Ordinance as an unconstitutional restriction of their expressive liberties. We affirm the trial court's judgment sustaining the ordinance.

FACTS AND PROCEEDINGS BELOW

A. Plaintiff-appellant Fantasy Ranch, Inc. ("Fantasy Ranch"), and intervenor plaintiffs-appellants, Cowtown Exposition, Inc., Tazz Man Inc., and Harry Freeman, are sexually oriented businesses ("SOBs") that feature topless dancing and operate under renewable licenses granted by defendant-appellee the City of Arlington, Texas ("the City"). Defendant-appellee Theron Bowman is the City's Chief of Police; as such, he is charged with enforcing the ordinances that the Arlington SOBs claim violate the Constitution. In October 2002, Bowman, acting pursuant to the City's Sexually Oriented Business Ordinance ("the SOB Ordinance") as it then-existed, notified Fantasy Ranch by letter of his intent to suspend its license to operate as a SOB for three days. According to the letter, Fantasy Ranch's license was subject to a temporary suspension under § 4.05 of the SOB Ordinance, which at that time required suspension of a SOB's license if "the [City's] Chief of Police determine[d] that [a SOB] licensee, operator or an employee ... ha[d] ... on five (5) or more occasions within any one (1) year period of time, violated [the City's prohibition on touching between topless dancers and patrons] and ha[d] been convicted or placed on deferred adjudication or probation for the violations." Although Fantasy Ranch requested and received a hearing on the proposed suspension, its objections failed, and in December 2002 the Deputy Chief of Police (before whom the hearing was conducted) ordered that the three-day license suspension go forward beginning January 26, 2003. Before the suspension took effect, Fantasy Ranch filed this lawsuit in the Northern District of Texas.

B. The City's Sexually Oriented Business Ordinance

Like many cities, Arlington maintains a series of ordinances that regulate SOBs through a combination of zoning restrictions, licensing requirements, and criminal laws. The appellants' claims focus on two groups of provisions in the City's current SOB Ordinance: (1) the "Proximity Provisions," which consist of (a) a buffer zone and stage height provision, (b) a floor demarcation provision, and (c) a tipping provision; and (2) the "Licensing Provisions," which define the procedure and substance governing suspension and revocation of a SOB's business license.

1. The Proximity Provisions

First among the Proximity Provisions are buffer zone and stage height requirements, which prohibit a "licensee, operator or employee" of a SOB from:

"knowingly allow[ing], in a Sexually Oriented Business another to appear in a state of nudity, unless the person is an employee [of the SOB] who, while in a state of nudity, is on a stage (on which no customer is present) at least eighteen (18) inches above the floor, and is: (1) at least six (6) feet from any customer ... ; or (2) physically separated from customers by a solid clear transparent unbreakable glass or plexiglass wall with no openings that would permit physical contact with customers."

Arlington, Tex., Ordinance 03-044, § 6.03(B) (April 15, 2003). Second is the SOB Ordinance's demarcation provision, which mandates that a "licensee, operator or employee [of a SOB] ... prominently and continuously display a two inches wide glow-in-the-dark line on the floor of the [SOB] marking a distance of six feet from each unenclosed stage on which an employee in a state of nudity may appear." Id. § 6.04(B). Third, the SOB Ordinance regulates the tipping of nude dancers by prohibiting customers or patrons from tipping a nude SOB employee "directly" but permitting tipping of a nude SOB employee through either "a tip receptacle, located more than six (6) feet from the nearest point of the performance stage where [the SOB] employee is in a state of nudity, or ... an employee that is not in a state of nudity, as part of the customer's bill." Id. § 6.03(C).

The City contends that the Proximity Provisions are designed to alleviate the negative secondary effects that flow from violations of its no-touch ordinance, which has long prohibited touching between nude SOB employees and SOB customers. According to the City's findings listed in the ordinance enacting the Proximity Provisions, the no-touch provision, standing alone, did not effectively prevent touching between nude SOB employees and their customers. The City explains that the Proximity Provisions were intended to address the no-touch provision's inadequacy by further limiting activities that allow and often result in a close proximity between nude SOB employees and their customers. In support of the Proximity Provisions, the City amassed the following evidentiary record which included: (1) references respecting the Proximity Provisions to (a) judicial decisions addressing similar ordinances from other cities and discussing the adverse secondary effects addressed by those ordinances, and (b) studies conducted in other jurisdictions on the adverse secondary effects of SOBs; (2) reports of numerous no-touch violations at SOBs within the City; (3) testimony regarding the effectiveness of stage height requirements in enforcing a no-touch rule; and (4) a report prepared by the City's expert witness, Dr. Goldsteen, concluding that the Proximity Provisions would effectively prevent touching between nude employees and patrons.

2. The Licensing Provisions

The Licensing Provisions set out the procedural and substantive scheme governing suspension and revocation of a SOB's license to do business. See Arlington, Tex., Sexually Oriented Business Ordinance § 4.01. It is the alleged procedural and substantive invalidity of these provisions that originally prompted this lawsuit. Since initiation of this case, however, the City has amended the Licensing Provisions significantly. Because of these amendments, the district court concluded that all of Fantasy Ranch's challenges to the previous Licensing Provisions are moot. To review the district court's judgment on this point, then, requires an understanding of how the pre-amendment version of the Licensing Provisions compares with the post-amendment version.

a. The Pre-amendment Licensing Provisions

Prior to their amendment by the City, and at the time that Fantasy Ranch originally filed this suit, the Licensing Provisions required that a SOB's license be temporarily suspended

"if the [City's] Chief of Police determine[d] that a licensee(s), operator(s), or employee(s) of a licensee ha[d] ... [o]n five (5) or more occasions within any one (1) year period of time, violated [the no-touch] provisions [of the SOB Ordinance] and ha[d] been convicted or placed on deferred adjudication or probation for the violations."

Arlington, Tex., Sexually Oriented Business Ordinance § 4.05(A)(1), amended by Arlington, Tex. Ordinance 03-041, § 4.05(A)(1) (April 1, 2003). Following the fourth such temporary suspension, the pre-amendment Licensing Provisions required that the City revoke the SOB's license. Id. § 4.06(A)(1). Once a SOB received notice that the Chief of Police had determined that its license was subject to a temporary suspension for five no-touch violations, the pre-amendment Licensing Provisions granted the SOB the right to challenge that notice of suspension either in writing to the City's "Chief of Police" or by requesting a hearing before the "Chief of Police" — a term that the Licensing Provisions defined to include, inter alia, the "Deputy Chief of Police." Id. § 4.07. The pre-amendment Licensing Provisions did not define the procedural or substantive rules and standards according to which the Chief of Police (or his deputy) was to render his decision. If the Chief of Police ordered a temporary suspension of the SOB's license to proceed, the pre-amendment Licensing Provisions permitted that SOB to appeal the suspension to a Texas state court, and the suspension would not go into effect until after the conclusion of that appeal. Id. §§ 4.05(A), 4.09.

b. The Post-amendment Licensing Provisions

On April 1, 2003, after Fantasy Ranch filed this lawsuit to challenge the constitutionality of the SOB Ordinance's pre-amendment Licensing Provisions, the City enacted Ordinance No. 03-041, which significantly amended the Licensing Provisions to incorporate more substantive and procedural protections for SOBs. Specifically, under the post-amendment Licensing Provisions, the Chief of Police could suspend a SOB's license because of that SOB's employees having been convicted of five violations within any one year of the no-touch or Proximity Provisions only if the SOB had been given notice of the citations for...