Green Valley Invs., LLC v. Cnty. of Winnebago
| Decision Date | 10 May 2014 |
| Docket Number | Case No. 13-C-402 |
| Court | U.S. District Court — Eastern District of Wisconsin |
| Parties | GREEN VALLEY INVESTMENTS, LLC, Plaintiff, v. COUNTY OF WINNEBAGO, Defendant. |
DECISION AND ORDER
Green Valley Investments, LLC owns an adult-themed business called Stars Cabaret, which presents nude dancing and serves alcohol, in violation of Winnebago County ordinances governing adult entertainment. Green Valley concedes that it has operated in violation of applicable ordinances since it opened in 2006. It argues, however, that the ordinance in effect when it opened was unconstitutional and should be deemed void. As such, Green Valley argues that it was in compliance with (non-void) county ordinances in 2006 and that it should therefore be considered a legal nonconforming use (i.e., "grandfathered") under the ordinance now in effect. (The ordinance has been amended several times since then.) For relief, it seeks a declaratory judgment that the zoning ordinance was facially unconstitutional and therefore void ab initio. Both parties have moved for summary judgment. For the reasons given below, the Plaintiff's motion will be denied and the Defendant's granted.
The first question is whether this court has subject matter jurisdiction over this action. Although the underlying question about the constitutionality of the ordinance is certainly a matter of federal constitutional law, in essence the real problem here is one of state law: the Plaintiff wants to be considered a nonconforming use under Wis. Stat. § 59.69(10)(a). And that is not all. One of the central constitutional questions posed is whether parts of the ordinance are severable, meaning that any unconstitutional parts may be stricken while the inoffensive parts are salvaged. That question is also one arising under state law. Thus, the parties, who are not diverse, are invoking federal jurisdiction to answer what are primarily state-law problems.
I am satisfied that federal question jurisdiction exists here. First, it is unclear from the complaint whether the Plaintiff is actually seeking a ruling from this court on the state law question of grandfathering or whether instead it merely seeks a declaration as to the federal constitutional question. Second, even though the ultimate problem is one of state law, the state-law issues necessarily require resolution of a substantial federal question, and all of these issues are components of the Plaintiff's own action (as opposed to a defense). Assuming other components of jurisdiction are present, federal courts maintain the authority to answer ripe federal questions even if the ultimate impact manifests itself in a state law context. The Supreme Court has "recognized for nearly 100 years that in certain cases federal-question jurisdiction will lie over state-law claims that implicate significant federal issues." Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U.S. 308, 312 (2005). This is based on the "commonsense notion that a federal court ought to be able to hear claims recognized under state law that nonetheless turn on substantial questions of federal law." Id. "The question is, does a state-law claim necessarilyraise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities." Id. at 314. Here, the federal forum may entertain the necessarily-raised federal issue without implicating any balance of state and federal judicial responsibilities. Although the relief sought is partly a matter of state law, the claim for declaratory relief on the constitutional question is the centerpiece of the Plaintiff's action.1
The second jurisdictional issue, which the Plaintiff addresses, is one of standing. (The Defendant apparently concedes there is standing.) Here, Plaintiff recognizes that the circumstances of this action are unusual. In short, Plaintiff is asking for a ruling that a long-out-of-use county ordinance was unconstitutional. Normally that would be a completely academic exercise and well outside the bounds of a court's power, which extends only to actual cases and controversies. "Cases are unripe when the parties point only to hypothetical, speculative, or illusory disputes as opposed to actual, concrete conflicts." Hinrichs v. Whitburn, 975 F.2d 1329, 1333 (7th Cir. 1992).2 Here, however, Plaintiff argues that the answer to the constitutionality question has real-world consequences for its licensing by the county. There are a number of steps in this argument. Plaintiff admits that it was not in compliance with the ordinance in effect in 2006, when its cabaret opened. But if that ordinance were found unconstitutional (Step 1), then the ordinance would also be deemed void and therefore inapplicable (Step 2). Thus, because there would have been no applicableordinance in 2006, Stars Cabaret would have not have been in violation of any ordinances at the time it opened (Step 3). As such, Plaintiff argues that Stars should have been considered a "nonconforming use" and grandfathered into the regulatory regime that followed repeal of the 2006 ordinance (Step 4).
I am satisfied that the Plaintiff has standing to make a facial challenge to the zoning ordinance on the ground that the ordinance is an unconstitutional prior restraint of speech. To show standing, a plaintiff must demonstrate an injury in fact, which means impingement on a legally-recognized interest that is concrete and particularized, actual or imminent, not conjectural or hypothetical. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 180-81 (2000) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). Here, the Plaintiff's ability to operate its cabaret in compliance with zoning regulations hinges on the constitutionality of the 2006 ordinance. Its injury by the allegedly unconstitutional ordinance is a personal one that could be remedied through the declaratory judgment it seeks. Without deciding the issue, it is reasonable to believe that an invalidation of the then-governing ordinance would have an impact on the Plaintiff's current ability to be deemed a valid nonconforming use.
Moreover, there is a threat of prosecution. Through counsel, Plaintiff asked the county to declare that it was a permissible nonconforming use, but the county refused to do so. (ECF. No. 1, Ex. B.) The county's corporation counsel also indicated that the county "would be forced to commence a compliance action against" Plaintiff if it did not comply with the new ordinances. (Id.) This constitutes a reasonable threat of prosecution. The "existence of a statute implies a threat to prosecute, so pre-enforcement challenges are proper, because a probability of future injury counts as 'injury' for the purpose of standing." Bauer v. Shepard, 620 F.3d 704, 708 (7th Cir. 2010). Given all of these factors, I conclude that the Plaintiff has demonstrated an injury in fact for the purposesof its facial challenge to the ordinance's licensing scheme. See 600 Marshall Entm't Concepts, LLC v. City of Memphis, 705 F.3d 576, 585 (6th Cir. 2013) ( )
Much of Plaintiff's initial argument speaks to the unconstitutionality of the ordinance due to its function as a prior restraint of speech. As noted above, if the Plaintiff can show the ordinance to be unconstitutional, then it believes it is entitled to be considered a nonconforming use and thus grandfathered into the present regulatory structure.
Judge Clevert ruled that the successor to the 2006 ordinance was, in fact, an unconstitutional prior restraint because it vested too much discretion in authorities and contained no time limits curbing the government approval process. Green Valley Inv. v. County of Winnebago, 790 F. Supp.2d 947, 959-60 (E.D. Wis. 2011). Here, the Defendant concedes, for present purposes, that the ordinance was an unconstitutional prior restraint. It argues, however, that the offending portions of the ordinance may be severed and that the Plaintiff was never in compliance with the portions of the ordinance that would have been valid at the time. As such, it is not entitled to be grandfathered.
A. Severability
As noted above, for present purposes Winnebago County has conceded that the conditional use permitting process is an unconstitutional prior restraint. Under that process, an AdultEntertainment Overlay (AEO) District could be established, but it was subject to the "unbridled discretion" of government officials. 790 F. Supp. 2d at 959. In addition, officials had no time limit for making a decision, which further increased their discretionary power over speech. Judge Clevert thus found that those portions of the ordinance constituted an impermissible prior restraint on protected speech.
The county argues, however, that these unconstitutional portions of the ordinance may be severed while the unoffending portions of the ordinance remain in tact. Specifically, the county argues that the standards set forth in §17.13(6)(d)—particularly the alcohol prohibition and the setback requirements—can be applied independent of the AEO permitting process. Because Plaintiff's establishment violated both of those requirements, and because those requirements are valid regulations in their own right, the county argues that Plaintiff was never in compliance with applicable zoning ordinances.
"In determining legislative intent with respect to severability, the first resort is to the language of the statute."...
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