Illusions-Dallas Private Club, Inc. v. Steen

Decision Date15 March 2007
Docket NumberNo. 05-10962.,05-10962.
Citation482 F.3d 299
PartiesILLUSIONS-DALLAS PRIVATE CLUB, INC., a Not-for-Profit Texas Corporation, doing business as Penthouse Key Club; Hotel Development Texas Ltd., a Texas Limited Liability Company; Silver City, an Unincorporated Membership Organization; Green Star, Inc., a Texas Corporation, Plaintiffs-Appellants, v. John T. STEEN, Jr., in his Official Capacity as Chairman of the Texas Alcoholic Beverage Commission; Gail Madden, in her Official Capacity as a Member of the Texas Alcoholic Beverage Commission; Alan Steen, in his Official Capacity as Administrator of the Texas Alcoholic Beverage Commission, Defendants-Appellees. Plano Miller Club Inc., a Non-Profit Texas Corporation; Adventure Plus Enterprises Inc., doing business as P. T.'s, also known as The Gold Club, Plaintiffs-Appellants, v. John T. Steen, Jr., in his Official Capacity as Chairman of the Texas Alcoholic Beverage Commission; Gail Madden, in her Official Capacity as a Member of the Texas Alcoholic Beverage Commission; Alan Steen, in his Official Capacity as Administrator of the Texas Alcoholic Beverage Commission, Defendants-Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

J. Michael Murray (argued), Berkman, Gordon, Murray & DeVan, Cleveland, OH, Roger Albright, Dallas, TX, for Plaintiffs-Appellants.

John P. Lilly, Jeffrey W. Hurt (argued), Hurt & Lilly, Dallas, TX, for Silver City and Green Star, Inc.

Bill L. Davis (argued), Robert F. Johnson, III, Austin, TX, for Defendants-Appellees.

Scott Dean Bergthold, Law Office of Scott D. Bergthold, Chattanooga, TN, for Amici Curiae.

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

[482 F.3d 303]

Before REAVLEY, STEWART and CLEMENT, Circuit Judges.

EDITH BROWN CLEMENT, Circuit Judge:

Illusions-Dallas Private Club, Inc., Hotel Development Texas Ltd., Silver City, and Green Star (collectively, "the Clubs") challenge a Texas statute that prevents sexually oriented businesses located in certain political subdivisions from obtaining or renewing permits to serve alcohol. The district court granted summary judgment against the Clubs on their constitutional claims. For the following reasons, we affirm in part and reverse in part.

I. FACTS AND PROCEEDINGS

The Clubs are private membership adult cabarets located in non-residential areas of Dallas, Texas. The Clubs feature sexually oriented dancing and are regulated as sexually oriented businesses ("SOBs") under Texas law and Dallas ordinances. Texas law allows political subdivisions to determine whether they will permit the sale of alcoholic beverages within their borders. See TEX. ALCO. BEV.CODE § 251.01.1 The Clubs are located in political subdivisions that have elected to be dry. As such, the Clubs cannot sell alcoholic beverages unless they obtain a Private Club Registration Permit ("club permit") in accordance with the Texas Alcoholic Beverage Code. The Clubs currently have club permits and serve alcohol while offering sexually oriented dancing as entertainment.

Section 32.03(k) of the Texas Alcoholic Beverage Code was enacted by the state legislature in October 2003 as House Bill 7. It prohibits the issuance of club permits to SOBs operated in dry political subdivisions and prohibits the renewal of existing club permits.2 Section 32.03(k) thus denies the Clubs, as SOBs operating in dry political subdivisions, the ability to serve alcohol.

Following the Texas legislature's enactment of § 32.03(k), the Clubs sued John T. Steen and Gail Madden, in their respective capacities as members of the Texas Alcoholic Beverage Commission ("TABC"); and Alan Steen, in his capacity as Administrator of the TABC, (collectively, "the State"). The Clubs' complaint, brought pursuant to 42 U.S.C. § 1983, sought declarations that § 32.03(k) was unconstitutional under the First, Fifth, and Fourteenth Amendments and sought to enjoin the individual defendants from enforcing § 32.03(k). In particular, the Clubs asserted that § 32.03(k) violated the Clubs' right to free expression under the First Amendment, their rights to equal protection and due process under the Fourteenth Amendment, and their right to be free from a taking of private property without just compensation, under the Fifth and Fourteenth Amendments.

The State moved for summary judgment on all claims, and the Clubs filed a cross-motion for partial summary judgment on the First Amendment claim. The district court granted summary judgment in favor of the State on the First Amendment claim, finding that the statute was content-neutral and that it survived intermediate scrutiny. The district court also granted summary judgment in favor of the State on the Clubs' Fifth and Fourteenth Amendment claims.

The Clubs timely appealed, contending that the district court's grant of summary judgment on the First Amendment and due process claims was erroneous. The Clubs have thus abandoned their equal protection claim and their Fifth Amendment takings claim. See, e.g., SEC v. Recile, 10 F.3d 1093, 1096 (5th Cir.1993) (noting that issues not raised in the briefs are abandoned). On appeal, the Clubs seek an entry of summary judgment in their favor on the First Amendment claim or, in the alternative, a remand for a trial on the First Amendment claim and the due process claim.

II. STANDARD OF REVIEW

Review of the district court's grant of summary judgment is de novo. J&B Entm't, Inc. v. City of Jackson, 152 F.3d 362, 365 (5th Cir.1998). Summary judgment is appropriate if there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. FED.R.CIV.P. 56(c). This court may "affirm a grant of summary judgment if [it] find[s] a basis, independent or not of the district court's reasoning, adequate to support the result." Texas Refrigeration Supply, Inc. v. FDIC, 953 F.2d 975, 980 (5th Cir.1992).

III. DISCUSSION
A. Due process claim

The district court found that there was no genuine issue of material fact on the issue of whether the Clubs were deprived of a property interest without due process because § 32.03(k) was a generally applicable legislative enactment and that the legislative process had provided the Clubs all process that was due. We agree. Due process claims are subject to a two part analysis. Courts must first determine whether a property interest exists and, if so, whether the holder of the interest received due process. See Logan v. Zimmerman Brush Co., 455 U.S. 422, 428, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982). Assuming that the Clubs have a property interest in the club permits issued by the TABC, they cannot demonstrate that they were denied due process.

"[W]hen a legislature extinguishes a property interest via legislation that affects a general class of people, the legislative process provides all the process that is due." McMurtray v. Holladay, 11 F.3d 499, 504 (5th Cir.1993). The Clubs argue that § 32.03(k) affected a small number of establishments and was narrowly focused on certain SOBs, notwithstanding its broad language and statewide applicability. The Clubs erroneously focus on the total number of establishments ultimately affected by § 32.03(k). The proper focus, however, is on whether the legislature intended to single out certain individuals or establishments. See id. (holding that a law extinguishing property rights of certain government employees did not violate due process where "the Act was intended to affect every employee" (first emphasis added)). Section 32.03(k) was intended to affect every permit-holding club in dry political subdivisions in the entire state of Texas, not any particular establishment or cadre of establishments. The Clubs were not denied due process.

B. First Amendment claim

We first address the State's contention that § 32.03(k) does not implicate the First Amendment at all. The State argues that this court should affirm the district court's grant of summary judgment because § 32.03(k) regulates no aspect of expression, does not restrict the time, place, or manner of erotic expression, and does not have even an incidental impact on First Amendment freedoms because nothing about it prevents erotic dance.

The State's argument is not without some force. Section 32.03(k) regulates the Clubs' ability to obtain or renew club permits and, therefore, regulates the Clubs' ability to legally serve alcoholic beverages. What § 32.03(k) does not do is regulate any aspect of the protected expressions included in the performances provided by the Clubs; § 32.03(k) only regulates the Clubs' ability to couple the performances with the service of alcohol. Cases applying First Amendment principles to alcohol regulations similar to § 32.03(k), moreover, have not explicitly addressed the argument, presented here, that alcohol regulations of SOBs do not implicate the First Amendment. They instead proceed directly to the First Amendment analysis. Nonetheless, based on a review of relevant cases from the Supreme Court and from other circuits that have addressed the constitutionality of statutes similar to § 32.03(k), we must conclude that § 32.03(k) sufficiently implicates the First Amendment to warrant further analysis under the relevant First Amendment jurisprudence.

The Supreme Court's opinions support this conclusion. The Court in California v. LaRue, 409 U.S. 109, 111-14, 93 S.Ct. 390, 34 L.Ed.2d 342 (1972), considered the constitutionality of regulations promulgated by California's Department of Alcoholic Beverages ("CDAB"). The California regulations prohibited bars and nightclubs licensed to sell alcoholic beverages by the CDAB from providing sexually-oriented entertainment described as grossly sexual. See id. at 118, 93 S.Ct. 390. The Court rejected the First Amendment challenge brought by, inter alia, the establishments licensed by the CDAB to serve alcohol. See id. 409 U.S. at 110, 118-19, 93 S.Ct. 390. In rejecting this First Amendment challenge, the Court did not...

To continue reading

Request your trial
27 cases
  • Smith v. TARRANT COUNTY COLLEGE DIST., Civil Action No. 4:09-CV-658-Y.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas
    • 15 de março de 2010
    ...... See Save the Bay, Inc. v. U.S. Army, 639 F.2d 1100, 1102 (5th ... See Sierra Club v. Morton, 405 U.S. 727, 735, 92 S.Ct. 1361, 31 ... Illusions—Dallas Private Club, Inc. v. Steen, 482 F.3d 299, 312 (5th Cir. ......
  • Lauder Inc. D/B/A Houston Tribune v. City of Houston
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • 4 de novembro de 2010
    ......'s passage, Lauder distributed the paper in private locations, such as restaurants or stores, and through 65 ... Illusions—Dallas Private Club, Inc. v. Steen, 482 F.3d 299, 312 (5th Cir.2007) (holding ......
  • Doe v. Landry
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 20 de setembro de 2018
    ...... and began working as a shot girl at the club where she formerly danced. Her income also ...Jefferson Cmty. Health Care Centers, Inc. v. Jefferson Par. Gov't, 849 F.3d 615, 624 (5th ... the level of scrutiny." Illusions-Dallas Private Club, Inc. v. Steen, 482 F.3d 299, 308 ......
  • Doe v. Marine-Lombard, CIVIL ACTION NO: 16–14876
    • United States
    • United States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana)
    • 8 de março de 2017
    ......Tex., Inc. v. Suehs , 692 F.3d 343, 348 (5th Cir. 2012) ; ... scrutiny); see also Illusions–Dallas Private Club, Inc. v. Steen , 482 F.3d 299, 307 (5th ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT