ILQ Investments, Inc. v. City of Rochester, 93-1925

• Decision Date: 15 June 1994
• Docket Number: No. 93-1925,93-1925
• Citation: 25 F.3d 1413
• Parties: ILQ INVESTMENTS, INC., a Minnesota corporation; Excalibur Group, Inc., a Minnesota corporation, Plaintiffs-Appellees, v. CITY OF ROCHESTER, a municipal corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1413

25 F.3d 1413

ILQ INVESTMENTS, INC., a Minnesota corporation; Excalibur Group, Inc., a Minnesota corporation, Plaintiffs-Appellees, v. CITY OF ROCHESTER, a municipal corporation, Defendant-Appellant.

No. 93-1925.

United States Court of Appeals,

Eighth Circuit.

Submitted Dec. 15, 1993.

Decided June 15, 1994.

James J. Thomson, Minneapolis, MN, argued, for appellant.

Randall D.B. Tigue, Minneapolis, MN, argued, for appellee.

Before LOKEN, Circuit Judge, HEANEY, Senior Circuit Judge, and HANSEN, Circuit Judge.

LOKEN, Circuit Judge.

Rochester is a city of 75,000 people in southern Minnesota. In April 1988, Rochester enacted Ordinance No. 2590, a zoning ordinance that defines and restricts the location of "adult establishment uses." In this case, the district court has preliminarily enjoined enforcement of Ordinance No. 2590 against a newly-opened adult bookstore in downtown Rochester. See ILQ Invs., Inc. v. City of Rochester, 816 F.Supp. 516 (D.Minn.1993). Concluding that Ordinance No. 2590 will almost certainly survive constitutional challenge under City of Renton v. Playtime Theatres, Inc., 475 U.S. 41, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986), we reverse.

I.

In the summer of 1992, appellees ILQ Investments, Inc., and Excalibur Group, Inc. (collectively "ILQ"), opened Downtown Book and Video on the main floor of a commercial building in premises previously occupied by a retail china shop. Downtown Book and Video segregates forty per cent of its floor space into an adults-only area selling sexually explicit books, magazines, and novelty items that account for fifty per cent of the store's total sales. The store has no facilities for on-premises viewing of these sexually explicit materials.

On August 7, 1992, the Zoning Administrator issued two Notices of Violation. The first advised ILQ that it violated Sec. 61.111 by changing the use of the property without a zoning certificate. ¹ The second Notice frames the issues for this appeal. It informed ILQ that Downtown Book and Video was violating Ordinance No. 2590 because the store is an "adult bookstore" ² and an "adult establishment" ³ that is located within 750 feet of a "youth facility," ⁴ the Rochester Public Library. Both Notices ordered the violations discontinued but gave ILQ ten days to appeal the Zoning Administrator's decisions.

ILQ appealed to the Zoning Board of Appeals and then to the Rochester Common Council. Both held public hearings, made detailed findings of fact and conclusions of law, and upheld the Zoning Administrator's decisions. Foregoing judicial review in state court, ILQ commenced this 42 U.S.C. Sec. 1983 action, seeking declaratory and injunctive relief on the ground that Ordinance No. 2590 violates ILQ's First Amendment and due process rights.

The district court granted a preliminary injunction, enjoining the City "from taking any action, civil or criminal, to enforce the provisions of Ordinance No. 2950 against [ILQ]." The court concluded that ILQ is likely to succeed on the merits of its constitutional challenge because the definition of "adult bookstore" is impermissibly vague, and because Rochester was unreasonable in relying on other cities' studies to justify both the breadth of Ordinance No. 2590 and its application to Downtown Book and Video. ILQ is irreparably harmed by this chilling of its First Amendment rights, the court reasoned, and the balance of harms and public interest support preliminary injunctive relief. See Dataphase Systems v. C.L. Systems, Inc., 640 F.2d 109 (8th Cir.1981) (en banc).

Rochester appeals this preliminary injunction, challenging only one prong of the district court's preliminary injunction analysis--whether ILQ is likely to succeed on the merits of its constitutional claims. We have jurisdiction to review the grant of a preliminary injunction. See 28 U.S.C. Sec. 1292(a)(1). We review for a clearly erroneous factual determination, an error of law, or an abuse of discretion. See West Pub. Co. v. Mead Data Central, Inc., 799 F.2d 1219, 1222-23 (8th Cir.1986), cert. denied, 479 U.S. 1070, 107 S.Ct. 962, 93 L.Ed.2d 1010 (1987).

II.

ILQ does not allege that Ordinance No. 2590 effectively bans adult entertainment uses from Rochester. Therefore, this zoning ordinance is "properly analyzed as a form of time, place, and manner regulation." City of Renton, 475 U.S. at 46, 106 S.Ct. at 928. Time, place, and manner regulations are acceptable if they are "content-neutral," and if they are "designed to serve a substantial governmental interest and do not unreasonably limit alternative avenues of communication." Id. at 47, 106 S.Ct. at 928. Applying this test, we have recently upheld similar ordinances enacted by the cities of Little Rock, Arkansas, see Ambassador Books & Video, Inc. v. City of Little Rock, 20 F.3d 858 (8th Cir.1994); Ramsey, Minnesota, see Holmberg v. City of Ramsey, 12 F.3d 140 (8th Cir.1993); Minneapolis, Minnesota, see Alexander v. City of Minneapolis, 928 F.2d 278 (8th Cir.1991); and St. Louis, Missouri, see Thames Ent., Inc. v. City of St. Louis, 851 F.2d 199 (8th Cir.1988). See also SDJ, Inc. v. City of Houston, 837 F.2d 1268 (5th Cir.1988), cert. denied, 489 U.S. 1052, 109 S.Ct. 1310, 103 L.Ed.2d 579 (1989).

In applying the City of Renton test, the first task is to determine whether the ordinance is "content-neutral." This is a term of art. "A regulation that serves purposes unrelated to the content of expression is deemed neutral, even if it has an incidental effect on some speakers or messages but not others." Ward v. Rock Against Racism, 491 U.S. 781, 791, 109 S.Ct. 2746, 2754, 105 L.Ed.2d 661 (1989). Thus, even if a time, place, and manner ordinance regulates only businesses selling sexually explicit materials, the ordinance is content-neutral if its purpose is to lessen undesirable secondary effects attributable to those businesses, such as increased crime, lower property values, or deteriorating residential neighborhoods. See Holmberg, 12 F.3d at 143; Doe v. City of Minneapolis, 898 F.2d 612, 617 (8th Cir.1990).

ILQ argues that Ordinance No. 2590 is not content-neutral because Rochester has failed to prove that the City's adult businesses cause adverse secondary effects. That argument impermissibly confuses distinct aspects of the City of Renton test. Content neutrality focuses on the City's purposes in enacting the ordinance. Ward, 491 U.S. at 791, 109 S.Ct. at 2754. Here, it is clear that the Common Council targeted not the content of Downtown Book and Video's materials, but the anticipated impact of adult businesses on their surrounding communities. On this record, Ordinance No. 2590 is indisputably content-neutral.

To survive First Amendment scrutiny, a content-neutral regulation must be "designed to serve a substantial governmental interest." City of Renton, 475 U.S. at 47, 106 S.Ct. at 928. Regulations reasonably designed to curb unwanted secondary effects of sexually oriented businesses serve a substantial governmental interest. See id. at 50, 106 S.Ct. at 930; Holmberg, 12 F.3d at 143. In identifying and measuring such secondary effects, a city may rely upon studies or evidence generated by other cities "so long as [that] evidence ... is reasonably believed to be relevant to the problem that the city addresses." City of Renton, 475 U.S. at 51-52, 106 S.Ct. at 931; see also Ambassador Books & Video, 20 F.3d at 862. The legislative history of Ordinance No. 2590 demonstrates that the City has satisfied this element of the City of Renton standard.

In February 1987, the Common Council became concerned about two adult bookstores located across from each other in downtown Rochester and directed the Planning Commission to study the effects of adult entertainment uses. On March 2, 1988, the Planning Department published the results of its study in a report entitled "Adult Entertainment: Land Use and Legal Perspectives." This report discussed the relevant legal issues and precedents and summarized studies of the adverse secondary effects of adult entertainment businesses conducted by other cities, including Minneapolis and St. Paul. The study concluded:

a) A considerable number of communities throughout the nation have studied the impacts which adult entertainments have on the areas surrounding them.

b) These studies have concluded that adult entertainment uses have an adverse impact on the surrounding neighborhoods.

c) Residential neighborhoods in proximity to adult uses suffer adverse effects including increased crime rates, lowered property values, and increased transiency.

d) Values of both commercial and residential properties are diminished when located in proximity to adult entertainment businesses.

e) The adverse impact on commercial areas is increased by the presence of more than one adult entertainment use in close proximity to another adult entertainment use.

f) The impact which an adult entertainment use has on the surrounding area appears to lessen as the distance from the adult entertainment use increases.

g) Reasonable "time, place and manner" restrictions which address the "secondary" impacts of adult entertainment uses are constitutionally permissible.

After conducting a public hearing, the Planning Commission adopted detailed findings and conclusions, including:

6. The concerns which have prompted public hearings in this city are similar to the concerns which motivated the communities of Indianapolis, Indiana; St. Paul, Minnesota; Phoenix, Arizona; and Seattle, Washington to undertake their studies of adult entertainment uses; consequently, the results of those studies are relevant to the existing or foreseeable impacts which such uses can have on the areas surrounding them in this city.

7. The concentration of adult entertainment uses in commercial areas or the location of adult entertainment uses in close proximity to residential uses, churches, parks and schools will result in devaluation of property values and decreases in...