Keepers, Inc. v. City of Milford

• Decision Date: 20 November 2015
• Docket Number: Nos. 14–1581–cv (Lead),14–2113–cv (XAP).,s. 14–1581–cv (Lead)
• Citation: 807 F.3d 24
• Parties: KEEPERS, INC., dba Keepers, fka Sidepockets, Inc., Plaintiff–Appellant–Cross–Appellee, v. CITY OF MILFORD, Defendant–Appellee–Cross–Appellant, v. Sidepockets, Inc., dba Keepers, After Dark LLC, dba Romantix Adult Emporium, Plaintiffs–Cross–Appellees.
• Court: U.S. Court of Appeals — Second Circuit

807 F.3d 24

KEEPERS, INC., dba Keepers, fka Sidepockets, Inc., Plaintiff–Appellant–Cross–Appellee,

v.CITY OF MILFORD, Defendant–Appellee–Cross–Appellant,

v.Sidepockets, Inc., dba Keepers, After Dark LLC, dba Romantix Adult Emporium, Plaintiffs–Cross–Appellees.

Nos. 14–1581–cv (Lead)

14–2113–cv (XAP).

United States Court of Appeals, Second Circuit.

Argued: May 18, 2015.

Decided: Nov. 20, 2015.

Jennifer M. Kinsley (Daniel A. Silver, Silver & Silver LLP, New Britain, CT, on the brief), Kinsley Law Office, Cincinnati, OH, for Plaintiff–Appellant–Cross–Appellee.

Scott D. Bergthold (James N. Tallberg, Karsten & Tallberg LLC, West Hartford, CT, on the brief), Law Office of Scott D. Bergthold, Chattanooga, TN, for Defendant–Appellee–Cross–Appellant.

Before: CABRANES, RAGGI, and CHIN, Circuit Judges.

JOSÉ A. CABRANES, Circuit Judge:

Plaintiff Keepers, Inc. ("Keepers") and defendant City of Milford, Connecticut ("Milford" or "the City") appeal and cross-appeal, respectively, from partial summary judgment awards to each party by the United States District Court for the District of Connecticut (Alvin W. Thompson, Judge ). This case presents two questions related to Chapter 2.3 Milford's municipal code, which regulates "adult-oriented establishments." The first is whether the District Court improperly considered the affidavit of Milford Chief of Police Keith Mello in granting partial summary judgment for the City. Keepers argues that the District Court should have struck the affidavit because it contradicted testimony given by Milford's former city attorney in a deposition taken pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure. We conclude that the District Court did not "abuse its discretion" in considering the affidavit, and we accordingly AFFIRM the District Court's partial summary judgment award to the City.

The second question is whether the City's requirement that sexually oriented businesses publicly post the names of their operators, officers, and significant owners violates the First Amendment. Keepers does not appeal a judgment by the District Court upholding that requirement with respect to individuals who operate, manage, or control such businesses, but Milford appeals the award of partial summary judgment in favor of Keepers holding the requirement unconstitutional with respect to passive owners and officers. The District Court should not have reached the merits of that issue, nor does this Court do so, because Keepers' First Amendment challenge does not present a justiciable case or controversy under Article III of the U.S. Constitution. Accordingly, we VACATE the District Court's partial judgment for Keepers insofar as it reached the merits of the public-posting requirement, and we REMAND the cause to the District Court with direction to dismiss that claim for lack of subject-matter jurisdiction.

I. BACKGROUND

A. Milford's Regulation of "Adult–Oriented Establishments "

Since 1996, Milford has regulated sexually oriented businesses ("SOBs"¹ ) through its Ordinance Regulating Adult–Oriented Establishments, which forms Chapter 2.3 of its municipal code. In 2003, Milford amended Chapter 2.3 to add several new restrictions on SOBs, including regulations for live performances involving nudity, new licensing requirements for operators of SOBs, and periodic inspections.² Most relevant here, the amended ordinance required an SOB to obtain an "adult-oriented establishment" license—which had to state the names of everyone who applied for it—and to post it "in a conspicuous place at or near the entrance ... so that it [could] be easily read at any time."³

Keepers fell within the scope of the 2003 ordinance. Keepers had been owned since 2001 by Joseph Regensberger, who initially operated the business as a restaurant and bar called Sidepockets.⁴ In 2002, however, Regensberger decided to convert Sidepockets into a "cabaret-style nightclub" featuring clothed and "seminude" female "dance entertainment."⁵ He accordingly obtained from the City the necessary adult-entertainment license pursuant to Chapter 2.3.⁶

In December 2003, shortly after Milford amended Chapter 2.3, Keepers filed suit in the District Court, challenging the ordinance's constitutionality. The City agreed not to enforce the ordinance while the litigation was pending.

In 2007, Milford repealed and replaced the ordinance.⁷ Many of the provisions in the 2007 ordinance were similar to those they replaced, although some requirements, such as those governing "adult arcades"—booths for viewing sexually explicit films—were stricter.⁸ Most relevant here, the 2007 ordinance introduced a more demanding public-posting requirement. Like the 2003 ordinance, the 2007 ordinance required an SOB to post its "adult-oriented establishment" license conspicuously near its entrance. But the 2007 ordinance expanded the list of individuals whose names had to appear on a license application—and, by extension, on the publicly posted license itself. Under the 2003 ordinance, the license had to include only the names of "operators"⁹ and "any other persons directly involved in the management or control of the adult-oriented establishment."¹⁰ But the 2007 ordinance broadened that list to include "each person with an influential interest" in the SOB or in "a legal entity that controls" it.¹¹ The 2007 ordinance defined "influential interest" to include "[a]ny of the following":

(1) the actual power to operate the sexually oriented business or control the operation, management or policies of the sexually oriented business or legal entity which operates the sexually oriented business,

(2) ownership of a financial interest of thirty percent (30%) or more of a business or of any class of voting securities of a business, or

(3) holding an office (e.g., president, vice president, secretary, treasurer, managing member, managing director, etc.) in a legal entity which operates the sexually oriented business.¹²

In short, the 2007 ordinance required SOBs to publicly post the names of operators, managers, officers, and anyone owning at least thirty percent of the business.

Soon after Milford passed the 2007 ordinance, and while the earlier suit was still pending, Keepers brought a second lawsuit in the District Court, this time challenging the new law.¹³ Around the same time, Keepers changed owners. Regensberger had encountered several setbacks, including a brief suspension of his liquor license in 2003 as a result of alleged misbehavior by dancers at Keepers, and the loss of his liquor license in 2007 due to prostitution at another establishment he owned. In 2008, he sold Keepers to his bartender, Angela Silano, whom the record indicates to be the company's president and sole owner.¹⁴

In October 2008, the District Court consolidated Keepers' first and second lawsuits,¹⁵ and both parties subsequently moved for summary judgment.¹⁶ In its motion, Keepers challenged the 2003 and 2007 ordinances on a number of constitutional grounds,¹⁷ and it also asserted that the ordinances violated the zoning requirements of Conn. Gen.Stat. § 8–2. Most relevant for this appeal, Keepers argued that the public-posting requirements of the 2003 and 2007 ordinances violated Keepers' "owners', employees' and entertainers' [First Amendment] right to anonymity while engaging in expressive activities."¹⁸ Specifically, Keepers urged the District Court to apply so-called intermediate scrutiny¹⁹ and strike down the public-posting requirements because they did not further a substantial governmental interest.²⁰

In response, Milford argued that it had "a substantial interest in regulating those who control and operate sexually oriented businesses."²¹ Specifically, Milford contended that the public-posting requirement allows "City officials and law enforcement agents to readily identify those who are responsible for the operation of a sexually oriented business for purposes of routine inspections and criminal investigations."²²

On March 30, 2013, the District Court granted nearly all of Milford's motion for summary judgment and denied nearly all of Keepers' motion.²³ Applying intermediate scrutiny, the Court agreed that Milford had a "substantial interest" in readily knowing who was responsible for operating an SOB, and that there was a "substantial relation between the City's interest" and the requirement that SOBs display the names of their operators.²⁴ The Court accordingly upheld the 2003 ordinance's posting requirement.

The Court went on to find, however, that the 2007 ordinance's posting requirement was "unconstitutionally broad."²⁵ Posting the names of owners and officers not involved in the actual operation of an SOB, the Court reasoned, lacked "a substantial relationship" to the City's asserted interest.²⁶ Accordingly, the Court invalidated the 2007 ordinance insofar as it "require[d] the posting of the names of individuals who do not manage, operate or control the sexually oriented business."²⁷

B. The Mello Affidavit

Keepers' complaint alleged that various provisions of Chapter 2.3 were unconstitutionally vague. During discovery, Keepers sought to substantiate that allegation by developing evidence that City officials interpreted Chapter 2.3 in a manner inconsistent with its plain meaning or in a manner that gave inadequate notice of the conduct proscribed.²⁸

On December 5, 2008, Keepers served a notice of deposition on the City pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure.²⁹ Rule 30(b)(6) permits a party to depose an organization, including a governmental entity, by sending it a notice of deposition "describ [ing] with reasonable particularity the matters for examination." After receiving such notice, the organization must designate someone familiar with the matters described in the notice to testify on its behalf. If the organizational deponent fails to comply by "mak[ing] available such number of persons as will be able to give complete, knowledgeable and binding answers on its behalf," a court may...