Lso v. Stroth

Citation205 F.3d 1146
Decision Date06 March 2000
Docket NumberNos. 98-56093,98-5634998-56465,s. 98-56093,98-5634998-56465
Parties(9th Cir. 2000) LSO, LTD., a California corporation, Plaintiff-AppellantCross-Appellee, v. JAY STROH, Director of the California Department of Alcoholic Beverage Control, in his official and individual capacities; MANUEL R. ESPINOZA, Chief Deputy Director of the California Department of Alcoholic Beverage Control, in his official and individual capacities; DAVID E. GILL, District Supervisor, Rancho Mirage District Office Department of Alcoholic Beverage Control, in his official and individual capacities, Defendants-AppelleesCross-Appellants
CourtU.S. Court of Appeals — Ninth Circuit

COUNSEL: Peter J. Eliasberg, ACLU Foundation of Southern California, Los Angeles, California, for the plaintiff-appellant-crossappellee.

Dana Thaddeus Cartozian, Deputy Attorney General, Los Angeles, California, for the defendants-appellees-crossappellants.

Appeals from the United States District Court for the Central District of California; Dickran M. Tevrizian, District Judge, Presiding. D.C. No. CV-97-05569-DT Before: Dorothy W. Nelson, Robert Boochever, and Thomas G. Nelson, Circuit Judges.

Opinion by Judge T.G. Nelson

T.G. NELSON, Circuit Judge:


This litigation arises from the efforts of Appellant Lifestyles Organization, Limited ("LSO") to hold its annual Erotic Art Exhibition and Trade Show in Palm Springs, California, in 1997. According to LSO's complaint, defendants Jay Stroh, Manuel R. Espinoza and David E. Gill, all officials of the California Department of Alcoholic Beverage Control ("ABC"), (collectively the "Officials") attempted to prevent LSO from holding the exhibition. They allegedly did this by threatening the Palm Springs Convention Center (the "Center") and other businesses with sanctions -up to and including loss of their liquor licenses -if they allowed LSO to display its art on their premises. The Officials based these threats on a California law prohibiting the display of certain sexual images, whether or not legally obscene, on the premises of establishments with liquor licenses. After the federal district court issued a temporary restraining order ("TRO") against the Officials, LSO held its event. On appeal, we must decide if LSO has standing to seek prospective and declaratory injunctive relief preventing the Officials from interfering with future LSO art exhibitions. We must also decide if the Officials are entitled to qualified immunity in a suit seeking damages for their actions against the 1997 exhibition. We have jurisdiction under 28 U.S.C. S 1291. We hold that LSO has standing and that the Officials were not entitled to qualified immunity.1


LSO is a California corporation that operates a membership organization consisting of approximately 30,000 members. It has held a convention every year since 1973, and at least seventeen of these have been in California. Since 1991, LSO's annual convention has included a Sensual and Erotic Art Exhibition. This event, according to LSO, is "the premiere exhibition devoted to erotic art in the United States." In addition to the art exhibition, the conventions include a trade show typically featuring a wide variety of exhibitors, including artists and art galleries, members of the travel industry, and publishers. In recent years, several thousand people have attended each convention.

LSO planned to hold its 1997 convention in Palm Springs. It chose the Center, a facility owned and operated by the City of Palm Springs, to host most of the events related to the convention. It contracted with the Center for exclusive use of the Convention Center, including all corridors and public areas, for July 30 through August 2, 1997.3 According to LSO, its employees and agents invested considerable time and effort to prepare for the organization's convention, especially the art exhibition. LSO planned to follow its longstanding practice of prohibiting alcohol in the area where the art exhibition and trade show were taking place.

It is undisputed that LSO's exhibitions do not include art that is legally obscene. Nonetheless, much of the art LSO intended to display in 1997 plainly fell within the proscriptions of California Administrative Code, Title 4, Section 143.4, which prohibits, on any premises holding a liquor license,

[t]he showing of film, still pictures, electronic repro duction or other visual reproductions depicting:

(1) Acts or simulated acts of sexual inter course, masturbation, sodomy, bestiality, oral copulation, flagellation or any sexual acts which are prohibited by law.

(2) Any person being touched, caressed or fondled on the breast, buttocks, anus or genitals.

(3) Scenes wherein a person displays the vulva or the anus or the genitals.

(4) Scenes wherein artificial devices or inanimate objects are employed to depict, or drawings are employed to portray, any of the prohibited activities described above.

In May 1997, appellee Gill, the District Supervisor at the ABC's Rancho Mirage District Office, convened a meeting of representatives of several ABC licensees, including the Center and several of the hotels which were to host events of the convention.4 LSO's president, Robert L. McGinley, and an attorney for LSO, Paul Murray, also attended.

Although the parties' versions of what happened at the meeting differ in some respects, they agree that, at a minimum, Gill read aloud from Section 143.4 and told the assembled representatives that ABC regulations applied to all parts of licensed facilities, even if no alcohol was being served in the precise area within the premises; that the ABC licensees were responsible for any violations of ABC regulations occurring on licensed premises; and that the ABC licensees were subject to sanctions ranging from a warning to revocation of its license.

Because the Center had a liquor license, LSO's representatives became concerned that Section 143.4 might prevent LSO from holding the exhibition there in the event a violation occurred. Attorney Murray offered to designate the parts of the Center where the trade show and art exhibition were to take place as alcohol-free zones during those events, on the theory that, in such a case, the ABC regulations would not apply there. The Officials ultimately rejected this proposal, maintaining it was not possible to "de-license " an area within the physical limits of a larger licensed area for the purposes of engaging in conduct otherwise prohibited by the liquor laws. Gill later mailed the text of Section 143.4 to the licensees. A letter accompanying the statute said: "Please be advised that the activity listed in these statutes cannot occur at any time on any portion of your licensed premises."

On June 24, 1997, McGinley and Murray met with Espinoza, who was ABC's Chief Deputy Director; Stroh, ABC's Director; and Kenton Byers, ABC's chief counsel. At this meeting appellee Espinoza allegedly expressed the view that the art exhibition would violate ABC regulations. LSO attempted to negotiate with the Officials, but the parties were unable to reach an agreement that would allow the exhibition to go forward at the Center without risk of ABC-imposed sanctions.

During the same time period, Gill had numerous conversations with Jim Dunn, general manager of the Center, which included discussion of LSO's planned art exhibition and ABC regulations. Gill told Dunn that the Center faced a threat of disciplinary action if displays in violation of the regulations were permitted. Dunn sent numerous letters to LSO discussing his concerns over the exhibition and the possibility of sanctions from ABC. He suggested that the exhibition be moved to a tent area across the street from the Center, but LSO refused.5 On July 23, 1997, Dunn notified LSO by letter that he had decided to bar the art exhibition from the Center because of fear that the Center would face sanctions from the Officials if the exhibition went on as planned. The Center sent an addendum to the original contract that called for relocating the exhibition to the tent area.

On July 28, 1997, LSO filed suit against ABC and several of its officials in federal district court seeking injunctive relief that would allow its 1997 exhibition to take place at the Convention Center. The following day, the district court issued a TRO forbidding the Officials from interfering with the art exhibition. The exhibition and trade show took place as scheduled at the Convention Center between July 31 and August 2, 1997. After the event, the district court vacated its order to show cause regarding a preliminary injunction.

Soon after that, LSO filed an amended complaint seeking declaratory relief, damages and injunctive relief under 42 U.S.C. S 1983. LSO sought damages and declaratory relief with respect to the Officials' alleged interference with its 1997 convention preparations. It sought injunctive and declaratory relief to prevent future interference by the Officials with the exhibitions and trade shows LSO intends to hold in the future.

Though the district court issued numerous orders, LSO appeals only some of them. First, it appeals the district court's orders holding that LSO lacked standing to seek injunctive and declaratory relief. Second, LSO objects to the district court's order granting summary judgment to the Officials on the ground of qualified immunity. Third, LSO objects to the district court's award of costs to the Officials. The Officials cross-appeal, objecting to the district court's award of fees to LSO with respect to the TRO.

I. Standing
A. The District Court's Orders

The district court, in its orders of September 22, 1997, and February 17, 1998, concluded that LSO lacked standing to seek prospective injunctive and declaratory relief, and therefore dismissed LSO's claims seeking...

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