Maxim Cabaret, Inc. v. City of Sandy Springs

• Decision Date: 18 June 2018
• Docket Number: S18A0496
• Citation: 816 S.E.2d 31,304 Ga. 187
• Court: Georgia Supreme Court
• Parties: MAXIM CABARET, INC. et al. v. CITY OF SANDY SPRINGS

304 Ga. 187

816 S.E.2d 31

MAXIM CABARET, INC. et al.

v.CITY OF SANDY SPRINGS

S18A0496

Supreme Court of Georgia.

Decided: June 18, 2018

Reconsideration Denied July 12, 2018

Begner & Begner, Alan I. Begner, Cory G. Begner, Eric A. Coffelt, for appellants.

Scott D. Bergthold ; Gray, Rust, St. Amand, Moffett & Brieske, Harvey S. Gray, for appellee.

Grant, Justice.

Appellant Maxim Cabaret, Inc. d/b/a Maxim Cabaret is a strip club in Sandy Springs, Georgia, and appellant Theo Lambros is the club's operator, sole shareholder, and president (collectively "Maxim"). Maxim appeals from the Fulton County Superior Court's order granting summary judgment to the City of Sandy Springs on Maxim's legal challenges to city ordinances. We hold that Maxim's challenges to prior versions of the City's ordinances that have since been replaced or amended are moot; current adult business ordinances prohibiting the sale of alcohol at businesses that offer live nude entertainment constitutionally regulate negative secondary effects of strip clubs without unduly inhibiting free speech or expression; and because the City may constitutionally prohibit Maxim from obtaining a license to sell liquor on its premises under the City's adult business licensing ordinances, Maxim lacks standing to challenge the City's alcohol licensing regulations. We affirm.

I.

Lambros has owned and operated Maxim Cabaret, an adult entertainment establishment featuring nude dancing, in its current location since March 1992. The club operated in unincorporated Fulton County until December 1, 2005, when it came under the jurisdiction of the newly incorporated City of Sandy Springs. In March 2003, Maxim stopped offering full nudity and offered cabaret entertainment with its performers clothed or partially clothed. At the same time, it applied for and was granted a Fulton County license for on-premises consumption of alcoholic beverages. After experiencing a drop in profits, however, Maxim resumed operating as a full-nudity strip club several months later.

In December 2005, the Sandy Springs city council conducted hearings at which it received and considered information concerning the negative secondary effects of sexually oriented businesses. The minutes reflect that the City was "deeply and profoundly concerned" about criminal activities associated with "the commercial combination of live nudity and alcohol," including specifically "disorderly conduct, prostitution, public solicitation, public indecency, fighting, battery, assaults, drug use, and drug trafficking." The City also expressed concern with other undesirable effects on the community of such establishments, including "commercial depression of property values, an acceleration of community blight in the surrounding neighborhoods," and increased costs for law enforcement and the judicial system. Effective January 1, 2006, the City enacted several zoning, business licensing, and alcohol licensing ordinances regulating adult entertainment establishments.¹ The ordinances included provisions that banned alcohol from the premises of adult entertainment establishments and restricted the permissible locations for such businesses. Under these regulations, Maxim is not authorized to operate as a strip club in its current location.

In January 2006, Maxim sued the City in Fulton County Superior Court, claiming that the City's adult business regulations were unconstitutional and seeking mandamus relief, declaratory and injunctive relief, and damages.² In July 2011, the parties moved for summary judgment. The superior court heard argument on the summary judgment motions on November 28, 2011 and May 4, 2015, and on June 10, 2016, issued an order granting summary judgment to the City on all of Maxim's claims.

Shortly after filing its first complaint, Maxim applied for a license to sell and serve alcohol on its premises, which was denied. By agreement with the City, however, Maxim has been allowed to operate with nude dancers and on-premises alcoholic beverage sales in its current location during the pendency of this litigation.

II.

During the decade-long course of this litigation in superior court, the City amended its adult business ordinances multiple times, in many cases changing or removing provisions that Maxim had alleged to be unconstitutional. Maxim also filed eight amendments to its complaint, the last of which consolidated all of its claims into a single pleading. In its eighth amended complaint, Maxim reasserted its constitutional claims regarding some of the City's ordinances that had since been amended, contending that because the original ordinances were unconstitutional and void, they could not be cured by amendment. In granting the City's summary judgment motion, the superior court found that "the general rule—that repeal of a challenged provision of law renders the challenge moot—applies." On appeal, Maxim claims that this finding was error. We disagree.

Maxim acknowledges that the City has since amended the ordinances at issue to remove or replace the purportedly unconstitutional provisions, and it has not cited to any evidence in the record showing that the complained-of provisions were ever enforced against it. Nor has it shown that there is any likelihood that the original ordinances will be re-enacted and enforced in the future. Under the circumstances, Maxim's claims regarding the previous ordinances are moot. See Shelley v. Town of Tyrone , 302 Ga. 297, 307, 806 S.E.2d 535 (2017) (challenges to zoning ordinance that had been repealed and replaced were moot); Pawnmart, Inc. v. Gwinnett Cty. , 279 Ga. 19, 19 n.1, 608 S.E.2d 639 (2005) (County's amendment of its ordinance to remove objected-to provision rendered Pawnmart's challenge to the provision moot).

Maxim's claims are not saved by its argument that its constitutional challenges to the City's original adult business regulations are not moot because the challenged ordinances were amended rather than repealed and replaced. It is true that "once a statute is declared unconstitutional and void, it cannot be saved by a subsequent statutory amendment, as there is, in legal contemplation, nothing to amend." In the Interest of R.A.S. , 249 Ga. 236, 237, 290 S.E.2d 34 (1982). The same rule applies to ordinances. But the ordinances challenged by Maxim were never declared unconstitutional, and the mere existence of litigation challenging their constitutionality does not preclude an amendment to remove the challenged provisions. See Shelley , 302 Ga. at 307, 806 S.E.2d 535.

Because the challenged ordinances no longer exist and were never enforced against Maxim, the resolution of Maxim's claims concerning those ordinances "would amount to the determination of an abstract question not arising upon existing facts or rights," and the trial court correctly determined that those claims were moot. Sexual Offender Registration Review Bd. v. Berzett , 301 Ga. 391, 396, 801 S.E.2d 821 (2017) (citation and punctuation omitted). " ‘[I]t is a settled principle of Georgia law that the jurisdiction of the courts is confined to justiciable controversies,’ and ‘[w]e will not decide the constitutionality of a law where no justiciable case or controversy is presented.’ " Id. (citation omitted).

III.

We now turn to Maxim's surviving claims regarding the constitutionality of existing adult business ordinances.³ At the heart of Maxim's challenges to the City's adult business regulations is its desire to continue operating as a full-nudity strip club while also selling alcoholic beverages to its customers. The current versions of both the adult business licensing code and the alcohol code contain ordinances prohibiting adult entertainment establishments such as Maxim from serving alcoholic beverages. But according to Maxim, the choice between nude entertainment and alcohol sales is no choice at all, because if it cannot have both it will be forced out of business entirely. Maxim argues on that basis that the City's ordinances infringe upon its right of free expression under the First Amendment to the United States Constitution and Article I, Section I, Paragraph V of the Georgia Constitution. This is not the first time we have heard such a claim, and again, we disagree.

It is true that both the First Amendment and the free speech provision of the Georgia Constitution have been held to protect nude dancing as a form of expressive conduct. See City of Erie v. Pap's A.M. , 529 U.S. 277, 289, 120 S.Ct. 1382, 146 L.Ed.2d 265 (2000) ; Oasis Goodtime Emporium I, Inc. v. City of Doraville , 297 Ga. 513, 520, 773 S.E.2d 728 (2015). But some limitation on the time, place, or manner of such expression is constitutionally permissible, as are appropriately limited regulations targeting the negative secondary effects of adult entertainment establishments. See, e.g., Pap's A.M. , 529 U.S. at 290-297, 120 S.Ct. 1382 ; City of Renton v. Playtime Theatres, Inc. , 475 U.S. 41, 48-49, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986) ; Trop, Inc. v. City of Brookhaven , 296 Ga. 85, 87, 764 S.E.2d 398 (2014).

At the outset, we reject Maxim's argument that the City's regulations prohibiting the sale of alcohol in nude dancing establishments should be subjected to strict scrutiny.⁴ This Court and the U.S. Supreme Court have held repeatedly that ordinances designed to combat the negative effects of sexually oriented businesses on the surrounding community are to be evaluated as "content-neutral" regulations, which are subject to intermediate scrutiny. See, e.g., City of Renton , 475 U.S. at 47-49, 106 S.Ct. 925 ; Oasis , 297 Ga. at 521, 773 S.E.2d 728 ; Goldrush II v. City of Marietta , 267 Ga. 683, 690, 482 S.E.2d 347 (1997). The express purpose of the challenged regulations is to combat the criminal activities and other undesirable secondary effects of "the commercial combination of live nudity and alcohol." Sandy Springs Adult Licensing Code § 26-21 (15). Thus, intermediate scrutiny applies.

Under intermediate scrutiny, a...