Ocello v. Koster

• Decision Date: 15 November 2011
• Docket Number: No. SC 91563.,SC 91563.
• Citation: 354 S.W.3d 187
• Parties: Michael OCELLO, et al., Appellants, v. Chris KOSTER, in his official capacity as Missouri Attorney General, Respondent.
• Court: Missouri Supreme Court

354 S.W.3d 187

Michael OCELLO, et al., Appellants,

v.Chris KOSTER, in his official capacity as Missouri Attorney General, Respondent.

No. SC 91563.

Supreme Court of Missouri, En Banc.

Nov. 15, 2011.

J. Michael Murray, Raymond V. Vasvari Jr., Berkman, Gordon, Murray & DeVan, Cleveland, James B. Deutsch, Mark H. Ellinger, Thomas W. Rynard, Blitz, Bardgett & Deutsch LC, Jefferson City, Richard T. Bryant, Kansas City, H. Louis Sirkin, Jennifer Kinsley, Sirkin Kinsley, Cincinnati, for Missouri residents and adult entertainment businesses.

Ronald Holliger, General Counsel, Mark E. Long, Emily Dodge, Attorney General's Office, Jefferson City, Scott D. Bergthold, Chattanooga, for the State.

LAURA DENVIR STITH, Judge.

Michael Ocello, Passions Video Inc., Genova's Chestnut Lounge Inc., and certain other Missouri residents and businesses (collectively “the businesses”) appeal the circuit court's grant of judgment on the pleadings against them in their challenge to the validity of sections 573.525 to 573.540, RSMo Supp.2010 ¹ (“the Act”), which regulate sexually oriented businesses in Missouri. They argue that the limitations contained in these statutes concerning touching of dancers by patrons, buffer zones around dancers, the banning of nudity in their establishments, alcohol and hours restrictions, and requirements that booths for viewing books and films be open to view violate their freedom of speech as protected by the First Amendment to the United States Constitution. They also assert that, prior to the Act's adoption, the General Assembly violated an aspect of section 23.140, RSMo 2000, regarding a bill's fiscal note and that this violation voids the Act.

For the reasons set forth below, this Court finds that the restrictions are not content-based limitations on speech but rather are aimed at limiting the negative secondary effects of sexually oriented businesses on the health, welfare and safety of Missouri residents. Applying the intermediate level of review that City of Los Angeles v. Alameda Books, Inc., 535 U.S. 425, 437–39, 122 S.Ct. 1728, 152 L.Ed.2d 670 (2002) (plurality opinion), states is appropriate for use in such cases, this Court finds that the statutes are reasonable time, place and manner or comparable restrictions and that the legislature relied on evidence it “reasonably believed to be relevant” to establish a connection between the statutory provisions under attack and the suppression of negative secondary effects of sexually oriented businesses. Accordingly, the Act does not unconstitutionally limit speech. This Court also rejects the argument that any failure to follow statutory procedures governing preparation of a fiscal note amounts to a failure to follow the Missouri Constitution and thereby voids the legislation. The Missouri Constitution does not require fiscal notes or address how they should be prepared. The judgment is affirmed.

I. FACTUAL AND PROCEDURAL BACKGROUND

Sections 573.525 to 573.540 (the “Act”), adopted by the Missouri legislature in 2010, regulates certain aspects of sexually oriented businesses by: (1) banning nude dancing in public; (2) requiring that semi-nude dancers not touch or come within six feet of customers; (3) prohibiting alcohol in sexually oriented businesses; (4) requiring sexually oriented businesses to close between midnight and 6 a.m.; and (5) requiring viewing booths in sexually oriented businesses to be visible from a central operating station.

Before the legislature passed the Act, legislative committees heard extensive testimony and received reports and other evidence from police officers, health officials, dancers, and concerned citizens and business owners related to the connection between sexually oriented businesses and a variety of detrimental secondary effects, including crimes such as prostitution and drug use, health and sanitation problems, and decreased property values.

In addition, the legislature heard from experts such as Dr. Richard McCleary, a professor of social ecology at the University of California–Irvine. Dr. McCleary testified that based on his extensive research—much of which, including numerous scientific studies, was provided to the legislature—sexually oriented businesses increase crime, drug use and other negative effects.

The legislature also reviewed dozens of judicial opinions as well as studies conducted by municipalities and states around the country concerning problems associated with sexually oriented businesses, including increased crime inside and outside those establishments, unsanitary and unhealthy conditions inside the establishments, and the deleterious effect of such businesses on property values and neighborhoods.

The legislature also considered evidence offered by opponents of the legislation. This included: (1) testimony from police officers and business owners who believed that sexually oriented businesses did not cause crime, blight or other negative secondary effects in their neighborhoods; (2) the testimony of Dr. Daniel G. Linz, a professor of communication, law and society at the University of California–Santa Barbara, who disputed the validity of many of the studies relied upon by proponents of the legislation; and (3) studies stating there is little correlation between sexually oriented businesses and crime and other negative secondary effects in the surrounding communities.

After holding these hearings, the legislature adopted the Act. On August 10, 2010, shortly before the effective date of the Act, the businesses filed a two-count petition in the Cole County circuit court challenging its validity. In Count I, the businesses claim that the Act is void because the General Assembly failed to hold a hearing regarding the accuracy of a fiscal note assessing the expected cost of the Act as required by section 23.140 and article III, section 35 of the Missouri Constitution. In Count II, the businesses claim that the Act restricts sexually oriented speech in violation of the First Amendment to the United States Constitution because the evidence that the General Assembly relied on to show that sexually oriented businesses cause negative secondary effects was constitutionally inadequate.

The State filed an answer in which it denied that the Act is unconstitutional or that the manner of its adoption was improper or rendered it void. It attached to its answer and incorporated by reference the legislative record upon which the Act was adopted, including the judicial opinions, crime, health and land use studies and reports, expert testimony, and anecdotal evidence offered by both proponents and opponents of the legislation. It then filed a motion for judgment on the pleadings, arguing that the General Assembly followed proper legislative procedures in passing the Act, that any deviations did not affect the validity of the legislation, and that the General Assembly reasonably had relied on evidence establishing a connection between sexually oriented businesses and negative secondary effects. The State's motion was granted as to both counts.² The businesses appeal. Because they challenge the constitutional validity of section 23.140, appeal is directly to this Court. Mo. Const. art. V, § 3.

II. STANDARD OF REVIEW

This Court reviews the constitutional validity of a statute de novo. In re Brasch, 332 S.W.3d 115, 119 (Mo. banc 2011). A statute is presumed valid, and the Court will uphold it unless it “clearly and undoubtedly” conflicts with the constitution. Prokopf v. Whaley, 592 S.W.2d 819, 824 (Mo. banc 1980). This Court “resolve[s] all doubt in favor of the [statute's] validity.” Westin Crown Plaza Hotel Co. v. King, 664 S.W.2d 2, 5 (Mo. banc 1984).

In reviewing grant of a motion for judgment on the pleadings, this Court must decide “whether the moving party is entitled to judgment as a matter of law on the face of the pleadings.” RGB2, Inc. v. Chestnut Plaza, Inc., 103 S.W.3d 420, 424 (Mo.App.2003). This Court will not “blindly accept the legal conclusions drawn by the pleaders from the facts.” Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir.1990). “The well-pleaded facts of the non-moving party's pleading are treated as admitted for purposes of the motion.” Eaton v. Mallinckrodt, Inc., 224 S.W.3d 596, 599 (Mo. banc 2007). Exhibits attached to the pleadings are incorporated therein and will be considered in determining whether judgment on the pleadings should have been granted. Rule 55.12.

III. FAILURE TO HOLD A FISCAL NOTE HEARING DID NOT INVALIDATE THE ACT

The businesses first challenge the process by which the Missouri General Assembly adopted the Act. The businesses' argument is grounded on article III, section 35 of the Missouri Constitution, which states in pertinent part:

There shall be a permanent joint committee on legislative research, selected by and from the members of each house as provided by law.... The committee shall meet when necessary to perform the duties, advisory to the general assembly, assigned to it by law.

(emphasis added).

The businesses focus the Court's attention on the requirement of article III, section 35 that the joint committee on legislative research (the “Committee”) “ shall meet when necessary to perform the duties, advisory to the general assembly, assigned to it by law.” Mo. Const. art. III, § 35 (emphasis added). They argue that because the constitution requires the creation of the Committee, any failure to properly and fully carry out duties assigned to the Committee by the legislature constitutes a failure to fulfill a constitutional duty and, necessarily, voids any legislation so passed.

The businesses suggest that this argument has particular application here. They note that section 23.140 requires that “[l]egislation, with the exception of appropriation bills, introduced into either house of the General Assembly shall, before being acted upon, be submitted to the oversight division of the committee on legislative research for the...