Recreational Dev. Of Phoenix v. City of Phoenix

• Citation: 83 F.Supp.2d 1072
• Decision Date: 23 August 1999
• Docket Number: No. 99-18-PHX-ROS.,99-18-PHX-ROS.
• Parties: RECREATIONAL DEVELOPMENTS OF PHOENIX, INC., et al., Plaintiffs, v. CITY OF PHOENIX, Defendant.
• Court: U.S. District Court — District of Arizona

83 F.Supp.2d 1072

RECREATIONAL DEVELOPMENTS OF PHOENIX, INC., et al., Plaintiffs, v. CITY OF PHOENIX, Defendant.

No. 99-18-PHX-ROS.

United States District Court, D. Arizona.

August 23, 1999.

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Christopher Reed Kaup, Peskind Hymson & Goldstein PC, Scottsdale, AZ, for plaintiffs.

James Harden Hays, Office of City Attorney, Phoenix, AZ, for defendant.

ORDER

SILVER, District Judge.

This case presents a pre-enforcement challenge to an ordinance passed by Defendant City of Phoenix regulating businesses the ordinance refers to as "live sex businesses." Phoenix, AZ Code § 23-54 (1998). Pending are a Motion for a Preliminary Injunction filed by Plaintiffs, who are owners and members of businesses in which live sex acts occur ("the clubs"), and a Motion to Dismiss filed by Defendant.

FACTUAL BACKGROUND

On December 9, 1998, the Phoenix City Council enacted § 23-54 of the Phoenix City Code, which states that "[t]he operation of a business for purposes of providing the opportunity to engage in, or the opportunity to view, live sex acts is declared to be a disorderly house and a public nuisance per se which should be prohibited."¹ Phoenix, AZ Code § 23-54 (1998). The ordinance allows Defendant to apply to the Municipal Court for an order permitting the City to abate violations of § 23-54, after which a judge is required to hold a hearing on whether the provision has been violated. If the judge concludes that a violation has occurred, Defendant is authorized to close the business. On December 16, 1998, the Phoenix City Council passed an amendment to § 23-54 adding subsection G, which exempted non-obscene performances "of any play, drama, or ballet in any theater, concert hall, fine arts academy, school, institution of higher education, or similar establishment" with certain additional limitations. Phoenix, AZ Code § 23-54 (1998). On January 6, 1999, Plaintiffs applied for a temporary restraining order and preliminary injunction to prevent the ordinance from becoming effective as scheduled on January 8, 1999. Defendant filed a Motion to Dismiss and Memorandum of Law in Opposition to Plaintiff's Request for Injunctive Relief and on January 7, 1999, the Court denied the application for a temporary restraining order. A hearing for a preliminary injunction was scheduled and held on March 4, 1999. Plaintiff presented the testimony of three witnesses and both parties submitted several exhibits, including deposition testimony by club members and owners.

The clubs purport to be private organizations allowing access only to members. The membership application process appears to be similar at all the clubs who are Plaintiffs in this lawsuit. (W. Markus Test. at 65.) Anyone interested in visiting the social clubs arrives at a club, fills out a membership form, pays membership and per visit fees, and is generally permitted to enter the club at that time.² Annual membership fees start as low as $1 when business is slow, with the majority ranging from $5 to $10. (R. Reedy Dep. at 7, 12; M. Fencl Dep. at 21; W. Markus Dep. at 36-37; F. Magarelli Dep. at 22; R. Van Brunschot Dep. at 27; Brigham Dep. at 9; G. Mutschler Dep. at 43.) Most of the club's income is derived from the per visit fees, which generally range between $20 and $30 for each visit. (R. Reedy Dep. at 27; W. Markus Dep. at 36-37; G. Mutschler Dep. at 44.) In several of the clubs, fees for single women are considerably less expensive than for men or couples. (W. Markus Dep. at 37; F. Magarelli Dep. at 26.)

Not everyone is permitted to become a member on a given night. The club owner Plaintiffs assert that they refuse entry to applicants who are visibly intoxicated, attempt to introduce drugs into the club, are self-identified prostitutes, have neglected personal hygiene, or are improperly attired. Plaintiffs also claim that prospective applicants must be proponents of the swinging lifestyle, though they acknowledge that their ability to verify such information is limited.³ (M. Fencl Dep. at 21-22; W. Markus Dep. at 31; W. Brigham Dep. 17.) Membership decisions are generally made by the person working the door on a given night, though on occasion, this person may consult with someone else with respect to a particular applicant.⁴ Clubs frequently ask for a name, telephone number, address, birth date, driver's license or an identification card, though the information is not verified other than by inspecting the license to verify the age of the applicant. (W. Markus Dep. at 39.) Members of law enforcement and reporters are not permitted to enter the clubs unless they are in their individual, rather than official capacities, but this information is not verified. (W. Markus Dep. at 39.) Club owner Plaintiffs assert they exercise some additional control over their clientele; if, for example, someone violates the "no-touch" without consent rule, they may be asked to leave the club. (W. Markus Dep. at 26; M. Fencl Dep. at 22.) Club members may offer suggestions regarding operation of the clubs, but they have no control over the clubs' management. (F. Magarelli Dep. at 11.)

There is no requirement that prospective members be referred by other members or that applicants live in the Phoenix area. In fact, new members may be visitors from other parts of the United States or from other countries such as Europe and Japan. (W. Markus Dep. at 24, 30-31.) The clubs attract clientele by extensive advertising in local newspapers. (W. Markus Dep. at 40, M. Fencl Dep. at 17; F. Magarelli Dep. at 27.) Some clubs also operate websites promoting their businesses. (M. Fencl Dep. at 17; F. Magarelli Dep. at 51.) This strategy has proven successful; owners of the clubs estimate that they have between 3,000 and 12,000 members. (W. Markus Dep. at 38, estimating Guys and Doll's membership at 3,000; M. Fencl Dep. at 27, estimating Chameleon's membership at 12,000; F. Magarelli Dep. at 46, estimating Encounters' membership at 8,000 or 9,000.) Some club patrons acknowledge that they are members of several different clubs. (R. Reedy Dep. at 6-7; 12-13.) On any given night, member attendance is estimated at several hundred people per club. (W. Brigham Dep. at 19.)

The clubs boast dance floors and in some cases, dancing poles and cages available for use by members. They also offer food, non-alcoholic beverages, and activities such as billiards, darts, hot tubs, and erotic videos. In addition, the clubs provide individual rooms, some of which are designed to allow observation of the activities by other patrons, including sexual conduct. Club owners contend that employees of the clubs are prohibited from introducing members for the purpose of having sex, fraternizing with club members while working, or providing any adult entertainment — such as topless dancing, massages, or escort services — to club patrons. Club owners also assert that they do not allow their members to `tip' a member for dancing or performing any acts including sexual acts. According to Plaintiffs, the clubs prohibit drugs, alcohol, prostitution, and solicitation of escorts on the premises.

Plaintiffs readily acknowledge that acts of oral sex and sexual intercourse occur regularly at the clubs, though they assert that such acts do not constitute the majority of the activities at the clubs. (W. Markus Dep. at 56; W. Bringham Test. at 43.) According to one club owner, sexual acts constitute ten to twenty per cent of the activity taking place over the course of an evening. (W. Bringham Test. at 43.) Plaintiffs claim that the clubs discourage members from engaging in unprotected sex through the provision of free condoms and the display of notices in the clubs encouraging the use of condoms. They acknowledge, however, that they merely attempt to motivate patrons to use condoms but do not enforce their use. (W. Markus Dep. at 51.) According to a report on an undercover investigation into some of the Plaintiffs' clubs written by a member of the Vice Enforcement Unit of the Phoenix Police Department:

In the dozen times we have visited [Club Chameleon, Encounters, Discretions, Impressions, and Sociables II], we have observed approximately thirty-five couples engaging in sexual contact. This contact includes sexual intercourse, fellatio, cunnilingus, and self-masturbation. During all of these open sexual acts no condoms were seen by the detectives on any of the males involved. There were several open sexual acts which involved more than one couple. There were not any condoms observed during these encounters. The detectives noticed that the employees would check in the rooms when these sexual acts were being committed and would make no effort to ensure the parties involved used condoms. In several of the clubs condoms were found for sale. However, none of the clubs were found to be distributing free condoms to its customers.

(11/13/98 Vasquez Memo at 1, attached to Pls' Index of Exhibits as Ex. L.)

Plaintiffs also assert that they provide clean sheets after every use of the private rooms, that they drain and clean the hot tub if it is clear that it has been used for sexual intercourse, and that they disinfect the couches on a regular basis. According to the Vice Enforcement Unit's report, however, the cleanliness of the clubs is questionable.

The open theaters in the clubs are surrounded by sofas and chairs. These areas are frequently used for some of the described sexual activities. Detectives have observed that after these sexual contacts no employees were seen cleaning any areas in the theater. The private rooms also had some of these problems. After customers used these private rooms, none of the sheets and towels were changed. This as well as the non use of condoms appears to be a safety concern. The potential exist for unwanted contact with different bodily fluids which include saliva, semen, blood, and fecal matter.

(11/13/98 Vasquez Memo at 1,...