Schultz v. City of Cumberland

Decision Date26 September 2000
Docket NumberNos. 98-4126,s. 98-4126
Citation228 F.3d 831
Parties(7th Cir. 2000) Joseph Schultz, doing business as Island Bar, and Tonya Norwood, Plaintiffs-Appellees/Cross-Appellants, v. City of Cumberland, Defendant-Appellant/Cross-Appellee. & 98-4209
CourtU.S. Court of Appeals — Seventh Circuit

Appeals from the United States District Court for the Western District of Wisconsin. No. 98 C 107--Barbara B. Crabb, Judge. [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

Before Coffey, Kanne and Evans, Circuit Judges.

Kanne, Circuit Judge.

The City of Cumberland had sought for years to close the Island Bar, a strip club within the small Wisconsin town, when it enacted a municipal ordinance regulating "sexually oriented businesses." The ordinance imposed comprehensive regulations on the operation of adult-entertainment establishments in Cumberland. In response, Joseph Schultz, the Island Bar's owner, and Tonya Norwood, an Island Bar exotic dancer, sued in district court challenging the ordinance's constitutionality under the First Amendment. We uphold the portions of the ordinance that serve as reasonable time, place or manner restrictions and strike the portions of the ordinance that ban sexually explicit dance movements and disqualify certain persons from holding adult-entertainment licenses.

I. History

In Cumberland, Wisconsin, the Island Bar is the lone sexually oriented business located in the small town of 2,200 residents. The Island Bar opened in 1993 and quickly attracted notoriety when Schultz converted the bar into a strip club featuring nude female dancers, including co- plaintiff Norwood. After assiduous undercover investigation by Barron County law enforcement, Cumberland authorities discovered prostitution and sexual contact between nude dancers and bar patrons, and revoked the Island Bar's liquor license on October 12, 1994. The Island Bar later reopened as a non-alcoholic bar, still featuring nude female dancing, but two convictions of Island Bar patrons for prostitution in March 1997 led to its closing for one year under Wis. Stat. sec. 823.13 as a public nuisance. See State v. Schultz, 582 N.W.2d 113 (Wis. Ct. App. 1998).

Unsatisfied with the one-year closure, the Cumberland city council established a municipal planning subcommittee dedicated to exploring more restrictive methods of regulating nude dancing. Happy to offer assistance were conservative interest groups devoted to fighting "sexually oriented businesses" (wittily abbreviated as "SOBs"). For example, the National Family Legal Foundation ("NFLF") provided a comprehensive handbook entitled Protecting Communities From Sexually Oriented Businesses. The handbook explains that it "is not meant to be a neutral overview of current methods of regulating 'adult' businesses. This is a 'how-to' manual for those who are serious about protecting their communities and doing battle with the incredibly powerful and profitable sex club industry." Copying virtually verbatim the NFLF's model regulation, Cumberland received comments on its new draft ordinance from the NFLF and Morality in Media, Inc., among others.

Following the NFLF's instructions on "Making the Legislative Record," Cumberland set about constructing legislative findings to support the NFLF ordinance in their community. The Cumberland committee in charge of drafting the ordinance divided research duties among its members. Mayor Lawrence Samlaska reviewed police reports and spoke to the Cumberland police about its investigation of crime at the Island Bar. Committee member Jeffrey Streeter researched the appropriate zoning location for sexually oriented businesses to minimize depreciation of real estate values and disturbances of the peace. Committee member Richard Nerbun obtained current health statistics from the Centers for Disease Control on sexually transmitted diseases and included them in the ordinance findings. Nerbun also considered the appropriate hours of operation for sexually oriented businesses, taking into account the proximity of the Island Bar to schools and school bus stops, citizen safety issues, the school schedule and hours-of- operation provisions in the ordinances of other cities. Committee member Carolyn Burns examined past cases involving municipal regulation of adult entertainment and reviewed studies published by other communities concerning the negative effects of adult businesses on surrounding neighborhoods. Based ostensibly on this research, supplemented heavily by NFLF assistance, the subcommittee drafted a legislative preamble lifted from the NFLF model ordinance. It expressed Cumberland's concern about the adverse effects of sexually oriented businesses on "the health, safety and welfare of the patrons of such businesses as well as the citizens of the City," including "prostitution and sexual liaisons of a casual nature," "sexually transmitted diseases," the "deleterious effect on both the existing businesses around them and the surrounding residential areas adjacent to them" and "objectionable operational characteristics, particularly when they are located in close proximity to each other, thereby contributing to urban blight and downgrading the quality of life in the adjacent area."

After a public hearing, the Cumberland planning commission voted to recommend the ordinance to the city council, and on January 6, 1998, the city council unanimously adopted City of Cumberland Ordinance 12.15 ("Ordinance"), establishing a licensing and regulatory system for all "sexually oriented businesses." First, the Purpose and Findings Section explains that the Ordinance has "neither the purpose nor effect of imposing a limitation or restriction on the content of any communicative materials." Instead, the purpose of the Ordinance is "to regulate sexually oriented businesses in order to promote the health, safety, morals, and general welfare of the citizens of the City" based on "the adverse secondary effects of adult uses on the community presented in hearings and in reports made available to the Council, and on findings incorporated in the cases of City of Renton v. Playtime Theaters, Inc., 475 U.S. 41 (1986), Young v. American Mini Theatres, 427 U.S. 50 (1976), and Barnes v. Glen Theatre, Inc., 501 U.S. 560 (1991), and on studies in other communities."

Second, Section II defines the different types of sexually oriented businesses subject to the Ordinance. Cumberland and the plaintiffs agree that the Island Bar is covered by the definitions for two categories of sexually oriented business: "adult theater" and "adult cabaret." Section II(3) defines "Adult Cabaret"

a nightclub, bar, restaurant, or similar commercial establishment which regularly features

(a) persons who appear in a state of nudity or semi-nude; or

(b) live performances which are characterized by the exposure of "specified anatomical areas" or by "specified sexual activities"; or

(c) films, motion pictures, video cassettes, slides or other photographic reproductions which are characterized by the depiction or description of "specified sexual activities" or "specified anatomical areas."

Section II(7) defines "Adult Theater"

a theater, concert hall, auditorium, or similar commercial establishment which regularly features persons who appear in a state of nudity or semi- nude, or live performances which are characterized by the exposure of "specified anatomical areas" or by "specified sexual activities."

In addition, the definitions for "adult arcade," "adult bookstore, novelty store or video store," "adult motel," "adult motion picture theater" and "adult mini-motion picture theater" all incorporate the phrase "characterized by the depiction or description of 'specified sexual activities' or 'specified anatomical areas.'" Specified sexual activities include "the fondling or other erotic touching of human genitals, pubic region, buttocks, anus, or female breasts"; "sex acts, normal or perverted, actual or simulated, including intercourse, oral copulation, masturbation, or sodomy"; and "excretory functions" in connection with sexual activity. Cumberland Municipal Code Section 12.15, at sec. II(24). Specified anatomical areas include "(a) the human male genitals in a discernibly turgid state, even if completely and opaquely covered; or (b) less than completely and opaquely covered human genitals, pubic region, buttocks or a female breast below a point immediately above the top of the areola." Id. at sec. II(22).

Third, Section VIII(A) declares the following: "It shall be a violation for a person who knowingly and intentionally, in a sexually oriented business, appears in a state of nudity or depicts specified sexual activities." The Ordinance defines "a state of nudity" as the following

[T]he showing of the human male or female genitals, pubic area, vulva, anus, anal cleft or cleavage with less than a fully opaque covering, the showing of the female breast with less than fully opaque covering of any part of the nipple, or the showing of the covered male genitals in a discernibly turgid state.

Section VIII(B) makes it a "violation" for an employee of a sexually oriented business to appear even semi-nude, unless the employee does not receive any pay or gratuity from customers and remains on a stage at least two feet off the floor and at least ten feet from any customer. The Ordinance defines "semi-nude condition" as the following

[T]he showing of the female breast below a horizontal line across the top of the areola at its highest point or the showing of the male or female buttocks. This definition shall include the entire lower portion of the human female breast, but shall not include any portion of the cleavage of the human female breast, exhibited by a dress, blouse, skirt, leotard, bathing suit, or other wearing apparel provided the areola is not exposed in whole or in part.

Fourth, the Ordinance...

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