Special Souvenirs, Inc. v. Town of Wayne
| Decision Date | 07 July 1999 |
| Docket Number | No. 95-C-488.,No. 93-C-518.,93-C-518.,95-C-488. |
| Parties | SPECIAL SOUVENIRS, INC., Plaintiff, v. TOWN OF WAYNE, Defendant (Two cases). |
| Court | U.S. District Court — Eastern District of Wisconsin |
Jeff Scott Olson, Madison, WI, for Plaintiff.
Eric S. Darling, Milwaukee, WI, H. Stanley Riffle, Waukesha, WI, for Defendant.
DECISION AND ORDER
This decision confronts the complex interaction of three cases involving the same parties and subject matter, two pending in federal court before me and one in state court. Specifically, the decision (1) rejects the suggestion that this court should abstain from the exercise of federal jurisdiction; (2) resolves all pending motions in the first federal action, addressing arguments based on standing, mootness, ripeness and preclusion; (3) resolves all pending motions in the second federal action on the constitutional merits; and (4) consolidates the federal cases for future processing.
The Town of Wayne is a Wisconsin township approximately thirty miles northwest of Milwaukee just east of Highway 41, and is home to about 1500 people.1 In December 1992, Special Souvenirs, Inc., leased property in the Town of Wayne with the intention of opening an adult book, magazine and video store. At about this time, the Town was in the process of amending its zoning ordinances to address planning issues associated with adult-oriented businesses.
On January 25, 1993, the Town enacted Ordinance No. 93-1, which redefined several zoning classifications and placed special restrictions on commercial establishments offering materials depicting "sexual conduct" or "nudity." See Town of Wayne, Wis., Ordinance No. 93-1, § 1.26(3)(v) (1993). The ordinance placed two conditions on the opening of such a commercial establishment: (1) it had to be located in a "B-2" commercial district; and (2) it had to be granted a conditional use permit. Id., § 1.26(3)(vii). The second condition, to obtain a conditional use permit, appears to have existed prior to the passage of Ordinance No. 93-1; however, the new ordinance included eight additional provisions governing the granting of such permits by the Town Board. Id.
The property leased by Special Souvenirs was located in a "B-1" commercial district. Moreover, the Town had failed to designate any areas as "B-2" commercial districts, the result being that the adult bookstore could not lawfully operate anywhere in town. Special Souvenirs nevertheless opened its doors in May 1993.
In addition, on May 24, 1993, the bookstore filed the first of two civil rights actions against the Town in federal court. The first action, Case No. 93-C-518 in the Eastern District of Wisconsin, was filed pursuant to 42 U.S.C. § 1983 and sought (1) a declaratory judgment that "the Town of Wayne adult use zoning scheme embodied in Ordinance No. 93-1 is invalid because it violates rights secured to the plaintiff by the First and Fourteenth Amendments to the United States Constitution"; (2) a permanent injunction enjoining the enforcement of Ordinance No. 93-1 by the Town; and (3) compensatory damages, costs, attorneys' fees and litigation expenses. (See 93-C-518 Compl. at 6.) The 93-C-518 complaint alleged five distinct constitutional infirmities in Ordinance No. 93-1. (Id. at ¶¶ 501-505.) One of these constitutional violations was that "[t]he Town of Wayne's adult use zoning scheme is invalid on its face because the locational restrictions it contains effectively preclude adult uses at any geographical location in the township." (Id. at ¶ 503.)
On June 9, 1993, Special Souvenirs also moved for a preliminary injunction against the Town to prevent enforcement of Ordinance No. 93-1. This motion was withdrawn by stipulated agreement on August 26, 1993, "based on the absence of enforcement activity, but [subject to reinstatement] in the event that the defendant seeks to enforce the underlying ordinance." (93-C-518 Stip. and Order 8/28/93 at 1.)
On September 10, 1993, the Town filed a state court action against Special Souvenirs, Case No. 93-CV-579 in the Circuit Court for Washington County. The Town sought daily forfeitures for alleged violations of zoning and building codes and a temporary injunction, enjoining the bookstore from operation until the necessary violations were cured. (See R. 93-CV-579, Ex. 1 at 4.) Specifically, the Town alleged that Special Souvenirs had ignored a "stop work" order posted at their premises in May, and then proceeded to open without a valid zoning permit or certificate of occupancy and without a permit for certain plumbing work that had been performed.
On September 23, 1993, Special Souvenirs reinstated its motion for a preliminary injunction in the federal case 93-C-518 arguing that the Town had commenced enforcement activity by pursuing a state court action aimed at closing the bookstore:
The defendant township contends that its state court action is unrelated to the issues before this Court. However, two of the three grounds upon which the town seeks to proceed are that the plaintiff here failed to obtain a zoning permit, and that the plaintiff failed to obtain a certificate of occupancy. The plaintiff would not have been eligible for either of these permits under the Town of Wayne Zoning Code as it currently stands, because of the unconstitutional provisions in the code which are challenged in the plaintiff's motion for a preliminary injunction.
On September 28, 1993, at a hearing before Circuit Court Judge Leo F. Schlaefer on the Town's motion for a temporary injunction in the state action, counsel for the Town stated in open court that the Town would not attempt to enforce Ordinance No. 93-1 against Special Souvenirs, should the bookstore apply for the necessary zoning and occupancy permits. (See R. 93-CV-579, Ex. 8 at 21-22.)
On October 21, 1993, the state circuit court granted the Town's motion for a temporary injunction in the state action and closed the bookstore. The court's decision was based on its finding that Special Souvenirs, in lacking the requisite three permits, had failed to comply with the Town's fundamental zoning and building ordinances, applicable to all commercial establishments. (See id., Ex. 20.) Within three weeks of its closing, Special Souvenirs secured the outstanding plumbing permit.
On November 22, 1993, Special Souvenirs filed a motion to supplement its complaint in the federal action, 93-C-518.2 The supplemental complaint alleged that the permit requirements at issue in the state court action were unconstitutional as applied to persons whose activities are protected by the First and Fourteenth Amendments. Specifically, Special Souvenirs alleged that the absence of effective time limitations and prompt judicial review made the issuance of a zoning permit and a certificate of occupancy by the Town unconstitutional when applied to establishments such as the bookstore. (See 93-C-518 Supplemental Compl. at 5-6.) Special Souvenirs sought declaratory and injunctive relief to enjoin enforcement of the permit requirements and compensatory damages, including lost profits and earning capacity "due to closure of its business by the defendant Town of Wayne" via the state court action. (Id. at 6.)
In December 1993, the Town adopted a new adult zoning ordinance which repealed Ordinance No. 93-1 to the extent that the earlier ordinance was in conflict with the new one. It appears that around this time areas of the Town were properly zoned as "B-2" commercial districts, thereby eliminating the total geographic exclusion of adult-oriented establishments from the Town and correcting one of the constitutional deficiencies alleged by Special Souvenirs.
On February 24, 1994, Special Souvenirs recast and filed as a counterclaim in the state action the same allegations and claim for damages set forth in the federal supplemental complaint, described above. (See R. 93-CV-579, Ex. 37 at 5-12.)
By March 1994, both the Town and Special Souvenirs had filed dispositive motions in both the federal and state court actions. Meanwhile, Special Souvenirs' efforts to obtain all the permits needed in order for the state injunction to be lifted — this included the zoning permit, the certificate of occupancy, as well as a conditional use permit — stretched over the course of ten months, during which time the bookstore remained closed. These efforts ultimately formed the basis for the second action filed in federal court. On October 27, 1994, when all the permits had been secured, the Washington County circuit court vacated its temporary injunction and allowed Special Souvenirs to reopen for business.
The state court, as it has throughout much of this litigation, beat the federal court to a decision on the parties' dispositive motions. In an oral decision on March 3, 1995, Judge Schlaefer granted the Town's motion for summary judgment in the state action, finding that there was no material dispute that Special Souvenirs had failed to comply with the applicable permit provisions before opening the bookstore. Special Souvenirs had argued the unconstitutionality of Ordinance No. 93-1 and the overall zoning scheme as an affirmative defense to noncompliance, and had pressed the more specific unconstitutionality of the code provisions governing zoning permits and certificates of occupancy — which were directly at issue in the Town's forfeiture claims — as a counterclaim. Judge Schlaefer addressed the constitutional arguments raised by Special Souvenirs in the following manner. As to Ordinance No. 93-1, the judge found that the ordinance was "not involved in the present action," as the action was about enforcing permit requirements applicable to all new businesses, and that therefore it could not "be made the basis for an issue which would then serve to defeat...
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