Spokane Arcade, Inc. v. City of Spokane, 94-35931

• Decision Date: 24 January 1996
• Docket Number: No. 94-35931,94-35931
• Citation: 75 F.3d 663
• Parties: 24 Media L. Rep. 1475, 96 Cal. Daily Op. Serv. 490, 96 Daily Journal D.A.R. 797 SPOKANE ARCADE, INC.; and World Wide Video of Washington, Inc., Plaintiffs-Appellants, v. CITY OF SPOKANE, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 663

75 F.3d 663

24 Media L. Rep. 1475, 96 Cal. Daily Op. Serv. 490,

96 Daily Journal D.A.R. 797

SPOKANE ARCADE, INC.; and World Wide Video of Washington Inc., Plaintiffs-Appellants, v. CITY OF SPOKANE, Defendant-Appellee.

No. 94-35931.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 7, 1995.

Decided Jan. 24, 1996.

Gilbert H. Levy, Seattle, Washington, for plaintiffs-appellants Spokane Arcade and World Wide Video.

Patricia Connolly Walker, Assistant City Attorney, Spokane, Washington, for defendant-appellee City of Spokane.

Appeal from the United States District Court for the Eastern District of Washington.

Before: D.W. NELSON and JOHN T. NOONAN, Jr., Circuit Judges, and TANNER, District Judge ^*.

D.W. NELSON, Circuit Judge:

Appellants Spokane Arcade and World-Wide Video ("World Video") brought this action against Appellee City of Spokane, alleging that ordinances promulgated by the city which regulated adult arcades were invalid restrictions on the manner in which protected speech may be expressed. World Video maintains that in order to comply with the ordinances it will have to hire more employees, thus increasing its payroll expenses and decreasing its profits; it contends that because of this alleged inability to make an adequate profit, it will in effect be denied access to the adult entertainment market. The district court, however, rejected its claim, and held that in determining whether the First Amendment had been violated, the relevant inquiry turned on whether the plaintiffs were free to engage in their protected speech and not on whether the regulation at issue resulted in decreased profits. We affirm.

BACKGROUND

Appellants Spokane Arcades and World Wide Video ("World Video") operate adult arcades in the City of Spokane. In the arcades, patrons enter booths and insert tokens or coins to watch sexually explicit videos. World Video also sells sexually explicit books, videotapes, magazines and novelties; these materials are located in a retail room off the entrance of the stores, while the viewing booths are in a video viewing room in the back. There is only one clerk on duty at a time, and s/he is stationed in the retail room.

In the spring of 1993, the Mayor of Spokane appointed a task force to study the problems associated with adult arcades, some of which included drug usage and sexual conduct between patrons in the video booths. These problems were compounded by the fact that police officers were unable to conduct walk-through inspections due to safety concerns. The Task Force presented evidence to the City Council that the configuration of the arcades and the lack of adequate staffing "creat[ed] the risk of officers encountering in progress criminal activity." Moreover, the Task Force maintained that "due to the maze-type design currently in place, it would be difficult for officers to tactically retreat should the need arise."

The Task Force suggested that a clear view into the arcades and doorways that opened into an adjacent public room would reduce the potential for crime. Accordingly, the city promulgated ordinances which provided, inter alia, that all arcade booths be "open to an adjacent public room so that the area inside is visible by direct line of sight to persons in the adjacent public room," and that "[t]here must be at least one employee on duty and situated in the public room adjacent to the adult arcade stations or booths at all times that any patron ... is present inside the premises." S.M.C. §§ 10.08.100(D), 10.08.110(A).

World Video challenged the ordinances in the district court, alleging that under the test enunciated by the Supreme Court in City of Renton v. Playtime Theatres, Inc., 475 U.S. 41, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986), reh'g denied, 475 U.S. 1132, 106 S.Ct. 1663, 90 L.Ed.2d 205 (1986), they were invalid restrictions on the manner in which speech may be expressed. The challenge relevant to this appeal centered on those sections of the ordinances which required that the interior of the booths be visible to employees in an adjacent public room and that at least one employee be situated in that room whenever a customer was present. World Video maintained that it would have to hire additional employees in order to ensure that the booths were visible to employees in the adjacent room, and argued that because of the revenue that would be lost as a result of the open booth requirement, the additional payroll expense would severely decrease the arcades' profitability and would unduly restrict World Video's ability to engage in protected expression. The district court disagreed, effectively dismissing World Video's economic impact arguments as it held that the ordinances did not deny World Video reasonable alternative avenues of communication.

STANDARD OF REVIEW

Following a bench trial, the judge's findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given the opportunity of the trial court to judge the credibility of the witnesses. Fed.R.Civ.P. 52(a). See Price v. United States Navy, 39 F.3d 1011, 1021 (9th Cir.1994); Saltarelli v. Bob Baker Group Medical Trust, 35 F.3d 382, 384 (9th Cir.1994). The district court's conclusions of law are reviewed de novo. Price, 39 F.3d at 1021.

DISCUSSION

As an initial matter, we take note of the fact that World Video's contention that additional employees would have to be hired in order to comply with the ordinances is not well-supported by the record. Except for the requirement that "[t]here must be at least one employee on duty and situated in the public room adjacent to the adult arcade stations or booths at all times that any patron ... is present," S.M.C. § 10.08.110(A), the ordinances do not regulate the number of employees that must be present in an establishment. In addition, the city presented evidence that there were design options available to World Video which would permit it to conduct retail sales and arcade viewing in the same room.

Even if World Video demonstrated that the hiring of additional employees was unavoidable, the adverse economic impact it posits is irrelevant to First Amendment analysis. Addressing the constitutionality of a municipal zoning ordinance which strictly regulated the establishment of adult businesses, this court in Topanga Press Inc. v. City of Los Angeles, 989 F.2d 1524 (9th Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 1537, 128 L.Ed.2d 190 (1994), discussed the extent to which economic considerations could inform the analysis of time, place and manner restrictions. The appellants in Topanga, a group of adult businesses, argued that the city provided an insufficient number of sites for the businesses and that enforcement of the ordinance would thus cause irreparable injury. We held that the relevant inquiry was whether the government denied the businesses the opportunity to open and operate their establishments, and...