The Tool Box v. Ogden City Corp.

• Decision Date: 21 January 2004
• Docket Number: No. 01-4134.,01-4134.
• Citation: 355 F.3d 1236
• Parties: THE TOOL BOX, a Utah corporation, Plaintiff-Appellant, v. OGDEN CITY CORPORATION, a Utah municipal corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

355 F.3d 1236

THE TOOL BOX, a Utah corporation, Plaintiff-Appellant, v. OGDEN CITY CORPORATION, a Utah municipal corporation, Defendant-Appellee.

No. 01-4134.

United States Court of Appeals, Tenth Circuit.

January 21, 2004.

COPYRIGHT MATERIAL OMITTED

W. Andrew McCullough of McCullough & Associates, LLC, Midvale, UT (Michael W. Gross of Schwartz & Goldberg, PC, Denver, CO, with him on the briefs), for Plaintiff-Appellant.

Donald L. Dalton of Dalton & Kelley, Salt Lake City, UT, for Defendant-Appellee.

Before TACHA, Chief Judge, SEYMOUR, PORFILIO, EBEL, KELLY, HENRY, BRISCOE, LUCERO, MURPHY, HARTZ, O'BRIEN, McCONNELL, and TYMKOVICH, Circuit Judges.

ON REHEARING EN BANC

HARTZ, Circuit Judge.

The Tool Box, Inc., wishes to open a nude-dancing establishment in Ogden City, Utah, within the boundaries of the Ogden Commercial and Industrial Park (the Industrial Park). Because the Industrial Park is zoned M-2, the location of the establishment would not violate the requirements of the City's ordinance regulating businesses that are sexually oriented (the BSO Ordinance). The Industrial Park is also subject, however, to the Ogden Commercial and Industrial Park Protective Covenants (the Protective Covenants), which were adopted by the City as owner of the land within the Industrial Park. The City denied Tool Box a building permit for the proposed nude-dancing establishment after ruling that the establishment would violate the Protective Covenants.

Tool Box brought suit under 42 U.S.C. § 1983 in federal court, seeking damages and injunctive relief against the City for violation of its constitutional rights. The district court granted the City's motion for summary judgment. Tool Box appealed, contending that the broad, vague language of the Protective Covenants conveyed unbridled discretion to the City, so that the Covenants constituted a prior restraint prohibited by the First Amendment (as applied to the States through the Fourteenth Amendment). A divided panel of this court agreed and reversed the district court. Tool Box v. Ogden City Corp., 316 F.3d 1167 (10th Cir.2003). We granted the City's request for en banc review and now affirm the judgment below.

Background

The City created the Industrial Park on City-owned property in 1976. The Protective Covenants were adopted in 1995 in anticipation of the sale, lease, and other development of the property. The record on appeal does not indicate how the covenants were authorized. But the parties have treated them as the equivalent of a municipal ordinance, which we will do as well.

The Protective Covenants recite both permitted and prohibited uses. Paragraph IV, entitled "Permitted Uses," states:

The purpose of the Industrial Park to be developed on the lands described in Exhibit A is to create a wholesome environment for the conduction of selective manufacturing and marketing enterprises which do not create a hazard or are not offensive due to appearance or to the emission of noxious odors, smoke or noise, and to promote research laboratories and regional office facilities.

Allowed uses in the Industrial Park shall include manufacturing, fabrication, wholesale and distribution purposes, offices, service facilities for the Industrial Park occupants, and similar uses which create benefits to local commerce and the development for additional employment opportunities.

App. at 26. Paragraph V, entitled "Prohibited Uses," states:

No portion of the property may be occupied for any of the following uses:

(1) Residential purposes, except for the dwelling of watchman or other employees attached to a particular enterprise authorized in the area.

(2) Manufacture, storage distribution or sale of explosives.

(3) Storage in bulk of junk, wrecked autos or other unsightly or second-hand materials.

(4) No portion of the premises or any portion thereof of any building or structure thereon at any time shall be used for the manufacturing, storage, distribution or sale of any products or items which shall increase the fire hazard of adjoining premises, or which emit noise or vibrations which will injure the reputation of said premises of the neighboring property or for any use which is in violation of the ordinances of Ogden City and the laws of the State of Utah.

Id. at 26-27. Other paragraphs relate to yard space, loading docks, parking requirements, building and construction requirements, storage, signs, and landscaping and maintenance. Id. at 27-28.

To enforce the Protective Covenants, the Industrial Park Review Board (the Review Board) was created. Composed of three persons appointed by the Mayor — two City employees and a representative of an owner of land in the Industrial Park — the Review Board makes the initial decision, which can be appealed to the Mayor. Id. at 26.

In the meantime, in 1990 the City enacted its BSO Ordinance. As do numerous such ordinances enacted around the country, the BSO Ordinance limits BSOs to areas of the City with certain zoning classifications and also controls the density of BSOs. Among the areas where zoning permits BSOs is the Industrial Park. In July 2000, 5.19% of the City's area, not including the Industrial Park, was available for such businesses. App. at 58. There were three BSOs operating in the City at that time. Id.

In late 1999 a private owner of property in the Industrial Park agreed to lease the property to Tool Box's owner for the purpose of constructing a nude-dancing establishment. Id. at 36. Tool Box then sought City approval. On January 3, 2000, the Ogden City attorney informed Tool Box that the Protective Covenants "will not constitute a bar to your client's proposed business." Id. at 38. But the Review Board disagreed. On April 12, 2000, it ruled as follows:

1. In the judgement of the board, the proposed use is not in keeping with the stated purposes of the industrial park which is to create a wholesome environment for selective manufacturing, fabrication and other allowed uses.

2. The proposed use conflicts with those types of businesses which are identified as "allowed uses" and which advance the purposes for which the industrial park was established.

Id. at 40. On appeal the Mayor affirmed, stating:

[T]he decision of the Review Board [is] a reasonable and carefully considered determination that the Protective Covenants do not allow for a sexually oriented business use and that such a use is not consistent with the purpose and intent of the Protective Covenants to promote selective manufacturing and marketing enterprises.

Id. at 44. As a result, a building permit was denied. Tool Box filed suit on June 1, 2000.

Discussion

Tool Box's sole claim on appeal is that denial of the building permit violated the First Amendment because the Restrictive Covenants grant such unbridled discretion to the City as to constitute a prior restraint on expression. The legal issue before us can best be understood by initially discussing what is not at issue on appeal.

First, perhaps surprisingly, Tool Box has not challenged the specific decision by the City to prevent it from opening a nude-dancing club. Nude dancing is constitutionally protected expressive conduct. See Barnes v. Glen Theatre, Inc., 501 U.S. 560, 566, 111 S.Ct. 2456, 115 L.Ed.2d 504 (1991) ("[N]ude dancing ... is expressive conduct within the outer perimeters of the First Amendment, though ... only marginally so."). Tool Box might therefore have rested its claim on the allegation that the City denied it a building permit in order to prevent expression that the City found offensive — in other words, that the purpose of the building-permit denial was to stifle the expressive conduct of nude dancing. See, e.g., Bd. of County Comm'rs v. Umbehr, 518 U.S. 668, 116 S.Ct. 2342, 135 L.Ed.2d 843 (1996) (county cannot refuse to renew contractor's trash-hauling contract in retaliation for criticism of the county). But Tool Box is not pursuing such a claim.

Second, Tool Box does not challenge the Protective Covenants under the four-part test of United States v. O'Brien, 391 U.S. 367, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968). Courts use this test when someone claims that application of a law has infringed on the person's freedom of speech, but "the governmental purpose in enacting the [law] is unrelated to the suppression of expression." City of Erie v. Pap's A.M., 529 U.S. 277, 289, 120 S.Ct. 1382, 146 L.Ed.2d 265 (2000). A law passes muster under O'Brien if (1) the law "is within the constitutional power of the government to enact," id. at 296, 120 S.Ct. 1382; (2) the law "furthers an important or substantial government interest," id.; (3) "the government interest is unrelated to the suppression of free expression," id. at 301, 120 S.Ct. 1382; and (4) "the restriction is no greater than is essential to the furtherance of the government interest," id. For example, the Supreme Court has employed the O'Brien test to reject a Vietnam War protester's challenge to the law prohibiting the burning of draft cards, O'Brien, 391 U.S. at 382, 88 S.Ct. 1673, and to reject a nude-dancing establishment's challenge to a law banning all public nudity, Pap's A.M., 529 U.S. at 296-302, 120 S.Ct. 1382. The district court found that the Protective Covenants satisfy the O'Brien test.

Nor does Tool Box challenge the Protective Covenants as a time-place-and-manner restriction on speech. Because the covenants were used to prohibit a nude-dancing establishment, they might be characterized as a law that, while not outright banning such establishments from the City, excludes them from a particular portion of town — the Industrial Park. (Indeed, the Mayor ruled that "the Protective Covenants do not allow for a sexually oriented business use." App. at 44.) Content-neutral time-place-and-manner restrictions are constitutional if "they are designed to serve a substantial governmental interest and do not unreasonably limit alternative avenues of communication." City of Renton v. Playtime Theatres, 475...