World Wide Video of Washington, Inc. v. City of Spokane

• Decision Date: 11 January 2005
• Docket Number: No. 22092-3-III, No. 22093-1-III.
• Citation: 125 Wash. App. 289,103 P.3d 1265,125 Wn. App. 289
• Parties: WORLD WIDE VIDEO OF WASHINGTON, INC., Appellant, v. CITY OF SPOKANE, Respondent, Marco Barbanti, Appellant, Carole Schultz, Defendant. Marco T. Barbanti, individual, Appellant, v. City of Spokane, a municipal corporation, Respondent, Worldwide Video of Washington, Inc., a Washington corporation, Defendant.
• Court: Washington Court of Appeals

103 P.3d 1265

125 Wash. App. 289

125 Wn. App. 289

WORLD WIDE VIDEO OF WASHINGTON, INC., Appellant, v. CITY OF SPOKANE, Respondent, Marco Barbanti, Appellant, Carole Schultz, Defendant.

Marco T. Barbanti, individual, Appellant, v. City of Spokane, a municipal corporation, Respondent, Worldwide Video of Washington, Inc., a Washington corporation, Defendant.

Nos. 22092-3-III, 22093-1-III.

Court of Appeals of Washington, Division 3, Panel Three.

January 11, 2005.

Reconsideration Denied February 15, 2005.

Marco T. Barbanti, Dominic M. Bartoletta, Attorney at Law, Spokane, WA, for Appellant.

Milton G. Rowland, Attorney at Law, Spokane, WA, for Respondent.

SCHULTHEIS, J.

By ordinance, the city of Spokane requires all adult retail use establishments (adult stores) to observe specific location requirements. For instance, such establishments may not be located within 750 feet of schools, places of religious worship, public parks, other adult stores, or certain residential zones. Ordinance C-32778, codified as former Spokane Municipal Code (SMC) 11.19.143(D) (2001). When it became effective in March 2001, the ordinance provided an amortization period of one year for nonconforming adult stores to relocate or change the nature of their businesses, with a procedure for additional extensions of this deadline. Former SMC 11.19.395 (2001).

On appeal, we are asked to decide whether regulating the location of adult stores violates state and federal constitutional rights. We also address whether the administrative hearing on the extension of the deadline for three nonconforming adult stores owned by World Wide Video of Washington, Inc. (WWV) followed proper procedures and reached a decision based on substantial evidence. We conclude that the First Amendment issues were settled in a previous case and that review of the free speech issues under the state constitution is not justified. We find no violation of additional constitutional rights. Further, finding no error in the administrative procedures or in the decision to grant an extension of the amortization period, we affirm.

FACTS

Spokane ordinance C-32778 was adopted in January 2001 to address civic concerns about the harmful secondary effects associated with adult stores. World Wide Video of Wash., Inc. v. City of Spokane, 368 F.3d 1186, 1188 (9th Cir.2004). By establishing setback requirements, the ordinance sought to limit citizen contact with such secondary effects as prostitution, public lewdness, used condoms, and video package litter featuring graphic depictions of sexual acts. Id. at 1190 n. 6. The ordinance defined an adult retail use establishment as "an enclosed building, or any portion thereof which, for money or any other form of consideration, devotes a significant or substantial portion of stock in trade, to the sale, exchange, rental, ... or viewing of `adult oriented merchandise.' "Ordinance C-32778, codified as SMC 11.19.03023. Adult oriented merchandize was further defined as goods such as videos, DVDs, and printed materials that depict or describe specified anatomical areas or sexual activities. Ordinance C-32778, codified as SMC 11.19.03023. Pursuant to former SMC 11.19.143(D),

1. An adult retail use establishment and an adult entertainment establishment may not be located or maintained within seven hundred fifty feet, measured from the nearest building of the adult retail use establishment or of the adult entertainment establishment to the nearest building of any of the following pre-existing uses:

a. public library,

b. public playground or park,

c. public or private school and its grounds, from kindergarten to twelfth grade,

d. nursery school, mini-day care center, or day care center,

e. church, convent, monastery, synagogue, or other place of religious worship,

f. another adult retail use establishment or an adult entertainment establishment, subject to the provisions of this section.

2. An adult retail use establishment or an adult entertainment establishment may not be located within seven hundred fifty feet of any of the following zones:

a. agricultural,

b. country residential,

c. residential suburban,

d. one-family residence,

e. two-family residence,

f. multifamily residence (R3 and R4),

g. residence-office.

See also World Wide, 368 F.3d at 1189 n. 2. Former SMC 11.19.395 set out the effect of ordinance C-32778 on nonconforming adult stores:

Any adult retail use establishment located within the City of Spokane on the date this provision becomes effective, which is made a nonconforming use by this provision, shall be terminated within twelve (12) months of the date this provision becomes effective, pursuant to Section 11.19.0336. Provided, however, that such termination date may be extended upon the approval of a written application filed with the Planning Director no later than one (1) month prior to the end of such twelve (12) month amortization period.

The administrative decision on whether or not to approve any extension period and the length of such extension period shall be based upon the applicant clearly demonstrating extreme economic hardship based upon an irreversible financial investment or commitment made prior to the date this provision becomes effective, which precludes reasonable alternative uses of the subject property.

WWV operates three adult stores in Spokane in buildings leased from Marco Barbanti.¹ Two of the leases are long-term: one for 25 years (the Market lease, signed in September 1998) and the other for 40 years (the Division lease, signed in April 2000). After learning that the Spokane stores did not comply with ordinance C-32778, WWV applied to Spokane planning services for an extension of the amortization period and simultaneously challenged the constitutionality of the ordinance in federal district court. Mr. Barbanti also applied for an extension. He claimed that if WWV defaulted on the leases he would lose $600,000 in revenue from the Division lease and $125,000 in revenue from the Market lease.

In March 2002, the Spokane city council adopted ordinance C-33001, which provided additional areas in the city that could accommodate adult stores. World Wide, 368 F.3d at 1189. Earlier that month, the director of planning services, John Mercer, reviewed the Barbanti and WWV requests for extensions of the amortization period. Mr. Mercer found that the leases for all three businesses allowed for a change in use (with landlord consent) and specified that the premises could not be used in a manner that constituted a nuisance or violated an ordinance. He also noted that neither party requested a specific extension period for relocation to a conforming site. Finding that the leases resulted in "some economic hardship," and that proposed ordinance C-33001 would provide additional areas for relocation, Mr. Mercer approved a six-month extension of the termination date. Appeal Board Record, Vol. I. He filed similar decisions for all three leases.

WWV and Mr. Barbanti timely filed appeals of the planning director's decisions to the Spokane hearing examiner, Greg Smith. World Wide, 368 F.3d at 1189. In a hearing held in April 2002, Mr. Smith refused to consider additional evidence and declared he would review the planning director's decisions on the record. Mr. Smith upheld the six-month extension, but held that it would run from the date of his May 15, 2002 decision. As a result, WWV was required to relocate or change the nature of its businesses by November 15, 2002. Id. at 1189.

Meanwhile, WWV pursued a § 1983 civil rights action against the city in the United States District Court for the Eastern District of Washington, alleging violations of the First Amendment. Id. at 1189-90. Although Mr. Barbanti did not join the federal suit as a party, he participated as an expert on the local real estate market and offered deposition testimony regarding the leases and the constitutionality of the ordinances.² The district court granted the city's motion for summary judgment in September 2002 and WWV appealed to the Ninth Circuit court of appeal. World Wide Video of Wash., Inc. v. City of Spokane, 227 F.Supp.2d 1143 (E.D.Wash.2002), aff'd, 368 F.3d 1186 (9th Cir.2004); World Wide, 368 F.3d at 1191.

In a decision filed May 27, 2004, the Ninth Circuit affirmed. World Wide, 368 F.3d at 1188. World Wide held that Spokane's adult store ordinances, because they intended to control the secondary effects of adult businesses, were content neutral and subject to intermediate constitutional scrutiny. Id. at 1191-92. The court further held that the ordinances were narrowly tailored to serve a substantial government interest: reduction of the undesirable secondary effects of adult stores. Id. at 1195. Finally, the court concluded the ordinances were not overbroad and provided an adequate amortization provision. Id. at 1199-1200. Regarding the latter decision, the court stated that "[a]s a general matter, an amortization period is insufficient only if it puts a business in an impossible position due to a shortage of relocation sites." Id. at 1200. With sufficient relocation sites provided by ordinance C-33001, WWV had a reasonable extension of the time to comply with code requirements. Id. To conclude, World Wide held that "municipalities are allowed to `keep the pig out of the parlor' by devising regulations that target the adverse secondary effects of sexually-oriented adult businesses." Id.

During the federal proceedings, WWV and Mr. Barbanti filed petitions challenging the Spokane hearing examiner's decision pursuant to chapter 36.70C RCW (the Land Use Petition Act). The two cases were consolidated and on April 25, 2003 the superior court affirmed the decision of the hearing examiner. In its findings and conclusions on the order of dismissal, the superior court found that Mr. Barbanti had an identity of interest and stood in privity with WWV in the federal litigation. Consequently, he was bound by the decision in World Wide rejecting ...