ZJ Gifts D-2, LLC v. City of Aurora, Civil Action No. 93-M-2310.

• Decision Date: 23 July 1996
• Docket Number: Civil Action No. 93-M-2310.
• Citation: 932 F. Supp. 1256
• Parties: Z.J. GIFTS D-2, L.L.C., d/b/a Christie's, an Oklahoma Limited Partnership, Plaintiff, v. The CITY OF AURORA, an Incorporated Municipality, Defendant.
• Court: U.S. District Court — District of Colorado

932 F. Supp. 1256

Z.J. GIFTS D-2, L.L.C., d/b/a Christie's, an Oklahoma Limited Partnership, Plaintiff, v. The CITY OF AURORA, an Incorporated Municipality, Defendant.

Civil Action No. 93-M-2310.

United States District Court, D. Colorado.

July 23, 1996.

Arthur M. Schwartz, Michael W. Gross, Denver, CO, for plaintiff.

Charles H. Richardson, Office of the City Attorney, Aurora, CO, for defendant.

MEMORANDUM OPINION AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT

MATSCH, Chief Judge.

The plaintiff is an Oklahoma limited partnership, doing business as Christie's at a leased site in the Granada Park Shopping Center located in a B-2 commercial retail zone district in the City of Aurora, Colorado ("Aurora"). That business has been operating since October 30, 1993. It sells and rents video tapes of sexually explicit conduct and also sells lingerie, magazines with sexually explicit content, and sexually oriented novelties. All of these items are for off-site use.

On December 13, 1993, Aurora adopted an ordinance, effective January 21, 1994, codified as Chapter 32.5 of the Aurora Municipal Code ("the Ordinance"). The Ordinance prohibits anyone from operating a "sexually oriented business" without a valid sexually oriented business license issued by the city. § 32.5-21(A). It confines these businesses to industrial zone districts. § 32.5-52(A). The Ordinance is a comprehensive one that requires background investigations of license applicants and managers, limits the location of the businesses relative to one another, sets certain requirements for the interior physical arrangement of business premises, and regulates the acts permitted at each site. The Ordinance describes a sexually oriented business as

an adult arcade, adult bookstore, adult novelty shop, adult video store, adult cabaret, adult motion picture theater, adult theater, or nude model studio.

§ 32.5-2.

Aurora enacted the Ordinance to minimize and control the adverse effects associated with such businesses including reduction in property values, spread of sexually transmitted diseases, and crime. It conducted a review of research on sexually oriented businesses and specifically found that prostitution, pandering, child pornography, possession and distribution of obscene material, possession and sale of controlled substances, and violent crimes against persons and property were aggravated by these businesses.

The plaintiff's second amended complaint filed February 10, 1994, challenges the constitutionality of the Ordinance under the United States Constitution and the constitution of the State of Colorado. Aurora counterclaimed to enjoin the conduct of the plaintiff's business as being in violation of the requirements of the Ordinance. Both parties filed cross motions for summary judgment with extensive briefs and exhibits. Oral argument was heard on March 28, 1996.

Although the plaintiff has raised multiple questions regarding the validity of the Ordinance, the pivotal issue is whether the application of the zoning restriction of that Ordinance to the plaintiff's business constitutes an abridgement of Christie's freedom of speech under the First Amendment made applicable by the Fourteenth Amendment to the United States Constitution. At oral argument, the court narrowed the focus of the inquiry to whether the restrictions imposed by the Ordinance that would require Christie's to relocate in an industrial zone district serve a legitimate governmental purpose. In this case, Aurora has shown that it adopted the subject Ordinance only after careful consideration of the results of a number of studies of the secondary adverse effects of sexually oriented businesses in other cities and after public hearing before the Aurora City Council.

The defendant has demonstrated the legitimacy of its concern for the need to mitigate crime and public health risks shown to be associated with such adult entertainment as erotic dancing, sexually explicit movie theaters and adult book stores with peep show facilities. Christie's is different because there is no such entertainment on its premises. Aurora also seeks to justify the Ordinance as required to protect property values, and it cites studies from other municipalities tending to support the loss of values when there are sexually oriented businesses in the neighborhood.

The distinction which is of interest here was made by the district court in ILQ Investments, Inc. v. City of Rochester, 816 F.Supp. 516 (D.Minn.1993). There the court granted a preliminary injunction restraining enforcement of a similar ordinance against a similar business, although it appears that the bookstore had more of a mix in that only about forty percent of the store floor space was devoted to sexually explicit material. The district court found that none of the studies relied upon by the city of Rochester included the type of business operated by that plaintiff. The district court was reversed by the Eighth Circuit Court of Appeals in ILQ Investments, Inc. v. City of Rochester, 25 F.3d 1413 (8th Cir.1994). The appellate court found adequate support for secondary effects from a study in Indianapolis and another in St. Paul. The Indianapolis study appears to be the same or similar to one of the studies relied upon by Aurora. It included the opinions from a survey of real estate appraisers concerning the reduction in value of residential property with the conclusion that "the best professional judgment available indicates overwhelmingly that adult entertainment businesses — even a relatively passive use such as an adult bookstore — have a serious negative effect on their immediate environs." Exhibit A, p. 51, Defendant's Brief in Support of Motion for Summary Judgment. The Eighth Circuit opined that Rochester need not prove that the subject bookstore would have the exact same adverse effects as the adult businesses studied by other cities so long as the city reasonably believed the evidence was relevant and said "even if Downtown Book and Video is a new type of adult business, it may not avoid time, place, and manner regulation that has been justified by studies of the secondary effects of reasonably similar businesses." 25 F.3d at 1418. Respectfully, this analysis is flawed in that it is directed more toward the subjective intent of the city council than the objective effects on the freedom to communicate.

In the many cases which have addressed the problem of sexually oriented businesses and the efforts of communities to restrict them, the analyses undertaken have followed a pattern of repeating the litany from the Supreme Court in City of Renton v. Playtime Theatres Inc., 475 U.S. 41, 49-50, 106 S.Ct. 925, 929-30, 89 L.Ed.2d 29 (1986) and other cases that such ordinances are content neutral because they are not designed to suppress the content of the speech — only the secondary adverse effects of sexually oriented business on the neighborhood. There can be no quarrel with that approach in those cases where those effects are well documented in the types of studies which were used by Aurora in considering this Ordinance. If the plaintiff had booths for peep shows on its premises, the issues in this case would then deal with some of the particular restrictions which may be more than necessary to meet the governmental purpose of avoiding or mitigating those secondary effects. The problem here is that none of the material relied on by the city council shows that the business of Christie's bears any relationship to such effects.

Indeed, in the matter of any increase in crime, the evidence is distinctly to the contrary. Deputy Police Chief Michael Stiers told the city council that Christie's had business establishments in Oklahoma City and that there were no reports of crime from them. He also said that there was such a business in Denver, and there were no reports of crime from it. Exhibit D, pp. 13-15, Plaintiff's Brief in Support of Cross-Motion for Summary Judgment. The studies concerning real estate values are non-persuasive. They seem to be little more than opinions of real estate appraisers based on hypotheticals, and there does not seem to be any distinction made between the type of adult book stores with peep...