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Monday, November 30, 2009

Sixth Circuit Upholds Denial of Preliminary Injunction In Adult Bookstore Case

The Sixth Circuit has upheld the denial of a preliminary injunction to a Memphis, Tennessee bookstore that sells "adult-themed" material.


Plaintiff's first argument is that the definition of "adult bookstore" violates the Equal Protection Clause. The Tennessee Act regulates "adult-oriented establishments," which include "adult bookstore[s]":

"Adult bookstore" means a business that [1] offers, as its principal or predominate stock or trade, sexually oriented material, devices, or paraphernalia, whether determined by the total number of sexually oriented materials, devices or paraphernalia offered for sale or by the retail value of such materials, devices or paraphernalia, specified sexual activities, or any combination or form thereof, whether printed, filmed, recorded or live, and [2] that restricts or purports to restrict admission to adults or to any class of adults. The definition specifically includes items sexually oriented in nature, regardless of how labeled or sold, such as adult novelties, risque gifts or marital aids;

Tenn. Code Ann. § 7-51-1102(1) (emphasis and numeration added). A bookstore will be deemed "adult" under the Act only if, first, its "principal or predominate stock" consists of sexually oriented or adult materials, and second, if it "restricts or purports to restrict" its premises to adults. Plaintiff argues that the second criterion makes the Act under-inclusive, in violation of the Equal Protection Clause. While a bookstore with a predominantly adult stock that excludes minors from its premises is subject to the Act, an identical bookstore that does not so restrict admission -- by, for example, setting up a "small front room" containing its insignificant stock of non-adult materials -- is not subject to the Act. Plaintiff argues that distinguishing between these two types of bookstores constitutes unequal treatment without a rational basis. The rational basis for the distinction is absent, Plaintiff maintains, because both types of bookstores are equally likely to produce the adverse secondary effects targeted by the Act, and no rationale supports exempting from regulation adult bookstores that admit minors....

Equal protection of the laws guaranteed by the Fourteenth Amendment "must coexist with the practical necessity that most legislation classifies for one purpose or another, with resulting disadvantage to various groups or persons." ...The Supreme Court has stated that courts will "uphold the legislative classification," if "a law neither burdens a fundamental right nor targets a suspect class, . . . so long as it bears a rational relation to some legitimate end."...

In this case, no "suspect class" is targeted. Nor does Plaintiff argue that a fundamental right associated with the freedom of expression is burdened. Plaintiff concedes that this classification needs only a rational basis to survive constitutional scrutiny. ...

...


As an initial matter, we note that the bookstores allegedly advantaged by an exemption from the Act are probably few in number, if any such establishments exist at all. Tennessee law prohibits the display of adult material "anywhere minors  are lawfully admitted." ...Any bookstore "principally or predominantly" devoted to adult merchandise that wishes to avoid regulation as an "adult-oriented establishment" and sets up a small general-merchandise section, to which minors are admitted, runs a high risk of violating this law and incurring criminal penalties. It is unsurprising, therefore, that Plaintiff does not identify any actual bookstores in Shelby County that meet the first, but not the second, criterion of an "adult bookstore" under the Act.

Even if the kinds of bookstores Plaintiff describes exist, or, as Plaintiff suggests, will come into existence as operators "scramble to establish a small front room of some minor amount of non-adult materials" into which minors are admitted, Appellant's Br. at 23, the "classification" does not lack a rational basis. "Th[e] [rational-basis] standard permits a court to hypothesize interests that might support legislative distinctions, whereas heightened scrutiny limits the realm of justification to demonstrable reality."... We can readily hypothesize the state's interest in confining regulation to bookstores that meet both definitional criteria. As a matter of practice, sexually oriented businesses, including bookstores, commonly restrict admission to adults. Moreover, only those businesses that cater to adults would restrict access in this manner. Restricted access is thus a reliable indicator that the goods offered or displayed on the premises are of an adult or explicit nature. A prominent display advertising an establishment as an "adult store," moreover, is a more objective indicator that the store is of the kind the Act aims to regulate, than the mere share of its stock or trade comprised of adult materials. Hence, it is not irrational for the legislature to use the access restriction as a means of identifying those bookstores that are likely to produce adverse secondary effects targeted by the Act.

Our court has adjudicated an analogous challenge to a restriction of business hours, which applied to adult establishments offering live entertainment but excepted those offering "nonlive entertainment." ... We explained that so long as a regulation "furthers a substantial government interest . . . and there is no evidence of an impermissible motive on the part of" the legislature, such an exception "is not a cause for concern under rational-basis review because a government may implement its program of reform by gradually adopting regulations that only partially ameliorate a perceived evil." ...The same reasoning is pertinent to this case: even if Plaintiff is correct that the exempted bookstores are as liable to produce pernicious secondary effects as the regulated bookstores, Tennessee and Shelby County are permitted to implement a gradual and incomplete solution "that only partially ameliorate[s]" such effects.

Thus, we hold that the district court did not err in determining that Plaintiff has not shown a substantial likelihood of succeeding on the merits of the challenge to the "adult bookstore" definition.

...


...
Plaintiff claims that the prohibition is unconstitutional for yet another reason: it violates the Due Process Clause because it allegedly imposes strict liability on the owner for any violations by employees or customers. The Act states that a license or permit will be revoked "when an operator, employee, entertainer, or escort knew, or should have known, of the violation and authorized, approved, or, in the exercise of due diligence, failed to take reasonable efforts to prevent the violation." Plaintiff asserts that an establishment's license will be revoked if an employee "whose knowledge cannot be imputed to the business itself" fails to take a reasonable effort to prevent alcohol use on the premises. ... While the district court did not address this argument, its interpretive premise is without merit. As Shelby County explains, "[a] violation by an employee imperils that employee's permit," but "does not imperil the operator's license, unless [the operator] 'knew, or should have known of the violation and authorized, approved, or, in the exercise of due diligence, failed to take reasonable efforts to prevent the violation.'" ...We agree, as this interpretation of the challenged provision is also compelled by the general standard for revocation of operator's licenses and employees' permits. The Act provides for a revocation or suspension of an operator's license on the basis of an employee's actions only if an operator "has a duty to supervise conduct on the premises," and "knew, or should have known, of the violation and authorized, approved, or, in the exercise of due diligence, failed to take reasonable efforts to prevent the violation." ...Because the Act does not punish operators of adult establishments on the basis of strict liability, we affirm the district court's determination that no substantial likelihood of success on the merits of this claim was demonstrated.



Finally, Plaintiff challenges the Act's provision on "[p]enalties for violation of part," which states:

(a) (1) A violation of this part shall, for a first offense, be a Class B misdemeanor, punishable by a fine only of five hundred dollars ($ 500), and shall result in the suspension or revocation of any license.
(2) A second or subsequent violation of this part is a Class A misdemeanor, and shall result in the suspension or revocation of any license.


(b) Each violation of this part shall be considered a separate offense, and any violation continuing more than one (1) hour of time shall be considered a separate offense for each hour of violation.

Tenn. Code Ann. § 7-51-1119. Section 7-51-1109 specifies that an operator whose license is revoked is disqualified from receiving an adult-oriented establishment license for five years. Plaintiff argues that a punitive revocation of a license on the basis of past violations of this Act constitutes an unconstitutional prior restraint on future protected expression.

The district court declined to consider this claim on the merits because it determined that Plaintiff, who has not applied for a license nor had a license revoked, lacked standing to challenge the penalty provision. Plaintiff protests that it need not wait for a license revocation to bring a facial challenge on overbreadth grounds. Appellant's Br. at 54-55. "[I]t is well established that one has standing to challenge a statute on the ground that it delegates overly broad licensing discretion to an administrative office, whether or not his conduct could be proscribed by a properly drawn statute, and whether or not he applied for a license." ... Plaintiff does not exactly articulate a challenge on the grounds of overly broad or unbridled discretion. However, the essence of Plaintiff's claim is that the allegedly unconstitutional applications of this provision are substantial relative to legitimate applications because punitive revocation suppresses future protected speech "unconnected to the negative secondary effects cited as legislative justification," Schultz v. City of Cumberland, 228 F.3d 831, 849 (7th Cir. 2000). Treating Plaintiff's arguments charitably, we hold that Plaintiff does have standing to bring this facial challenge to the Act on the basis of its penalty provision.

Constitutional invalidity of prior restraints may result from one or both of "two evils . . .: (1) the risk of censorship associated with the vesting of unbridled discretion in government officials; and (2) 'the risk of indefinitely suppressing permissible speech' when a licensing law fails to provide for the prompt issuance of a license." ...The Tennessee Act's licensing scheme is a prior restraint on protected expression. ... Prior restraints are not unconstitutional per se. Richland Bookmart, Inc., 555 F.3d at 533 (citing Odle, 421 F.3d at 389). Where license issuance is based on explicit and objective criteria, a licensing scheme passes constitutional muster when it "guarantee[s] applicants a prompt final judicial decision on the merits of a license denial and preservation of the status quo while an application or judicial review of a license denial is pending." ...Logically, the same procedural guarantees required for license denials are required for license revocations. Furthermore, "[s]ystems of prior restraint . . . [must] also pass[] the appropriate level of scrutiny."

...

Plaintiff raises other grounds for its facial attack on the Act, all of which are waived and/or addressed by our opinion in the companion case. Plaintiff's claim that the definition of "adult cabaret," § 7-51-1102(2), renders the Act unconstitutionally overbroad was found to lack merit in Entertainment Productions. Plaintiff's claims that the definition of "specified sexual activities," § 7-51-1102(27), and the prohibition on "fondling," § 7-51-1114(d)(1)(D), are overbroad and/or not narrowly tailored are waived. While Plaintiff identifies these claims in its initial complaint, they are not presented in its Memorandum in Support of Motion for a Preliminary Injunction, and were therefore not addressed by the district court. Lastly, Plaintiff's claim that the prohibition on touching and the buffer-zone requirement are overbroad and/or not narrowly tailored is also waived because it was not presented in its Memorandum in Support of Motion for a Preliminary Injunction and was not addressed by the district court. In any case, we rejected this claim on the merits in Entertainment Productions.

For the foregoing reasons, we affirm the district court's denial of the preliminary injunction.

The case is East Brooks Books v. Shelby County, TN, decided Nov. 25, 2009.

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