Friday, August 20, 2021
The Fifth Circuit ruled that a $5 per person fee for "latex clubs" in Texas violated free speech and due process. The ruling means that state authorities can't enforce the fee against sexually oriented clubs where dancers wear opaque latex breast coverings and shorts.
The case, Texas Entertainment Association v. Hegar, arose when Texas enacted a "sexually oriented business" fee that imposed a $5 charge per customer on businesses that serve alcohol in the presence of nude entertainment. In response, some sexually oriented businesses required dancers to wear opaque latex breast coverings and shorts. The gambit allowed these "latex clubs" to dodge the $5 fee for a good eight years, until the Texas comptroller issued a rule that excluded latex from the definition of "clothing" under the law. The rule meant that latex clubs now had to pay the fee.
The TEA, which represents sexually oriented businesses in Texas, sued, arguing that the comptroller's move violated free speech, due process, and equal protection. The Fifth Circuit agreed, except as to equal protection.
The court ruled that the comptroller's redefinition was a content-based restriction on speech (and not content-neutral), because the comptroller produced no evidence that the redefinition served any non-speech purpose (like reducing the secondary effects of latex clubs). (The court declined to shoehorn the state's initial asserted interest behind the $5 fee--reducing secondary effects--into the comptroller's decision, more than eight years later, and based on no evidence.) The court applied strict scrutiny, and ruled that the comptroller's action failed.
The court also ruled that the comptroller's action violated due process. The court said that the comptroller previously declined to impose the fee on latex clubs--indeed, that the comptroller told one club that "everything was good"--and upset the latex clubs' "settled expectation that they would not be subject to" the fee.
Finally, the court ruled that the action didn't violate equal protection. The court said that latex clubs were more like nude dancing establishments (which were already subject to the fee), and not like sports bars (which were not). Because the move did not treat similarly situated businesses differently (latex clubs aren't similar to sports bars), the court ruled that it didn't violate equal protection.