Amicus Curiae Brief — City News & Novelty, Inc. v. Waukesha

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In the Supreme Court of the United ta

—— —

CITY NEWS AND NOVELTY, INC., PETITIONER

CITY OF WAUKESHA

ON WRIT OF CERTIORARI TO THE

COURT OF APPEALS OF WISCONSIN, DISTRICT II

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE SUPPORTING RESPONDENT

SETH P. WAXMAN

Solicitor General

Counsel of Record

DAVID W. OGDEN

Assistant Attorney General

EDWIN S. KNEEDLER

Deputy Solicitor General

LISA SCHIAVO BLATT

Assistant to the Solicitor

General

MICHAEL JAY SINGER

HOWARD S. SCHER

Attorneys

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

QUESTION PRESENTED

Whether the First Amendment requires a municipal

ordinance that governs the licensing of adult-oriented busi-

nesses to ensure that a license remains in effect until there

has been a judicial decision on the validity of the city’s de-

cision not to renew the license.

(I)

TABLE OF CONTENTS

Interest of the United States

Statement

Summary of argument

Argument:

I. The First Amendment does not require a

municipal licensing ordinance that regulates

sexually-oriented businesses to guarantee an

automatic stay of the denial of a license renewal

pending judicial review

A. Respondent’s licensing scheme adequately

protects the First Amendment interests of

applicants by authorizing a court to stay the

City’s licensing decision

B. An automatic stay rule would unduly

infringe upon respondent’s interest in

regulating the secondary effects of

sexually-oriented businesses

C. An automatic stay rule is not required by

the First Amendment to avoid the dangers

of a censorship regime

D. Policy considerations do not support an

automatic stay rule

II. Petitioner's challenges to the administrative

review provisions under state law are not

properly before this Court

Conclusion

TABLE OF AUTHORITIES

Cases:

Alexander v. United States, 509 U.S. 544 (1998) .............

Arcara v. Cloud Books, Inc., 478 U.S. 697 (1986) ............

(IIT)

ow =

S 8

Cases—Continued:

Baby Tam & Co. v. City of Las Vegas, 154

29200 15, 25

Bantam Books, Inc. v. Sullivan, 372 U.S. 58

Ce _ 22

Blessing v. Freestone, 520 U.S. 329 (1997 28, 29

Blount v. Rizzi, 400 U.S. 410197197. ————— 22

Browndale Int'l Ltd. v. Board of Adjustment, 208

N.W.2d 121 (Wis. 1973), cert. denied, 416 US.

1ͤ— 14

Chicago Teachers Union v. Hudson, 475 U.S. 292

9 21

City News & Novelty, Inc. v. City of Waukesha,

487 N.W.2d 316 (Ct. App. 1992), (review denied, 491

N.W.2d 768 (Wis. 1992) * 2

City of Erie v. Pap’s A. M., 120 S. Ct. 1382 (2000) 17, 20

City of Lakewood v. Plain Dealer Publ ꝙ Co., 486

U.S. 750 (1988) 26

City of Renton v. Playtime Theatres, Inc., 475

EEE 9,17

Clark v. Community for Creative Non-Violence,

468 U.S. 288 (1984) — ́ — — 1-2, 17

FW/PBS, Inc. v. City of Dallas, 493 U.S. 215

(1990) passim

Freedman v. Maryland, 380 U.S. 51 (1965) ........... 7, 9, 10, 11,

13, 20, 21, 22, 24

Graff v. City of Chicago, 9 F.3d 1309 (7th Cir.

1993), cert. denied, 511 U.S. 1085 (1994) 23-24

Interstate Circuit, Inc. v. City of Dallas, 390

US. 676 (1968) 13

Jones v. United States, 527 U.S. 373 (1999) 29

Mathews v. Eldridge, 424 US. 319 (1976) 13

Motor Vehicle Mfrs. Ass'n v. State Farm Mut.

Auto. Ins. Co., 463 U.S. 29 (1988) 24

National Collegiate Athletic Ass'n v. Smith, 525

U.S. 459 (19990 28

Cases—Continued:

National Socialist Party of Am. v. Village of

Skokie, 482 U.S. 43 (1977) 22

Shuttlesworth v. City of Birmingham, 394 U.S. 147

(1969) 23, 27

Southeastern Promotions, Lid. v. Conrad, 420

U.S. 546 (1975) 22

State ex rel. Casper v. Board of Trustees, 140

N.W.2d 301 (Wis. 1966) 14

Teitel Film Corp. v. Cusack, 390 U.S. 139 (1968) ............. 22

United States v. Armstrong, 517 U.S. 456 (1998) 27

United States v. Chemical Found., Inc., 272 U.S. 1

(1926) 27

United States v. Mezzanatto, 513 U.S. 196 (1996) ........... 27

United States v. Thirty-Seven (37) Photographs,

402 U.S. 368 (1971) 22

Vance v. Universal Amusement Co., 445 U.S. 308

(1980) 22

Walker v. City of Birmingham, 388 U.S. 307

(1967) 27

Werner v. A.L. Grootemaat & Sons, Inc., 259

N.W.2d 310 (Wis. 1977) . 15

Young v. American Mini Theatres, Inc., 427 US.

50 (1976) . 9,17

Constitution, statutes, regulations and rules:

U.S. Const. Amend. I passim

Administrative Procedure Act, 5 U.S.C. 701 et seg.

5 U.S.C. 705 14, 15, 24

5 U.S.C. 705-706 85

5 U.S.C. 706 24

16 U.S.C. 1 (1994 & Supp. I'V 1998) 1

42 U.S.C. 1983 25

Wis. Stat. Ann. (West 1999):

Ch. 68 * 7, 28, 29, 30

§ 68.02(2) 4

Statutes, regulations and rules-—Continued: Page

§ 68.08 4

§ 68.09(3) 4

§ 68.10 5

§ 68.10(1) 4

FF EE 4

§ 68.11 . 5

§ 68.1101) 4

§ 68.12 5, 28

§ 68.12(1) 4, 28

§ 68.13 .. 5

§ 68.13(1) 4,8, 14

Ch. 781 (Supp. 1999):

9 EEE 4,5

9 EEE 8, 15

Ch. 806 (1994)

§ 806.04 25

Ch. 813 (1994 & Supp. 1999):

§ 813.02(1)(a) 8,15

Ch. 823 (1994):

§ 823.09 18-19

Waukesha, Wis., Mun. Code (1995):

§ 2.11(1) 4, 8,14

§ 8.195 2, 18, 21, 29

§ 8.195(1) 2,3

§ 8.195(2) 3

8.19503) (e) 3

8.19503) d) 3, 4, 6, 29, 30

§ 8.195(4) 21

§ 8.195(4)(aX(1) 3,19

§ 8.195(4)(aX(2) 3, 19

§ 8.195(4)(b)\(1) 3,19

§ 8.195(4)(b)\(2) 3,19

§ 8.195(7)(a) 3, 28

Vil

Regulations and rules—Continued:

§ 8.195(9)

§ 8.195(10)

§ 8.195(10)(c)

§ 8.195(10)(d)

§ 8.195(10)(e)

§ 8.195(11)

Waukesha, Wis., Ordinance 42-00 (Sept. 2000) -

36 C. F. R.:

Section 7.96(g)(2)

Section 7.96(g)(3)

Section 7.96(g)(4)(iii)

Section 7.96(g)(5)

Section 7.96(g)(5)iv)

Section 7.96(g)(6)

Section 251.50

Section 251.51

Section 251.54

Section 251.56

Section 251.60

Section 251.64

Fed. R. Civ. P. :

Rule 65(a)

Rule 65(b)

Sup. Ct. R. 14.1(a)

Miscellaneous:

60 Fed. Reg. 45,258 (1995)

Letter from Jeff Scott Olson to the Wisconsin

Court of Appeals, Distriet II (Apr. 19, 1999)

8 1

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In the Supreme Court of the United States

No. 99-1680

CITY NEWS AND NOVELTY, INC., PETITIONER

CITY OF WAUKESHA

ON WRIT OF CERTIORARI TO THE

COURT OF APPEALS OF WISCONSIN, DISTRICT II

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE SUPPORTING RESPONDENT

INTEREST OF THE UNITED STATES

This case presents the question whether a licensing

scheme that regulates businesses that seek to display or sell

adult-oriented material protected by the First Amendment

must guarantee an automatic stay of a decision denying a

licensing renewal pending judicial review, where the de-

cision is based on considerations other than the content of

the material that is displayed or sold. The National Park

Service (NPS) within the United States Department of the

Interior is charged with promoting and regulating the use of

the National Parks, some of which are often used for special

events and demonstrations, such as marching, picketing,

religious services, and other activities protected under the

First Amendment. 16 U.S.C. 1 (1994 & Supp. IV 1998); Clark

(1)

v. Community for Creative Non-Violence, 468 U.S. 288, 289-

290 (1984). NPS has promulgated regulations that provide

that demonstrations and special events in the National

Capital Region zenerally may not be held without a permit.

36 C. F. R. 7.96(g)(2). The NPS has promulgated time, place,

and manner restrictions governing demonstrations and

special events. 36 C. F. R. 7.96(g)(5). NPS’s regulations also

set forth procedures for the application, extension, or revo-

cation of a permit, 36 C. F. R. 7.96(g)(3), (4)(iii), (5)(iv) and (6),

but those regulations do not require a judicial decision on the

merits before the denial takes effect.

The Forest Service within the United States Department

of Agriculture has similar regulations for the issuance, re-

newal, and termination of special-use permits that govern

non-commercial activity conducted by groups of 75 or more

persons on lands in the National Forest System. 36 C.F.R.

251.50, 251.51, 251.54, 251.56, 251.60, 251.64. Those regula-

tions are designed to “provid[e] a reasonable administrative

system for allocating space among scheduled and existing

uses and activities, address{] concerns of public health and

safety, and control{] or prevent{] adverse impacts on forest

resources.” 60 Fed. Reg. 45,258 (1995). The United States

therefore has a significant interest in the Court’s resolution

of the question presented.

STATEMENT

1. Respondent, the City of Waukesha, Wisconsin, deter-

mined that adult-oriented establishments contribute to dec-

lining property values and an increased level of criminal

activity in surrounding communities. Waukesha, Wis., Mun.

Code (Mun. Code) § 8.195 (1995) (preamble).' In order to

1 The ordinance defines adult-oriented establishments to include

adult bookstores,’ ‘adult motion picture theaters’, adult mini- motion pie-

ture establishments’ or ‘adult cabarets,’” as those terms are defined under

the ordinance. Mun. Code § 8.195(1). An “adult bookstore” includes “an

establishment having as a substantial or significant portion of its stock in

combat those secondary effects, respondent enacted an

ordinance that provides that no “adult oriented establish-

ment shall be operated or maintained in the City without

first obtaining a license to operate issued by the City.“ Id.

§ 8.195(2). The ordinance specifies minimum age qualifica-

tions for license applicants, id. § 8.195(4)(a)(1) and (b)(1), and

prohibits the issuance of a license to any applicant who vio-

lated respondent’s ordinance within the preceding five years,

id. § 8.19504 C(a)(2) and (b)(2). The ordinance further regu-

lates the physical layout of adult-oriented establishments

that have a “booth, room or cubicle for the private viewing of

any adult entertainment.” Id. § 8.195(9). The ordinance bars

adult-oriented establishments from allowing minors to enter

such establishments, id. § 8.195(10)(c); requires such estab-

lishments to maintain the premises in “a clean and sanitary

manner,” id. § 8.195(10)(d); and requires adequate light-

ing for “the public portions of the establishment,” id.

§ 8.195(10)(e).

The ordinance provides that every license terminates

after one year from the date of issuance. Mun. Code

§ 8.195(7)(a). An application for renewal of a license must be

filed “not later than 60 days before the license expires.”

Ibid. The ordinance sets forth the procedures for obtaining

an initial license, which respondent and the courts below

construed to apply as well to obtaining a renewal of a license.

Pet. App. 13-14. Under those procedures, the city clerk,

upon receipt of an application for license renewal, must

notify the applicant within 21 days whether the renewal has

been granted or denied, and the clerk must state in writing

the reasons for any denial. Mun. Code § 8.195(3)(c) and (d).

trade, for sale, rent, trade, lease, inspection or viewing, books, films, video

cassettes, magazines or other periodicals, which are distinguished or

characterized by their emphasis on matters depicting, describing or

relating to specified anatomical areas or specified sexual activities.” bid;

see also ibid. (defining “specified anatomical areas” and “specified sexual

activities”).

An unsuccessful renewal applicant then has two options.

First, under the ordinance, the applicant has ten days after

being notified of the denial to request a public hearing, which

must be held within ten days of the request. Mun. Code

§ 8.195(3)(d).” Second, the applicant may follow the admini-

strative procedures under state law that generally govern

the “granting, denial, renewal, nonrenewal, revocation or

suspension of a license.” Id. § 8.195(11); see Wis. Stat. Ann.

(Wis. Stat.) § 68.02(2) (West 1999). Under those alternative

procedures, an unsuccessful applicant for a license renewal

has 30 days to request the City to review its initial deter-

mination. Id. § 68.08. The City then has 15 days to conduct

its review and issue a decision. Jd. § 68.09(3). The applicant

may appeal an adverse decision within 30 days, id. § 68.10(1)

and (2), and the City must provide a hearing within 15 days

of receipt of the notice of appeal. Id. § 68.11(1). The City

must issue its final determination within 20 days after the

hearing is completed. Id. § 68.12(1). Finally, whether the

City renders a final decision under its ordinance or alter-

natively under state law, an unsuccessful renewal applicant

has a right to obtain judicial review of the City’s final de-

cision by filing a certiorari action in state court within 30

days of receipt of the City’s decision. Id §§ 68.13(1) and

781.01 (Supp. 1999); see also Mun. Code §§ 2.11(1), 8.195(11).

2. Petitioner is the operator of an adult-oriented estab-

lishment located in the City of Waukesha which makes

available to its customers sexually explicit materials, includ-

ing books, magazines, and videotapes. Petitioner’s establish-

ment also provides viewing booths in which customers

may view sexually explicit videotapes. Pet. App. 3. On

November 15, 1995, petitioner applied for renewal of its

2 As discussed pp. 29-30, infra, after the Court of Appeals held Sec-

tion 8.195(3)(d) unconstitutional because it failed to require the city to

reach a final determination within a definite time limit (Pet. App. 25-26),

respondent amended Section 8.195(3)(d).

license, which was due to expire on January 15, 1996. Id. at

7. On December 19, 1995, the City’s Common Council passed

a resolution denying petitioner’s renewal application because

petitioner had violated the licensing ordinance by permitting

minors to loiter on the premises, by failing to maintain an

unobstructed view of the viewing booths, and by allowing

patrons to engage in sexual conduct inside the booths. Ibid.;

see also id. at 76-83.

Petitioner requested review by the Common Council,

which affirmed the decision on January 22, 1996. Petitioner

then invoked the administrative review procedures under

Wisconsin Statutes Annotated Section 68.10 and, on June 28,

1996, the City of Waukesha Administrative Review Appeals

Board affirmed the Common Council’s decision. Pet. App. 8,

72-73.

Petitioner filed in the Circuit Court for Waukesha County

a certiorari action under Wisconsin Statutes Annotated Sec-

tions 68.13 and 781.01 (West Supp. 1999) challenging respon-

dent’s decision not to renew its license. Compl. No. 96 CV

1427 (Cir. Ct.). The Circuit Court affirmed respondent’s de-

cision. Pet. App. 55-71. The court rejected petitioner’s

contention that the licensing scheme conferred unbridled

discretion upon city officials to grant or deny an application

for license renewal. Id. at 57-60. The court also held that

respondent’s licensing scheme required an administrative

decision to be issued within definite time limits, id. at 60-62,

and that, under the scheme, “most of the [administrative]

review process can be completed prior to the expiration of

the one year term of the license,” id. at 64. The court also

concluded that the ordinance adequately provided “access to

— judicial review under Wisconsin Statute Chapter

68.” Ibid.

3 Petitioner had waived the time periods under Sections 68.11 and

68.12. Pet. App. 73.

3. The Court of Appeals of Wisconsin affirmed in part

and reversed in part. Pet. App. 1-43. The court observed

(id. at 9-10) that a plurality of this Court in FW/PBS, Inc. v.

City of Dallas, 493 U.S. 215, 225 (1990), concluded that the

First Amendment bars a licensing scheme regulating sexu-

ally-oriented business from placing “unbridled discretion in _

the hands of a government official or agency” who decides

whether to grant or withhold a license. The court also

observed that the plurality concluded that the “licensing

decision must be made ‘within a specified and reasonable

time period during which the status quo is maintained,’ and

that “a regulatory scheme must provide for ‘prompt judicial

review’ in the event that a license is erroneously denied.”

Pet. App. 10 (quoting FW/PBS, 493 U.S. at 228).*

Applying those principles, the Court of Appeals held that

respondent’s ordinance “contains specific guidelines for re-

newal” and therefore does not confer “unbridled discretion”

on city officials in making a licensing decision. Pet. App. 12.

The court further held that the ordinance preserves the

status quo during the period in which a licensor makes a

decision. Id. at 19. The court reasoned that the ordinance

requires an applicant to apply for a license renewal at least

60 days before the expiration of the license, and the ordi-

nance requires city officials to approve or deny the appli-

cation within 21 days. Ibid.

The court held, however, that Section 8.195(3)(d), which

required respondent to hold a public hearing within ten days

of the applicant’s request but imposed no further limitations,

“create[d] a risk of an indefinite delay by putting an appli-

4 The Wisconsin Supreme Court earlier had declined (Pet. App. 53)

the Court of Appeals’ certification of the questions whether “an ‘adult-

oriented establishments’ municipal ordinance that fails to preserve the

status quo during the administrative license renewal process [is] facially

unconstitutional” and whether “the ordinance lis] unconstitutional if it

fails to provide express time limits for judicial review.” Id. at 44-45.

cant at the mercy of the licensing body,” because it failed to

direct respondent “as to what it must do following the

hearing or when it must presumably take action in response

to the hearing.” Pet. App. 25-26. The court nonetheless held

that severance of the invalid hearing provision “le[ft] intact

an otherwise complete licensing scheme,” because the ordi-

nance incorporated the alternative administrative review

procedures under Chapter 68 of the Wisconsin Statutes. Id.

at 28. The court determined that Chapter 68 “sets forth

narrow, definite and objective standards for bringing an

appeal.” Ibid.

The Court of Appeals also rejected petitioner’s contention

that the ordinance is constitutionally defective for failing to

guarantee a judicial decision upholding the denial of a license

before the denial takes effect. The court acknowledged (Pet.

App. 20) that Freedman v. Maryland, 380 U.S. 51, 59 (1965),

held that a licensing scheme that involved the direct censor-

ship of expressive material must “assure a prompt final

judicial decision.” The court noted, however, that “more

recently in FW/PBS the Court appears to have relaxed this

requirement.” Pet. App. 20. The court explained that the

plurality in FW/PBS stated that “expeditious judicial review

of [the licensing] decision must be available,” and that “there

must be the possibility of prompt judicial review in the

event that the license is erroneously denied.” Ibid. (quoting

493 U.S. at 227, 228 (emphasis added by Court of Appeals)).

The court held that “prompt access or availability of judicial

review satisfies First Amendment protections,” reasoning

that “a municipality does not have the authority to direct a

state judicial court to issue a decision within a specified

period of time.” Jd. at 22. The court accordingly found that

the city’s ordinance is constitutional because it permits an

aggrieved applicant to file a certiorari action to obtain

judicial review of the city’s final determination. Id. at 23-24.°

The Wisconsin Supreme Court denied further review. Pet.

App. 54.

SUMMARY OF ARGUMENT

I. A. Businesses that are subject to respondent’s licens-

ing scheme have a right to judicial review of a final municipal

decision not to grant or renew a license. Mun. Code

§§ 2.11(1), 8.195(11); Wis. Stat. § 68.13(1). A court reviewing

such a decision also may stay the city’s licensing decision if

the city declines to stay the effect of its own decision and the

applicant can demonstrate that it is entitled to temporary

relief pending judicial review. Wis. Stat. § 781.02 (Supp.

1999); id. § 813.02(1)(a) (1994 & Supp. 1999). Under those

procedures, a court may fully protect the First Amendment

interests of a license applicant that otherwise could not

operate its business pending judicial review of the city’s

licensing decision. In light of the procedure for issuance of a

stay in particular cases where the requisite showing has

been made, respondent has not demonstrated an adequate

justification for a rule that would require an automatic stay

of all decisions denying an applicant a license renewal.

B. Any benefit to be served by an automatic stay rule

would be outweighed by the harm to a city’s interest in

enforcing a licensing scheme to control the secondary effects

of adult-oriented establishments. A city has a substantial

interest in imposing time, place, and manner restrictions on

sexually-oriented businesses to eradicate adverse secondary

5 The Court of Appeals also rejected petitioner’s contentions (1) that

the Mayor improperly participated in the city’s decision to deny peti-

tioner’s renewal application, Pet. App. 29-31; (2) that petitioner had

insufficient notice of the city’s charges, id. at 31-35; and (3) that re-

spondent should have suspended petitioner’s license as a less severe

sanction, id. at 35-37. The court then sustained the grounds upon which

respondent based its non-renewal determination. Id. at 38-42.

effects. City of Renton v. Playtime Theatres, Inc., 475 U.S.

41, 47 (1986); Young v. American Mini Theatres, Inc., 427

U.S. 50 (1976). That interest would be significantly impaired

by a rule that automatically barred a city’s licensing decision

from going into effect until a court has resolved any chal-

lenge to the decision. Such a rule also would be particularly

pernicious in cases in which the city has determined that a

renewal applicant has repeatedly violated the licensing

scheme and is therefore not qualified to operate an adult-

oriented establishment.

C. This Court’s First Amendment precedents do not

require that a city’s licensing scheme provide for an auto-

matic stay of all adverse licensing-renewal decisions. The

Court has required a prior judicial determination on the

merits of a censorship decision to guard against the risk that

censoring officials will ben protected speech and the risk that

a censored speaker will refrain from bringing a judicial

challenge to a particular censorship decision. Freedman v.

Maryland, 380 U.S. 51, 57-59 (1965); FW/PBS, Inc. v. City of

Dallas, 493 U.S. 215, 229 (1990) (plurality opinion) (discuss-

ing Freedman). Neither of those dangers is inherent under a

licensing scheme that is not aimed at the suppression of

speech, but is designed to combat the secondary effects of

sexually-oriented businesses. City officials under such an

ordinance do not condition a license upon the review or

approval of the content of an applicant’s materials. Rather,

they determine whether an applicant is qualified to hold a

license. In those circumstances, a decision that an applicant

is not entitled to renewal of its license is akin to a variety of

administrative decisions to which a court applies a deferen-

tial standard of review, and which may be stayed pending

judicial review only when temporary relief is found to be

warranted in the circumstances of the particular case. See

Administrative Procedure Act, 5 U.S.C. 705-706; Fed. R.

Civ. P. 65(a) and (b).

D. An automatic stay rule cannot be justified on the

ground that a court should resolve any facial challenge to a

municipal licensing scheme before a licensing decision

takes effect. Applicants may bring a facial challenge to a

city’s ordinance without first exhausting the city’s admini-

strative review procedures. Nor is an automatic stay rule

justified on the premise that city officials might be hostile to

the First Amendment rights of license applicants. Respon-

dent’s licensing determinations are made without regard to

the content of any material sought to be displayed or sold by

an applicant, and the ordinance contains objective criteria

that govern whether city officials will renew an applicant’s

license. In any event, there has been no showing that city

officials act in bad faith in administering municipal licensing

schemes generally or that respondent's officials have done so

in this case.

II. Petitioner’s challenges to the alternative admini-

strative review procedures under state law are not properly

before this Court. Petitioner’s contentions were neither

timely raised nor passed upon by the Wisconsin Court of

Appeals, and similarly were not raised in the petition for a

writ of certiorari. There is in any event no occasion for this

Court to review petitioner’s contentions because respondent

has recently amended the administrative review procedures

under its ordinance.

ARGUMENT

I. THE FIRST AMENDMENT DOES NOT REQUIRE

A MUNICIPAL LICENSING ORDINANCE THAT

REGULATES SEXUALLY-ORIENTED BUSI-

NESSES TO GUARANTEE AN AUTOMATIC

STAY OF THE DENIAL OF A LICENSE RE-

NEWAL PENDING JUDICIAL REVIEW

In Freedman v. Maryland, 380 U.S. 51, 58 (1965), this

Court held that a “noncriminal process which requires the

prior submission of a film to a censor avoids constitutional

infirmity only if it takes place under procedural safeguards

designed to obviate the dangers of a censorship system.”

“First, the burden of proving that the film is unprotected

expression must rest on the censor.” Ibid. Second, “the

exhibitor must be assured, by statute or authoritative

judicial construction, that the censor will, within a specified

brief period, either issue a license or go to court to restrain

showing the film,” id. at 58-59, and that lalny restraint

imposed in advance of a final determination on the merits

must similarly be limited to preservation of the status quo

for the shortest fixed period compatible with sound judicial

resolution,” id. at 59. Third, the censorship scheme “must

also assure a prompt final judicial decision, to minimize the

deterrent effect of an interim and possibly erroneous denial

of a license.” Ibid.

In FW/PBS, Inc. v. City of Dallas, 493 U.S. 215 (1990),

this Court considered whether the procedural requirements

imposed by Freedman applied to a municipal licensing

ordinance that regulated sexually-oriented businesses in

order to eradicate the adverse secondary effects of such

businesses. /d. at 220. A plurality of the Court described

the three Freedman safeguards as follows:

(1) any restraint prior to judicial review can be imposed

only for a specified brief period during which the status

quo must be maintained; (2) expeditious judicial review

of that decision must be available; and (3) the censor

must bear the burden of going to court to suppress the

speech and must bear the burden of proof once in court.

Id. at 227. In a series of opinions, the Court in FW/PBS held

that only the first two of those safeguards applied to the

city’s licensing scheme.

With respect to the first two safeguards, a plurality of the

Court concluded that, under the city’s ordinance, “the li-

censor must make the decision whether to issue the license

within a specified and reasonable time during which the

status quo is maintained.” Id. at 228. The plurality also

concluded that “there must be the possibility of prompt

judicial review in the event that the license is erroneously

denied.” Ibid. The plurality found that the licensing scheme

in that case failed those two requirements, because it pro-

vided neither “an effective limitation on the time within

which the licensor’s decision must be made” nor “an avenue

for prompt judicial review so as to minimize suppression of

the speech in the event of a license denial.” Jd. at 229.

Justice Brennan, joined by Justices Marshall and Blackmun,

concurred in the judgment, concluding that because in their

view “all three of the procedural safeguards specified in”

Freedman should be applicable, id. at 239, the city should

also “bear the burden of going to court and proving its case

before it may permissibly deny licenses to First Amend-

-ment-protected businesses,” id. at 240.

With respect to the third Freedman requirement, the

plurality concluded that “the First Amendment does not

require that the city bear the burden of going to court to

effect the denial of a license application or that it bear the

burden of proof once in court.” F'W/PBS, 493 U.S. at 230.

The plurality explained that the city’s ordinance was “signifi-

cantly different from the censorship scheme examined in

Freedman,” because unlike in Freedman, where the govern-

ment “engaged in direct censorship of particular expressive

material,” the city officials in FW/PBS administered the

licensing ordinance without regard to the content of any

protected speech. /d. at 229. The plurality further reasoned

that the city’s ordinance did not pose the risk that those

seeking a license would be deterred from challenging an

adverse licensing decision in court. Id. at 229-230. The

plurality thus concluded that the First Amendment is satis-

fied when there is a “[lJimitation on the time within which

the licensor must issue the license as well as the availability

of prompt judicial review.” Jd. at 230. Justice White, joined

aso 2

by the Chief Justice, disagreed with the plurality’s appli-

cation of Freedman, concluding that none of Freedman’s

requirements applied to the city’s ordinance. Id. at 244-249.

Justice Scalia, in his dissent, reasoned that the licensing

scheme was not subject to the First Amendment. Id. at 250-

264. Those three Justices therefore necessarily agreed with

the plurality’s conclusion that the city did not bear the

burden of going to court to enforce its licensing scheme and

did not bear the burden of proof once in court.

Neither Freedman nor FW/PBS addressed the precise

issue presented in this case—whether, as petitioner urges

(Br. 43-49), the First Amendment requires a municipal

licensing scheme that regulates sexually-oriented businesses

to provide for an automatic stay of the city’s licensing

decision pending a judicial determination on the merits.“ In

our view, the answer to that question is no. Under

respondent’s ordinance, a licensing decision is amenable to

prompt judicial review, and a court has the authority in a

particular case to preserve the status quo pending judicial

review of the city’s decision if the city declines to stay its

own decision pending judicial review and the applicant

makes the showing required for interim relief. Those

procedures properly balance the First Amendment interests

of applicants and the city’s competing interest in enforcing a

licensing scheme to combat the secondary effects of sexually-

oriented business. Cf. Mathews v. Eldridge, 424 U.S. 319,

335 (1976) (Procedures necessary to satisfy due process

depend on consideration of “(flirst, the private interest that

will be affected by the official action; second, the risk of an

§ Petitioner specifically does not argue that the city’s decision must

be stayed until it is final in the sense that all judicial appeals have been

exhausted. Pet. Br. 44 & n.27; see also Interstate Circuit, Inc. v. City of

Dallas, 390 U.S. 676, 690 n. 22 41968) (“The assurance of a ‘prompt final

judicial decision’ is made here * * * by the guaranty of a speedy

determination in the trial court.”) (quoting Freedman, 380 U.S. at 59).

erroneous deprivation of—such interest through the

procedures used, and the probable value, if any, of additional

or substitute procedural safeguards; and finally, the

Government’s interest, including the * * * burdens that

the additional or substitute procedural requirement would

entail.”).

A. Respondent's Licensing Scheme Adequately Protects

The First Amendment Interests Of Applicants By

Authorizing A Court To Stay The City’s Licensing

Decision

1. Respondent’s ordinance provides that a business

subject to its licensing scheme may obtain judicial review of

a final municipal decision not to grant or renew a license by

filing a certiorari action in state court within 30 days of

receipt of the city’s decision. Mun. Code §§ 2.11(1), 8.195(11);

Wis. Stat. § 68.13(1). “(T]he statutory review by certiorari is

a matter of right,” and such an action “inquires into not only

the jurisdiction of the board or body making the deter-

mination but also the merits of the determination.” Brown-

dale Int'l Ltd. v. Board of Adjustment, 208 N.W.2d 121, 129

(Wis. 1973) (quoting State ex rel. Casper v. Board of

Trustees, 140 N.W.2d 301, 304 (Wis. 1966)), cert. denied, 416

U.S. 936 (1974). Thus, in a certiorari action, the reviewing

court “may affirm or reverse the final determination, or

remand to the decision maker for further proceedings con-

sistent with the court’s decision.” Wis. Stat. § 68.13(1).

Moreover, a business that has been denied a license

renewal has two ways in which it may obtain interim relief

pending judicial review. First, it may request the city to

stay its own licensing decision pending judicial review.

Indeed, respondent granted that relief in this very case. Pet.

Br. 10 n.11 (“{TJhe City exercised its discretion to not

enforce its licensing requirement * * * while all relevant

* * * judicial review was proceeding.”); cf. 5 U.S.C. 705

(“When an agency finds that justice so requires, it may

postpone the effective date of action taken by it, pending

judicial review.”). '

Second, a business denied a stay by the city may request

the court to issue an immediate stay of the decision if the

business can demonstrate that it is entitled to temporary

relief pending judicial review. Wisconsin law expressly

provides that a court in a certiorari action may award

“temporary relief pending disposition of the action or

proceeding.” Wis. Stat. § 781.02 (Supp. 1999); ef. 5 U.S.C.

705 (reviewing court may postpone effective date of agency

action or preserve status or rights during judicial

proceedings). State law similarly allows a court to enter a

temporary injunction to restrain an act “[w)hen it appears

from a party’s pleading that the party is entitled to

judgment” and the commission of the act sought to be

restrained “during the litigation would injure the party.”

Wis. Stat. § 813.02(1)(a) (1994 & Supp. 1999); see Werner v.

A.L. Grootemaat & Sons, Inc., 259 N.W.2d 310, 314 (Wis.

1977) (party must show a “reasonable probability of ultimate

success on the merits” and “irreparable harm”).

Under those procedures, a court not only may review and

reverse a decision by respondent not to renew a license, but

also may preserve the status quo pending a judicial decision

on the merits. Far from being “meaningless” (Pet. Br. 48

(quoting Baby Tam & Co. v. City of Las Vegas, 154 F.3d

1097, 1101 (9th Cir. 1998)), the governing procedures permit

a court in a particular case to stay the effect of a decision

denying a license renewal if an applicant can demonstrate

that it is likely to succeed on the merits and that the city’s

decision would cause the applicant irreparable harm. See

Wis. Stat. § 813.02(1)(a) (1994 & Supp. 1999). Petitioner does

not challenge the proposition that, by preserving the status

quo, such a stay will fully protect the First Amendment

rights of an applicant who has been denied a license renewal.

2. Petitioner argues (Br. 45-49) that an automatic stay is

required because applicants that have been denied a license

renewal always suffer irreparable harm to their First

Amendment or economic interests if they cannot operate

their businesses while a court is resolving a judicial chal-

lenge to the city’s decision. It is significant for purposes of

First Amendment analysis, however, that any harm to an

adult-oriented business’s interests in selling or displaying

expressive materials pending judicial review is not the

product of direct censorship of the materials based on their

content, but rather the incidental consequence of a decision

based on the qualifications of the applicant (including, here,

its past conduct), without regard to the content of the

materials. See pp. 21-24, infra. Furthermore, petitioner

ignores the usual requirement that a party seeking a stay

must demonstrate both irreparable harm and a likelihood of

success on the merits. Under respondent’s ordinance, the

business will already have had an opportunity for a hearing

prior to the city’s decision denying its application. This

Court held in FW/PBS that the First Amendment allows

such a decision by the city to be conclusive unless the

applicant bears the burden of going to court to challenge the

decision. See pp. 12-13, supra. There accordingly is no

reason why the First Amendment should bar state law from

requiring an applicant who chooses to challenge the city’s

decision from also bearing the lesser burden of demonstrat-

ing at least a likelihood that the decision was erroneous

before obtaining an interim stay.

Petitioner of course does not suggest that applicants are

entitled under the First Amendment to operate an adult-

oriented business after the first reviewing court affirms the

city’s decision denying to grant or renew a license. See p. 13,

note 6, supra. Thus, an automatic stay rule would confer an

unjustified windfall on applicants who would not have been

entitled to a stay on the basis of their individual circum-

stances and who ultimately lose on the merits. Indeed, an

automatic stay rule would advance an applicant’s legitimate

First Amendment interests only in the limited situation in

which both the city and the court would have denied an

applicant’s request for a stay but the court ultimately re-

verses the city’s decision. Petitioner offers no basis for

concluding that such a situation arises with sufficient fre-

quency to impose an automatic stay rule, especially since the

applicant would have had a fair opportunity for immediate

judicial relief on an interim basis, but simply failed to make

the requisite showing at that point.

B. An Automatic Stay Rule Would Unduly Infringe Upon

Respondent’s Interest In Regulating The Secondary

Effects Of Sexually-Oriented Businesses

1. This Court has recognized that the government has a

legitimate and substantial interest in imposing time, place,

and manner restrictions on certain businesses to “prevent[]

harmful ‘secondary’ effects that are unrelated to the sup-

pression of expression.” City of Erie v. Pap’s A.M., 120 S.

Ct. 1382, 1394 (2000) (plurality opinion) (upholding city ord-

inance banning public nudity); see also id. at 1402 (Souter, J.,

concurring in part and dissenting in part); see, e.g. City of

Renton v. Playtime Theatres, Inc., 475 U.S. 41, 47 (1986)

(upholding a city ordinance that governed the zoning of adult

motion picture theatres because the ordinance “is aimed not

at the content of the films shown at ‘adult motion picture

theatres,’ but rather at the secondary effects of such theaters

on the surrounding community”); accord Young v. American

Mini Theatres, Inc., 427 U.S. 50 (1976); see also Clark v.

Community for Creative Non-Violence, 468 U.S. 288, 299

(1984) (regulations that were “unrelated to suppression of

expression” served “substantial Government interest in con-

serving park property”). Here, respondent reasonably

concluded that sexually-oriented businesses “affect property

values, contribute to physical deterioration and blight, have

a deleterious effect on both existing businesses around them

and surrounding residential areas, including increased tran-

siency [and] increased levels of criminal activities including

prostitution, rape, assaults and other sex related crimes.”

Mun. Code § 8.195 (preamble) (Pet. App. 95). Respondent

therefore passed its ordinance not for “the purpose or effect

of imposing a limitation or restriction on the content of any

communicative materials,” but to “combat and curb the ad-

verse secondary effects brought on by adult oriented

establishments.” /bid. (Pet. App. 97).

Respondent’s interest in regulating those effects would be

significantly impaired by a rule that barred respondent from

enforcing a decision denying a license renewal in advance of

a judicial determination upholding the decision, because such

a rule would permit a business to operate even though the

city has determined that the business is not fit to operate.

An automatic stay rule similarly would be inconsistent with

the Court’s conclusion in FW/PBS that “the First Amend-

ment does not require that the city bear the burden of going

to court to effect the denial of a license application.” 493 U.S.

at 230 (plurality opinion); see also id. at 244 (White, J.,

concurring in part and dissenting in part). Aggrieved appli-

cants under such a regime would have an enormous incentive

to file a notice of appeal simply to effectuate an automatic

stay of an adverse licensing decision. Although the applicant

presumably would have the burden in the ensuing proceed-

ings of challenging the decision on the merits, see id. at 229-

230 (plurality opinion), an automatic stay of the licensing

decision that the applicant challenges on judicial review

would be, in the interim, the practical equivalent of requiring

that the city “bear the burden of going to court to effect the

denial of a license application.” Id. at 230.

Indeed, petitioner argues (Br. 40-42) that a city should seek a court

order that temporarily closes such a business either “to prevent im-

mediate and great injury to the public health or safety” (Br. 41) or because

the business is a public nuisance. Neither of those alternatives would

adequately protect a city’s interests when an applicant’s conduct or lack of

qualifications does not rise to the level of “immediate and great injury to

the public health or safety” or constitutes a public nuisance. See Wis.

2. Petitioner recognizes (Br. 49 n.30) that an automatic

stay rule might be inappropriate when the city denies an

initial application, “before the subject expressive activity

has begun.” In that instance, an applicant has not shown

that it is qualified to operate an adult-oriented business,

because, e.g., the applicant does not meet the minimum age

qualifications, Mun. Code § 8.195(4)(a)(1) and (b)(1), or the

applicant previously had violated respondent’s ordinance

within the preceding five years, id. & 8.195(4)(a)(2) and (b)(2).

There is no principled distinction, however, between that

situation and the denial of a renewal application on similar

grounds. Indeed, respondent’s interest in regulating the

secondary effects of sexually-oriented businesses may be

even stronger when it has denied a license renewal to an

applicant that has repeatedly violated the city’s ordinance

and demonstrated in fact that it is not qualified to operate a

sexually-oriented business. A requirement that the city

must stay its decision denying a license renewal pending

judicial review in that instance would significantly burden

the city’s legitimate and substantial interest in enforcing its

licensing scheme.

Stat. § 823.09 (1994) (defining public nuisance to include the maintaining or

using of a building “for the purpose of lewdness, assignation or pros-

titution”).

8 An automatic stay rule could impose significant costs in other

contexts as well. For instance, the National Park Service and the Forest

Service have promulgated content-neutral time, place, and manner

regulations that govern the granting and renewal of permits to engage in

expressive activity on national lands. See pp. 1-2, supra. A constitutional

rule that required those permit decisions to be automatically stayed

pending judicial review would prevent the government from issuing

permits to other applicants who also wish to engage in expressive activity

on the particular land at issue. See 36 C. F. R. 7.96(g)(5)(iv) (providing that

permits for demonstrations will be extended “unless another application

requests use of the particular area and said application precludes double

occupancy”); 60 Fed. Reg. at 45,258 (promulgating Forest Service's

That principle is well-illustrated in this case. Here, city

officials found that petitioner repeatedly had allowed minors

to visit its premises and had permitted patrons to engage in

sexual activity in viewing booths. Pet. App. 76-83. The

courts below affirmed those findings as supported by sub-

stantial evidence, id. at 38-42, 69-70, and the courts similarly

concluded that respondent properly declined to renew rather

than suspend petitioner’s license, “[c]onsidering both the

health and safety issues as well as [petitioner’s] record of

ordinance violations.” Jd. at 37; see also id. at 69 (trial court).

A rule that would require a city to permit such a business to

operate simply because the business challenged the city’s

decision denying a renewal of the license would seriously

undermine the government’s interest in enforcing licensing

regulations to preventl] harmful ‘secondary’ effects that are

unrelated to the suppression of expression.” City of Erie,

120 S. Ct. at 1394 (plurality opinion).

C. An Automatic Stay Rule Is Not Required By The First

Amendment To Avoid The Dangers Of A Censorship

Regime

Relying on this Court’s decision in Freedman v. Mary-

land, supra, petitioner argues (Br. 16) that respondent’s

licensing scheme “may not alter the status quo by forcing the

cessation of ongoing expressive businesses prior to judicial

review.” See also Pet. Br. 23-26, 32-33, 43-45. Petitioner’s

reliance on Freedman is misplaced. In that case, the Court -

relied on two rationales to support the requirement of

special judicial review procedures. First, the Court found

that government review and censorship of expressive activ-

ity present the inherent risk that officials will suppress

protected speech. 380 U.S. at 57-59. Second, the Court con-

cluded that a censorship scheme poses the significant danger

regulations in part to providlſe] a reasonable administrative system for

allocating space among scheduled and existing uses and activities”).

that potential distributors or exhibitors will be deterred

from bringing a judicial challenge to the decision to censor a

particular work, because they would not have a sufficient

stake in that one work to assume the burden of instituting

judicial proceedings. Id. at 58-59. Those concerns, however,

are not similarly present in the context of respondent’s

licensing scheme.

1. Respondent’s ordinance “provide[s] for licensing and

regulation of adult oriented establishments * * * to combat

and curb the secondary effects of such establishments.”

Mun. Code § 8.195 (preamble) (Pet. App. 97); see also

FW/PBS, 493 U.S. at 220 (city ordinance “was aimed at

eradicating the secondary effects of crime and urban

blight”). In determining when a renewal applicant is eligible

for a license under respondent’s ordinance, city officials do

not review or censor the content of any expressive material

sold or displayed by a regulated busiriess. Rather, the li-

censing scheme imposes time, place, and manner restrictions

by regulating (1) the qualifications of a license applicant, (2)

the physical layout. of the business, and (3) the conduct that

may occur on the premises. “Sée Mun. Code § 8.195(4), (9)

and (10).

Unlike a law that directly censors speech, respondent’s

ordinance does not present the risk identified in Freedman

that city officials will impermissibly engage in the suppres-

sion of. protected speech. In Freedman, the Court explained

that where a “censor’s business is to censor, there inheres

the danger that he may well he less responsive than a

court—part of an independent branch of government—to the

constitutionally protected interests in free expression.” 380

Ct. Chicago Teachers Union v. Hudson, 475 U.S. 292, 308 n.20

(1986) (concluding that the “special judicial procedures” mandated by

Freedman were not necessary to protect the First Amendment interests

of non-union employees when the union determines whether service fees

are related to collective bargaining activities).

U.S. at 57-58: The Court therefore concluded that “only a

judicial determination in an adversary proceeding ensures

the necessary sensitivity to freedom of expression.” Id. at

58.

This Court in other decisions has explained that “the line

between unconditionally guaranteed speech and speech that

may be legitimately regulated is a close one.” Southeastern

Promotions, Ltd. v. Conrad, 420 U.S. 546, 561 (1975); see

also Vance v. Universal Amusement Co., 445 U.S. 308, 316

n.13 (1980) (per curiam) (“{TJhe line between legitimate and

illegitimate speech is often so finely drawn that the risks of

freewheeling censorship are formidable.”) (quoting South-

eastern Promotions, Ltd., 420 U.S. at 559); Bantam Books,

Inc. v. Sullivan, 372 U.S. 58, 66 (1963) (“constitutionally

protected expression * * * is often separated from obscen-

ity only by a dim and uncertain line.“). Because censorship

schemes necessarily pose the risk that the government will

suppress constitutionally protected speech, Freedman and

other decisions reviewing such schemes have required the

government to obtain a prompt judicial decision that affirms

the censor’s view that the speech sought to be restrained is

actually unprotected.” ,

10 See, e.g., Vance, 445 U.S. at 316 & n.14 (state law authorized judges

to enjoin indefinitely exhibition of obscene films); Southeastern Pro-

motions, Ltd., 420 U.S. at 547-548 (administrative board barred stage

production of “Hair”); United States v. Thirty-Seven (37) Photographs,

402 U.S. 363, 365-377 (1971) (law permitted customs agents to seize

imported obscene materials); Blount v. Rizzi, 400 U.S. 410, 411-414 (1971)

(postal laws permitted censorship of obscene mail); Teitel Film Corp. v.

Cusack, 390 U.S. 139, 141 (1968) (per curiam) (city motion picture

censorship ordinance); Bantam Books, Inc., 372 U.S. at 70-72 (state

commission attempted to censor obscene books); ef. National Socialist

Party of Am. v. Village of Skokie, 432 U.S. 43, 44 (1977) (trial court en-

joined paraders from displaying swastika or materials promoting hatred of

Jews); see also Alexander v. United States, 509 U.S. 544, 551 (1993) (“The

constitutional infirmity in nearly all of our prior restraint cases involving

obscene material * * * was that the government had seized or otherwise

There is no comparable danger that city officials will

improperly suppress protected speech under a licensing

scheme in which officials do not condition a license upon the

approval of the speech sought to be exhibited. In those cir-

cumstances, “the city does not exercise discretion by passing

judgment on the content of any protected speech.” F'W/PBS,

493 U.S. at 229 (plurality opnion). Rather, city officials

determine whether a particular applicant is qualified to

operate a sexually-oriented business, “a ministerial action

that is not presumptively invalid.” Ibid.“

Those principles are fully applicable here. When respon-

dent denied petitioner’s application for a license renewal,

city officials did not base that denial on the content of any

expressive material exhibited or sold by petitioner. Rather,

city officials determined that petitioner had violated the

licensing ordinance because petitioner had permitted minors

to visit its premises, had failed to maintain an unobstructed

view to the viewing booths, and had permitted patrons to

engage in sexual activity in viewing booths. Pet. App. 76-

80. Those kinds of determinations are routinely made by

administrators, and they are not inherently fraught with

First Amendment concerns. See Graff v. City of Chicago, 9

F.3d 1309, 1333 (7th Cir. 1993) (Flaum, J., concurring)

(“Clearly included among such nonthreatening schemes are

restrained materials suspected of being obscene without a prior judicial

determination that they were in fact so.”).

'! Contrary to the suggestion of petitioner's amicus Liberty Project

(Br. 16), the Court in Shuttlesworth v. City of Birmingham, 394 U.S. 147

(1969), did not hold that a content-neutral licensing scheme must provide

for a prior judicial determination on the merits before a licensing decision

may become effective. Rather, the Court in dicta simply stated that the

validity of a municipal ordinance that authorized “no more than the

objective and even-handed regulation of traffic on (city) streets and public

ways” “would depend upon, among other things, the availability of

expeditious judicial review of the Commission's refusal of a permit.” Id. at

154-155 & n.4.

those that only ask and allow administrators to make the

kind of determinations for which they are especially suited;

e.g. questions about city aesthetics, traffic flow or City Code

violations.”), cert. denied, 511 U.S. 1085 (1994).

Similarly, a court reviewing a decision by respondent

under its licensing scheme does not assume that the decision

is presumptively invalid. Cf. Motor Vehicle Mfrs. Ass n v.

State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 n.9 (1983)

(noting “the presumption of regularity afforded an agency in

fulfilling its statutory mandate”). To the contrary, the courts

below were required to affirm respondent’s decision denying

petitioner a license renewal if the city “kept within its juris-

diction” and “acted according to the law,” the decision was

not “arbitrary, oppressive or unreasonable,” and “the evi-

dence presented was such that [respondent] might rea-

sonably make the order or determination in question.” Pet.

App. 8. That deferential standard of review, which peti-

tioner has not challenged, is indistinguishable from the

standard of review accorded a wide variety of administrative

decisions that are not subject to an automatic stay pending

judicial review. See, e.g., Administrative Procedure Act, 5

U.S.C. 705, 706; see also Fed. R. Civ. P. 65(b) (standards for

obtaining a temporary retraining order).

2. This Court in Freedman also reasoned that a prior

judicial determination affirming the censor’s ban on speech

was necessary because otherwise “it may prove too burden-

some to seek review of the censor’s determination.” 380 U.S.

at 59. The Court explained that an “administrative refusal to

license, signifying the censor’s view that the film is

unprotected, may have a discouraging effect on the ex-

hibitor.” Ibid. The plurality in FW/PBS similarly observed

that when a censored speaker is “likely to be deterred from

challenging the decision to suppress the speech, * * * the

censor’s decision to suppress [is] tantamount to complete

suppression of the speech.” 493 U.S. at 229.

Under respondent’s ordinance, by contrast, Iblecause the

license is the key to the applicant’s obtaining and main-

taining a business, there is every incentive for the applicant

to pursue a license denial through court.” F'W/PBS, 493 U.S.

at 229-230 (plurality opinion); accord id. at 248 ((White, J.,

concurring in part and dissenting in part) (businesses subject

to city’s licensing scheme “will have every incentive to pur-

sue the licensing applications vigorously”). Similarly,

applicants denied a license renewal by respondent “have

much more at stake” economically than a one-time speaker

subject to a censorship scheme, and are therefore likely to

challenge an adverse decision by respondent if there is a

reasonable basis for such a challenge. Id. at 229 (plurality

opinion). In those circumstances, a prior judicial decision is

unnecessary to prevent a denial of a license renewal from

becoming “tantamount to complete suppression of the

speech.” Ibid. (plurality opinion).

D. Policy Considerations Do Not Support An Automatic

Stay Rule

Petitioner also argues that policy reasons support an

automatic stay rule. Those contentions lack merit.

1. Petitioner contends (Br. 27-29, 36) that a prior judicial

determination is necessary so that a court may resolve an

applicant’s facial constitutional challenges to the ordinance’s

standards for license renewal or revocation. Petitioner fur-

ther argues (Br. 38-40) that a court should resolve facial

challenges before a licensing decision takes effect, because

city officials cannot resolve them during the administrative

review process. But applicants may bring a facial challenge

to a city’s licensing scheme without proceeding under the

city’s licensing scheme, either by filing a declaratory judg-

ment action in state court, see Wis. Stat. § 806.04 (1994), or

by filing an action under 42 U.S.C. 1983 in federal court. See,

e.g., Baby Tam & Co., 154 F.3d at 1098-1099 (Section 1983

action). This Court in FW/PBS allowed such a facial

challenge to both the administrative and judicial review pro-

cedures, without requiring exhaustion of administrative

remedies. See 493 U.S. at 223-225 (plurality opinion). The

existence of possible facial challenges to a city ordinance

therefore provides no basis for a rule requiring an automatic

stay of all license-renewal denials pending judicial review.

2. Petitioner also asserts (Br. 32-35, 37, 44-45) that an

automatic stay rule is necessary because local licensing

officials are hostile to the First Amendment rights of

sexually-oriented businesses. In determining whether to

renew a license under respondent’s ordinance, however, city

officials do not review the content of any speech; rather, they

decide whether a particular applicant is qualified to operate

a sexually-oriented business. Official action under such a

scheme is not based on the review of speech and therefore is

not “presumptively invalid.” F'W/PBS, 493 U.S. at 229

(plurality opinion). See pp. 21-24, supra.

Similarly, municipal licensing ordinances that regulate

sexually-oriented businesses must be accompanied by objec-

tive standards that cabin the discretion of officials who

decide whether to grant or deny a license. FW/PBS, 493

U.S. at 225-226 (plurality opinion); id. at 246 (White, J.,

concurring in part and dissenting in part); see also City of

Lakewood v. Plain Dealer Publ’g Co., 486 U.S. 750, 758

(1988) (“Standards provide the guideposts that check the

licensor and allow courts quickly and easily to determine

whether the licensor is discriminating against disfavored

speech.”). Here, the Court of Appeals determined that re-

12 Indeed, in addition to instituting the proceeding below to challenge

respondent’s particular non-renewal decision, petitioner filed suit in both

state and federal court seeking to invalidate respondent’s ordinance as

facially unconstitutional. See City News & Novelty, Inc. v. City of Wau-

kesha, 487 N.W.2d 316 (Ct. App. 1992) (state declaratory judgment

action), review denied, 491 N.W.2d 768 (Wis. 1992); Compl. No. 96-C-383

(E.D. Wis.) (Section 1983 action).

spondent’s ordinance contains objective criteria that govern

the standards for license renewal, and that holding is not at

issue here. Pet. App. 12-16. Thus, because objective

ordinance will deny a license based on the speech of a parti-

cular applicant, there is no need for respondent to guarantee

that its licensing decisions will not go into effect until a court

determines that those objective standards were properly

applied in a given case.”

For similar reasons, petitioner errs in asserting that

special judicial procedures are required to guard against the

possibility that local officials will deny a license renewal

application based on “false charges” or “factually question-

able prostitution or lewd conduct charges against the

dancers at an adult entertainment business.” Br. 30, 31. It

is presumed that city officials who administer licensing

schemes that contain objective standards will properly

discharge their duties under local law. See United States v.

Chemical Found., Inc., 272 U.S. 1, 14-15 (1926) (“[{I]n the

absence of clear evidence to the contrary, courts presume

that [public officers] have properly discharged their official

duties.”); accord United States v. Armstrong, 517 U.S. 456,

464 (1996); United States v. Mezzanatto, 513 U.S. 196, 210

(1995). Moreover, petitioner has not asserted that any

official misconduct occurred in this case. Cf. Arcara v. Cloud

Books, Inc., 478 U.S. 697, 707 n.4 (1986) (There is no sug-

gestion on the record before us that the closure of re-

1 Petitioner argues (Br. 33) that Walker v. City of Birmingham, 388

U.S. 307, 317, 339 (1967) and Shuttlesworth v. City of Birmingham, 394

U.S. 147, 157-158 (1969), represent instances of “local officials who have

used permitting or licensing laws to censor speech they disfavored.”

Unlike respondent’s ordinance, however, the terms of the city’s ordinance

at issue in those decisions “clearly gave the City Commission extensive

authority to issue or refuse to issue parade permits on the basis of broad

criteria entirely unrelated to legitimate municipal regulation of the public

streets and sidewalks.” Id. at 153.

spondents’ bookstore was sought under the public health

nuisance statute as a pretext for the suppression of First

Amendment protected material.”). In any event, as ex-

plained above, respondent’s licensing scheme permits a court

to preserve the status quo if an applicant can demonstrate a

likelihood in a given case that city officials acted in bad faith

in denying a license renewal.

II. PETITIONER’S CHALLENGES TO THE ADMIN-

ISTRATIVE REVIEW PROVISIONS UNDER STATE

LAW ARE NOT PROPERLY BEFORE THIS COURT

Petitioner argues (Br. 4-5, 14-18, 19-22) that the provisions

for administrative review of the city’s licensing decisions

under Chapter 68 of the Wisconsin Statutes Annotated are

constitutionally deficient because they do not ensure an “ad-

ministrative ruling on a permit application within a specified

and brief time period,” and because they “fail to preserve the

status quo pending completion of * * * administrative

review.” Br. 17-18.“ We do not address the merits of those

contentions, however, because they are not properly before

this Court.

First, petitioner’s challenges to Chapter 68 were not

timely raised or passed upon by the courts below. See, e. g.,

National Collegiate Athletic Ass’n v. Smith, 525 U.S. 459,

470 (1999); Blessing v. Freestone, 520 U.S. 329, 340 n.3

(1997). As the Court of Appeals observed, petitioner did not

4 Petitioner contends (Br. 5, 15, 21) that Chapter 68 allows the city a

minimum time of 71 days in which to issue a final licensing decision, and

that because the applicant is permitted to file his renewal application up to

60 days before a license expires, Mun. Code § 8.195(7)(a), th ‘ity may

issue its final decision 11 days after the license expires. Petitioner also

contends (Br. 5, 20) that the city may indefinitely delay making a final

decision under Chapter 68 because, although Wis. Stat. § 68.12(1)

mandates a final decision (within 20 days of completion of the hearing

and the filing of briefs,” Chapter 68 neither limits the duration of

the hearing nor imposes any time constraints on the filing of briefs.

29 °

“directly challenge” the administrative review procedures of

Chapter 68. Pet. App. 28. Rather, petitioner challenged

the administrative review procedures under Section 8.195 of

the city’s ordinance. The court agreed with petitioner's

contention that Section 8.195(3)(d) did not contain definite

time limits. Id. at 24-26. The court further accepted the

proposition that there must be “effective preservation of the

status quo during the period in which the licensor makes its

decision.” Jd. at 19. The court held, however, that because

the alternative state law procedures under Chapter 68 “set({]

forth narrow, definite and objective standards” for admin-

istrative review, the ordinance as a whole is constitutional.

Id. at 28.

Second, in its petition for a writ of certiorari, petitioner

did not challenge the validity of the Chapter 68

administrative review procedures. Rather, petitioner asked

this Court to resolve a conflict among the circuits concerning

the guarantee of prompt judicial review. Pet. 13."

Petitioner therefore did not properly preserve its con-

tentions in this Court. See Sup. Ct. R. 14.1(a); see, e.g.,

Jones v. United States, 527 U.S. 373, 394 (1999); Blessing,

520 U.S. at 340 n.3.

Third, respondent has recently amended the admini-

strative review procedures under its licensing scheme. As

previously discussed, the Court of Appeals invalidated Sec-

tion 8.195(3)(d) because it failed to direct city officials to take

15 In its briefs to the Court of Appeals, petitioner did not raise the

arguments that it now advances. It was not until six days after oral

argument that petitioner stated its view that a hearing under Section

68.12 could be indefinitely extended. See Letter from Jeff Scott Olson to

Court of Appeals 1-2 (Apr. 19, 1999).

16 This Court limited its grant of certiorari to the third quest. on

presented, see 120 S. Ct. 2687 (2000), which was whether “a licensing

scheme which acts as a prior restraint is required to contain explicit

language which prevents injury t» a speaker’s rights from want of a

prompt judicial decision.” See Pet. i.

action after holding a hearing. Pet. App. 25-26. On Septem-

ber 19, 2000, respondent amended Section 8.195(3)(d), effee-

tive immediately, to require city officials to issue a final

licensing determination within 20 days of the commencement

of the hearing. Waukesha, Wis., Ordinance 42-00. License

applicants now may invoke the administrative procedures

under amended Section 8.195(3)(d) instead of the alternative

administrative procedures under Chapter 68 that petitioner

now challenges. No court has passed on the validity of the

amended ordinance, and thus any issue concerning the

constitutionality of the alternative Chapter 68 procedures

may be of no continuing significance. Especially in these

circumstances, there is no occasion for this Court to address

petitioner’s challenges to Chapter 68.

CONCLUSION

For the foregoing reasons, the decision of the Wisconsin

Court of Appeals should be affirmed.

Respectfully submitted.