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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2001
- **Citation:** 531 U.S. 278

## Text

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No. 99-1680 | OCT 2 6 onng

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In the Supreme Court of the United ta

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CITY NEWS AND NOVELTY, INC., PETITIONER
D.
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 =

10

14

17

S 8

2

IV
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

VI

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
V.

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)

2

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”).

4

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).

5

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.

6

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.

7

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

8

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).

10

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

11

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

12

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

13

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).

14

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

15

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

16

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

17

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

18

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.

19

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

20

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”).

21

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).

22

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.

24

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).

27

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.

28

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.

30

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.

SETH P. WAXMAN
Solicitor General

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

OCTOBER 2000

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0364%3A07. Public record. Not legal advice.
