Petition for Writ of Certiorari — Jakes, Ltd. v. City of Coates

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) Supreme Court, U8:

FILED

No.

73 187 AUG 1 2002

In The OFFICE OF THE OLERK

Supreme Court of the United States

JAKES, LTD., and RICHARD J. JACOBSON,

Petitioners,

VS.

CITY OF COATES,

Respondent.

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Eighth Circuit

PETITION FOR WRIT OF CERTIORARI

RANDALL D.B. TIGUE

Counsel of Record

3960 Minnehaha Avenue South

Suite 100

Minneapolis, MN 55406

612/825-0936

Attorney for Petitioners

be sail, <<

QUESTIONS PRESENTED

1. 's a statutc which prohibits the amortization of non-

conforming uses in zoning law, but which exempts from that

prohibition only businesses presumptively to thc protection of the First

Amendment, bascd upon the contents of materials sold or exhibited,

subject only to “dcferential, rational basis scrutiny” upon

constitutional challenge’?

2. Reyardless of such standard of review, can an

cxcmption from a prohibition on amortization be sustained against a

First Amendment challenge, in the absence of any evidence of record

that the exemption was adopted for the purposc of addressing adverse

secondary effects?

3. In light of this Court’s decision in A‘ameda Books,

can a Zoning regulation amortizing an adult use, defined by content,

be resolved on summary judgment, in the facc of a genuine issuc of

material fact as to the ordinance’s cfficacy in eliminating adverse

sccondary effects?

4. Can an ordinance licensing presumptively protected

First Amendment activities bc sustained, when such a license permits

suspension at the unfcttered discretion of governmental officials?

2 Do Petitioncrs have standing to challenge an

ordinance disqualifying persons convicted of crime from engaging in

protected First Amendment activity, notwithstanding the absence from

an allegation that they would be disqualificd by such a provision, if

the enforcement of such a provision is the justification for disclosure

requirements and a liecnsc fcc?

6. Can government constitutionally impose upon one

desiring to cxcrcise First Amendment rights the burden of proving

that a license fee as a precondition for the cxcrcise of those rights is

unreasonable?

7. In light of Alameda Books, can liccnsing restrictions

on First Amcndment activitics bc sustained, in light of undisputed

cvidence that the effect would be substantial to reduce the availability

of constitutionally protected speech?

CORPORATE DISCLOSURE STATEMENT

Petitioner in the above-entitled matter is Jake’s Ltd.,

Inc., a Minnesota corporation. There is no parent or publicaly

held company owning more than 10% of the corporation’s

stock. All parties to the proceeding are listed in the caption.

TABLE OF CONTENTS

SII 0 a'2's 4s o-y s well's Roe eae an ve i

Corporate disclosure statement ..................... ii

Pe ED a5 hace cc De eee eae vi

PIE 5 2s 5s devotee ben x teense cans 1

PIN, cn 3k ps Wx ke bebe Pec cn be eee 1

Constitutional and statutory provisions involved ........ 2

ee nee Tr eer ee =

Reasons for granting the writ ...................... 1]

I. The “adults-only” exemption to the othcrwise absolute

prohibition on amortization is inconsistent with decisions of this Court

and of other fedcral circuits ................2.022 0.00 en 12

A. Absolutely no authority exists for the proposition that a

“content correlated” restriction on speech can be subjected only to

“dcferential rational-basis review.” ...............0000--5. 14

B. The enactment of the “adults-only without any finding or

evidentiary showing tying it to a “secondary cffects” rationalc violates

i FU II. tc ik one k oo aos eee a eee eee 16

Il. The Eighth Circuit’s decision in granting summary

judgment on the amortization ordinance itself acted contrary to

applicable decisions of this Court and of other federal circuits... 19

If]. The licensing provisions violate the First

oot see RELIST 20

A. Permitting the suspension of a licens in the unfettered

discretion of municipal government renders the ordinance

unconstitutional under the First Amendment. ..........____ 20

B. The Eighth Circuit’s decision that petitioners lack

Standing to challenge the disqualification provisions of the licensing

ordinance is contrary to decisions of this Court and other fcdcral

Oe ......:<tives eee 22

ok The Eighth Circuit decision on thc license fee is

contrary to decisions of this court and of other federal circuits . 23

D. The decision upholding the validity of the distance

requircments and the prohibition on gratuitics is in direct violation of

this Court’s mandate in Alameda Books...............__. 25

COME 6005 Sie. peepee 27

TABLE OF AUTHORITIES

Constitutional provisions:

U.S. Constitution Amend. I .................... ‘passim

U.S. Constitution Amend. V .. 0.2... ee eee 13

Statutes and Ordinances:

Se Us OB AE ca kc sw 44 14S eee 2

ee reer ramen ga 2

Minn. Stat. Soc. 462.357, Subd. le ..............05. 5, 18

Coates City Code Sec. $08.10...................... 8

Coates City Code Sec. 508.17(S).................... x

Coates City Code Sec, $08.17B(10) ................. 8

Coates City Code Sec. $08.12D.................00.. 9

Cation Gite GE TG Ee o's see cc andsuceaee ens 3

Coates City Ordinance No. 36 ..................045, 4

Coates City Ordinance No. 40 ...................... 4

Cases:

AVR, Inc. v. City of St. Louis Park, 585 N.W. 2d 411 (Minn. App.

1998), pet for rev, denied (Minn. Dec, 15, 1998) .......... 13

Busey v, District of Columbia, 78 U.S. App. D.C. 189, 148 F.2d 592

i: Beer errno i oe 25

City of Colorado Springs v. 2354, Inc., 896 P. 2d 272 (Colo.

BETTE Pe eee eee 21

vil

City af Lakewood v. Plain Dealer Publishing Co., 485 U.S. 750

WO HC e rah Weenverhide Ven guie recite muy he akel ca, 1]

City of Los Angeles v. Alameda Bouks, Inc.,535 US. .122S8.Ct

1728 (May 13, 2002) ...... 2... passim

City of Renton v. Playtime Theaters, Inc., 457 U.S. 41 1986) . 20

Coates v. City of Cincinatti, 402 U.S. 61] | en 24

Last Brooks Books, Inc. v. City of Memphis, 48 F. 3d 220 (6" Cir.

NA heKeevi vineesi elec erete ri te kek 12

FCC v. Sanders Bruthers Radio Station, 309 U.S. 470 (1940) 24

Flanigan’s linterprises v. Fulton County, Ga., 242 F. 3d 976 (11

viasise: EET LTE CTT TOS 1]

Forsyth County, Ga. v. Nationalist Movement, 50S U.S. 123 -

-cchan EARLE EE eee 1]

Freeborn County vy. Claussens, 295 Minn. 96 WEEE Gis wre 13

Genusa v. City of Peoria, 619 F. 3d 1203 (7 Cir. 1980) .. 12, 24

Murdock v. Pennsylvania, 319 U.S. 105 aes 12, 24

New York Times, Inc. v. Arizona Board of Regents, 20 Ariz. App.

macs nonin, ER EC EERE TE er Pee eee tee ee 2s

Oswall v. Ramsey County, 371 N.W. 2d 24] (Minn. App.

dan Ee RT ne 13

vill

Ranch House, Inc. v. Amerson, 238 F. 3d 1273 (11% Cir.

ere ere rr rr yr ert Tee rey eee eee ey ll

Schultz v. City of Cumberland, 228 F. 3d 831 (7 Cir. 2000) .. 12

Shuttlesworth v. City of Birmingham, 395 U.S. 147 (1969) ... 21

United States v. Playboy Entertainment Group, Inc., 529 U.S. 803

ENP T, Te Te ee Tee ere ee ee Tae ee re ee 20

Jake’s Ltd., Inc., and Richard J. Jacobson, respectfully

petition for a writ of certiorari to review the decision of the

United States Court of Appeals for the Eighth Circuit, issued

March 26, 2002 (Appendix at A.1-A. 14), and for which

rehearing was denied on May 3, 2002 (Appendix at A48.)

OPINIONS BELOW |

The opinion of the United States Court of appeals for

the Eighth Circuit is reported at 284 F. 3d 884 (8" Cir. March

26, 2002), and set forth at Appendix A 1

The initial opinion of the District Court is reported at

169 F. Supp. 2d 1014 (D. Minn, 2001), and is set forth in

Appendix at A.15-A.37. The District Court opinion upon

motion for amended findings is reported at 176 F. Supp. 2d 899

(D. Minn, 2001), and is set forth in the Appendix at A.38-A.46.

ICTION

The United States Court of Appeals for the Eighth

Circuit rendered its judgment on March 26, 2002, and denied

a timely petition for rehearing with a suggestion for rehearing

en banc, on May 3, 2002. Jurisdiction of this Court is invoked

pursuant to Title 28 U.S.C. Sec. 1254(1).

CONSTITUTIONAL AND STATUTORY PROVISIONS

INVOLVED

Constitution of the United States, Amendment 1.

The First Amendment to the United States provides, in

pertinent part: “Congress shal] make no law...abridging the

freedom of speech or of the press...”

Constitution of the United States, Amendment 14.

The Fourteenth Amendment to the Constitution of the

United States provides, in pertinent part: “...nor shall any State

deprive any person life, liberty, or property without due process

of law...”

Title 42 U.S.C. Sec. 1983.

Title 42 U.S.C. Sec. 1983 provides, in pertinent part:

“every person who, under color of state law...subjects or causes

to be subjected, any citizen to the deprivation of any rights,

privileges or immunities secured by the Constitution and law,

shall be liable to the party injured in an action at law.”

Minn. Stat. Sec.462.357, Subd. 1c provides as follows:

“Except as otherwise provided in this

subdivision, a municipality must not enact,

amend, or enforce an ordinance providing for

the elimination or termination of a use by

amortization which use was lawful at the time of

its inception. This subdivision does not apply to

adults-only bookstores, adults-only theaters, or

similar adults-only businesses, as defined by

ordinance.”

Coates City Ordinances 36 and 40 are too voluminous

in nature to set forth here. They are contained in the Appendix

at A.194-A 230.

STATEMENT OF THE CASE

Petitioners and their predecessors in title have operated

Jake's Bar in Coates, Minnesota, since January of 1992.' In

1994, the City of Coates enacted ordinance No. 21, by and large

relegating so-called “sexually oriented businesses” to the

agricultural zone and calling for the amortization of non-

conforming uses by December 31, 1996.

In December of 1996, Petitioners commenced an action

in Dakota County District Court challenging the

constitutionality of the 1994 zoning ordinance, an action which

Respondent removed to United States District Court for the

District of Minnesota. On April 13, 1998, the United States

1See complaint, Appendix at A.50.

District Court for the District of Minnesota issued an order and

memorandum declaring ordinance No. 21 to be unconstitutional

under the First and Fourteenth Amendments to the United

States Constitution.” 7

At issue in the instant case are two subsequent

ordinances, the first, ordinance No. 40, enacted on July 10,

2000, reenacted the zoning ordinance and called for the

amortization of non-conforming uses, of which Petitioners’ was

the only such use, by January 31, 2001.’

The second ordinance, ordinance No.36, called for the

licensure of so-called “sexually oriented businesses.”

The zoning ordinance, with its amortization provision,

was enacted pursuant to Minn. Stat. Sec. 462.357, Subd. Ic,

supra, which, as already noted, absolutely prohibits

municipalities from enacting, amending, or enforcing municipal

ordinances calling for the elimination of non-conforming uses by

2This history is set forth in the Eighth Circuit opinion, 284 F.

3d at 886-887, Appendix at A.3-A.4. In the interest of

brevity, documents in the earlier litigation are not included in

the Appendix. |

3Sce Appellant’s Appendix at A.223.

amortization, but contains an exemption for “adults-only

bookstores, adults-only theaters, or similar adults-only

businesses, as defined by ordinance.” The complete legislative

history of this particular provision, enacted in the 1999 Session

of the Minnesota Legislature, is set forth in the Appendix at

A.80-A.167. That legislative history indicates that the “‘adults-

only” exception to the ban on amortization was enacted as a

floor amendment on the Minnesota Senate on April 8, 1999.

Appendix at A.158-A.160. The history of the provision,

including the “adults-only” exemption plainly reveals that it was

enacted without any evidence whatsoever that “adult uses”

cause adverse secondary effects at all, much less any evidence

that such uses causes adverse secondary effects which differ in

either degree or in kind from other non-conforming zoning uses

otherwise subject to amortization.

The record reflects that the City of Coates, in enacting

its amortization ordinance, went even further than the

Minnesota Legislature, in that it enacted its amortization

ordinance in the face of evidence that the only adult use to be

amortized, to-wit: Petitioners’ establishment, had caused no

adverse secondary effects in its eight years of existence. Prior

to enacting the amortization provision with respect to Jake’s,

the Coates City Council received an uncontradicted report from

planner R. Bruce McLaughlin indicating that, for the four- year

period from 1992 to 1996, property values in the area of Jake’s

had increased by 34.83 percent, while property values in the

area surrounding the House of Coates, a nearby establishment,

had increased by 11.61 percent during the same period.

Appendix at A.77-A.78. During the same period of time,

Jake’s received 19 visits from police, some 14 of which

generated police reports, while the House of Coates had 13

police calls, sorme 9 of which generated police reports.

‘Appellants’ Appendix at A.78-A.79. However, virtually the

entire difference between Jake’s and the House of Coates was

attributable to the fact that when Jake’s first opened for

business in 1992, the current Mayor of the City of Coates

posted, and tried to enforce “no parking” signs in front of the

establishment, without authorization by any City Council action.

Id. at A.79, A.68-A.69.

The only attempt by the City of Coates to dispute the

McLaughlin statistics arose out of a memorandum prepared on

October 29, 1999, by city attorney Michael Molenda, Appendix

at A.231-A.245, in which Molenda alleged that Jake’s was

responsible for 44.7 percent of all criminal prosecutions over a

five-year period and for some 70 percent of all prosecution

costs.

However, in a responsive affidavit by Petitioner Richard

J. Jacobson, it was plainly established that those numbers were

extremely inflated and distorted. In that affidavit, Petitioner

Jacobson points out that of the 17 prosecutions alleged by

Molenda to be “Jake’s related,” five, or nearly one-third, and

$5,705.68 of the $9,211.70 in prosecution costs, arose out of a

single incident, which resulted in a judgment of acquittal at the

end of the state’s case. If this single incident were removed

from the calculation, there would have been only 33

prosecutions with 12 Jake’s-related.

Moreover, in at least 3 of the 12, the relationship to

Jake’s was strained best. For example, a DWI prosecution was

attributed to Jake’s because a driver with a stalled vehicle was

walking toward Jake’s to us2 the phone; a burglar alarm

response was attributable to Jake’s, despite the fact that Jake’s

did not have a burglar alarm at the time; and an incident on

March 1, 1999, was attributable to Jake’s because it involved

the same Defendant who had struck a motor vehicle in Jake’s

parking lot 7 months earlier. As a result, if these dubious

incidents were removed from the calculation, Jake’s would be

responsible for only 9 of the 33 criminal prosecution over five

years, something not terribly out of the ordinary, given the fact

that there are three commercial establishment in the city at

which cnmes are likely to occur, and Jake’s would be

responsible for fewer than one-third of those crimes. See

Appendix at A.246-A.250.

The licensing ordinance prohibits any person from

owning or operating a sexually oriented business without a

license.*

Under Sec. 508.10, Appendix at A.203-A.204, a license

application must be granted, unless one of eight disqualification

factors exists, including that the applicant “has had a conviction

of a felony or gross misdemeanor relating to sex offenses,

obscenity offenses, or adult uses in the past five (5) years...”

Under Sec. 508.17(5), a license may be suspended for

up to sixty days if the licensee conducts the business “in such a

4See Sec. $08.05, Appendix at A.198.

manner as to constitute a breach of the peace or to constitute a

menace to the health, safety or general welfare of the

community.” Appendix at A.211,

The fee for the sexually oriented business license is set

in Sec. 2 of the ordinance at $2,000, plus a $500 investigation

fee. Appendix at A.213.

Under Sec. 508.12D, with respect to establishments

providing live entertainment, among the restrictions imposed are

a prohibition against providing entertainment at a distance

closer than six feet from a patron, a prohibition against soliciting

gratuity or pay from a patron, and a prohibition against a patron

giving any gratuity to a performer, Appendix at A.207-A 208.

The record is devoid of any evidence to support a

factual basis for any of the foregoing restrictions. Indeed,

Molenda’s own report plainly indicates that in its years of

existence, there has never been a prostitution arrest at Jake’s.

Appendix at A.231-A.245. ,

Concerning the impact of these restrictions, the

undisputed evidence before the trial court was that such

restrictions would be immediate, devastating and substantially

restrict the availability of constitutionally protected speech at

Jake’s establishment. According to an undisputed affidavit

submitted by Appellant Richard J. Jacobson, because of

relatively small size of the club, implementation of a six-foot

separation requirement between dancers and patrons would

eliminate roughly two-thirds of the seating capacity of 120

persons.*

Also undisputed was the testimony Paul Bern, an

executive with the Deja Vu Corporation, indicating that

implementation of such requirements in the State of Washington

has resulted in devastating financial losses, Bern indicating that

he is not aware of a single adult entertainment establishment

anywhere in the United States of America which has been able

to operate profitably when confronted with such distance

restrictions. Appendix at A.170-A.192.

The District Court upheld the validity of both the

“adults-only” exemption to the statutory prohibition against

amortization, the zoning provisions, and the licensing

provisions. The Court of Appeals affirmed in all respects,

5See Appendix at A.70. The same affidavit notes that on

many occasions, frequently on weekends, the bar is often

filled to capacity.

except to find that Petitioners lacked standing to challenge the

disqualification from licensure by those with criminal

convictions. See 284 F. 3d at 890, Appendix at A.10-A.11.

REASONS FOR GRANTING THE WRIT

The Eighth Circuit’s decision upholding the “adults-

only” xemption from the otherwise absolute prohibition against

amortization, on the basis of “deferential rational-basis review,”

is directly at odds with every decision with this Court, most

notably this Court’s recent decision in City of Los Angeles v.

Alameda Books, Inc., 535 U.S.___, 122 S. Ct. 1728 (May 13,

2002), holding that such “content correlated” restrictions are,

at minimum, subject to intermediate scrutiny. The decision is

also in conflict the Eleventh Circuit’s decisions in Ranch House,

Inc. v. Amerson, 238 F. 3d 1273 (11" Cir. 2001), and

Flanigan's Enterprises v. Fulton County, Ga., 242 F. 3d 976

(11® Cir. 2001), in that it was enacted with neither findings nor

evidence that it was based upon a “secondary effects” rationale.

Likewise, the amortization ordinance itself is in direct

conflict with both this Court’s decision in Alameda Books and

6284 F. 3d at 889. Appendix at A9.

the Eleventh Circuit’s decision in Flanigan's Enterprises, where

summary judgment was upheld in the face of a genuine factual

dispute as to the evidentiary basis of the city’s “secondary

effects” determination.

To the extent the licensing. provisions permit the

suspension of a license in the unfettered discretion of the City

Council, they are at odds with the decisions of this Court in City

of Lakewood v. Plain Dealer Publishing Co., 485 U.S. 750

(1988), and J’orsyth County, Ga. v. Nationalist Movement, 505

U.S. 123 (1992), and the decision of the Sixth Circuit in Last

Brooks Books, Inc. v. City of Memphis, 48 F. 3d 220 (6" Cir.

1995).

In holding that Petitioners lacked standing to challenge

the disqualification provisions of the ordinance, in the absence

of a showing that they would be actually disqualified, despite

the fact that the disclosure and license fee provisions are

directly related to those disqualification provisions, the court’s

decision is in conflict with the Seventh Circuit's decisions in

Genusa v. City of Peoria, 619 F. 3d 1203 (7* Cir. 1980), and

Schultz v. City of Cumberland, 228 F. 3d 831 (7" Cir. 2000).

The court’s decision imposing upon Petitioners the

burden of proving the unreasonableness of a license fee which

is a precondition for the exercise of First Amendment nghts, is

directly in conflict with the decisions of this Court in Murdock

v. Pennsylvania, 319 U.S. 105 (1943), and United States v.

Playboy Entertainment Group, Inc., $29 U.S, 803 (2000).

Finally, the court’s upholding the distance restrictions

and prohibitions against gratuities, notwithstanding the

undisputed evidence as to the impact it would have in.

restraining First Amendment rights, is directly contrary to this

Court’s decision in Alameda Books.

I. THE “ADULTS-ONLY” EXEMPTION TO

THE OTHERWISE ABSOLUTE PROHIBITION ON

AMORTIZATION IS INCONSISTENT WITH

DECISIONS OF THIS COURT AND OF OTHER

FEDERAL CIRCUITS.

A. ABSOLUTELY NO AUTHORITY EXISTS

FOR THE PROPOSITION THAT A “CONTENT

CORRELATED” RESTRICTION ON SPEECH CAN BE

SUBJECTED ONLY TO “DEFERENTIAL RATIONAL-

BASIS REVIEW.”

It has long been the law in Minnesota that when a

zoning restriction is enacted or amended, rendering an existing

use unlawful, preexisting uses rendered unlawful by the zoning

change must be permitted to remain or taken by eminent

domain. See, for example, Freeborn County v. Claussens, 295

Minn. 96 (1972), and Oswalt v. Ramsey County, 371 N.W. 2d

241 (Minn. App. 1985). However, Minnesota courts have

recognized that, consistent with the Fifth Amendment

prohibition against taking without just compensation, lawful

non-conforming uses can be amortized, so long as the

amortization period permits the recovery of the property

owner’s initial investment. See AVR, Inc. v. City of St. Louis

Park, 585 N.W. 2d 411 (Minn. App. 1998), pet for rev. denied

(Minn. Dec. 15, 1998).

In direct response to the A VR decision, the 1999 Session

of the Minnesota Legislature enacted Minn. Stat. Sec. 462.357,

Subd. lc, absolutely prohibiting the enactment or enforcement

of amortization provisions. However, at the 11™ hour, an

arnendment was added thereto, exempting from the otherwise

absolute prohibition against amortization “adults-only

bookstores, adults-only theaters, and similar adults-only

businesses as defined by ordinance.” Appendix at A.158-A. 160.

Thus, the only uses for which amortization were permitted are

uses presumptively entitled to the protection of the First

Amendment, premised upon the content of the books, motion

pictures, or live entertainment shown on those premises.’

In Alameda Books, this. Court made it absolutely clear

that zoning regulation, based upon the content of speech, even

assuming it were established to be content-neutral," are subject

to intermediate scrutiny, and not deferential, rational basis

review. See for example, Justice O’Connor’s plurality opinion,

7In Alameda Books, supra, Justice Souter, in his concurning

opinion, quite accurately called such restrictions, if not

“content-based,” at least “content correlated,” See 122 S. Ct.

at 1746, Souter, J. dissenting.

8In Alameda Books, both plurality and dissenting opinion

made it clear that content-based regulations are subject to

strict scrutiny. See, for example, the plurality opinion’s

assertion that content-based regula’ ions are “considered

presumptively invalid and subject to strict scrutiny.” 122 S.

Ct. at 1733. See also the dissenting opinion of Justice

Souter, stating: “A restriction based on content survives only

on a showing of a necessity to serve a legitimate and

compelling governmental interest, combined with the least-

restrictive narrow tailoring to serve it [Citation omitted. J;

since merely protecting listeners from offense at a message is

not a legitimate interest of government [Citation omitted. ],

strict scrutiny leaves few survivors.” Id. at 1745, Souter, J.,

dissenting.

asserting that, “Renton requires that municipal ordinances

require only intermediate scrutiny if they are content neutral.”

[Citation omitted. ] Id. at 1737.

Likewise, Justice Kennedy, whose concurring opinion

provided the necessary fifth vote for the result reached in

Alameda Books, stated that even though a zoning regulation

may be defined in terms of the content of speech:

“A zoning regulation designed to decrease

secondary effects and not speech should be

subject to intermediate rather than strict

scrutiny.” Id. at 1741, Kennedy, J. concurring.

Finally, Justice Souter, in his dissenting opinion, and

suggests that such ordinances stand or fall “on the result of

what our cases speak of as intermediate scrutiny...” Id. at 1744,

Souter, J. dissenting.

All of these opinions make it clear that the notion that

an exemption to an otherwise complete ban on amortization of

non-conforming uses, defined solely on the basis of the content

of constitutionally protected speech, is to be Judged by

“deferential, rational basis review” has absolutely no support on

this Court.

B. THE ENACTMENT OF THE “ADULTS-

ONLY WITHOUT ANY FINDING OR EVIDENTIARY

SHOWING TYING IT TO A “SECONDARY EFFECTS”

RATIONALE VIOLATES THE FIRST AMENDMENT.

Tn holding that the Minnesota Legislature could enact a

clearly “content correlated” exemption to an otherwise absolute

prohibition against amortization of non-conforming uses,

without any explicit finding or evidentiary showing that the

exemption had its basis in a “secondary effects” theory, the

Eighth Circuit rendered a decision clearly at odds with the

holding of both the Eleventh Circuit in Ranch House, Inc. v.

Amerson, supra, 238 F. 3d 1273 (11 Cir. 2001), and of this

Court in Alameda Books. In Ranch House, the Eleventh Circuit

stated:

“We are aware of no case where a court has

adopted that proposition or sustained a

secondary effects argument in the absence of

any indication that the relevant legislative body

intended to ameliorate such effects (footnote

omitted, emphasis in original). Secondary

effects doctrine is an exception to the general

tule that a statute which on its face distinguishes

among particular types of speech or expression

by content is subject to strict scrutiny. [Citations

omitted. ] Adopting Defendants’ broad argument

would permit the exception to swallow the rule,

: and would permit the proscription of protected

speech far in excess of what the, First

Amendment allows. Additionally, Defendants

argument renders meaningless the rule that

‘[w]Jhen the Government restncts speech, the

Government bears the burden of proving the

constitutionality of its actions.’ [Citation

omitted.] Under Defendants’ argument, a

government would have no burden whatsoever

to invoke the secondary effects doctrine and

thereby obtain lesser judicial scrutiny for

legislation restricting First Amendment nghts.”

Id. at 1282-1283.

Secondly, the decision is plainly at odds with this

Court's decision in Alameda Books.

Of key importance is the following language in

the

plurality opinion of Justice O’Connor:

“In Renton,...[wJe held that municipality may

rely on any evidence that is ‘reasonably believed

to be relevant’ for demonstrating a connection

between speech and a substantial, independent

government interest [Citations omitted. ] This is

not to say that a municipality can get away with

shoddy data or reasoning. The municipality’s

evidence must fairly support the municipality’s

rationale for its ordinance. If Plaintiffs fail to

cast direct doubt on this rationale, either by

demonstrating that the municipality’s evidence

does not support its rationale or by furnishing

evidence that disputes the municipality's factual

firidings, the municipality meets the standard set

forth in Renton, If Plaintiffs succeed in casting

doubt on a municipality’s rationale in either

manner, the burden shifts back to the

municipality to supplement the record with

evidence renewing support for a theory that

justifies its ordinance.” [Citation omitted. } 1d. at

1736.

Clearly, with respect to the “adults-only” exemption to

the otherwise absolute prohibition on amortizing non-

conforming uses contained in Minn. Stat. Sec, 462.357, Subd.

1c, the state did not come close to meeting its evidentiary

burden.

The State Legislature, in enacting the “adults-only”

exemption didn’t just rely upon “shoddy data or reasoning,” it

relied upon no data or reasoning whatsoever. The legislative

record is absolutely devoid of any evidence whatsoever that the

legislature adopted the “adults-only” exemption to the

otherwise absolutely prohibition on amortization for any reason

other than objection to the content of the materials shown. This

clearly would not pass the most fundamental test set forth in the

O’Connor plurality opinion.’

Ii. THE EIGHTH CIRCUIT’S DECISION IN

GRANTING SUMMARY JUDGMENT ON THE

AMORTIZATION ORDINANCE ITSELF ACTED

CONTRARY TO APPLICABLE DECISIONS OF THIS

COURT AND OF OTHER FEDERAL CIRCUITS.

As already noted, supra, in her plurality opinion in

Alameda

Books, Justice O’Connor noted that when a municipality’s

secondary effects rationale is challenged by proponents of a

First-Amendment protected business, either by challenging the

9To be sure, this standard clearly represents only the stated

view of only four justices, to-wit: Justice O’ Connor, Chief

Justice Rehnquist, Justice Scalia and Justice Thomas.

However, it is clear that the four dissenting Justices, Souter,

Stevens, Ginsburg, and Breyer, would require a far more

stringent evidentiary showing on the part of government. See

for example, Id. at 1746-1747, Souter J. dissenting.

Consequently, it is clear that the foregoing quotation from the

plurality opinion represents the bare minimum which a

majority of the United States Supreme Court would require in

order to justify an adult entertainment regulation premised on

a secondary effects theory. It is clearly the standard which

now governs the instant case.

validity of the municipality’s evidence, or by producing contrary

evidence, the burden shifts to the municipality to produce

evidence establishing the validity ofits regulation. See Alameda

Books, 122 S. Ct. at 1736. Likewise, Justice Kennedy, in his

concurring opinion, clearly held that such disputes are to be

resolved by a trial, and not by summary judgment. See Id. at

1743-1744, Kennedy, J. concurring.

In the instant case, Petitioners produced substantial

evidence that its use was causing no adverse secondary effects

and had not over eight years of operation. Moreover, when the

city attempted to refute that evidence with plainly exaggerated

and inflated statistics, Petitioners exposed them. Clearly, under

Alameda Books, at minimum, a trial was required.

Apart from being plainly inconsistent with this Court’s

decision in Alameda Books, the Eighth Circuit decision is also

directly contrary to the Eleventh Circuit’s decision in

Flanigan’s Enterprises v. Fulton County Ga., 242 F. 3d 976

(11 Cir. 2001), where substantial and uncontradicted evidence

as to the absence of secondary effects was held to invalidate an

ordinance notwithstanding nominal reliance upon virtually the

same foreign studies purportedly relied upon by the City of

Coates in the instant case.'°

Il. THE LICENSING PROVISIONS VIOLATE

THE FIRST AMENDMENT.

A. PERMITTING THE SUSPENSION OF A

LICENSE IN THE UNFETTERED DISCRETION OF

MUNICIPAL GOVERNMENT RENDERS THE

ORDINANCE UNCONSTITUTIONAL UNDER THE

FIRST AMENDMENT.

As already noted, supra, the ordinance permits the

suspension of an adult entertainment license upon the

determination that the licensee conducted its business “in such

a manner to constitute...a menace to the health, safety, or

10In this regard, it should be noted that the instant case is in a

far different posture than was City of Renton v. Playtime

Theaters, Inc., 457 U.S. 41 1986), in which this Court held

that municipalities could reasonably rely upon the results of

studies from other jurisdictions, In Renton, there were no

pre-existing adult uses, and the ordinance was of prospective

effect only, making it eminently reasonable to rely upon

Studies from other jurisdictions. By contrast, Petitioners’ use

had been present for some eight years at the time the final

zoning ordinance was enacted, giving the city extensive local

experience in determining whether or not the use was in fact

causing adverse secondary effects and thus needed to be

amortized. Compare, XLP Corp. v. County of Lake, 743

N.E. 2d 162 (Ill. App. 2 Dist 2000),

general welfare of the community,” Appendix at A.211,

language indistinguishable from that universally held to

constitute an unlawful prior restraint since it gives the city

unbridled discretion over the exercise of First Amendment

rights. Compare Shuttlesworth v, City of Birmingham, 395

U.S. 147 (1969); City of Lakewood v. Plain Dealer Publishing

Co., supra, 485 U.S. 750 (1988); and Forsyth County, Ga. vy.

Nationalist Movement, supra, 505 U.S. 123 (1993).

The Eighth Circuit attempts to distinguish all of these

cases by asserting that a difference exists between allowing the

government unbridled discretion to make an initial grant of a

license and allowing it unbridled discretion to suspend a license

once granted, 284 F, 3d at 890, Appendix at A.10. The Eighth

Circuit cites no authority for the proposition that unbridled

discretion to suspend a license is immune from First

Amendment scrutiny, and the proposition makes no sense.

Indeed, the prohibition against unbridled discretion in the

granting of a license would be rendered essentially meaningless,

if municipality could exercise unbridled discretion in removing

a license once granted. Other courts which have faced this

issue have refused to draw such a distinction. Compare City of

Colorado Springs v. 2354, Inc., 896 P. 2d 272 (Colo. 1995),

and Last Brooks Buoks, Inc, v. City of Memphis, supra, 48 F.

3d 220 (6 Cir. 1995), both of which invalidated licensing

ordinances, in part, because of the discretion granted to suspend

a license to engage in protected First Amendment activities.

The Eighth Circuit also asserts that the ordinance in

question is actually “discretion limiting” comparing it to the

Minnesota’s public nuisance statute, prohibiting a condition,

“which endangers the safety, health, morals, comfort or repose

of any considerable members of the public.” 284 F. 3d at 890,

Appendix at A.10. The more appropriate comparison, however,

would be to this Court’s decision in Coates v, City of

Cincinnati, 402 U.S. 611 (1971), invalidating a statute

prohibiting three or more persons to assemble and “conduct

themselves in a manner annoying to persons passing by or

occupants of adjacent buildings.” The Eighth Circuit does not

explain how language which would clearly be declared

unconstitutionally vague under decisions of this Court

meaningfully limits official discretion.

B. THE EIGHTH CIRCUIT’S DECISION THAT

PETITIONERS LACK STANDING TO CHALLENGE

THE DISQUALIFICATION PROVISIONS OF THE

LICENSING ORDINANCE IS CONTRARY TO

DECISIONS OF THIS COURT AND OTHER FEDERAL

CIRCUITS.

To be sure, when the Eighth Circuit held that Petitioners

lacked standing to challenge the disqualification provisions in

the absence of a showing that they would actually be

disqualified thereby, it reached a result similar to that reached

by this Court in

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

‘ However, it is clear that under the rules for standing

adopted by this Court, to-wit: the requirement that Petitioners

suffer an injury in fact and that the interest sought to be

protected is arguably within the zone of interest sought to be

protected or regulated by the constitutional guarantee in

question," Petitioners’ standing is clear. Petitioners plainly

suffer injury in fact by the regulation by virtue of the fact that

they are required to disclose their criminal history, and are in

fact assessed a license fee for the purpose of investigating the

criminal history. See Appendix at A.200-A.201, A.213.

11See for example, FCC v. Sanders Brothers Radio Station,

309 U.S. 470, 473-477 (1940).

In Genusa v. City of Peoria, supra, 619 F. 3d 1203,

1218 (7" Cir. 1980), the court recognized those facts as

sufficient to grant standing. '”

C. THE EIGHTH CIRCUIT DECTSION ON

THE LICENSE FEE IS CONTRARY TO DECISIONS OF

THIS COURT AND OF OTHER FEDERAL CIRCUITS,

As already noted, supra, the licensing ordinance in

question imposed a $2,000 license fee and a $150 investigation

fee to license a “sexually-oriented business.”

Under this Court’s decision in Murdock v.

Pennsylvania, supra, 319 U.S. 105 (1943), this Court clearly

held that is was constitutionally impermissible to license the

right to engage in activity protected by the First Amendment,

and that license fees were plainly limited to that reasonably

necessary to defer the municipality’s actual expenditures in

administering the licensing scheme. Plainly, if the

disqualification provisions were invalidated, there would be

virtually no expenditures to be reimbursed.

In rejecting Petitioners’ arguments, the Eighth Circuit

12The holding of Genusa was recently reaffirmed in Schultz

v. City of Cumberland, supra, 228 F. 3d 831 (7" Cir. 2000).

made two assertions, both of which clearly call for the grant of

certiorari. The first is a proposition that Murduck does not

apply to sexually oriented speech, a proposition for which the

Eighth Circuit found no support, and which is clearly contrary

to the spirit of this Court’s decision in FW/PBS . gupra

according substantial First Amendment protection to the

licensure of sexually oriented speech. 284 F. 3d at 890-891,

Appendix at A.11. Secondly, the Eighth Circuit imposed upoe

the proponents of sexually oriented speech the burden of

proving the unreasonableness of the fee, instead of requiring

government to prove the reasonableness of the restriction on the

First Amendment (|d_), something directly contrary to decisions

of this Court, such as United Siates v. Playboy Entertainment

Group, supra, 529 U.S. 803, 813 (2000), and of other federal

circuits, such as Busey v, District of Columbia, 78 U.S. App

D.C. 189, 148 F. 2d $92 (1943),”

D. THE DECISION UPHOLDING THE

VALIDITY OF THE DISTANCE REQUIREMENTS AND

THE PROHIBITION ON GRATUITIES IS IN DIRECT

13See also New York Times, /nc. v. Arizona Board of

Regents, 20 Ariz. App. 422 (1973)

VIOLATION OF THIS COURT’S MANDATE IN

ALAMEDA BOOKS.

In this case, the Eighth Circuit upheld the validity of a

six-foot separation requirement between dancers and patrons,

and a prohibition against the payment of gratuities from patrons

to dancers, notwithstanding the fact that there was no

evidentiary support for the necessity of such requirements, and

notwithstanding undisputed evidence that such requirements

would eliminate 60% of Petitioners’ seating capacity, and that

no adult entertainment use anywhere in the United States had

been able to operate profitably under such requirements

(Appendix at A 70-A.192). Plainly, such a holding, without

even the benefit of a trial, is directly contrary to this Court’s

decision in Alameda Books, in particular, Justice Kennedy’s

concurring opinion, where he wrote the following concerning

secondary effects regulations of sexually oriented businesses:

“In Renton , the court determined that while

material inside adult bookstores and movie

theaters is speech, the consequent sordidness

outside is not. The challenge is to correct the

latter while leaving the former, as far as

possible, untouched Ia city can decrease the

crime and blight associated with certain speech

by the traditional exercise of its zoning power,

and at the same time leave the quantity and

bil ) , ) tiall

undiminished, there is no First Amendment

objection (emphasis supplied).” 122 S. Ct. at

1739, Kennedy, J. concurring.

Later in his concurring opinion, Justice Kennedy noted

that the objective of such legislation was the suppressing of

secondary effects, “ while leaving the quantity and accessibility

of speech substantially intact (emphasis supplied).” Id. at 1742.

Plainly, when a regulation has had the universal effect of

running adult entertainment establishments out of business, it

plainly does not leave the quantity and accessibility of speech

essentially intact. At minimum, there was a factual dispute

concerning these regulations mandating a trial under Alameda

Books.‘*

14Obviously, when the Eighth Circuit rendered its decision in

this case on March 26, 2002, and denied rehearing on May 3,

2002, it did not have the benefit of this Court’s decision in

Alameda Books, which was not rendered until May 13.

Plainly, an appropriate disposition, if certiorari for argument

is not granted is to grant certiorari, vacate the Eighth

Circuit’s decision and remand it for reconsideration in light of

Alameda Books.

ONCLUSION

For all of the foregoing reasons, the Petition for Writ of

Certiorari should be, in all respects, granted.

Respectfully submitted,

RANDALL TIGUE LAW OFFICE, P.A.

Randall D.B. Tigue

Attorney for Petitioners

Minnehaha Professional Building

3960 Minnehaha Avenue South

Suite 100

Minneapolis, MN 55406

612/825-0936

Dated: July 29, 2002

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

No. 01-1869

Jake’s Ltd., Inc.; Richard J.

Jacobson,

Plaintiffs-Appellants. Appeal from the United

9. States District Court for

City of Coates, the District of Minnesota

Defendant-Appellee.

Submitted: November 12, 2001

Filed: March 26, 2002

Before LOKEN, LAY, and HEANEY, Circuit Judges.

————~

LOKEN, Circuit Judge.

Jake’s Bar in Coates, Minnesota, has featured live

nude dancing since early 1992. Coates is a town of 182

people located fifteen miles southeast of St. Paul. The

Coates City Council enacted a zoning ordinance in 1994

that strictly limited the location of sexually oriented

businesses. Jake’s sued, and the district court declared

that the ordinance unconstitutionally infringed the First

Amendment protection afforded to nude dancing as a form

of expressive conduct. The City then enacted an amended

zoning ordinance and a restrictive licensing ordinance.

Jake’s sued again. Kuling on cross motions for summary

judgment, the district judge upheld the current ordi-

nances. Jake’s appeals: We modify one portion of the

judgment and affirm.

I. Background.

Nude dancing is expressive conduct protected by the

First Amendment, “though . . . only marginally so.” Barnes

v. Glen Theatre, Inc., 501 U.S. 560, 565-66 (1991) (plural-

ity opinion). The Supreme Court has held that state and

local laws prohibiting public nudity may constitutionally

be applied to businesses such as Jake's, despite the limited

First Amendment protection afforded totally nude danc-

ing. See City of Erie v. Pap’s A.M., 529 U.S. 277, 296-302

(2000) (plurality opinion); Barnes, 501 U.S. at 567-72

(plurality opinion). But the City of Coates elected to

proceed differently. Rather than ban public nudity alto-

gether, its 1994 ordinance regulated the time, place, and

manner in which Jake’s as a sexually oriented business

may present live nude dancing to its customers. It is now

well-established that this type of regulation is permissible

under the First Amendment provided the ordinance is

justified without reference to the content of the regulated

speech, is designed to promote a substantial government

interest, and allows reasonable alternate avenues for

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

475 U.S. 41, 48-50 (1986). We have applied this test in

numerous cases in which various adult entertainment

businesses challenged local zoning and licensing ordi-

nances. See BZAPS, Inc. v. City of Mankato, 268 F.3d 603,

605 (8th Cir.2001) (nude dancing); IL@ Investments, Inc. v.

City of Rochester, 25 F.3d 1418, 1416 (8th Cir.) (adult

bookstore), cert. denied, 513 U.S. 1017 (1994); Ambassador

Books & Video, Inc. v. City of Little Rock, 20 F.3d 858, 861-

63 (8th Cir.) (adult bookstore), cert. denied, 513 U.S. 867

(1994); Holmberg v. City of Ramsey, 12 F.3d 140, 142 (8th

Cir.1993) (adult bookstore and novelty shop), cert denied,

513 U.S. 810 (1994); Alexander v. City of Minneapolis, 928

F.2d 278, 283-84 (8th Cir.1991) (adult theater).

The 1994 zoning ordinance provided that sexually

oriented businesses must be located within an agricultural

zone and must be at least 750 feet from specified uses,

including other sexually oriented businesses, single- or

multi-family dwellings, churches, schools, bars, and public

parks. The ordinance also required all nonconforming

sexually oriented businesses to cease operations by De-

cember 31, 1996. This type of delayed prohibition is known

as an amortization provision because it justifies the

removal of a nonconforming use by giving the owner a

period of time to recoup (amortize) its investment before it

must relocate. Jake’s present location did not comply with

the 1994 ordinance because it is not in an agricultural

zone and is less than 750 feet from a residence. Thus, the

amortization provision if valid would force Jake’s to

relocate.

Jake’s filed a lawsuit in state court challenging the

1994 ordinance in late 1996. After the City removed, the

district court declared the ordinance unconstitutional

because the requirement that a portion of any new subdi-

vision of agriculturally zoned land be donated as parkland

did not leave any site to which Jake’s could lawfully

relocate (as the ordinance prohibited Jake’s from locating

near a public park). However, Judge Richard H. Kyle’s

opinion further stated:

[I]f Coates’ requirement for land dedication for

subdivision were altered either to allow some

non-discretionary alternative (equivalent fee in

lieu of the land dedication) or to limit the land

dedication requirement to certain types of subdi-

vision (i.e., subdivisions over a certain size),

much of the land in the four quadrants [contain-

ing possible relocation sites] would be rendered

available for a sexually oriented business. The

Court sees the discretionary aspect of the waiver

of the land dedication requirement to be the only

obstacle to Coates’ zoning ordinance passing con-

stitutional muster.

Rather than appeal Judge Kyle’s decision, the City

amended its zoning ordinance to correct this constitutional

deficiency by making the parkland dedication requirement

nondiscretionary and permitting a developer to make a

“cash park dedication” in lieu of dedicating land. The City

also enacted a licensing ordinance imposing numerous

restrictions on sexually oriented businesses. As relevant to

this appeal, the ordinance restricted persons with a

criminal history for sex related offenses from obtaining a

license, imposed license and investigation fees, required

that dancers and patrons be at least six feet apart at all

times, and prohibited dancers from soliciting and custom-

ers from offering gratuities.

Jake’s commenced this action in state court challeng-

ing the new zoning and licensing ordinances. The City

again removed, and the case was assigned to Judge Dono-

van W. Frank. On cross-motions for summary judgment,

Judge Frank upheld the challenged ordinances but stayed

his order pending appeal, thereby permitting Jake’s to

remain open. Jake’s, Ltd. v. City of Coates, 176 F.Supp.2d

899, 905-11, and 169 F.Supp.2d 1014, 1017-19 (D. Minn.

2001). Jake’s appeals; renewing its challenges to the

current zoning and licensing ordinances.

II. Zoning Issues.

City of Renton requires that an ordinance restricting

adult entertainment be content-neutral, promote a sub-

stantial government interest, and allow reasonable alter-

nate avenues for communication. 475 U.S. at 48-50. Two of

those requirements are not at issue in this case. Jake’s

concedes the ordinances at issue are content neutral. See

also ILQ, 25 F.3d at 1416 (even if an ordinance regulates

only sexually oriented businesses, it is content-neutral “if

its purpose is to lessen undesirable secondary effects

attributable to those businesses”). And the final aspect of

the City of Renton test — whether the zoning ordinance

allows reasonable alternative avenues for communication

— is no longer an issue because Judge Kyle’s initial deci-

sion told the City how to amend the ordinance to cure a

prior defect, the City amended the ordinance accordingly,

and Jake’s does not argue it has no reasonable alternative

site where it may now relocate.

Jake’s argues that the Coates ordinance fails the City

of Renton test because the City had an insufficient eviden-

tiary basis to conclude that its zoning restrictions further

a substantial government interest. The ordinance is

intended to reduce criminal activity, prevent the deteriora-

tion of residential neighborhoods, and eliminate the

“dehumanizing influence” that sexually oriented busi-

nesses may have on churchgoers, park users, and daycare

clients. These are commonly known as the adverse “secon-

dary effects” of adult entertainment enterprises. It is well-

settled that a city’s interest in preserving the quality of

urban life and the character of its neighborhoods justifies

zoning restrictions intended to minimize such effects. See

Young v. American Mini Theatres, Inc., 427 U.S. 50, 71

(1976) (plurality opinion).

In making its secondary effects findings, the City

relied on previous studies by Phoenix, Seattle, Indianapo-

lis, Rochester (Minnesota), St. Paul, and the Minnesota

Attorney General. The City also relied on a 1999 memo-

randum by the City Attorney reviewing these studies and

reporting that 17 of 38 crimes prosecuted by the City since

December 1993 were “Jake’s related.” Jake’s countered

with an expert’s study opining that the City Attorney

erred in attributing many of the 17 crimes to Jake's.

Relying on this study, Jake’s argues that the police activity

due to Jake’s is on a par with that at The House of Coates,

a local bar that does not have nude dancing, and therefore

the City’s crime statistics do not support regulating Jake’s

on the basis of this secondary effect. In addition, pointing

to evidence that property values near Jake’s have in-

creased in recent years, Jake’s argues the City has no

evidence that sexually oriented businesses contribute to

economic blight. Therefore, Jake’s concludes, the City

Council had no evidence supporting its conclusion that the

zoning ordinance would reduce adverse secondary effects.

We disagree.

Leaving aside whether the record is adequate to show

the adverse secondary effects of crime and economic blight,

Jake’s argument is flawed because it ignores the City’s

reliance on studies showing that proximity to sexually

oriented businesses results in adverse secondary effects on

residential neighborhoods, churches, schools, and other

land uses that would be lessened by an ordinance impos-

ing distance restrictions as great or greater than the 750

foot restriction in the Coates ordinance. The appropriate

location of various land users is a prime objective of

municipal zoning. And a city need not conduct its own

studies to demonstrate that a proposed ordinance will

serve to reduce adverse secondary effects, “so long as

whatever evidence the city relies upon is reasonably

believed to be relevant to the problem that the city ad-

dresses.” City of Renton, 475 U.S. at 51-52. See City of

Erie, 529 U.S. at 297; Young, 427 U.S. at 55. We have

repeatedly upheld as reasonable the reliance on secondary

effects studies from other communities to justify distance

restrictions of this type. See ILQ, 25 F.3d at 1417-18;

Ambassador Books, 20 F.3d at 860; Holmberg, 12 F.3d at

142. .

Jake’s argues that this case is like Flanigan’s Enter.,

Inc. of Ga. v. Fulton County, 242 F.3d 976 (11th Cir. 2001),

petition for cert. filed, 70 U.S.L.W. 3091 (July 23, 2001)

(No. 01-144), where the court reversed a grant of summary

judgment because the County had not reasonably relied on

studies from other communities. But Flanigan’s is distin-

guishable in two critical respects. First, it involved a total

ban on nude dancing in establishments that serve liquor,

not a locational zoning restriction. 242 F.3d at 974. Thus,

the adverse secondary effects from proximity to churches,

schools, and other specific land uses were not at issue.

Second, in Flanigan’s, the County’s own studies refuted

the presence of the secondary effects on which it relied.

242 F.3d at 986. Here, though Jake’s attacks the City’s

secondary effects findings, the City contends they are

supported by the secondary effects evidence, including the

City Attorney's 1999 report. Like the district court, we

conclude the City relied upon secondary effects evidence it

“reasonably believed to be relevant to the problem” it

addressed in the zoning ordinance. City of Renton, 475

U.S. at 51-52.

Having no viable challenge to the Citys zoning

restrictions under City of Renton, Jake’s attacks the

amortization provision in the zoning ordinance. Jake’s first

argues that the state statute permitting municipalities to

use amortization as a means of eliminating nonconforming

adult businesses is unconstitutional. See Minn. Stat.

§ 462.357, subd. Ic. (2000). This argument is without

merit. We have repeatedly upheld amortization provisions

requiring nonconforming adult entertainment businesses

to relocate as part of a municipality’s valid time, place, and

manner regulation of such businesses. See Ambassador

Books, 20 F.3d at 865; Holmberg, 12 F.3d at 142, 144;

Alexander, 928 F.2d at 283-84. Here, the state statute

merely authorizes municipalities to amortize nonconforming

sexually oriented businesses. The relevant question is

whether a municipality’s use of that authority complies

with the City of Renton standards. The State of Minnesota

was under no constitutional obligation to study secondary

effects in the abstract before granting this authority to

local governmental bodies.

Jake’s further argues that Coates may not invoke the

statutory exception and impose amortization on Jake's

because it does not qualify as a “similar adults-only

business” under state law. The argument is contrary to the

plain language of the statute,’ but Jake’s attempts to avoid

' After prohibiting municipalities from using amortization to

eliminate nonconforming uses, Minn. Stat. § 462.537, subd. Ic, provides

that this restriction “does not apply to adults-only bookstores, adults-

only theaters, or similar adults-only businesses, as defined by ordi-

nance.” The Coates zoning ordinance defines a sexually oriented

business as “an adult book store, adult body painting studio, adult

companionship establishment, adult motion picture theater, adult

entertainment facility, adult modeling studio, adult mini motion picture

theater, or adult sauna” and includes definitions of each type of adult

business.

I Re OE ee

this issue of statutory construction by arguing there is no

“constitutional basis” for classifying Jake’s as similar to an

adults-only business, and the statutory language is in any

event unconstitutionally vague. At this point, the argu-

ment becomes a jumble of federal and state law concepts.

The simple and complete answer is that the Coates zoning

ordinance as applied to Jake’s passes muster under City of

_ Renton, and the state statute permitting amortization of

“adults-only” businesses is valid under deferential ra-

tional-basis review. Therefore, we affirm the district

court’s decision that the Coates zoning ordinances regulat-

ing sexually oriented businesses (found in Coates Ordi-

nances Nos. 40 and 41) are constitutional.

III. Licensing Issues.

A. Jake’s first argues that the licensing provisions in

Coates Ordinance No. 36 constitute an unconstitutional

prior restraint on free expression. “[I]n the area of free

expression a licensing statute placing unbridled discretion

in the hands of a government official or agency constitutes

a prior restraint and may result in censorship.” City of

Lakewood v. Plain Dealer Publ’g Co., 486 U.S. 750, 757

(1988). Jake’s does not challenge the provisions in Ordi-

nance 36 governing issuance of an initial license, which

impose time constraints on the approval process, require

the use of objectively verifiable criteria, and provide for

prompt judicial review, the constitutional requirements

enumerated in the various opinions in FW/PBS, Inc. v.

City of Dallas, 493 U.S. 215, 224-27, 239, 246, 249 (1990).

Instead, Jake’s argues that Ordinance 36 confers unbri-

dled discretion in authorizing the City to suspend licenses

if a sexually oriented business is conducted “in such a

A10

manner as... to constitute a menace to the health, safety,

or general welfare of the community.”

Jake’s cites no authority for the proposition that the

prior restraint standards of City of Lakewood and

FW/PBS apply equally to license suspensions and revoca-

tions. The proposition is inherently suspect, because

license revocation is necessarily less of a prior restraint

than the initial licensing process. But in any event, we

reject as frivolous the contention that an ordinance au-

thorizing revocation if the licensee is “a menace to the

health, safety, or general welfare of the community”

confers unbridled discretion. This is a specific discretion-

limiting standard not unlike the definition of a public

nuisance long known to the law. See, e.g., Minn. Stat.

§ 609.74(1) (defining public nuisance as a condition which

“endangers the safety, health, morals, comfort, or repose of

any considerable number of members of the public”).

Jake’s further objects that the license renewal provi-

sion does not provide for a stay pending appeal if renewal

is denied. Jake’s did not raise this issue in the district

court, and we decline to consider it.

B. Jake’s next argues that Ordinance 36 unconstitu-

tionally provides that a license may not issue to any

person who “has had a conviction of a felony or a gross

misdemeanor or misdemeanor relating to sex offenses,

obscenity offenses, or adult uses in the past five (5) years.”

A similar restriction was upheld in DLS, Inc. v. City of

Chattanooga, 107 F.3d 403, 414 (6th Cir. 1997). However,

Jake’s lacks standing to raise the issue because it made no

showing that the restriction will disable its owners from

obtaining a license. Therefore, the district court lacked

jurisdiction to consider the issue, and we must vacate the

All

grant of summary judgment upholding this provision in

the ordinance. See FW/PBS, 493 U.S. at 234-35.

Cc. Jake's next argues that Ordinance 36 imposes «

$2,500 fee that is constitutionally unreasonable. When

Hampshire, 312 U.S. 569, 576-77 (1941). Jake's argues

that this principle extends to the licensing of sexually

oriented businesses, citing three district court decisions

that referred to such fees as implicating “fundamental”

rights. See AAK, Inc. v. City of Woonsocket, 830 F Supp. 99,

105 (D.R.1. 1993); Wendling v. City of Duluth, 496 P Sapp

1380, 1384-85 (D. Minn. 1980); Bayside Enter. Inc «

Carson, 450 F.Supp. 696, 704 (MLD. Pla. 1978). In cur

view, the analogy to Murdock and Cox does not withstand

close analysis in light of the Supreme Court's declaration

may be so large or so discriminatory as to demonstrate

that it is not content neutral. But in other contexts the

prospective licensee has the burden of establishing thet +

license fee is unreasonable. See LCM Enter. Inc. « Toms of

Dartmouth, 14 F.3d 675, 680 (let Cir 1904) Jake's offered

no evidence on this issue, instead simply arguing thet the

City had the burden to prove its fee is revenue neutral On

this record, we conclude the district court's grant of sum».

mary judgment was proper

Al2

D. Finally, Jake's challenges the provisions in

Ordinance 36 requiring that live exotic dancing be con-

ducted on a platform raised at least two feet from the floor

and located no less than six feet from any patron, and

prohibiting the solicitation or offering of gratuities for the

dancers. Several circuits have upheld similar require-

ments as reasonable, content-neutral time, place, and

manner restrictions. See Deja Vu of Nashville, Inc. v.

Metro. Gov't of Nashville & Davidson County, 274 F.3d

377, 396-98 (6th Cir. 2001) (three feet); DLS, 107 F.3d at

408-13 (six feet); Colacurcio v. City of Kent, 163 F.3d 545,

553 (9th Cir. 1998), cert. denied, 529 U.S. 1053 (2000) (ten

feet); Kev, Inc. v. Kitsap County, 793 F.2d 1053, 1061-62

(9th Cir. 1986) (ten feet and no tipping).

Jake's argues that these restrictions are not needed to

combat adverse secondary effects in Coates, pointing to

the lack of arrests for sex crimes at its establishment.

Jake's also contends that distance requirements destroy

“individual patron-focused dancing, a separate and dis-

tinct medium of communication,” relying on expert testi-

mony it presented to that effect. Like our sister circuits,

we conclude these restrictions reasonably further the

government interest in preventing crime. As the Ninth

Circuit observed in Kev, 793 F.2d at 1061:

Separating dancers from patrons would reduce

the opportunity for prostitution and narcotics

transactions.... Preventing the exchange of

money between dancers and patrons would also

appear to reduce the likelihood of drug and sex

transactions occurring on regulated premises... .

While the dancer’s erotic message may be

slightly less effective from ten feet, the ability to

engage in the protected expression is not signifi-

cantly impaired. (footnotes omitted)

Al13

Jake’s further argues these provisions would have a

disastrous effect on its ability to operate because the six-

foot requirement would eliminate two-thirds of the seating

capacity of 120 patrons, eliminate customer access to the

women’s restroom, and require further capacity reductions

to permit access to the men’s restroom. Under the City of

Renton standard, Ordinance 36 must afford Jake’s a

“reasonable opportunity to open and operate.” 475 U.S. at

54. The inquiry is not concerned with the economic impact

of restrictions on a particular business; instead, “we

consider the economic effects of the ordinance in the

aggregate, not at the individual level.” DLS, 107 F.3d at

413. Here, the Coates zoning ordinance is constitutional,

so Jake’s must relocate. Jake’s presented no evidence that

it could not design a viable new facility that would satisfy

the six-foot requirement. It presented evidence that the

no-tipping restriction would reduce profits and adversely

affect the income of the dancers, but that evidence fell far

short of establishing that Ordinance 36 does not provide a

reasonable opportunity to open and operate. Thus, while

the short-term financial impact of these restrictions might

affect implementation of the zoning ordinance’s amortiza-

tion provision — an issue we do not consider — it does not

affect the validity of Ordinance 36.

IV. Conclusion.

The judgment of the district court is affirmed except

the portion that declared section 508.10(5) of Coates

Ordinance No. 36 constitutional. We modify the judgment

to provide that plaintiffs’ challenge to section 508.10(5) is

dismissed for lack of jurisdiction.

Al4

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT

Al5

UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

Civil No.

Jake’s Ltd., Inc.; a 00-192 (DWF/AJB)

Minnesota corporation,

and Richard J. Jacobson,

Plaintiffs. MEMORANDUM

‘ OPINION AND ORDER

The City of Coates, a

municipal corporation,

Defendant.

(Filed Feb. 16, 2001)

Randall D.B. Tigue, Esq., Tigue Law Office, 2940 Pillsbury

Avenue South, Suite 200, Minneapolis, Minnesota 55408,

appeared on behalf of Plaintiffs.

James J. Thomson, Esq. and Joe Y. Yang, Esq., Kennedy &

Graven, 470 Pillsbury Center, 200 6th Street South,

Minneapolis, Minnesota 55402, appeared on behalf of

Defendant.

Introduction

The above-entitled matter came on for hearing before

the undersigned United States District Judge on October

13, 2000, pursuant to Defendant’s and Plaintiffs’ cross-

motions for summary judgment. In the Complaint, Plain-

tiffs allege that the enactment of certain zoning and

licensing provisions is in violation of Minn. Stat.

§ 462.357, Title 42 U.S.C. § 1983, and the First and Four-

teenth Amendments of the United States Constitution.

Plaintiffs concede, however, that Counts I and II of their

Al6

complaint are moot in light of Defendant's ordinance

enactments, on July 10, 2000, subsequent to the initiation

of the current litigation. Consequently, Plaintiffs seek

attorney's fees and costs with respect to Counts I and Il.

Defendant counter-claims requesting declaratory and

injunctive relief stating that certain relevant ordinances

are valid. For the reasons set forth below, Plaintiffs’

motion is denied and Defendant’s motion is granted.

Background

Richard J. Jacobson is the President and fifty-percent

owner of Jake’s Ltd., Inc., a Minnesota corporation that

operates a business known as Jake’s Bar (“Jake’s”). Jake’s

is located at 15981 Clayton Avenue, Coates, Minnesota, a

real estate parcel owned by Mr. Jacobson. Jake’s has been

in operation since January 1992 and has featured and

continues to feature live nude dancing. Both Mr. Jacobson

and Jake’s Ltd., Inc. (“Plaintiffs”) have brought suit

against the City of Coates (“the City”) for enacting zoning

and licensing ordinances that allegedly violate the First

and Fourteenth Amendments of the United States and

Minnesota Constitutions.

In 1994, the City of Coates enacted Ordinance No. 21

which added Section 522 to the City’s code for the regula-

tion of “sexually-oriented businesses.” At the time of

enactment and to date, Jake’s is the only business in

Coates that qualifies as a sexually-oriented business. In

relevant part, Ordinance No. 21 provided that a sexually-

oriented business could only be located within an agricul-

tural zone and could not be located within 750 feet of

numerous specified structures, including other sexually-

oriented businesses, single- or multi-family dwellings,

Al7

residentially-zoned property, and public parks. The City’s

subdivision regulations required that the subdivision of

agricultural land for conditional uses, of which the opera-

tion of Jake’s was one, be subject to the City Council’s

discretionary requirement that a percentage of the land be

dedicated for public park purposes. In addition, Sections

401 and 402 provided that any business in noncompliance

with the City’s zoning ordinances at the date of enactment

“shall be terminated and become illegal on and after

December 31, 1996.” As of the enactment, Jake’s was in

violation of the City’s zoning laws because it was and

continues not to be located within an agricultural district,

and it was and remains in violation of the 750 foot dis-

tance requirements.

In December 1996, the Plaintiffs brought suit against

the City challenging the constitutionality of Ordinance No.

21. Minnesota District Court Judge Kyle found that

Ordinance No. 21 was unconstitutional because it did not

provide for any space within the City where Jake’s could

be legally relocated. Judge Kyle found that the provision,

as written and in conjunction with the subdivision ordi-

nances, granted too much discretion to the City Council. If

the Council required a particular subdivision of agricul-

tural land to designate a percentage to public park devel-

opment, then a sexually-oriented business could not locate

there without violating the 750 foot distance requirement,

and therefore, could not locate anywhere legaHy within the

City of Coates. Judge Kyle noted in his opinion that the

unconstitutionality of the ordinance could be remedied by

providing for a required fee for park development as an

alternative to actual land designation. Such a provision

shifted the discretion from the City Council to the private

land developer.

A18

In 1998, the City enacted two additional ordinances.

Ordinance No. 31 established the discretionary fee subdi-

vision provision suggested by Judge Kyle, and it elimi-

nated the mandatory park-land designation requirement.

Ordinance No. 32 required that non-conforming sexually-

oriented businesses terminate their uses at the existing

location by December 31, 1999. These ordinances were

intended by the City to address the Plaintiffs’ challenges

to the earlier ordinances. In enacting Ordinance Nos. 31

and 32, however, the City failed to provide published

notice of the relevant public council meeting as required

under Minn. Stat. § 462.357, subd. 3." Nevertheless, the

Plaintiffs and their council were in attendance at the

meeting. In addition, the City did not reenact Ordinance

21 nor include its substantive regulation of sexually-

oriented businesses in either of the two new ordinances.

On December 13, 1999, the City enacted Ordinance

No. 36 which contained numerous licensing and operating

provisions relevant to sexually-oriented businesses. In

relevant part, the licensing provisions of Ordinance 36

provide that: (1) within twenty days of receiving a com-

pleted license application, the City Clerk must verify all

information and conduct any necessary investigation,

including the ordering of criminal background checks; (2)

within fifteen days after the completion of the verification

1 Minn.Stat. Sec. 462.357, Subd. 3 states in pertinent part:

No zoning ordinance or amendment thereto shall be adopted

until a public hearing has been held thereon by the plan-

ning agency or by the governing body. A notice of the time,

place, and purpose of the“hearing shall be published in the

official newspaper of the municipality at least ten days prior

to the day of the hearing.

A19

and investigation, the City Clerk must accept or deny the

license application; (3) within twenty days of receipt of

notice of the Clerk’s decision, an applicant may appeal to

the City Council; (4) within twenty days of receipt of the

appeal, a hearing before the City Council shall take place;

(5) during the application process, an appeal to the City

Council, and pending a final determination upon appeal to

a court of law, an applicant operating a business not

previously subject to the license provisions may remain in

operation; (6) an applicant with a criminal history contain-

ing a felony or gross misdemeanor relating to sex offenses,

obscenity offenses, or adult uses in the past five years

shall be ineligible for licensure; and (7) the licensing fee

shall be $2,500.00, $2,000.00 for the license and $500.00

for the investigation fee. In addition, one provision im-

posed a six-foot distance requirement between dancers and

patrons. Another provision prohibited dancers from solicit-

ing tips from customers and patrons from providing any

gratuity to the dancers.

Plaintiffs initiated the current action on December 29,

1999, challenging Ordinances 31, 32, and 36 on the

grounds that: (1) the constitutional deficiency of Ordi-

nance 21 identified by Judge Kyle could not be cured by an

amendment to the park dedication provision when the

entire ordinance was found to be void; (2) Ordinances 31

and 32 were enacted in violation of the state public hear-

ing requirements contained in Minn. Stat. § 462.357; and

(3) the provisions of Ordinance 36 relating to licensing

constitute an improper prior restraint on protected expres-

sion and those relating to operation were content-based,

all in violation of the First Amendment.

A20

On May 18, 2000, the City adopted Ordinance 39

which amended the licensing provisions so that sexually-

oriented businesses not previously required to obtain a

license could continue to operate pending the judicial

outcome of any litigation related to the denial of a license,

in addition to any appeals before the City Council. On

July, 10, 2000, subsequent to a public hearing on June 12,

2000, the City adopted Ordinances 40 and 41 consistent

with state procedural rules. See Minn. Stat. § 462.357,

subd. 3. In pertinent part, Ordinance 40 replaced Ordi-

nance 21 and extended the amortization period until

January 31, 2001, and Ordinance 41 substantively re-

placed Ordinance 31.

Discussion

1. Standard of Review

Summary judgment is proper if there are no disputed

issues of material fact and the moving party is entitled to

judgment as a matter of law. Fed. R. Civ. P 56(c). The

court must view the evidence and the inferences which

may be reasonably drawn from the evidence in the light

most favorable to the nonmoving party. Enterprise Bank v.

Magna Bank of Missouri, 92 F.3d 743, 747 (8th Cir. 1996).

However, as the Supreme Court has stated, “summary

judgment procedure is properly regarded not as a disfa-

vored procedural shortcut, but rather as an integral part

of the Federal Rules as a whole, which are designed to

‘secure the just, speedy, and inexpensive determination of

every action.’” Fed. R. Civ. P. 1. Celotex Corp. v. Catrett,

477 U.S. 317, 324 (1986).

The moving party bears the burden of showing that

there is no genuine issue of material fact and that it is

A21

entitled to judgment as a matter of law. Enterprise Bank,

92 F.3d at 747. The nonmoving party must demonstrate

the existence of specific facts in the record which create a

genuine issue for trial. Krenik v. County of Le Sueur, 47

F.3d 953, 957 (8th Cir. 1995). A party opposing a properly

supported motion for summary judgment may not rest

upon mere allegations or denials, but must set forth

specific facts showing that there is a genuine issue for

trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256

(1986); Krenik, 47 F.3d at 957.

2. Issues

a. Ordinances 40 and 41: Sexual] -oriented Busi-

nesses and Subdivision

i. Plaintiffs’ Motion for Attorney’s Fees

Counts I and II are dismissed as moot because of the

enactment of Ordinances 40 and 41.” Plaintiffs argue,

however, that the current litigation prompted the City’s

action to render such claims moot, and thus, Plaintiffs are

entitled to their reasonable costs, disbursements, and

attorney's fees under 42 U.S.C. § 1988. The Court dis-

agrees.

Under 42 U.S.C. § 1988, a plaintiff who prevails in its

action to enforce a § 1983 claim may be awarded reasonable

* Count I claims the illegality of the zoning provisions under state

law; and, Count II claims the unconstitutionality of the zoning and

amortization provisions.

A22

attorney's fees as part of costs.’ Because the outcome of

claims I and II was determined prior to trial, however, the

applicability of § 1988 must be examined under what is

known as the “catalyst theory.” The “catalyst theory,”

which has been routinely accepted by the Eighth Circuit

posits that “[t]he plaintiff is a ‘prevailing party’ under

section 1988 if his suit is a catalyst for the defendant’s

voluntary compliance, and the defendant’s compliance was

not gratuitous, meaning that the plaintiff’s suit was

neither ‘frivolous, unreasonable, [nlor groundless.’” Little

Rock School Dist. v. Pulaski County Special School Dist.

No. 1, 17 F.3d 260, 262 (8th Cir. 1994) (quoting United

Handicapped Federation v. Andre, 622 F.2d 342, 347 (8th

Cir. 1980); see also Tyler v. Corner Const. Corp., Inc., 167

F.3d 1202, 1205 (8th Cir. 1999)) (“The catalyst theory,

moreover, has always been advocated ... where the

defendant voluntarily granted the requested relief, render-

ing the lawsuit moot{.]”). A plaintiff, however, must prevail

with respect to his or her federal civil rights claim(s)

regardless of the outcome of related state law claims.

Warner by Warner v. Independent School Dist. No. 625, 134

F.3d 1333, 1337 (8th Cir. 1998).

Because only certain counts are moot, the instant case

is distinct from those where the voluntary action by the

Defendant or a negotiated settlement has rendered the

* 42 U.S.C. § 1988 states in pertinent part that:

In any action or proceeding to enforce a provision of sections

1981, 1981a, 1982, 1983, 1985, and 1986 of this title, ... ,

the court, in its discretion, may allow the prevailing party,

other than the United States, a reasonable attorney's fee as

part of the costs.

A23

entire action moot. Nonetheless, the Court finds the

catalyst theory applicable to its analysis here. Given the

timing of the lawsuit and the corrective ordinance enact-

ments, it is reasonable to infer that Plaintiffs’ lawsuit was

the catalyst to the favorable resolution of the relevant

claims. The Court finds, however, that Plaintiffs are not

eligible for attorney's fees under § 1988 because the issues

on which they prevailed were not related to their federal

claims under 42 U.S.C. § 1983.

With respect to Plaintiffs’ successful procedural

challenges brought under Minn. Stat. § 462.357, Plaintiffs

are ineligible for fees because they have only prevailed

under state law. To the extent that Plaintiffs also chal-

lenge the constitutionality of the ordinances, Plaintiffs are

also ineligible for fees. While such challenges certainly

implicate federal law, Plaintiffs misinterpret the status of

the relevant ordinances subsequent to the previous law-

suit and thus, their claim is meritless. Plaintiffs argue

that, pursuant to Judge Kyle’s decision, Ordinance 21 was

unconstitutional and thus, the corrective amendment in

Ordinance 31 was also unconstitutional. They contend

that the enactment of Ordinances 40 and 41 corrected this

discrepancy and was a direct response to their challenge.

To the contrary, Ordinances 40 and 41 were merely an

exercise of the City’s legislative function. Plaintiffs are

correct in stating that Ordinance 21 was void as unconsti-

tutional pursuant to Judge Kyle’s decision. Consequently,

however, Ordinance 31 was an amendment to an ordi-

nance which effectively did not exist, thus rendering the

amendment ineffective as well. Even if the amendment

had been enforced against a party, it would not have

violated the party’s rights because it would have been

entirely ineffective or inappropriately, but harmlessly,

A24

enforced as part of a theoretically constitutional ordi-

nance. In essence, the City had no legislation, constitu-

tional or not, covering the substance of Ordinances 21 and

31 from the time of Judge Kyle’s decision until Ordinances

40 and 41 were enacted. The City’s enactment of the two

ordinances was an exercise of its legislative power rather

than a purely ameliorative response to Plaintiffs’ chal-

lenges as they would have the Court believe. Plaintiffs did

not prevail on federal claims as they were postured

against an unconstitutional ordinance that simply did not

exist, and thus, they are not eligible for attorney's fees

under § 1983.

ii. Defendant’s Motion for Declaratory Judg-

ment

Defendant moves the Court to issue declaratory

judgment on whether Ordinances 40 and 41 are constitu-

tional. Defendant contends that Ordinances 40 and 41 are

substantively identical to Ordinances 21, 31, and 32 with

the addition of the constitutionally ameliorative amend-

ment enacted in response to Judge Kyle's decision. Conse-

quently, Defendant argues that the Court should render

its decision relying on the doctrine of collateral estoppel, or

alternatively finding that Plaintiffs’ constitutional chal-

lenges are meritless. On the other hand, Plaintiffs contend

that collateral estoppel should not apply here because the

pertinent facts and law have changed since Judge Kyle's

decision. In addition, Plaintiffs contend that declaratory

judgment is inappropriate because, at the time of hearing.

no controversy existed. given the amortization period

through January 31, 2001.

Declaratory judgment is an appropriate remedy when

“the facts alleged, under all the circumstances, show that

there is a substantial controversy. between partie bering

adverse legal interests. of sufficient immediacy and reality

to warrant (ite) issuance.... * Sherwoeed Medieval fadue

tries, Inc. v. Dehnatel, Inc, 612 P24 734. THT Gh Ce

1975). It is clear to this Court thet the parties have af

A26

It is clear to the Court that the issues and parties

before it are identical to those that were fully litigated and

decided by Jude Kyle. The only changes effectuated by

the enactment of Ordinances 40 and 41 were: (1) the cure

of procedural defects; (2) the enactment of a judicially-

recommended, constitutionally curative amendment; (3)

the extension of an already-existing amortization provi-

sion; and, as discussed previously, (4) the enactment of an

ordinance mirroring the constitutionally sound provisions

of Ordinance 21. The Court finds that issue preclusion is

properly applied with respect to Plaintiffs’ challenges to

Ordinances 40 and 41 as they reflect the substance of

previous Ordinances 21 and 31, with the exception of the

amortization provision contained in Section 522.

To the extent that Plaintiffs’ claims challenge the

constitutionality of the amortization provision contained

in Ordinance 40, the Court declines to apply collateral

estoppel. The Defendant argues that because the amorti-

zation was included within Ordinance 21, but invalidation

of the entire ordinance was based solely on the subdivision

provision, then by implication, the amortization was

constitutionally valid. The Court would tend to agree. The

Court, however, recognizes that the previous judgment did

not directly address the constitutionality of the amortiza-

ton provision, and thus, will undertake the appropriate

analysis at this time.

The Eighth Circuit has upheld a similar amortization

provision for sexually-oriented businesses. Ambassador

Books & Video, Inc. v. City of Little Rock, Ark., 20 F.3d 858,

865 (8th Cir. 1994) (upholding three-year amortization

period for adult businesses). Moreover, the Eighth Circuit

has upheld the application of content-neutral restrictions

of sexually-oriented businesses when applied to businesses

A27

existing at the time of enactment. See, e.g., Holmberg v.

City of Ramsey, 12 F.3d 140 (8th Cir. 1993); Alexander v,

City of Minneapolis, 928 F.2d 278 (8th Cir. 1991). While

the current ordinance is less than the three-year term

upheld in Ambassador Books, it is markedly more than the

immediate application upheld in Holmberg and Alexander.

Based on precedent, the Court finds the current amortiza-

tion provision to be constitutional, and the substantive

ordinance provisions to which it applies to be constitu-

tional as well.’

Plaintiffs contend that both the facts and law have

changed since Judge Kyle’s decision. The Court disagrees.

Plaintiffs cite City of Erie v. Pap’s A.M., 529 U.S. 277

(2000), for the proposition that when a city’s actual experi-

ence with the secondary effects of a sexually-oriented

business is contrary to the generally accepted studies

documenting the negative secondary affects of such busi-

nesses, then there is no reasonable basis for the enactment

of regulations. They contend that this is a change from

Nixon v. Shrink Missouri Government PAC, 528 U.S. 377

(2000), which held that a local government’s reasonable

belief that the experience of other jurisdictions is relevant

to the problem it is addressing is a sufficient evidentiary

showing to support regulation implicating the First

Amendment, and thus, not finding an original, commu-

nity-specific determination to be necessary.

. The Court need not reach Plaintiffs’ severability argument given

its finding of the constitutionality of the amortization provision.

A28

Plaintiffs appear to be relying primarily on Justice

Souter’s dissent in Erie where he does question the evi-

dentiary basis required to support the city’s enactment of

an ordinance banning public nudity and requiring the use

of g-strings and “pasties” at nude dancing establishments.

Erie, 529 U.S. at 310-17. The Erie Court found that the

city had made its evidentiary showing by implicitly relying

on the experiences of other jurisdictions memorialized in

the Court’s earlier decision in Renton. While Justice

Souter clearly believes that the Court should have been

more demanding of the City, his argument also appears to

caution that evidentiary requirements may depend upon

the nature of the ordinance at issue and other relevant

facts. In a footnote, he states that:

The nature of the legislating institution might

also affect the calculus. We do not require Con-

gress to create a record in the manner of an ad-

ministrative agency, and we accord its findings

greater respect than those of agencies. We might

likewise defer less to a city council than we

would to Congress. The need for evidence may be

especially acute when a regulation is content-

based on its face and is analyzed as content-

neutral only because of the secondary effects doc-

trine. And it may be greater when the regulation

takes the form of a ban, rather than a time,

place, or manner restriction.

Id., at 311, n.1 (citations omitted). Justice Souter’s argu-

ment pertains to the specific facts of Erie and what he saw

as a lack of evidence that establishments featuring danc-

ers with pasties would impact the surrounding neighbor-

hoods any differently than those featuring entirely nude

dancers. However, the ordinances at issue in the instant

case more neatly fit into the category of time, place, and

RS OE Sa ee ee eee ee a hee ee ee on oe Pe eres

A29

manner restrictions and thus, do not clearly implicate

Justice Souter’s concerns.

Nonetheless, the more appropriate application of Erie

is to follow the majority's opinion which states, unequivo-

cally, that “the evidentiary standard described in Renton

controls here.” Erie, 529 U.S. at 297. In Erie, the Court

found that “the [city] could reasonably rely on the eviden-

tiary foundation set forth in Renton and American Mini

Theatres to the effect that secondary effects are caused by

the presence of even one adult entertainment establish-

ment in a given neighborhood.” Erie, 529 U.S. at 297. The

Court went on to recognize that the City of Erie created

findings of its actual experience which the sexually-

oriented business failed to rebut, thus providing further

evidentiary support for its ordinance. While it had the

opportunity to do so, however, the Court did not find such

additional evidentiary proof to be necessary.

Under Erie, it is clearly appropriate for the City of

Coates to have relied on the experiences of other commu-

nities and even the discussion of secondary effects dis-

cussed in Renton in order to justify the enactment of the

ordinances at issue. Plaintiffs argue, however, that be-

cause, after the original enactments, the City evaluated its

own experience in addition to the originally relied upon

studies of other communities, then, necessarily, the facts

have changed. They go on to state that because they can

minimize the City’s findings of criminal incidents and

prosecutions related to Jake’s, then the City’s actual

experience is, in fact, contradictory to the generally ac-

cepted relationship of secondary effects and sexually-

oriented businesses. Moreover, Plaintiffs have challenged

the characterization of certain findings and attempted to

explain statistics as presenting an inflated view of the

A30

number of incidents actually occurring. The Court dis-

agrees. The City was not required to submit findings

related to its actual experience. Even subject to Plaintiffs’

challenges, the City’s findings still present evidence of

secondary effects. The law, as it stands, clearly allows a

community to reasonably restrict sexually-oriented busi-

nesses within it without requiring that the community

actually experience the secondary effects such restrictions

are authorized to prevent. Thus, Plaintiffs’ arguments on ©

this issue must also fail. For the reasons stated, the Court

finds Ordinances 40 and 41 to be constitutional.

b. Ordinance 36: Licensing and Other Restrictions*

i. Licensing

Plaintiffs challenge the licensing provisions on several

grounds claiming that: (1) there is no reasonable time

limit to regulate when a criminal background check must

be completed; (2) the stay provision insufficiently applies

only to businesses not previously subject to the licensing

provisions; (3) the requirement of a criminal background

check is unconstitutional; and (4) because the licensing

* Plaintiffs only briefly address this issue in their Memorandum,

yet they incorporate by reference argument on this issue that was

included in their briefing papers submitted to a Minnesota state court

for a temporary injunction and later to this Court as an attachment to

the Defendant’s Notice of Removal. While the Court has evaluated all

arguments submitted, the Court views the Plaintiffs’ action as an

improper attempt to circumvent the local rules on length of briefing

papers and an inconsiderate, unprofessional affront to the Court and

the opposing party.

A31

fees are related to the purported cost of criminal back-

ground checks and related costs, the fee itself is also

unconstitutional.

Municipalities are generally authorized to maintain

licensing schemes in regulation of sexually-oriented

businesses. The Supreme Court, however, has determined

that without proper safeguards, such schemes can consti-

tute unconstitutional prior restraint on expression.

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

FW/PBS, a majority of the Court held that a proper

licensing scheme must provide: (1) a specified brief period

of time for any restraint in place prior to judicial review;

and (2) expeditious judicial review. FW/PBS, 493 U.S. at

1034 (relying on the requirements set forth in Freedman v.

State of Maryland, 380 U.S. 51 (1965)). There remains a

split in the circuits as to whether the Supreme Court’s

requirement of judicial review refers to a final judicial

determination or mere access to the judiciary. Compare

Baby Tam & Co., Inc. v. City of Las Vegas, 154 F.3d 1097

(9th Cir. 1998) (judicial decision required); East Brooks

Books, Inc. v. City of Memphis, 48 F.3d 220 (6th Cir. 1995)

QGudicial decision required); 11126 Baltimore Boulevard,

Inc. v. Prince George’s County, Md., 58 F.3d 988 (4th Cir.

1995), en banc, (judicial decision required) with Boss

Capital, Inc. v. City of Casselberry, 187 F.3d 1251 (11th Cir.

1999) Gudicial review sufficient); TK’s Video, Inc. v. Denton

County, Tex., 24 F.3d 705 (5th Cir. 1994) (judicial review

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

1993), en banc, (common law writ of certiorari procedure

sufficient); Jews for Jesus, Inc. v. Massachusetts Bay

Transp. Auth., 984 F.2d 1319 (1st Cir. 1993) (judicial

review sufficient). The Eighth Circuit has yet to address

this issue. The Supreme Court had granted certiorari on

A32

this issue, but recently withdrew its grant because the

sexually-oriented business in the underlying case with-

drew its application for a license rendering the issue moot.

City News and Novelty, Inc. v. City of Waukesha, 120 S. Ct.

2687 (2000), cert. dismissed by, City News and Novelty,

Inc. v. City of Waukesha, 121 S. Ct. 743 (2001). Even if a

prompt judicial determination is what is required, a

municipality can rectify the unconstitutional delay or prior

restraint by staying the enforcement of relevant ordi-

nances pending the judicial determination. 11126 Boule-

vard, 58 F.3d at 1001 n.18.

Plaintiffs’ first and second challenges can be consid-

ered together. Simply requiring that a criminal back-

ground check be ordered does not guarantee that such

investigation will be completed within the reasonable time

period constitutionally required and, in this case, found to

be provided by the City. The Court recognizes that the City

has minimal, if any, control over how quickly a criminal

background check will be completed. It is compliance with

the second requirement of FW/PBS, however, that could

remedy this concern and that Ordinance 36 as amended by

Ordinance 39 currently provides. Section 509.8 clearly

stays the enforcement of the remaining provisions for

businesses not previously subject to the licensing provi-

sions of which Jake’s is one. Given that the City’s licensing

scheme is newly enacted and yet to be implemented, there

are currently no businesses previously subject to its

provisions and thus unprotected by the stay provision.

Plaintiffs express concern that, even if their business

were to become licensed, that the City would likely unrea-

sonably revoke the license rendering Jake’s unprotected by

the stay provision as it now stands. There is no evidence

before the Court that the City would revoke a license

FO aS) SYN SE ae Ly Oe a Pe PS Te OPES Bees Ae ee re ee at

A33

without proper grounds. Plaintiffs allege that such evi-

dence can be implied from the alleged grant of unbridled

discretion to the City through section 508.17(A)(5), which

provides, in part, for suspension of licenses if the licensed

business is conducted “in such a manner as to constitute a

breach of the peace or to constitute a menace to the health,

safety, or general welfare of the community.” The Court

finds, however, to the extent that this clause is construed

to refer to conduct constituting a violation of relevant state

law or regulation, such as crimes or regulations pertaining

to public health and safety, public misconduct, or nuisance,

then the provision is objective and reasonable. See, e.g.,

Minn. Stat. § 299L, et seg. (regulating gambling), 609.66 et

seq. (crimes against public safety and health), and

609.705, et seg. (crimes of public misconduct and nui-

sance). Plaintiffs’ current concerns would be more appro-

priately directed at the lack of stay protection provided to

businesses up for yearly license renewal as set forth in

section 508.11. Nonetheless, there are no businesses who

currently would be deprived of the procedural protections

required under FW/PBS. Thus, the Court finds the

licensing scheme to be constitutional as currently applied

to businesses not previously subject to the licensing

provisions.

ii. Criminal History Disqualification Provision

Plaintiffs also challenge section 508.10(5) which

establishes an applicant’s criminal history as a potentially

disqualifying factor. It provides that an applicant with a

five-year-old or less felony, gross misdemeanor, or misde-

meanor conviction relating to “sex offenses, obscenity

offenses, or adult uses” is ineligible for a license. The

Court finds the provision to be sufficiently related to the

A34

City’s reasonable purpose of limiting the secondary effects

of sexually-oriented businesses. FW/PBS, Inc. v. City of

Dallas, 837 F.2d 1298, 1304-05 (5th Cir. 1988) aff’d in part

and vacated in part on other grounds, 493 U.S. 215 (1990).

With respect to crimes of sex offenses and obscenity

offenses, the Court finds there to be a substantial relation-

ship between the nature of the convictions and the secon-

dary effects to be regulated by the ordinance. Id. To the

extent that the term “adult uses” is construed to refer to

state laws prohibiting the operation of certain adult

businesses and/or the participation in certain adult activi-

ties, such as Minn. Stat. §§ 609.33, 617.33, et seq. (regulat-

ing disorderly houses and houses of prostitution), the

Court also finds a substantial relationship between the

nature of the convictions and the secondary effects.

Moreover, the fact that the ordinance includes a five-

year time period eliminates the concern that the City is

unreasonably and completely eliminating the first

amendment rights of a particular group of people. See City

of Paducah v. Investment Entertainment, Inc., 791 F.2d

463 (6th Cir. 1986), cert. denied, 479 U.S. 915 (1986)

(invalidating law requiring revocation of license for dis-

tributors of adult-oriented materials upon judicial deter-

mination of prior distribution of obscenity); Genusa v. City

of Peoria, 619 F.2d 1203 (7th Cir. 1980) (invalidating

disclosure and disqualification provisions based in part

upon prior criminal conduct). While the two may appear

inextricably linked, it is clear to the Court that the provi-

sion is aimed at regulating the secondary effects rather

than the protected expression. The provision is intended to

control the.crime that is potentially associated with

sexually-oriented businesses and reasonably regulates the

credentials of those who will be operating and presumably

A35

responsible for preventing the manifestation of secondary

effects at their sexually-oriented business. For the reasons

stated, the Court finds the disqualification provision to be

constitutional and thus, the related disclosure and fee

provisions to be constitutional as well.

iv. Distance and Tip Restrictions ~

Ordinance 36 also prohibits patrons and dancers from

being within six feet of each other and from providing or

soliciting tips. In their complaint, Plaintiffs challenge the

relevant provisions as “impermissible content-based

censorship of constitutionally protected speech.” During

oral argument, Plaintiffs’ argument on these issues fo-

cused on the financial impact to the business and, ulti-

mately, to the opportunity to maintain a commercial

avenue for such expression.

While the law remains uncertain as to the degree of

protection nude dancing should receive, the Supreme

Court has held that it is indeed a protected form of expres-

sion. Barnes v. Glen Theatre, Inc., 501 U.S. 560, 565-66

(1991) (concluding that nude dancing “is expressive

conduct within the outer perimeters of the First Amend-

ment, though . . . only marginally so”). A municipality may

regulate a protected form of expression, such as nude

dancing, provided that the restriction is content-neutral,

reasonably affecting the time, place, and/or manner of the

expression. See Clark v. Community for Creative Non-

Violence, 468 U.S. 288 (1984). A reasonable content-

neutral restriction is such that: (1) the regulations are

within the constitutional power of the government; (2) the

regulations further an important or substantial govern-

mental interest; (3) the governmental interest is unrelated

A36

to the suppression of free expression; and (4) the inciden-

tal restriction on alleged First Amendment freedoms is no

greater than is essential to the furtherance of that inter-

est. United States v. O’Brien, 391 U.S. 367, 376-77 (1968)

(establishing test for evaluating restrictions on symbolic

speech); see also Ward v. Rock Against Racism, 491 U.S.

781, 791 (1989) (establishing three-factor, content-neutral

test for restriction of expression in public forum).’

The City of Coates was well within its constitutional

powers to manifest its concerns through legislation and to

exercise its police powers for the protection of public

health and safety. Moreover, the City has a substantial

government interest in regulating the industry of sexually-

oriented businesses, given the social concerns attendant to

such businesses. While the restrictions at issue may affect

the manner in which dancing occurs and even limit the

overall capacity of a sexually-oriented business, sufficient

opportunity remains for the dancers to exercise their

protected expression satisfying the requirement that the

regulation be narrowly tailored. In fact, the ordinance here

is more liberal than other like ordinances that have been

upheld by courts. See, e.g., Colacurcio v. City of Kent, 163

’ The Ward test requires a municipal ordinance restricting

expression in a public forum to be: (1) content-neutral (2) narrowly

tailored to serve a significant government interest; and (3) leaving open

ample alternative channels for communication of the information.

While the Supreme Court applied this test to a private establishment in

City of Renton v. Playtime Theatres, Inc., 475 U.S. 41 (1986) and

concluded in Clark v. Community for Creative Non-Violence, 468 U.S.

288 (1984) that the Ward test embodied the principles of O’Brien, it

nonetheless proceeded to analyze the claims in Barnes and later in Erie

v. Pap’s A.M., 529 U.S. 277 (2000) under O’Brien. Thus, the Court will

adopt the O’Brien test for its analysis here.

A37

F.3d 545 (9th Cir. 1998) (holding ten-foot distance re-

quirement as content-neutral despite elimination of table

dancing as form of expression). The Court finds that the

provisions here are reasonable time, place, and manner

restrictions and thus, not in violation of the First Amend-

ment.

For the reasons stated, IT IS HEREBY ORDERED

THAT:

1. Plaintiffs’ Motion for Summary Judgment (Doc.

No. 7) is DENIED;

a. Plaintiffs’ request for attorney’s fees as to

Counts I and II is DENIED;

b. Ordinances 40, 41, and 36 as amended by Or-

dinance 39 are constitutional.

2. Defendant’s Motion for Summary Judgment (Doc.

No. 12) is GRANTED;

a. Ordinances 40, 41, and 36 as amended by

Ordinance 39 are constitutional.

3. Plaintiff’s Complaint (Doc. No. 1) is DISMISSED

WITH PREJUDICE.

LET JUDGMENT BE ENTERED ACCORDINGLY.

Dated: February 16th, 2001 /s/ Donovan W. Frank

DONOVAN W. FRANK

Judge of United States

District Court

A38

UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

Jake's Ltd., Inc., a Civil Ne

Minnesota corporation, 00-192 (DWP/AJB)

and Richard J. Jacobson,

Plaintiffs,

. ORDER AND

, MEMORANDUM

The City of Coates, a

municipal corporation,

Defendant (Piled Mar. 13, 2001)

Randall D.B. Tigue, Eeq., Tigue Law Office, 2940 Pillebery

Avenue South, Suite 200, Minneapolis, Minnesota 554608.

appeared on behalf of Plaintiffs

James J. Thomson, Eeq., Kennedy & Graven, 470 Pille

bury Center, 200 6th Street South, Minnespolie, Minne

sota 55402, appeared on behalf of Defendant.

Order

The current motion before the Court &@ Pieintifiy

Motion for Amended Pindings and for « Stay of the Trial

Court's Decision Pending Appeal In eddition, Defendant

has requested that the Court revise ite Pebruary 16, 2001.

order to issue an injunction enjoining Plaintiff fom

operating « sexually-criented business sf their current

location. Both parties’ requests are in response & the

Court’s February 16, 2001, Memeorendem Opinion and

Order which granted summary jedgment & fever of

Defendant. Por the reasons stated. « w hereby ordered

that.

aly i *] a

thy “ihay * il

Or ——™

A40

MEMORANDUM

l. Plaintiffs’ Motion for Amended Findings

Plaintiffs’ Motion for Amended Findings is based on

Plaintiflv argument that Minn. Stat. § 462.357, subd. Ic is

unconstitutional. Minn. Stat. § 462.357, subd. ic states

that

Except as otherwise provided in this subdivision,

a municipality must not enact, amend, or enforce

en ordinance providing for the elimination or

termination of « use by amortization which use

was lawful at the time of its inception. This sub-

division does not apply to adulte-only bookstores,

adulte-only theaters, or similar adults-only busi-

nesses ae defined by ordinance

Plaintifie maintain thet the exemption for sadults-only

businesses we unconstitutional and severable from the rest

of the provision, thus precluding the amortization of all

nonconforming uses, regardless of business type They

argue thet the exception i overbroad and without an

evedentiary beste thet euch businesses cause adverse

soxonmdary effects

Te begin, Pieintiffe failed to raise this argument in

any of their briefing papers prior to the hearing on October

12 7000 Pleintiffe counse! reseed the argument at hear-

img. providing minime! elshorstion to the Court Since the

hearing howewer Plaintiffs counsel hase eubmitted letters

end mow « motion eddressing this new theory While the

Court certainly eupporte end encourages conscientious

amd thorough edvacecy. 6 significant smount of Plaintiffs

argument eiece the bearing bese not rested on newly

becubed case low Not only can euch evbmiseions compro-

mee @ party's compliance with the Lowa) Rules. but they

A4l

can also detract from the proven effect of a thorough yet

concise distillation of the law truly applicable to a party's

case. Even considering its ruling in light of Minn. Stat.

§ 462.357, subd. 1c, however, the Court finds that its

previous decision requires no amendment.

Minn. Stat. § 462.357, subd. 1c was enacted in 1999.

As Defendant has pointed out and this Court previously

found, however, courts, including the Eighth Circuit, have

routinely upheld the amortization of adults-only busi-

nesses as constitutional. See Ambassador Books & Video,

Inc. v. City of Little Rock, 20 F.3d 858 (8th Cir. 1994);

Holmberg v. City of Ramsey, 12 F.3d 140, 144 (8th Cir

1994). The decision of the Minnesota legislature to prevent

amortization of other businesses has no impact on the

practice with respect to adults-only businesses. In effect,

the legislature was officially recognizing and deferring to

prior judicial decisions on the issue. By implication, the

validity of such an exemption has already been established

by the Eighth Circuit and other courts.

To state that the statute is overbroad is also without

merit. The only clause that provides breadth to the statute

is that which states, “or similar adults-only businesses as

defined by ordinance.” The clause simply recognizes that a

municipality should not be unable to invoke the statute

simply because it uses different terms to describe adults-

only businesses or because it may host businesses differ-

exempt uses and it is that definition that could ultimately

be subject to First Amendment challenge. While the term

“similar” generally may not create the brightest of lines, to

A42

argue that it would allow for trucking companies and

Dairy Queens to be termed “adults-only” ignores the widely-

accepted meaning of the term in the constitutional arena.

For these reasons, the Court declines to amend its holding

with respect to the constitutionality of the amortization

provision.

2. Plaintiffs’ Motion for a Stay Pending Appeal

a. Standard of Review

The decision whether to stay a final judgment pending

appeal is within the discretion of a trial court. Fed. R. Civ.

P. 62(c). If a stay is granted, a court may do so “upon such

terms as to bond or otherwise as it considers proper for the

security of the rights of the adverse party.” Id. The stan-

dards for granting a stay pending appeal are: (1) a strong

showing that the appellant will likely prevail on the

merits of the appeal; (2) a showing that the appellant will

suffer irreparable harm if the stay is denied; (3) a showing

that no substantial harm will come to other interested

parties if the stay is issued; and (4) a showing that a stay

will not harm the public interest. Hilton v. Braunskill, 481

U.S. 770, 776 (1987); Reserve Mining Co. v. United States,

498 F.2d 1073, 1076-77 (8th Cir. 1974). In essence, a court

must balance the equities in light of the circumstance of

the particular case. Reserve Mining, 498 F.2d at 1077

(noting weighted importance of public health as fourth

factor particularly in environmental cases).

b. Likelihood of Success on the Merits

Plaintiffs maintain that they are likely to succeed on

appeal, challenging mainly the Court’s decision with

respect to the amortization and licensing provisions. As

A43

the Court has noted above and in its February 16, 2001,

order, there is clear precedent in this Circuit that amorti-

zation clauses are constitutional as applied to sexually-

oriented businesses. Ambassador Books & Video, Inc. v.

City of Little Rock, 20 F.3d 858 (8th Cir. 1994); Holmberg v.

City of Ramsey, 12 F.3d 140, 144 (8th Cir. 1994). The case

law cited by Plaintiffs on this issue subsequent to the

Court's decision in this case does not challenge the founda-

tion upon which the decision rests.

Plaintiffs cite to N.W. Enterprises, Inc. v. City of

Houston, 27 F. Supp. 2d 754 (S.D.Tex.1998), for its invali-

dation of a distance ordinance that was not established to

have any potential effect on the adverse secondary effects

of sexually-oriented businesses yet was to be applied to

established businesses that had relied on the previous,

less-stringent distance ordinance. What Plaintiffs fail to

discuss about N.W. Enterprises, however, is that the court

also addressed the application of amortization provisions

to sexually-oriented businesses. Jd. at 817-22. While the

issues before the N.W. Enterprises court related primarily

to the adequacy of the provision and the extension process

provided, the court’s analysis operated around the princi-

ple that amortization provisions were properly applied to

sexually-oriented businesses. Jd. at 817. This Court does

not see how N.W. Enterprises affects its previous decision

other than by perhaps providing further support.

The second case that Plaintiffs cite is XLP Corp. v.

County of Lake, 2000 WL 33156447 (Ill. App. 2nd Dist.

2000). The issue beforethe XLP court was whether, on the

pleadings, it could decide the constitutionality of enforcing

an ordinance against an already existing sexually-oriented

business when the city based its enactment on the experi-

ence of other municipalities. In XLP. the plaintiff-business

A44

contested such a decision, arguing that the case should go

to trial. To the contrary, the parties in this case both

sought summary judgment, apparently finding the XLP

issue irrelevant to the instant facts.

Plaintiffs also cite Flanigan’s Enterprises, Inc. v.

Fulton County, 2001 WL 166375 (11th Cir. Feb. 20, 2001),

for its finding that “it was unreasonable for Defendants to

rely on remote, foreign studies concerning secondary

effects when the county’s own current, empirical data

conclusively demonstrated that such studies were not

relevant to local conditions” when enacting a liquor ban for

sexually-oriented businesses. Flanigan’s, 2001 WL 166375,

*8. In its previous order granting summary judgment, this

Court found that Ordinance 40 containing the amortiza-

tion provision mirrors Ordinance 21 which was previously

evaluated by Judge Richard Kyle of this District. The

evidence of adverse secondary effects for Ordinance 21 was

already deemed sufficient by Judge Kyle as discussed in

his January 26, 1998, Memorandum Opinion and Order,

pp. 8-9, and again cited in his Findings of Fact and Con-

clusions of Law subsequent to trial, dated April 13, 1998,

p. 13.

The Court has found no case law that requires a City

to produce new or additional evidence of adverse 3econ-

dary effects upon the amendment of an ordinance, particu-

larly when the amendment is an update of an

amortization provision that had expired pending judicial

proceedings and that was deemed substantively constitu-

tional. Moreover, as it explained in its previous order, the

Court does not read City of Erie v. Pap’s A.M., 529 US.

277 (2000), to require that a city generate its own study of

adverse secondary effects. To the extent that the City did

so in this case subsequent to its original enactment of

A45

Ordinance 21, the Court found, after considering Plaintiffs

challenges, that the results did not contradict the general

conclusions already gleaned from the studies of other

communities. Even to the extent that Plaintiffs’ challenges

minimized the degree of the City’s findings of adverse

secondary effects, evidence of criminal activity remained

and, in conjunction with its previous reliance on other

studies, provided sufficient basis upon which to amend the

ordinance.

Plaintiffs also challenge the Court’s decision with

respect to the licensing ordinance. After a thorough review

of the record, all arguments and submissions of the par-

ties, and being otherwise duly advised in the premises, the

Court reached a reasoned conclusion. The Court stands by

its earlier decision, yet recognizes the possibility that the

Eighth Circuit could disagree. While the Court does not

find this factor to weigh strongly in favor of Plaintiffs, in

light of the First Amendment implications and the addi-

tional factors discussed below, the Court will grant the

requested stay.

c. Likelihood of Irreparable Harm to Appel-

lant

The likelihood that Plaintiffs will suffer irreparable

harm if the Court were to deny the stay is strong. Without

a stay, Plaintiffs would be enjoined from operating the

sexually-oriented business, Jake’s, at its current location.

The potential financial, professional, and personal impact

of such an injunction is significant. Moreover, to the extent

that Plaintiffs’ activity is protected by the First Amend-

ment, Plaintiffs would experience further irreparable

harm should an appeal be successful and a stay not have

A46

been granted. Defendant’s contention that Plaintiffs could

avoid irreparable harm by operating an alternative busi-

ness in accordance with unchallenged City ordinances is

somewhat unrealistic and ignores the First Amendment

implications.

d. Likelihood of Harm to Defendant and Pub-

lic Interest

Because the Defendant represents the City, the third

and fourth factors virtually merge. Defendant contends

that if a stay is granted, then the City will be harmed by

the adverse secondary effects of the sexually-oriented

business, especially criminal activity. Correspondingly, the

public interest in public health and safety would be

implicated. While these two factors certainly argue effec-

tively against granting a stay, the Court finds that the

potential irreparable harm tips the balance in favor of a

stay. For these reasons, the Court will stay its February

16, 2001, order pending appeal.

Neither party has submitted argument on the issue of

whether the Court should require a bond. Defendant has

maintained that the injury to be siffered should the stay

be granted is the result of adverse secondary effects

attendant to Plaintiffs’ business. The Court, however,

declines to speculate as to the nature and extent of such

harm and holds that no bond shal be required upon the

stay of this Court’s order pending aopeal.

D.WF.

A47

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

No. 01-1869 . Civil 00-192

Jake’s, Ltd., Inc.; Richard J. : (DWF/AJB)

Jacomen, ° Appeal from the

Appellants, * United States District

- * Court for the District of

* Minnesota

City of Coates, x

Appellee. °

JUDGMENT

(Filed May 28, 2002)

This appeal from the United States District Court was

submitted on the record of the district court, briefs of the

parties and was argued by counsel.

After consideration, it is hereby ordered and adjudged

that the judgment of the district court in this cause is

affirmed as modified in accordance with the opinion of this

Court.

(5172-010199) March 26, 2002

A true copy.

ATTEST: Michael E. Gans

CLERK, U.S. COURT OF APPEALS,

EIGHTH CIRCUIT.

A48

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

No. 01-1869 .

Jake’s LTD., Inc., etc., et al.,” O7¢er Denying Petition

gees ’ for Rehearing and for

Appellants,

Rehearing En Banc

Vs.

City of Coates, etc.,

%&* &© & & & &

Appellee.

The petition for rehearing en banc is denied. The

petition for rehearing by the panel is also denied.

(5128-010199)

May 3, 2002

Order Entered at the Direction of the Court:

Clerk, U.S. Court of Appeals, Eighth Circuit

A49

STATE OF MINNESOTA DISTRICT COURT

COUNTY OF DAKOTA FIRST JUDICIAL DISTRICT

Jake’s Ltd., Inc. a

Minnesota corporation,

and Richard J. Jacobson,

Plaintiff, COMPLAINT

VS.

City of Coates, a

municipal corporation,

Defendant.

Court File No.

The above-named Plaintiffs, for their complaint

against Defendant, hereby allege the following:

INTRODUCTION

1. This is an action brought pursuant to Title 42

U.S.C. Sec. 1983 and the Constitution of the United

States, and in particular under the First and Fourteenth

Amendments thereto, this being an action brought to

redress the deprivation, under color of state law, statute,

ordinance, regulation, custom and usage, or rights, privi-

leges and immunities guaranteed to Plaintiffs under the

Constitution of the United States.

PARTIES

2. Plaintiff, Richard J. Jacobson is a citizen of the

United States and of the State of Minnesota. He is the

owner of a parcel of real property located within the County

of Dakota, City of Coates, located at 15981 Clayton Avenue.

A50

He is also the President and 50 percent shareholder of

Plaintiff Jake’s Ltd., Inc., a Minnesota corporation.

3. Plaintiff Jake’s Ltd., Inc., is a corporation organ-

ized under the laws of the State of Minnesota. It currently

operates a business known as “Jake's,” on the real estate

owned by Plaintiff Jacobson.

4. Defendant City of Coates is a municipal corpora-

tion organized under the laws of the State of Minnesota.

5. Since January of 1992, Plaintiffs and their prede-

cessors in title have operated a business known as Jake's

Bar, located at 15981 Clayton Avenue in the City of

Coates, Minnesota.

6. Jake’s Bar has featured live nude dance enter-

tainment on premises. As such, the activities are pre-

sumptively entitled to constitutional protection under the

First and Fourteenth Amendments to the United States

Constitution, and under Article I, Section 3 of the Minne-

sota Constitution.

7. During its years of existence, there has been no

evidence that Jake’s Bar has caused any adverse secon-

dary effects on the surrounding neighborhood, such as a

decline in property values, an increase in crime, or urban

blight.

8. Until 1994, Jake’s was in full compliance with the

zoning ordinance of the City of Coates.

9. In 1994, the City of Coates enacted Ordinance No.

21, a copy of which is attached hereto as Exhibit A, adding

a Section 522 to the City’s Zoning Ordinance regulating so-

called “sexually oriented businesses.”

A51

10. Under Section 2(65) of the Ordinance, the term

“sexually oriented business” is defined as followed:

“An adult bookstore, adult body painting studio,

adult companionship establishment, adult mo-

tion picture theater, adult entertainment facility,

adult modeling studio, adult mini me ion picture

theater, or adult sauna.”

11. Under Section 2(58), the term “adult entertain-

ment facility” is defined as follows:

“A building or space wherein an admission is

charged for entrance or food or non-alcoholic bev-

erages are served or intended for consumption

and wherein may be observed live presentation

or entertainment distinguished or characterized

by an emphasis on matters depicting, describing,

or relating to specified sexual activities or speci-

fied anatomical areas as defined herein.”

12. Under Section 2(67) the term “specified anatomi-

cal areas” is defined as follows:

“(a) Less than completely and opaquely covered:

(1) Human genitals, pubic region or pubic hair; or

(2) Buttock; or

(3) Female breast or breasts below a point immedi-

ately above the top of the areola; or

(4) Any combination of the foregoing; or

(b) Human male genitals in « discernibly turgid

state even if completely and opaquely covered.”

13. Jake's Bar is an “sexually oriented business”

within the meaning of these definitions.

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businesses were eet forth in ewbhperagrept D of the Costen

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A54

16. The general policy of the City of Coates concern-

ing uses which are lawful at the time the zoning ordinance

is amended are set forth in Sections 401 and 402 of the

Coates Zoning Ordinance, a copy of which is attached

hereto as Exhibit B:

“Section 401: Intent.

It is the intent of this Ordinance to permit legal

non-conforming uses and structures existing on

the effective date of this Ordinance or amend-

ment thereto, to continue until they are removed,

but not to encourage their survival.

Section 402: Non-Conforming Uses Buildings.

The lawful use of a building or structure existing

at the time of the adoption of this Ordinance may

be continued although this use does not conform

- with the district provisions.”

17. However, with respect to sexually oriented

businesses, subparagraph F of the 1994 ordinance con-

tained the following provisions:

“Sexually-oriented businesses which are classi-

fied as legal non-conforming uses may continue

in accordance with the provision of this Section,

except that any such non-conforming use shall be

terminated, and become illegal on and after De-

cember 31, 1996. To the extent possible, the City

shall attempt to identify all such uses which be-

come classified as non-conforming under the pro-

visions of this section and shall notify the

property owners and operators of such uses in writ-

ing of the change in status, and the terms and con-

ditions which apply. The owner of any property on

which an adult use is located may apply to the

Council for an extension of the termination date.

A55

Any such application shall be in writing and be

received by the City no later than October 1,

1996. Failure to submit a timely extension appli-

cation shall constitute a waiver of the right to re-

quest an exception. The applicant shall have the

burden of proof to demonstrate the amortization

period as an unreasonable burden upon the

business and does not allow adequate time to re-.

cover a reasonable return upon the business in-

vestment and also the time required for an

extension. In making its decision, the Council

may consider any fact irrelevant to the issue, in-

cluding but not limited to:

(a) The degree or magnitude or threat to the

public health, safety and general welfare posed

by the secondary impacts of the operation.

(b) The length of time that the adult use has

been operating.

converted to a conforming use.

(d) The nature and character of the surround-

ing neighborhood.

(e) The value and condition of the improve-

ments on the property.

(f) The amount of the applicant’s investment in

the business.

(g) The amount of investment already realized.”

18. At the time the 1994 amendment to the zoning

ordinance was enacted, Plaintiffs’ establishment was the

only sexually oriented business of any kind located within

the City of Coates.

A56

19. In December of 1996, Plaintiff commenced an

action in this Court challenging the constitutionality of the

1994 amendment to the city’s zoning ordinance.

20. Defendant, in responding to the lawsuit, re-

moved the lawsuit to the United States District Court for

the District of Minnesota.

21. On April 13, 1998, the United States District

Court for the District of Minnesota issued an order,

memorandum, and judgment, a copy of which is attached

hereto as Exhibit C declaring the 1994 amendment to the

zoning ordinance, as subsequently amended, to be facially

unconstitutional as a violation of the First and Fourteenth

Amendments to the United States Constitution.

22. In September of 1998, the City Council of Defen-

dant City of Coates voted to enact two additional ordi-

nances:

a. Ordinance No. 31, a copy of which is attached

hereto as Exhibit D, which purported to cure the constitu-

tional deficiency in the zoning ordinance invalidated by

the United States District Court in 1998, by eliminating a

requirement that a portion of all subdivided land be

dedicated for park purposes, available at the discretion of

the City Council, making such a waiver mandatory at the

discretion of the developer.

b. Ordinance No. 32, a copy of which is attached

hereto as Exhibit E, requiring all non-conforming sexually

oriented businesses to terminate their uses at the existing

location as of December 31, 1999.

23. Plaintiffs’ business is the only business affected

by the amortization provision.

A57

24. In enacting ordinances No. 31 and 32, Defendant

failed to provide either published notice or a public hear-

ing, both of which are required by Minn. State. Sec.

462.357, Subd. 3.

25. On December 13, 1999, Defendant City Council

enacted ordinance No. 36, a copy of which is attached _

hereto as Exhibit F and incorporated by reference as if

fully set forth herein.

26. In enacting ordinance No. 36, Defendant City of

Coates acted under color of state law, statute, ordinance,

regulation, custom and usage, within the meaning of Title

42 U.S.C. Sec. 1983.

27. Pursuant to Sec. 508.05 of said ordinance, no

person shall own or operate a “sexually oriented business”

without a license issued pursuant to the ordinance. The

term “sexually oriented business” adopts the definition

contained in the zoning ordinance, invalidated by the

United States District Court in the earlier federal litiga-

tion.

28. Consideration of the application for a license is

governed by Secs. 508.07 and 508.08. Sec 508.07(B) pro-

vides as follows:

“Applications for licenses under this Article shall

be submitted to the City Clerk. Within twenty

(20) days of the receipt of a completed application

and payment of all licensing application fees, the

City Clerk or designee shall verify any and all of

the information requested of the applicant, in-

cluding the ordering of criminal background

checks and conduct any necessary investigation

to assure compliance with this part.”

A58

29. Sec. 508.08 of the ordinance provides as follows:

“No later than fifteen (15) calendar days after

the completion of the license application verifica-

tion and investigation by the City Clerk, as pre-

scribed in 508.07, the City Clerk shall accept or

deny the license application in accordance with

this part. If the application is denied, the City

Clerk shall notify the application of the determi-

nation in writing. The notice shall be mailed by

certified and regular mail to the applicant at the

address provided in the application form and it

shall inform the applicant of the applicant’s

right, within twenty (20) calendar days of receipt

of the notice by the applicant, to request an ap-

peal of the City Clerk’s determination to the City

Council or to immediately challenge the determi-

nation in the court of law. If an appeal to the

City Council is timely received by the City Clerk,

the hearing before the City Council shall take

place within twenty (20) calendar days of the re-

ceipt of the appeal by the City Clerk. If an appli-

cation is granted for a location where a building

is under construction or not ready for occupancy,

the license shall not be delivered to the licensee

until a certificate of occupancy has been issued

for the licensed premises. During the application

consideration process described herein, an appli-

cant operating a business not previously subject

to the license provisions of this Park may remain

operating pending the outcome of the application

consideration.”

30. Sec. 508.10 of the ordinance provides as follows:

“The City Clerk shall issue a license under this

Part to an applicant unless one (1) or more of the

following conditions exist:

A59

(1) The applicant is a minor at the time the ap-

plication is submitted;

PS Cpe a SS OTe al

(2) The applicant failed to supply all of the in-

formation requested on the license application;

(3) The applicant gave false, fraudulent, or un-

truthful information on the license application;

(4) The applicant had a sexually oriented li-

cense revoked within a one (1) year immediately

preceding the date the license application was

submitted;

AS NOMA iid sei ey Ee RESIS SIRE AOI re iiiake

(5) The applicant has had a conviction of a fel-

ony or gross misdemeanor or misdemeanor re-

lated to sex offenses, obscenity offenses, or adult

uses in the-past five (5) years;

NPS Acca haye ae eea ond Ree

(6) The sexually oriented business does meet all

the zoning requirements prescribed in the City of

Coates Zoning Code. This provision shall not ap-

ply to a business existing at the time this Part

and ordinance is [sic] enacted which is not yet

required to comply with the Coates Zoning Code;

PSE os sr Ba a Fan

(7) The premises to be licensed is sexually-

oriented business is currently licensed by the

City as a tanning facility, tattoo establishment,

pawn shop, therapeutic massage enterprise, or

an establishment licensed to sell alcoholic bever-

ages;

sae oares be kheameakeees

Sales i Se

(8) The applicant has not paid the license an

investigation fees required;

30. Under Sec. 101.03 of the Coates City Code, as

amended by ordinance No. 36, the annual license fee is

two thousand dollars, plus an investigation fee of five

hundred dollars.

;

A60

31. Under the provisions of Sec. 508.17(a)(5), a

sexually oriented business is subject to suspension for up

to sixty days if the City Council determines that the

licensee has conducted the licensed business “in such a

manner as to constitute a breach of the peace or to consti-

tute a menace to the health, safety or general welfare of

the community.”

32. Under Subparagraph (b)(10), the license is

subject to permanent revocation, in the event that the

licensee “is delinquent in payment to the City, County,

State, or Federal Governments for hotel occupancy taxes,

ad valorem taxes, sales taxes, or other government im-

poses financial obligation.”

33. With respect to live entertainment, the ordinance

contains the following restrictions:

“(1) All performers, dancers, and persons pro-

viding live entertainment distinguished or char-

acterized by an emphasis on matters depicting,

describing, or relating to special specified sexual

activities, or specified anatomical areas in li-

censed facilities or in areas adjoining the licensed

facility where entertainment can be seen by pa-

trons or customers shall:

(a) provide social entertainment on a

platform intended for that purpose

which is raised at least two feet from

the level of the floor;

(b) provides said entertainment at a

distance no closer than six (6) feet to

any patron;

4 |

a itty a a et ane ating

ee hf | ge ee, Bee oe A

A61

(d) not solicit any pay or gratuity from

any patron;

(2) No patron, customer, or spectator

of a licensed facility providing live en-

tertainment distinguished or character-

ized by an emphasis on matters

depicting, describing or relating to

specified sexual activities or specified

anatomical areas shall:

(a) fondle or caress any performer,

dancer or other person, providing live

entertainment;

(b) directly pay or give any gratuity to

any performer, dancer or other person

providing live entertainment.”

COUNT I - ILLEGALITY OF ZONING

PROVISION UNDER STATE LAW

34. Plaintiffs reallege the allegations set forth in

paragraph 1-33, supra.

35. Ordinances No. 31 and 32, purportedly requiring

the amortization of Plaintiffs use by December 31, 1999,

are unlawful under state law for the following reasons:

a. The provisions were unlawfully enacted, due

to Defendant’s failure to comply with the published notice

and public hearing provisions of Minn. Stat. Sec. 462.357,

Subd.3.

b. Because, as a matter of state law, the judicial

determination that ordinance No. 21 was facially unconsti-

tutional rendered said ordinance void ab initio, even

assuming Ordinance No. 31 corrected its constitutional

A62

deficiencies, said purported correction would have no force

in effect in the absence of the reenactment of the substan-

tive provisions of ordinance No. 21, which did not occur.

c. The ordinance violates Minn. Stat. Sec.

462.357, Subd. 1c, in that municipalities are prohibited

thereby from enforcing an ordinance providing for the

elimination or termination of a use by amortization which

use was lawful at the time of its inception.

36. In the event it is determined that Plaintiffs’ use

falls within the exception provided for “adults only book-

stores, adults-only theaters, or similar adults-only busi-

nesses, as defined by ordinance,” then said exception is

facially unconstitutional under the. First and Fourteenth

Amendments to the United States Constitution, and the

unconstitutional exception is severable from the remain-

der of the statute.

COUNT II - UNCONSTITUTIONALITY

OF ZONING AMORTIZATION PROVISIONS

RIP SVAN Ee SS SS ee

37. Plaintiffs reallege the allegations set forth in

paragraphs 1-36, supra.

38. Even assuming ordinances No. 31 and 32 were

otherwise valid under state law, the amortization provi-

sion would violate the First Amendment for the following

reasons:

a. Because the amendment to the park dedica-

tion ordinance was never lawfully enacted under Minne-

sota law, the zoning ordinance remains unconstitutional

for the reasons already determined by Judge Richard Kyle

in the prior federal litigation.

A63

b. The amortization provision was enacted

without an empirical basis for believing that Plaintifix’

business caused adverse secondary effects and was thus

content-based censorship.

c. Enforcement of the ordinance would have the

effect of suppressing, or greatly reducing access to consti-

tutionally protected speech, in violation of the First and

Fourteenth Amendments to the United States Constitu-

tion.

d. The ordinance, if implemented, would not

have the effect of reducing adverse secondary effects;

rather, adverse secondary effects would be either unaf-

fected or exacerbated by implementation of the ordinance.

COUNT III - UNCONSTITUTIONALITY OF

LICENSING PROVISIONS

39. Plaintiffs reallege the allegations set forth in

paragraphs 1-38, supra.

40. Ordinance No. 36, governing the licensure of

sexually oriented businesses is facially unconstitutional

and unconstitutional as applied to Plaintiff for the follow-

ing reasons:

a. The ordinance lacks a legitimate public

purpose and is therefore an unlawful prior restraint on

freedom of expression.

b. The ordinance vests impermissible discretion

in municipal government to censor the exercise of rights

guaranteed by the First and Fourteenth Amendments to

the United States Constitution.

A64

c. The ordinance fails to provide the procedural

due process necessary for the licensing of constitutionally

protected speech.

d. The disqualification based upon prior crimi-

nal convictions for license revocation is an unlawful prior

restraint on freedom of expression.

e. The disqualification for tax delinquency is an

unlawful prior restraint of freedom of expression.

f. The license fee provision constitutes an

unlawful prior restraint on constitutionally protected

expression.

g. The prohibition against providing gratuity to

entertainers and a six (6) foot separation requirement

constitute an impermissible content-based censorship of

constitutionally protected speech.

41. As a result, Plaintiffs are entitled to a declara-

tory judgment invalidating, both facially and as applied,

ordinances No. 31, 32 and 36.

EQUITY AND IRREPARABLE INJURY

42. Plaintiffs reallege the allegations set forth in

paragraphs 1-41, supra.

43. Under the provisions of the ordinances, on their

face, violation of either the zoning or licensing provisions

are criminal offenses subjecting Plaintiffs to misdemeanor

criminal penalties of up to 90 days imprisonment and $700

fine. °

44. Asa result, Plaintiffs face irreparable injury, as

a matter of law, in that they are required to choose between

A65

the exercise of First Amendment rights on the one hand,

and criminal prosecution on the other hand.

45. As a result, Defendants have no adequate rem-

edy at law, and are entitled to a temporary and permanent

injunction enjoining and restraining the enforcement of

said provisions. -

WHEREFORE, Plaintiffs request that judgment and

decree of this Court as follows:

a. That this Court issue a declaratory judgment

declaring Coates City Ordinances No. 31, 32, and 36 to be

void under state law and/or facially unconstitutional under

the First and Fourteenth Amendments to the United

States Constitution.

b. That this Court issue a temporary and permanent

injunction, and until a hearing can be had on a motion for

temporary injunction, a temporary restraining order,

restraining and enjoining said Defendants from enforcing

said ordinances against Plaintiff.

c. That Plaintiffs be awarded their reasonable costs,

disbursements, and attorney’s fees, pursuant to Title 42

U.S.C. 1988.

A66

d. That the Court grant such other and further relief

as it may deem just, fair and equitable.

RANDALL TIGUE LAW

OFFICE, P.A.

/s/ Randall D.B. Tigue

Randall D.B. Tigue

Atty ID No. 110000

Attorney for Plaintiffs

Karmel Square Bldg.,

Elroy St. Entrance

2940 Pillsbury Avenue South

Minneapolis, MN 55408

612/825-0936

Dated: December 30, 1999

ACKNOWLEDGMENT

The undersigned hereby acknowledges that costs,

disbursements and reasonable attorney and witness fees

may be awarded pursuant to Minn. Stat. Sec. 549.21,

Subd. 2, to the party against whom the allegations in this

pleading are asserted.

/s/ Randall D.B. Tigue

Randall D.B. Tigue

Attorney for Plaintiffs

Karmel Square Bldg.,

Elroy St. Entrance,

Suite 200

2940 Pillsbury Avenue South

Minneapolis, MN 55408

Telephone: (612) 825-0936

Dated: December 30, 1999

A67

VERIFICATION

Richard J. Jacobson, being first duly sworn on oath,

hereby deposes and says that hee [sic] has an individual

Plaintiff, as well as President of the corporate Plaintiff,

Jake’s Ltd., Inc., in the above-entitled matter, that he has

read the foregoing Complaint, and that the allegations

contained therein are true, except as to those matters

stated upon information and belief, and that, with respect

to such matters, he believes them to be true.

/s/ Richard J. Jacobson

Richard J. Jacobson

Subscribed and sworn to before

me this 30th day of December, 1999.

/s/ Michelle Hreha

Notary Pubic

[SEAL] MICHELLE A. HREHA

NOTARY PUBLIC —- MINNESOTA

HENNEPIN COUNTY

My Commission Expires Jan. 31, 2000

A68

STATE OF MINNESOTA DISTRICT COURT

COUNTY OF DAKOTA FIRST JUDICIAL DISTRICT

Jake’s Ltd., Inc. a

Minnesota corporation,

and Richard J. Jacobson,

Plaintiff,

AFFIDAVIT OF

vs. RICHARD J. JACOBSON

City of Coates, a

municipal corporation, Court File No.

Defendant.

STATE OF MINNESOTA)

)SS

COUNTY OF HENNEPIN)

Richard J. Jacobson, being first duly sworn on oath,

hereby deposes and says the following:

1. Your affiant is the individual Plaintiff in the

above-entitled matter, owning the real estate on which

Jake’s is located.

2. Your affiant is also the president and 50% share-

holder of the corporate Plaintiff, Jake’s Ltd., Inc.

3. Your affiant has been involved in the operation

and/or management of Jake’s, almost since its inception in

1992.

4. When Jake’s first opened for business, it was

targeted for harassment -by members of the Coates City

Council.

5. Current Mayor Jack Gores, without the benefit of

formal City Council action, posted “no parking” signs

P *

;

‘

aid

A69

immediately in front of Jake’s. These were the only “no

parking” signs located anywhere within the City of Coates

and were obviously placed there for no other purpose than

to disrupt the business of Jake’s.

6. Customers irate over being singled out for no

parking, and receiving parking tickets, often reacted by

knocking the signs down, only to have Mr. Gores person-

ally put them back up again.

7. It was this controversy, generated solely because of

the unilateral action of members of the Coates City Coun-

cil, which accounts for a substantial of number of police

calls to Jake’s mentioned in Mr. McLaughlin’s position

statement, and virtually the entire difference in the

number of police calls between Jake’s and the House of

Coates.

8. After ordinances No. 31 and 32, seeking to amend

the Coates Zoning Ordinance to salvage the constitutional-

ity of the adult entertainment zoning provisions, invali-

dated by the United States District Court in April of 1998,

were introduced for first reading, your affiant personally

read every issue of the Hastings Gazette, which is the

designated legal newspaper for the City of Coates, seeking

to find notices of public hearing, as mandated by Minn.

Stat. Sec. 462.357, Subd. 3. No such notices were ever

published.

9. Your affiant also personally attended every

meeting of the City Council between introduction and

passage of ordinances No. 31 and 32.

10. No public hearing, as mandated by Minn. Stat.

Sec. 462.357, Subd. 3, was ever held with respect to either

of those ordinances, although both ordinances constituted

A70

amendments to a zoning ordinance, within the meaning of

state law.

11. Your affiant also notes that, introduced contem-

poraneously with ordinance No. 36 and 37, concerning the

licensure of adult entertainment businesses, was ordi-

nance No. 34, a copy of which is attached hereto Exhibit A.

This ordinance does nothing except repeat the distance

and location requirements contained in the original zoning

ordinance, which was held unconstitutional by Judge Kyle

in April of 1998.

12. Your affiant has also attempted to determine the

impact of the six-foot separation requirement mandated by

the licensing ordinance.

13. If a tape measure were taken from the existing

stage and six-feet measured off in all directions, as it

would have to be under the terms of the ordinance, the

impact on your affiant’s business would be devastating.

14. Your affiant’s current seating capacity in the

stage area where the dancers perform is approximately

120. There are many occasions, frequently on weekends

when the bar area is in fact filled to capacity.

15. A _ six-foot separation requirement from the

existing stage would eliminate roughly two-thirds of that

seating capacity.

16. It would also render the women’s restroom

inaccessible to female customers.

17. It would eliminate even more of the seating

capacity, if patrons are seated at the bar, and an aisle to

and from the men’s restroom to enable an exit to the door

were added.

;

Fe ORR AN St NR a te a ie hn iin. Maden sal

en Wai Fie Sie a

RESET TA ial DNR NEM MPR Pe TM OS Dette hae

A71

18. Your affiant executes this affidavit in support of

the attached motion for temporary injunction and tempo-

rary restraining order.

/s/ Richard J. Jacobson

Richard J. Jacobson

Subscribed and sworn to before

me this 30th day of December, 1999.

/s/ Michelle Hreha

Notary Pubic

[SEAL] MICHELLE A. HREHA

NOTARY PUBLIC —- MINNESOTA

HENNEPIN COUNTY

My Commission Expires Jan. 31, 2000

A72

STATE OF MINNESOTA DISTRICT COURT

COUNTY OF DAKOTA FIRST JUDICIAL DISTRICT

Jake’s Ltd., Inc. a

Minnesota corporation,

and Richard J. Jacobson,

Plaintiff, AFFIDAVIT OF

Vs. RANDALL D.B. TIGUE

City of Coates, a

municipal corporation, Court File No.

Defendant.

STATE OF MINNESOTA)

)SS

COUNTY OF HENNEPIN)

Randall D.B. Tigue, being first duly sworn on oath,

hereby deposes and says the following:

1. Your affiant is the attorney for Plaintiffs in the

above-entitled matter.

2. Your affiant was also the attorney for Plaintiffs in

the prior litigation commenced in this court and later

removed to the United States District Court for the Dis-

trict of Minnesota, which resulted in the original Coates

Adult Entertainment Zoning Ordinance, ordinance No. 21

being declared unconstitutional by United States District

Court Judge Richard Kyle.

3. Coates Mayor Jack Gores and several other

members of the Coates City Council attended the trial.

4. Your affiant further directed his planning expert

who testified at trial, R. Bruce McLaughlin of Indian

A73

Rocks Beach, Florida to mail to the Mayor and all mem-

bers of the City Council a position statement reflecting Mr.

McLaughlin undisputed trial testimony concerning the

alleged “adverse secondary effects” of Jake’s Bar, with

respect to property values and crime, plainly indicating

that Jake’s had not caused any adverse secondary effects

since its opening in 1992. A copy of the pertinent portion of

that position paper provided to the members of the Coates

City Council is attached hereto as Exhibit A.

5. Your affiant and his paralegal assistant Patricia

M. DaCunha, also researched the legislative history of

current Minn. State. Sec. 462.357, Subd. 1c, which prohib-

its the amortization of non-conforming uses, but contains

an exception for “adults-only bookstores, adults-only

theaters, or similar adults-only businesses, as defined by

ordinance.”

6. The legislation in question was originally intro-

duced in the Minnesota House as H.F. 896, a true a correct

copy of which is attached hereto as Exhibit B.

7. The Senate version of the bill was introduced as

S.F. 854, the original version of which is attached hereto

as Exhibit C.

8. The House bill was referred to the Committee on

Local Government and Metropolitan affairs, which held a

public hearing thereon on March 3, 1999. A true and

correct transcript of said hearing is attached hereto as

Exhibit D.

9 The bill was subsequently brought to the floor of

the State House of Representatives on March 8, 1999.

10. The Senate bill was similarly referred to the

Local Government and Metropolitan Affairs Committee of

A74

the Senate, which held a public hearing thereon on March

8, 1999. A true and correct copy of a transcription of said

hearing is attached hereto as Exhibit E.

11. The Senate version of the bill by the full senate

was considered on April 8, 1999. A true and correct copy of

the proceedings thereon taken from the Journal of the

Minnesota Senate is attached hereto as Exhibit F.

12. Your affiant also represented the Plaintiffs in

East of the River Enterprises III v. City of Hudson, St.

Croix County Circuit Court File No. 99-CV-211.

13. A true and correct copy of the testimony of Dr.

Judith Hanna in those proceedings is attached hereto as

Exhibit G.

14. A true and correct copy of the testimony of Paul

Bern in those proceedings is attached hereto as Exhibit H.

15. Your affiant executes this affidavit in support of

the attached motion for temporary injunction and tempo-

rary restraining order.

/s/ Randall D.B. Tigue

Randall D.B. Tigue

Subscribed and sworn to before

me this 3rd day of January, 2000.

/s/ Michelle Hreha

Notary Pubic

NOTARY PUBLIC —- MINNESOTA

HENNEPIN COUNTY

My Commission Expires Jan. 31, 2000

A75

Exhibit A

CITY OF COATES, MINNESOTA

CONTEMPLATED AMENDMENT TO THE

ADULT USE ZONING REGULATIONS

POSITION STATEMENT

PREPARED FOR JAKE’S, LTD., INC.

Indian Rocks Beach, Florida

(813) 595-7634

C:\Atwork\TIGUE\ R. Bruce McLaughlin

COATES \9643R6 PS Member, American

August 1, 1998 Institute

Printed January 3,2000 ~ Of Certified Planners

Services, Inc., 1998

aS * *

ACTUAL EFFECTS

1.1 Introduction:

Adult Uses, such as Jake’s, offer a form of expression

which is protected by the First Amendment to the Consti-

tution of the United States, and by the corresponding

provisions of the Constitution of the State of Minnesota. In

the early 1970s, the City of Detroit perpetrated a fraud on

the Courts and on the people of the United States when it

alleged that Adult Uses (sexually oriented businesses)

have “adverse secondary effects” that are unique and that

distinctly different from the effects of any generic commer-

cial land use.

These alleged adverse secondary effects are lower property

values, higher demands for police service, and other factors

I eae

A76

of urban blight. Subsequently, a number of jurisdictions

prepared “studies” to support Detroit’s contention. These

studies range from employing inappropriate methodologies

to being outright dishonest.

This Chapter of the Position Statement will review the

actual impacts of Jake’s on the factors which are allegedly

impacted by an adult use.

1.2 Study Areas:

To determine in effect, if any, of Jake’s on property values

and on demands for police service, in keeping with the

requirements for such analyses, a control area was se-

lected. Because U.S. Highway 52 is a 4-lane divided and

controlled access highway, with service roads through

most of the City, it serves as a barrier or buffer between

land uses on one side of the highway and those on the

other.’ Accordingly, the subject and control areas were

limited to one side of the highway each.

Since the control use and area were also in the City of

Coates, and since the City is so small, there were clearly

no demographic differences between the areas. The areas

were also carefully checked in the field to determine if

other existing land uses, (such as “lovers’ lanes,” derelict

buildings, or physical features,) might become confounding

variables and affect the results. No such land uses were

found. Accordingly, property values were analyzed for

' See, e.g., the numerous Zoning Ordinances (including Adult Use

Zoning Ordinance,) that establish a controlled access highway as a

buffer for variance purposes.

A77

Jake’s and each property contiguous to it to the North,

West and South.

The control use selected was the House of Coates, a bar

and restaurant located on the East side of U.S. 52, to-

wards the South end of the City. The House of Coates, like

Jake’s, is a place of assembly, where persons gather for

food and beverages. It is smaller in size and capacity than

Jake’s and it is on the outskirts of the City, rather than in

the “core” of the City. Like Jake’s, the House of Coates

backs on fields, and has a single family detached dwelling

to one side. Further, diagonally across the Highway from

Jake’s (and thus outside the area of influence of the adult

cabaret,) is a convenience store with package sales of

alcoholic beverages — two notorious crime magnets.

Accordingly, any unavoidable bias in geographic compari-

son would indicate that the House of Coates is in the

location, and of a size less likely to be problematic.

1.3 Property Values:

Property values were analyzed for the potential areas of

impact for Jake’s and for the House of Coates for the four

year period ending with the 1996 assessment.” Both

businesses existed throughout the period, and other land

uses also seemed to be unchanged through the period.

* The base for taxes to be paid in 1997 Source Dakota County

Assessor, Hastings, MN, December, 1996; analysis, McLaughlin

Consulting Services, Inc. December, 1996.

A78

The analysis of property values showed the property

values for Jake’s and for the properties to the North, West

and South, increased 34.83% over the four year period.

In contrast, property values for House of Coates and the

properties to the North, East and South increased only

11.61% over the same period. Therefore, using local

empirical data, controlled for potentially confounding

variables, there is no indication whatsoever of any “ad-

verse secondary effect” from Jake’s on property values.

1.4 Calls for Police Service:

Data on calls for police services were obtained from the

Dakota County Sheriff's Office. Data were obtained for

the “areas of influence” described in section 1.2, above.

For the most part, there were no calls for service except at

the two businesses being studied, and at Coates Corner,

the convenience store kitty-corner to Jake’s.

In the time period studied, there were approximately 19

calls for police service at Jake’s, of which approximately 14

resulted in police reports. Several of the calls were for

either unlocked vehicles or unlocked premises. Also, a

significant number of the calls were for parking violations,

the result of the apparently selective imposition of parking

requirements. Further, several calls were traffic-related,

which were initiated on the highway. Also, the club called

for assistance on several occasions, usually dealing with

snowmobiles illegally parked.

* Dakota County Sheriffs Office, 1996 Calls for Police Service,

Hastings, MN, 1997.

ee ee

SS essessseesssssssesstsneserenepetererenstnennnneeeeseses

tht Tots AM BR Oe ae eh

A79

There were a number of disturbance/fight calls, but, for the

most part, the calls were unrelated to the nature of the busi-

ness. There were no calls related to sex crimes or narcotics.

At the House of Coates, there were approximately 13 calls

for police service, of which nine resulted in police, reports.

Most of the calls at the House of Coates related to motor

vehicle thefts. There were no disturbance reports.

While the above data show that Jake’s has a higher

demand for police service than did the House of Coates,

when the more serious incidents (those resulting in police

reports,) are taken into consideration, and when the

smaller size of the House of Coates is also taken into

consideration, the demands are roughly equal. Further, it

should be noted that many of the calls at Jake’s related to

the selectively imposed parking restrictions, traffic of-

fenses originating on the highway, or management re-

questing police service.

Therefore, there is no evidence that Jake’s has an inordi-

nate demand for police services.

1.5 Blight Designations:

No blight designations have been made in the City of Coates.

1.6 Conclusions:

Local, empirical data, properly controlled for confounding

variables, clearly indicate that Jake’s does not cause

adverse secondary effects.

* * *

A80

— Exhibit A —

[LOGO] Minnesota House of Representatives

KEY: strieken — old language to be removed

underscored — new language to be added

NOTE: If you cannot see any difference in the key above,

you need to change the display of stricken and/or under-

scored language.

Authors and Status @ List versions

H.F. No. 896, 1st Engrossment: 81st Legislative Session

(1999-2000) Posted on 3/9/99

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1.19

A bill for an act relating to land use; pre-

cluding the termination of lawful land

uses by amortization; authorizing the en-

forcement of a particular ordinance relat-

ing to amortization; amending Minnesota

Statutes 1998, section 394.21, by adding a

subdivision; and 462.357, by adding a

subdivision.

BE IT ENACTED BY THE LEGISLATURE OF

THE STATE OF MINNESOTA:

Section 1. Minnesota Statutes 1998, section

394.21, is amended by adding a subdivision to read:

Subd. 1a. [AMORTIZATION PROHIBITED.] A

county, regardless of population, under this chap-

ter or under a special or local law, must not enact,

amend, or enforce an ordinance providing for the

elimination or termination of a use by amortization

which use was lawful at the time of its inception.

eer eee SAE RM aOR Ne: See a

A81

1.20 Sec. 2. Minnesota Statutes 1998, section

1.21 462.357, is amended by adding a subdivision to

1.22 read:

1.23

1.24 Subd. 1c. [AMORTIZATION PROHIBITED.] A

1.25 municipality must not enact, amend, or enforce an

1.26 ordinance providing for the elimination or termina-

tion of a use by amortization which use was lawful

7 at the time of its inception.

2.3 Sec. 3. [CITY OF ST. LOUIS PARK. |

2.4

25 Notwithstanding section 2, the city of St. Louis

Park may enforce ordinance .:umber_14:7-4.1

(1995). adopted by the city on October 2, 1995,

relating to the amortization of a nonconforming

ready-mix facility.

Sec. 4. [EFFECTIVE DATE. ]

Section 1 and 2 are effective the day after their

final enactment. Section 3 is effective the day after

its final enactment without local approval, as

provided in Minnesota Statutes, section 645.023.

A82

— Exhibit B —

[LOGO] Minnesota Senate

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Authors and Status @ List versions

S.F. No. 854, as introduced: 81st Legislative Session

(1999-2000) Posted on 2/17/99

1.1

1.2

1.3

1.4

* ee

1.6

1.7

1.8

1.9

1.10

1.11

1.12

1.13

1.14

1.15

1.16

1.17

1.18

A bill for an act relating to land use; pre-

cluding the termination of lawful land

uses by amortization; amending Minne-

sota Statutes 1998, sections 394.21, by

adding a subdivision; and 462.357, by

adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF

THE STATE OF MINNESOTA:

Section 1. Minnesota Statutes 1998, section

394.21, is amended by adding a subdivision to read:

Subd. la. [AMORTIZATION PROHIBITED.] A

county, regardless of population, under this chap-

ter or under a special or local law, must not enact

amend, or enforce an ordinance providing for the

elimination or termination of a use by amortization

which use was lawful at the time of its inception.

_ << =.

A83 e

1.19 Sec. 2. Minnesota Statutes 1998, section

1.20 462.357, is amended by adding a subdivision to

1.21 read:

1.22

Subd. 1c. [AMORTIZATION PROHIBITED.] A

municipality must not enact, amend, or enforce an

ordinance providing for the elimination or termina-

tion of a use by amortization which use was lawful

at the time of its inception.

Sec. 3. [EFFECTIVE DATE. ]

Sections 1 and 2 are effective the day after

their final enactment.

A84

- Exhibit C -

TRANSCRIPTION OF CASSETTE TAPE LABELED

“LOCAL GOVERNMENT & METRO AFFAIRS

3-3-99 TAPE 2, 1/2”

HOUSE FILE NO. 896

NOTES

[2] Page Line

[3] INDEX

NS TI I i 4

[4] (Continuation of Side 1 of cassette labeled,

“Local Government & Metro Affairs, 3-3-99 Tape

2, 1/2.”)

MR. CHAIR: Members and audience, if you

want to lead your conversations to the hallway, I would

appreciate that.

We have House File 896 on the agenda next. Repre-

sentative Larsen.

REPRESENTATIVE LARSEN: Thank you very

much, Mr. Chair, and I always think it’s great for us to sit

on the other side of the table here and see how you guys

look. You know, you look pretty good.

A85

MR. CHAIR: Do you want to move your bill? Is

it going —

REPRESENTATIVE

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