Talk of Town v. Department of Finance & Business Services ex rel. City of Las Vegas
Docket: Nos. 01-15303, 01-16390
Court: Court of Appeals for the Ninth Circuit; September 10, 2003; Federal Appellate Court
The case involves the suspension of the erotic dancing license for Talk of the Town (TOT) due to violations of Las Vegas alcohol licensing laws. Investigations by the City of Las Vegas' Business License Department revealed that TOT allowed the sale and consumption of alcohol without a valid liquor license. Despite being warned, investigators noted patrons consuming alcohol and were directed to a nearby liquor store by TOT employees. On February 6, 1998, TOT received a 'Notice to Cease and Desist' for violating municipal code LVMC 6.50.170. Subsequently, a 'Complaint for Disciplinary Action' was filed against TOT, citing violations of multiple codes related to alcohol consumption in erotic dancing establishments. TOT denied the allegations and raised defenses concerning process insufficiency, lack of adequate notice, and non-willfulness of actions. A hearing on May 20, 1998, allowed both parties to present their cases, leading the City Council to find substantial evidence against TOT. Consequently, on May 29, 1998, the Council imposed a three-week suspension of TOT's license, effective fourteen days post-notification, citing violations of the mentioned municipal codes.
Service was executed the same day, and prior to the expiration of fourteen days, TOT initiated a lawsuit in Nevada district court seeking declaratory and injunctive relief and requested a stay of its license suspension, which was granted. The case was later removed to federal district court, where both parties filed summary judgment motions. TOT claimed that the City’s procedures for license suspension violated its First and Fourteenth Amendment rights, arguing that the lack of adherence to established procedural guidelines for adult business licensing was unconstitutional. Specifically, TOT challenged LVMC 6.35.140(D) for failing to provide prompt judicial review during license suspension. The City countered that TOT’s rights were not violated and that the procedures were constitutionally adequate.
The federal district court ultimately dismissed TOT's constitutional challenge regarding the City’s procedures but found LVMC 6.35.140(D) unconstitutional due to insufficient safeguards for license suspension or revocation. The court issued a stay on the enforcement of the suspension, allowing both parties fourteen days to seek judicial review, with the stay remaining until a final determination was made. If neither party sought review, the stay would automatically lift. On April 27, 2001, TOT filed a motion to amend and an emergency motion for a stay, arguing that the unconstitutionality of LVMC 6.35.140(D) rendered the entire suspension scheme void. The City moved to close TOT's business on April 28, 2001, but the district court granted an emergency stay on May 1, 2001, and scheduled oral arguments for May 15, 2001. On June 1, 2001, the district court denied TOT’s motion to amend judgment but stayed the order to allow TOT to appeal, with TOT appealing the ruling that permits future enforcement of the City Council’s 1998 suspension decision.
The City cross-appeals the district court’s finding that the First Amendment is relevant to this case, highlighting two lines of First Amendment jurisprudence: the O’Brien line and the prior restraint doctrine. The O’Brien line addresses whether generally applicable regulations impose a disproportionate burden on First Amendment activities or regulate conduct with an expressive element. In contrast, the prior restraint doctrine deals with situations where protected expression is contingent on government approval, emphasizing that such restraints are usually unconstitutional due to the need for robust protections for free expression.
The case involves the applicability of these principles to the burden on TOT’s expressive activities following its violation of a liquor license law. The City argues that the O’Brien framework does not necessitate additional protections, while TOT asserts that prior restraint principles should apply.
The Supreme Court's decision in Arcara v. Cloud Books, Inc. is pertinent, where a bookstore's closure due to illegal activity was challenged as an infringement on First Amendment rights. The Court ruled that the closure did not trigger First Amendment scrutiny because it stemmed from a generally applicable law aimed at addressing illegal conduct, indicating that sanctions under such laws do not warrant First Amendment protections unless they regulate expressive conduct or impose a disproportionate burden on expression.
Applying this reasoning, the Las Vegas Municipal Code section barring alcohol consumption without a valid liquor license does not regulate conduct with a protected expressive element, nor does it impose a disproportionate burden on expressive activities, as the requirement applies uniformly to all businesses, including both bookstores and bars.
The dispute centers on whether the City had the authority to penalize TOT for violating liquor laws, particularly regarding the suspension of its erotic dancing license. TOT argues that this constitutes a 'prior restraint' on free expression, which requires procedural safeguards not provided in this case. The Supreme Court has established that requiring prior approval from a governing authority for expressive conduct raises First Amendment concerns. In *Freedman v. Maryland*, the Court highlighted the risks of a censorship system with broad discretion that could suppress protected expression. It mandated procedural safeguards to ensure that censorship does not occur without judicial review, minimizing the risk of erroneous denial of licenses. This principle was reaffirmed in *FW/PBS, Inc. v. City of Dallas*, where a licensing scheme for sexually oriented businesses was deemed unconstitutional due to a lack of timely inspections, which could lead to undue delays in issuing licenses and, consequently, suppress protected speech.
The Court identified that the licensing scheme in question differed fundamentally from the censorship scheme in Freedman, where authorities engaged in direct censorship of expressive materials. In contrast, the Dallas ordinance does not allow officials to judge the content of protected speech, leading the Court to avoid imposing the same procedural requirements as in Freedman. Instead, the Court concluded that the risk of indefinite delays in issuing licenses for expressive conduct could be mitigated by imposing a time limit on licensure decisions and ensuring prompt judicial review.
The requirement for prompt judicial review was first applied to sexually oriented business license denials in *Baby Tam Co. v. City of Las Vegas*, where a licensing statute was struck down for not providing such review. Subsequently, in *4-805 Convoy, Inc. v. City of San Diego*, a nude dancing establishment's license was suspended for regulatory violations. The establishment challenged the constitutionality of the suspension procedures, claiming inadequate safeguards against speech restraints. The court ruled that procedures for suspending or revoking such licenses must allow for either prompt judicial hearings or maintain the status quo until a judicial decision is made.
The district court relied on *Convoy* to assert that the local ordinance (LVMC 6.35.140(D)) provides for judicial review of suspension or revocation decisions but deemed it unconstitutional for lacking prompt review mechanisms or status quo preservation. However, the present case involves the enforcement of a general liquor licensing requirement, which burdens expressive conduct only incidentally. The principles established in *Freedman* do not apply here, as the conduct in question is not inherently expressive. The Court referenced *Arcara*, affirming that the enforcement of generally applicable laws can occur even when protected expressive conduct is present alongside unprotected activities. TOT's argument that the City could have used nuisance abatement procedures instead of the specific licensing provision is noted but does not alter the Court's analysis.
The City followed a procedurally appropriate method in addressing TOT's disciplinary action, relying on LVMC 6.02.330(H) rather than LVMC 6.35.140, which was not mentioned in the complaint. LVMC 6.02.330(H) allows for disciplinary action by the City Council for good cause, including activities deemed public or private nuisances or illegal conduct. During the hearing, TOT's counsel invoked LVMC 6.35.140 to argue for a fourteen-day stay of the license suspension, which the Council granted, providing additional procedural protections not mandated by law.
TOT's attempts to distinguish this case from the precedent set in Arcara are unpersuasive. The Supreme Court did not require judicial scrutiny for sanctions under generally applicable regulations that do not involve protected expression. In Arcara, the Court indicated that closure penalties for violations such as fire or health code breaches do not warrant special procedural safeguards if the underlying conduct does not involve protected expression. TOT's claim that its First Amendment rights are fully suppressed by the suspension—unlike the bookstore in Arcara, which could relocate—does not alter the application of existing legal principles regarding permissible sanctions.
The court's opinion in Arcara indicates that the bookstore's ability to relocate was not a decisive factor in the case. The severity of the burden on TOT is questionable, especially since the bookstore's closure in Arcara lasted one year, while TOT faced only a three-week suspension. The City aimed to protect the community by sanctioning premises involved in unlawful activities. There is no evidence suggesting that the suspension was a guise to suppress protected expression; without such evidence, claims of selective prosecution cannot stand. If a nuisance statute were misused to target a bookstore for selling indecent materials, it would raise First Amendment issues requiring careful scrutiny. The court concludes that the City's action against TOT for violating liquor license requirements does not engage First Amendment protections, contradicting the district court's application of procedural safeguards from another case. Consequently, the district court's order is reversed and remanded for further proceedings consistent with this opinion. The appeal regarding TOT's remedy is rendered moot. The Las Vegas Municipal Code prohibits advertising as an erotic dance establishment without a valid license, which applies to TOT’s premises. The investigation into TOT primarily focused on the erotic dance area, while a prior instance highlighted the doorman's questionable comments regarding alcohol consumption on the premises. The City Council may take disciplinary action for good cause, including for activities deemed a public nuisance. TOT held an Erotic Dance Establishment License, along with a Coin Operated Amusement License and a Video Viewing License, but the suspension of these latter two was not contested in the district court and remains unaddressed on appeal. If the erotic dance license is suspended or revoked, the licensee has a fourteen-day period to seek judicial review, which can be waived by the licensee or expedited by the City through judicial means.
TOT failed to present any arguments or legal citations to support its claim that the procedures leading to the City's suspension of its license violated Due Process or the First Amendment. The appellate court noted that TOT did not address this claim in its opening brief, stating that unraised issues are typically not considered on appeal. The district court also dismissed the City's request to amend its judgment based on a new version of LVMC 6.35.140(D) enacted in 2000.
The court referenced O'Brien, which evaluated First Amendment issues related to criminal sanctions for altering draft registration certificates, and Arcara v. Cloud Books, Inc., where the individual burned his draft card in protest against the Vietnam War. It acknowledged that erotic dance establishments like TOT are venues for constitutionally protected expression. A government regulation is deemed justified if it falls within governmental power, serves a substantial government interest unrelated to suppressing expression, and the restrictions on First Amendment freedoms are essential for that interest.
While the court noted that if a bookstore could prove selective prosecution due to a speech-suppressive motive, they might have a valid claim, no such evidence was found in the case at hand, nor did the bookstore assert this intent at trial. Additionally, the LVMC regulations prohibit nude dancing establishments from serving alcohol without a valid liquor license, but this requirement does not disproportionately burden expressive conduct. An administrative appeal revealed that Convoy violated the rule against unlicensed dancers, resulting in a suspension reduction from fourteen to seven days. The appellate court dismissed TOT's due process challenge, as it was based on the incorrect assumption that First Amendment scrutiny was necessary in this case.
