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American Entertainers, L.L.C. v. City of Rocky Mount

United States Court of Appeals, Fourth Circuit

April 27, 2018

AMERICAN ENTERTAINERS, L.L.C., a North Carolina limited liability company, d/b/a Gentleman's Playground, Plaintiff - Appellant,
v.
CITY OF ROCKY MOUNT, NORTH CAROLINA, Defendant-Appellee.

          Argued: January 24, 2018

          Appeal from the United States District Court for the Eastern District of North Carolina, at Raleigh. James C. Dever III, Chief District Judge. (5:14-cv-00438-D)

          Gary Scott Edinger, BENJAMIN, AARONSON, EDINGER & PATANZO, PA, Gainesville, Florida, for Appellant.

          James Nicholas Ellis, POYNER SPRUILL LLP, Rocky Mount, North Carolina, for Appellee.

          Before AGEE, WYNN, and THACKER, Circuit Judges.

         Affirmed in part and vacated and remanded in part by published opinion.

          WYNN, Circuit Judge

         The City of Rocky Mount, North Carolina ("Rocky Mount"), regulates "sexually oriented businesses" by requiring those businesses to obtain a license prior to operation. Appellant American Entertainers, LLC ("American Entertainers"), an exotic dancing venue, argues that the licensing regulation, in its entirety, violates the First Amendment on overbreadth grounds because it potentially requires licensure of venues that display "mainstream" performances such as ballets, concerts, and theatrical productions. In the alternative, American Entertainers contends that one of the licensing regulation's denial provisions is an unconstitutional prior restraint because it vests "unbridled discretion" in a governmental official to deny license applications and that another of the denial provisions violates the Equal Protection Clause of the Fourteenth Amendment by barring eighteen- to twenty-one-year-olds from owning "sexually oriented businesses." The district court rejected all three claims.

         For the reasons that follow, we affirm the district court's denial of American Entertainers' First Amendment overbreadth challenge and Equal Protection challenge. We conclude, however, that the district court erred in rejecting American Entertainers' prior restraint claim. By authorizing the police chief to deny a license if the chief believes the applicant will fail to comply with "all applicable laws, " the challenged denial provision is insufficiently "narrow, objective, and definite" to pass constitutional muster. Shuttlesworth v. City of Birmingham, 394 U.S. 147, 151 (1969). We therefore strike as unconstitutional the relevant denial provision from the Ordinance and remand to the district court to consider whether and to what extent the provision is severable from the remainder of the Ordinance.

         In sum, we affirm in part, vacate in part, and remand the case to the district court for further proceedings consistent with this opinion.

         I.

         A.

         Since 2002, American Entertainers has operated within Rocky Mount's limits a business known as "Gentleman's Playground." Gentleman's Playground features exotic dancers, whose scant attire has varied throughout its sixteen years of operation. Rocky Mount and American Entertainers previously have had disputes regarding the revealing nature of Gentleman's Playground's dancers' attire, including a voluntarily dismissed lawsuit back in 2003. Although years subsequently passed without incident, a 2014 police investigation regarding Gentleman's Playground caused Rocky Mount to seek to enforce against American Entertainers its sexually oriented business ordinance. Rocky Mount, N.C., Code of Ordinances § 13-270 et seq. [hereinafter Ordinance].

         The Ordinance constitutes Chapter 13, Article VII of Rocky Mount's City Code, and addresses "the regulatory licensing requirements for sexually oriented businesses located within the city." § 13-270(a). Rocky Mount enacted the Ordinance because "[s]exually oriented businesses . . . are recognized as having serious objectionable operational characteristics" and "[s]tudies and experiences in other municipalities have shown that lower property values and increased crime rates tend to accompany and are brought about by sexually oriented businesses." Id. Accordingly, "[t]he city council f[ou]nd[] that regulation . . . [wa]s necessary to insure that these adverse secondary effects do not contribute to the blighting of surrounding neighborhoods and to regulate acts, omissions or conditions detrimental to the health, safety or welfare and the peace and dignity of the city." Id. The Ordinance's stated goal is to "balanc[e] . . . the legitimate ends of the community, " and requires any sexually oriented business "to carry its share of financing the administrative and enforcement activities." § 13-270(b).

         The Ordinance defines a sexually oriented business as, in pertinent part, "any . . . adult cabaret . . . as defined in this article." § 13-271 (emphasis added). An "adult cabaret, " in turn, is defined as "any retail business or private club as defined in North Carolina General Statutes § 18B-1000 which: (a) serves food or beverages, or permits the consumption of food or beverages; and (b) regularly provides or has available for viewing by its patrons or members adult live entertainment." Id. (emphasis added). The term "adult live entertainment" means "any performance of or involving the actual presence of real people which exhibits specified sexual activities or specified anatomical areas, as defined in this article." Id. (emphasis added). The Ordinance defines "specified sexual activities" as, in relevant part, the "[f]ondling or other erotic touching of human genitals, pubic regions, buttocks or female breasts." Id.

         Additionally, the Ordinance contains six license-denial provisions. § 13-273(d). The two provisions at issue in this appeal permit Rocky Mount's police chief to deny a license if either (1) "the operation [of the sexually oriented business], as proposed by the applicant, if permitted, would not comply with all applicable laws, including, but not limited to, the city's building, zoning, and health regulations;" or (2) any license applicants or other specified business principals are "not over the age of twenty-one . . . years." § 13-273(d)(2), (d)(6).

         B.

         Rocky Mount sought to enforce the Ordinance against American Entertainers after police investigators learned that dancers at Gentleman's Playground were providing "adult live entertainment" within the meaning of the Ordinance. In response, American Entertainers filed a Complaint in the Eastern District of North Carolina challenging, among other things, the application and constitutionality of the Ordinance under the First Amendment and the Equal Protection Clause.

         After the close of discovery, the parties filed cross-motions for summary judgment. The district court granted in part and denied in part the motions, resolving in Rocky Mount's favor American Entertainers' constitutional claims. American Entertainers timely filed a motion for rehearing, which the district court denied. American Entertainers timely appealed three constitutional determinations to this Court.

         II.

         American Entertainers asserts three arguments on appeal, that the Ordinance: (A) is unconstitutionally overbroad; (B) imposes an unconstitutional prior restraint by granting Rocky Mount's police chief unfettered discretion to deny a permit; and (C) violates the First Amendment and Equal Protection Clause by prohibiting from being owners, officers, or directors of a sexually oriented business individuals between eighteen and twenty-one years of age. Because this appeal arises from ...


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