JOHN R. TUNHEIM, District Judge.
Plaintiff, Risky Business Novelties and Videos, Inc. ("Risky Business"), a Minnesota corporation, brings this action against the County of Crow Wing ("Crow Wing"), pursuant to 42 U.S.C. § 1983. Risky Business alleges that Crow Wing has violated the First and Fourteenth Amendments by attempting to enforce a new adult use ordinance against it. Presently before the Court is Risky Business's motion for a preliminary injunction preventing enforcement of the ordinance. It does not appear that Crow Wing has authority to enforce the ordinance against Risky Business because Risky Business is already subject to an ordinance in the City of Brainerd. Furthermore, Risky Business has met the standards entitling it to preliminary injunctive relief regarding its § 1983 claim. Accordingly, the Court will grant Risky Business's motion for a preliminary injunction.
Timothy Houle became the Crow Wing County Administrator in 2008. (Aff. of Timothy Houle ¶ 1, Dec. 12, 2012, Docket No. 13.) He was previously the Morrison County Coordinator. (Id. ¶ 2.) In his position at Morrison County, Houle became aware that an adult use business, the Camp Bar, had problems including prostitutes working at the business. (Id. ¶ 4.) The owner of the Camp Bar served jail time for promoting prostitution, filed multiple unsuccessful lawsuits against Morrison County, and was eventually shot and killed in a standoff after holding the Morrison County Board of Commissioners hostage at gunpoint during a regular meeting. (Id. ¶¶ 3-6.)
Based on this experience in Morrison County, Houle reviewed Crow Wing's adult use ordinance when he became Crow Wing's County Administrator. (Id. ¶ 5.) He determined that "there could have been a more well-defined regulatory scheme to control the time, place and manner of adult use businesses without getting into content." (Id. ¶ 7.)
On April 10, 2012, the Board held a public hearing on the adult use ordinance drafted by Houle ("the Ordinance"), and there was no public comment. (See Ex. B to Compl., Nov. 29, 2012, Docket No. 8; Houle Aff. ¶ 10.) The Board then voted unanimously to approve the Ordinance, and it became effective that same day. (Houle Aff. ¶ 10.)
Prior to voting, the Board reviewed and considered several land use studies and sample adult use ordinances. (Id. ¶ 12, Ex. 5.)
In addition to the studies and ordinances, the Board also claimed to rely on its knowledge of actual conditions within Crow Wing and the surrounding counties, including the circumstances surrounding the Camp Bar, when enacting the Ordinance. (Ex. B to Compl.; Houle Aff. ¶ 13.) According to Risky Business's expert, who reviewed the minutes of the meeting at which the Board enacted the Ordinance, the Board referenced the allegedly problematic adult use establishments in Morrison County but did not claim that Risky Business had caused any adverse secondary effects. (Decl. of R. Bruce McLaughlin ¶ 12, Nov. 26, 2012, Docket No. 4.) Risky Business claims that, in the years between 2005 and 2012, it "has not generated any adverse secondary effects in the surrounding community such as an increase in crime, a lowering of property values, or the creation of urban blight." (Compl. ¶ 13, Nov. 26, 2012, Docket No. 1.)
The Board passed a resolution along with the Ordinance itself. The Resolution articulates the need for the Ordinance based on Crow Wing's responsibility to protect minors from exposure to sexually-oriented material. (Ex. B to Compl.) It also discusses alleged adverse secondary effects associated with sexually-oriented businesses such as illegal behaviors like prostitution and drug abuse, casual sexual liaisons and the transmission of sexually transmitted diseases, negative effects on neighboring businesses, declining property values, and increased crime. (Id.)
The Crow Wing Ordinance states that it does not apply to businesses in cities or townships that have enacted an adult use licensing ordinance. (Id. at 13.) It appears that Brainerd, the city where Risky Business is located, has an adult use licensing ordinance with substantial similarities to Crow Wing's Ordinance. (See Compl. ¶¶ 6-7.)
The Crow Wing Ordinance itself contains several sections, including licensing, fees, sanctions for violations, inspections, and regulation and performance standards. (Ex. B to Compl.) The Ordinance requires that sexually-oriented businesses obtain a license from Crow Wing's Public Health Department to operate their businesses. (Id. § Sec. II, A.)
Under the Ordinance, a sexually-oriented business is defined as:
(Id. § I, R.) Crow Wing stated at oral argument that it believes that a business must satisfy prongs (1) or (2) of the definition of a sexually-oriented business in order to be subject to the Ordinance. In other words, a business would not be subjected to the restrictions in the Ordinance
The Ordinance defines "Specified Anatomical Areas" as "less than completely and opaquely covered human genitals, pubic region, buttock, anus or female breast(s) below a point immediately above the top of the areola; and, exposed or opaquely covered human male genitals in discernibly turgid state." (Id. § I, S.) "Specified Sexual Activities" is defined as covering a variety of activities, including sexual intercourse. (Id. § I, T.)
If a business qualifies as a sexually-oriented business under the Ordinance, it is subject to various restrictions and requirements. For example, the Ordinance makes it a criminal offense to operate a sexually-oriented business without a license; requires the submission of applications for a license, which must include certain information
Risky Business is located in Crow Wing, in the city of Brainerd. Crow Wing has attempted to enforce its Ordinance against Risky Business. However, such enforcement is currently on hold pending resolution of this motion. (See Ex. A to Compl. ¶ 9, Nov. 29, 2012, Docket No. 8.)
Crow Wing's attempt to enforce its ordinance began when Crow Wing's Public Health Nurse, Andrea Deyo, sent a letter to Ronald Beattie Jr., Risky Business's owner, informing him of the Ordinance and requesting a meeting to discuss its effects on Risky Business. (Aff. of Andrea Deyo, ¶¶ 1-2, Ex. 1, Dec. 12, 2012, Docket No. 12.) Deyo dropped off a copy of the Ordinance at Risky Business on August 28, 2012, and made a site visit on August 30, 2012. (Id. ¶ 3.) At this visit, she provided Beattie another copy of the Ordinance as well as other paperwork. (Id.) Beattie submitted an application for a sexually-oriented business license on October 11, 2012, investigative and license fees on October 12, 2012, and a supplement to his application on October 22, 2012. (Id. ¶¶ 4-6.) With his application, he submitted a diagram of Risky Business.
Deyo then inspected Risky Business on November 20, 2012, and completed a sexually-oriented business inspection form. (Id. ¶ 7, Ex. 3.) She discussed with Beattie ways in which Risky Business was not in compliance with the Ordinance, namely the doors, windows, and other openings were not covered with an opaque material and the video surveillance system was not functional. (Id. ¶ 7.) She informed Beattie that he had ten working days to bring the store into compliance or his license application would be denied. (Id. ¶ 7.)
According to Deyo, the diagram that Risky Business submitted of its store to Crow Wing is misleading. (Id. ¶ 8; see also id., Ex. 4.) The diagram shows that Risky Business has a room for adult videos, a room for adult novelties, and an area for general clothing and merchandise. (Id. ¶ 8.) Using the numbers submitted on the floor plan, the room containing adult videos is approximately 130 square feet and the room holding the adult novelties is in excess of 215 square feet. (Id., Ex. 4.) According to Deyo, however, many items labeled as general clothing and merchandise in fact depicted sexual organs and/or acts. (Id. ¶ 9.) Deyo acknowledged that there were also many items in the general clothing and merchandise area that were not sexually-oriented. (Id. ¶ 9.)
Beattie claims that Risky Business always has "one [adult] video tape less than 25 percent of his inventory" that occupies "one square foot less than 25 percent of the floor space." (See Ex. A to Compl.) Crow Wing responds that it does not know whether this allegation is accurate. (See id.)
The Court must consider four factors in determining whether a preliminary injunction should be granted: (1) the threat of irreparable harm to the moving party; (2) the state of balance between the alleged irreparable harm and the harm that granting the preliminary injunction would inflict on the other party; (3) the likelihood of the moving party's success on the merits; and (4) the public interest. Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 113 (8
As an initial matter, it is not apparent to the Court in examining the language of the Crow Wing Ordinance that it can be applied by its terms against Risky Business. As noted above, the Crow Wing Ordinance states that it does not apply to businesses in cities or townships that have enacted an adult use licensing ordinance. It appears that Brainerd has an adult use licensing ordinance. The Court finds, by reviewing the plain language of the Crow Wing Ordinance, that it likely cannot be applied in the City of Brainerd. Indeed, at oral argument, Crow Wing did not deny that this section of Crow Wing's Ordinance might prohibit its enforcement in the City of Brainerd. This fact suggests that an injunction against the enforcement of Crow Wing's Ordinance is appropriate and that Risky Business has a likelihood of success in showing that the Crow Wing Ordinance is not enforceable against it. The Court will not address this matter further, however, because it has not been briefed by the parties and the Court does not have enough information to fully analyze this issue.
The Court will first address the likelihood of success on the merits because the Eighth Circuit often emphasizes this factor and has held that "the absence of a likelihood of success on the merits strongly suggests that preliminary injunctive relief should be denied." See CDI Energy Srvs., Inc. v. West River Pumps, Inc., 567 F.3d 398, 402 (8
Crow Wing claims that Risky Business is subject to the Ordinance because it qualifies as a sexually-oriented business. As noted above, a sexually-oriented business is defined as including any business or enterprise where the sum total of floor area devoted to uses or activities that emphasize the presentation, display, depiction, or description of specified anatomical areas or specified sexual activities, for more than seven days per year, exceeds forty square feet. (Ex. B to Compl., § 1, R(2).) The floor plan submitted with Risky Business's license application shows that the square footage of its adult novelty room alone is over 215 square feet. (Deyo Aff., Ex. 4.) Thus, Crow Wing argues that Risky Business is a "sexually-oriented business." Risky Business claims that the Ordinance, including its application to Risky Business as a "sexually-oriented business," violates the First Amendment.
When analyzing the constitutionality of an ordinance under the First Amendment, the Court must first determine if the ordinance is "content-neutral." Ward v. Rock Against Racism, 491 U.S. 781, 791 (1989). "A regulation that serves purposes unrelated to the content of expression is deemed neutral, even if it has an incidental effect on some speakers or messages but not others." Id. "Thus, even if a time, place, and manner ordinance regulates only businesses selling sexually explicit materials, the ordinance is content-neutral if its purpose is to lessen undesirable secondary effects attributable to those businesses, such as increased crime, lower property values, or deteriorating residential neighborhoods." ILQ Invs., Inc. v. City of Rochester, 25 F.3d 1413, 1416 (8
Next, the Court must determine if the content-neutral regulation is "designed to serve a
First, the Court must determine if Risky Business has demonstrated a significant governmental interest in its Ordinance. See Phelps-Roper, 697 F.3d at 693 (considering existence of significant governmental interest). Curbing unwanted secondary effects of sex businesses is a substantial governmental interest. ILQ Invs., 25 F.3d at 1416. But in order for an Ordinance to serve that interest, it must be reasonably designed. Id.
Risky Business argues that there is insufficient evidence about the negative effects of Risky Business, in particular, to support the Ordinance. The Court does not find this argument persuasive.
Here, the most recent study relied on by Crow Wing was a decade old and the most dated was four decades old, and the Court has no evidence that these studies are still applicable today. See PAO Xiong v. City of Moorhead, Minn., 641 F.Supp.2d 822, 827 (D. Minn. 2009) ("[T]here may come a time when ... studies are so old and outdated that a municipality's reliance on the studies' analysis in determining relevant secondary effects will no longer be reasonable."). Reliance on these studies seems potentially unreasonable given that the Internet has made adult materials much more widely available than they were in the 1970s, 1980s, 1990s, and even the early 2000s. These societal developments call into question whether the purported secondary effects of businesses that sell such widely-available material are the same today as they were decades ago. See id.
Additionally, Crow Wing seemingly relied on very little information other than the dated studies and ordinances. Crow Wing has provided almost no information regarding information it relied on in enacting the Ordinance outside of these studies and ordinances, except for one piece of extreme evidence regarding the criminal acts of a bar owner in a different county. Thus, although this issue is a close one, the Court finds at this preliminary stage that the County may have been unreasonable in relying on the evidence it used to support the Ordinance. See DiMa Corp. v. High Forest Twp., Civ. No. 02-3800, 2003 WL 21909571, at *4 (D. Minn. Aug. 7, 2003).
Next, the Court will consider if Risky Business is likely to succeed in showing that the Ordinance is not narrowly tailored. See Phelps-Roper, 697 F.3d at 693 (considering whether ordinance is narrowly tailored). In determining whether an ordinance is narrowly tailored, governmental bodies have some latitude in determining how to address problems they have identified. See Young v. Am. Mini Theaters, Inc., 427 U.S. 50, 71 (1976). As the Supreme Court stated:
Ward, 491 U.S. at 800 (internal quotation marks omitted).
An ordinance is not narrowly tailored if it is overbroad.
In this case, the Court finds that Risky Business has demonstrated a fair likelihood of prevailing on a claim that the Ordinance is overbroad and, therefore, not narrowly tailored. See Krantz v. City of Fort Smith, 160 F.3d 1214, 1221 (8
The Court must next consider the other three Dataphase factors. One of these facts is the threat of irreparable injury. It is well-settled that a "loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury." Elrod v. Burns, 427 U.S. 347, 373 (1976). Because Risky Business has established a sufficient likelihood of success on its First Amendment claim, it has also shown a threat of irreparable harm as the result of the deprivation of its First Amendment rights.
Next, the Court should consider the balance between the alleged irreparable harm and the harm that granting the preliminary injunction would inflict on the other party. "The balance of equities ... generally favors the constitutionally-protected freedom of expression." Phelps-Roper v. Nixon, 545 F.3d 685, 690 (8
Finally, because "[i]t is always in the public interest to protect constitutional rights," Phelps-Roper, 545 F.3d at 690, the Court concludes that this final factor weighs in favor of a preliminary injunction. Although Crow Wing has identified some important goals that it associated with its Ordinance, as the Court explained above, the County has failed to show that it is reasonable to believe that its Ordinance will achieve these goals. Thus, Risky Business has shown that the public interest weighs in its favor.
The Court therefore finds that each of the Dataphase factors supports a preliminary injunction. Although it is unclear if Risky Business will ultimately prevail in its First Amendment challenge, it appears at this stage that Risky Business is likely to succeed on the merits. Risky Business has also shown that the other Dataphase factors weigh in its favor. Accordingly, the Court will grant Risky Business's motion.
Federal Rule of Civil Procedure 65 requires that a preliminary injunction or a temporary restraining order shall only issue if the applicant "gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained." Fed R. Civ. P. 65(c). Risky Business asks that the Court waive the security requirement.
Because the County did not object to Risky Business's request that the security requirement be waived, the Court will grant the waiver. See Northshor Experience, Inc. v. City of Duluth, Minn., 442 F.Supp.2d 713, 723 (D. Minn. 2006) (granting a waiver when the defendant had not objected or otherwise "addressed this issue or attempted to quantify any dollar amount of harm that it may face from a wrongly issued injunction").
Based on the foregoing, and all the files, records, and proceedings herein,
1. Plaintiff's Motion for Preliminary Injunction [Docket No. 2] is
2. Plaintiff is not required to provide security under Federal Rule of Civil Procedure 65(c).
