For the reasons hereinafter stated, we agree with the district court that there were no genuine issues of material fact presented and that the appellees were entitled to judgment as a matter of law.

We note at the outset that appellants have alleged the existence of a case or controversy within the meaning of article III of the Constitution and that their claim for relief under 28 U.S.C. § 2201 is justiciable.

Federal declaratory relief under 28 U.S.C. § 2201 is available when those seeking to invoke the power of federal courts allege an actual case or controversy within the meaning of article III of the Constitution. Doe v. Bolton, 410 U.S. 179, 188, 93 S. Ct. 739, 35 L. Ed. 2d 201 (1972); Flast v. Cohen, 392 U.S. 83, 99-101, 88 S. Ct. 1942, 20 L. Ed. 2d 947 (1968). In order to assure the requisite adverseness of interest which "sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions" the parties must possess a "personal stake in the outcome" of the case. Baker v. Carr, 369 U.S. 186, 204, 82 S. Ct. 691, 7 L. Ed. 2d 663 (1962).

In Steffel v. Thompson, 415 U.S. 452, 475, 94 S. Ct. 1209, 39 L. Ed. 2d 505 (1974), the Supreme Court held that declaratory relief may be invoked against a general as well as an actual threat of state prosecution whether an attack is made on the constitutionality of a state statute on its face or as applied. The challenger need not expose himself to actual arrest.

In this case the ordinance is not moribund and applies particularly and unambiguously to appellants' business. A violation of any provision of the ordinance is grounds for revocation or suspension of any and all licenses held by a liquor establishment as well as the imposition of a term of imprisonment or a fine up to $300.00.

This case presents the issue of whether the state's broad regulatory power over liquor within its borders, conferred by the twenty-first amendment, outweighs a tavern owner's first amendment interest in presenting sexually explicit entertainment to its patrons. We conclude that it does.

Although it has been held that the twenty-first amendment must be read in light of other provisions of the Constitution, Hostetter v. Idlewild Liquor Corp., 377 U.S. 324, 332, 84 S. Ct. 1293, 12 L. Ed. 2d 350 (1964), it has been read as conferring something more upon a state than the normal operation of the police power. In Seagram & Sons v. Hostetter, 384 U.S. 35, 42, 86 S. Ct. 1254, 16 L. Ed. 2d 336 (1966), the Court reaffirmed its view that a state is not confined by the normal operation of the commerce clause when regulating intoxicating liquors within its borders. Accord, Finch & Co. v. McKittrick, 305 U.S. 395, 398, 59 S. Ct. 356, 83 L. Ed. 246 (1939). Furthermore, a regulation enacted pursuant to the twenty-first amendment entitles it to a presumption of validity. California v. LaRue, 409 U.S. 109, 118-19, 93 S. Ct. 390, 34 L. Ed. 2d 342 (1972).

It is important to note at the outset that this case is before us in the context of the city's regulatory powers over intoxicating liquors within its borders. The City of Virginia has not attempted to bar all nude entertainment, whether live or on film, across the board. Rather the city has prohibited such entertainment only in establishments licensed to sell liquor by the drink.

In California v. LaRue, supra, 409 U.S. 109, 93 S. Ct. 390, 34 L. Ed. 2d 342, the Supreme Court upheld the constitutionality of a regulation issued by the California Department of Alcoholic Beverage Control which prohibited explicit sexual live entertainment and films in taverns licensed to sell liquor by the drink. The Court pointed out that the challenged regulations arose "not in the context of censoring a dramatic performance in a theater, but rather in a context of licensing bars and nightclubs to sell liquor by the drink." Id. at 114, 93 S.Ct. at 395. The Court made it clear that because of the state's broad regulatory powers under the twenty-first amendment traditional first amendment standards were not appropriate in resolving the issue of the regulation's constitutionality. Id. at 116, 93 S. Ct. 390. While the Court admitted that the regulations proscribed some forms of entertainment entitled to the protection of the first amendment, the regulations were addressed to the conduct rather than speech elements of the entertainment. Id. at 116-17, 93 S. Ct. 390. The Court went on to apply a rational basis test concluding that the state may promulgate broad prophylactic rules banning sexually explicit entertainment at licensed taverns so long as they represent a reasonable exercise of a state's twenty-first amendment powers and are rationally related to the furtherance of legitimate state interests. Because the Court could not conclude that the department's decision that certain sexual performances ought not occur at licensed taverns selling liquor by the drink was an irrational one, the regulation on its face did not violate the first and fourteenth amendments to the Constitution. Id. at 118, 93 S. Ct. 390.

In Paladino v. City of Omaha, 471 F.2d 812 (8th Cir. 1972), this court held that an ordinance bearing a basic similarity to the regulation upheld in California v. LaRue, supra, 409 U.S. 109, 93 S. Ct. 390, 34 L. Ed. 2d 342, was not unconstitutional On its face.4 The ordinance in Paladino was more restrictive than the regulation upheld in LaRue in that it additionally banned topless dancing in bars. We concluded that "unless we can say that the determination made by the City as to Which sexually oriented performances are barred is in fact 'irrational', we cannot hold that the ordinance on its face violates the Federal Constitution * * *." Paladino v. City of Omaha, supra, 471 F.2d at 814.5

Appellants contend that Peto v. Cook, 364 F. Supp. 1 (S.D.Ohio 1973), Aff'd sub nom. Guggenheim v. Peto, 415 U.S. 943, 94 S. Ct. 1462, 39 L. Ed. 2d 560 (1974), implicitly narrows the Supreme Court's holding in California v. LaRue, supra, 409 U.S. 109, 93 S. Ct. 390, 34 L. Ed. 2d 342, and urges this court to adopt the district court's reasoning in Peto. We reject this contention because the facts before us are clearly distinguishable from the facts before the district court in Peto.

In that case the regulation before the court was considerably broader than in this case in that it sought to regulate literature, advertising materials and language as well as sexually explicit entertainment in both on and off premises liquor establishments. Peto v. Cook, supra, 364 F.Supp. at 3 n.5.

Furthermore, the Peto case arose in the context of a warrantless search of plaintiff's "take out" liquor establishment in which allegedly obscene printed materials were seized without an opportunity for a judicial determination of their obscenity. Id. at 4. The court held that the warrantless search and seizure was per se violative of the fourth amendment and therefore held it unconstitutional and permanently enjoined enforcement of the portions of the regulation which sought to regulate printed materials not previously found obscene under the standards of Miller v. California, 413 U.S. 15, 93 S. Ct. 2607, 37 L. Ed. 2d 419 (1973). However the Peto court held constitutional those portions of the regulation falling within the ambit of California v. LaRue, supra, 409 U.S. 109, 93 S. Ct. 390, 34 L. Ed. 2d 342. Peto v. Cook, supra, 364 F.Supp. at 5. Thus there is no merit in appellants' contention and we reject the invitation to follow the inapposite reasoning of the district court in Peto.

Because we cannot say that the city's conclusion (as embodied in the ordinance) that sexually explicit entertainment should not occur in premises licensed to sell liquor by the drink is an irrational one, we hold that the ordinance does not on its face violate the first or fourteenth amendments to the Federal Constitution.

Therefore we find that the district court properly granted appellees' cross-motion for summary judgment because there were no genuine issues of material fact before the court; and under the authority of California v. LaRue, supra, 409 U.S. 109, 93 S. Ct. 390, 34 L. Ed. 2d 342 and Paladino v. City of Omaha, supra, 471 F.2d 812, appellees were entitled to judgment in their favor as a matter of law.

The judgment of the district court is affirmed.