LYNN ADELMAN, District Judge.
Since 2009, plaintiffs Six Star Holdings, LLC and Ferol, LLC have sought to open night clubs featuring erotic dance entertainment in the downtown area of the City of Milwaukee. In order to both serve liquor and present erotic dancing,
In the present lawsuit, which arises under 42 U.S.C. § 1983, the plaintiffs allege that the former ordinances governing tavern amusement, theaters, and public entertainment clubs violated the First Amendment. They also allege that the tavern, tavern-amusement, and theater ordinances were unconstitutionally applied to them. The plaintiffs do not seek any injunctive or other form of prospective relief, and they do not bring any claims involving the newly enacted ordinance governing public entertainment premises. Instead, they seek only damages for the time period in which the repealed ordinances (and the tavern ordinance, which is still in force) prevented them from offering erotic dance entertainment in the City. Before me now are the parties' motions for summary judgment.
The plaintiffs are managed by John Ferraro, who is the manager of three existing erotic dance establishments in Wisconsin, each named Silk Exotic Gentlemen's Club. One of these establishments is located in the City of Milwaukee, although not in the downtown area. In 2009, Ferraro formed Ferol and leased premises located on Pittsburgh Avenue in downtown Milwaukee, intending to open a new erotic dance establishment, named Satin. Because Satin would have offered both liquor and erotic entertainment, Ferol needed to obtain both a tavern license and a tavern-amusement license. Ferol applied for both licenses in July 2009. Once the applications were filed, the alderman for the district in which Satin was to be located informed his constituents of Ferol's proposal. Many in the neighborhood voiced opposition to the proposal, and Ferol's lawyer advised it that, based on the amount of public opposition, the applications were sure to be denied. Under the Code of Ordinances, when a license application is denied, the applicant is disqualified from applying for the same license for the same premises for one year. See Milwaukee Code of Ordinances § 85-13-4-a. After considering the advice of its lawyer, Ferol decided to withdraw its applications rather than risk having the applications denied and being prohibited from reapplying for one year.
In August 2010, Ferraro decided to reapply for tavern and tavern-amusement licenses for Satin. He also decided to attempt to open a third erotic dance establishment in the City of Milwaukee and formed Six Star for the purpose of operating that establishment, which would have been named Silk East. Six Star proceeded to execute a lease for a location on Old World Third Street in downtown Milwaukee and to apply for the necessary tavern and tavern-amusement licenses.
The Committee heard Six Star's applications first. Sixteen witnesses testified in opposition to its proposal for the Old World Third location. Ten of those witnesses represented commercial interests in the neighborhood, such as existing retail stores, hotels, and business associations. They almost uniformly opposed using the location as an erotic dance establishment on the ground that such a use would have been inconsistent with a development plan that had been adopted for the neighborhood. The business representatives testified that the goal of the development plan was to attract more retail establishments to the neighborhood, such as clothing stores and other shops, and that the presence of a gentlemen's club would deter retailers from moving in. Most of the remaining witnesses were residents of the neighborhood, including individuals who lived in apartments above the proposed location. Those witnesses expressed concern about the noise that the proposed establishment would generate, about the safety of the neighborhood given the kind of clientele adult establishments are known to attract, and about the effect of the establishment on property values. Some of the residents also noted that the area was already oversaturated with bars and night clubs. One resident, Francisco Camacho, indicated that he found erotic dancing offensive. He testified that he opposed both Six Star's and Ferol's proposals on the ground that erotic dancing perverts the community and is against the teachings of Islam.
Alderman Bauman, the alderman for the district, testified in opposition to Six Star's applications. He mostly emphasized the concerns of the business community and their efforts to turn the area into one focused on shopping and retail. As he explained:
Continuation of Licenses Committee Hearing Tr., Sept. 20, 2010 at 12-13, ECF No. 61-2.
Once all testimony had been taken, the Committee discussed Six Star's applications. Alderman Hamilton moved to recommend that the Common Council deny the applications on the ground that granting the licenses would be contrary to the
Turning to Ferol's applications, the Committee heard testimony from eleven witnesses who opposed the proposal. The witnesses included representatives of the business community and residents of the neighborhood. Both the residents and the business representatives stated that the proposal was inconsistent with a development plan that had been adopted for the area. As one witness explained, the development plan called for a mix of residential and retail uses, including so-called "mixed" uses in which retail or commercial establishments occupied the first floor of a building and residential units occupied the upper floors. See Continuation of Licenses Committee Hearing Tr., Sept. 20, 2010 at 22-25, ECF No. 62-1. The plan specified that the commercial uses in the neighborhood would be "boutique-scaled," which meant that they would be small-scale businesses such as boutique retailers and design showrooms. Id. at 22-23. The witness explained that the proposal for Satin involved a large facility (20,000 square feet and up to 1,000 to 1,200 patrons per day) that was significantly out-of-scale with this focus on boutique uses. The witness further explained that there was not enough parking in the area to support a facility of that size. Other witnesses echoed this concern about adequate parking. Still other witnesses expressed concern about the effect of the proposal on residential property values and on neighborhood safety, and about potential noise and traffic issues.
Alderman Witkowiak, the alderman for the district, also testified in opposition to Ferol's applications. He mostly reiterated the concerns expressed by the community members who testified in opposition to Ferol's applications. He explained that the proposal was too large and out-of-scale for the neighborhood, that there would be inadequate parking space to support the proposal, that the proposal was inconsistent with the development plan for the area, and that some residents were concerned about safety and property values.
Once all testimony had been taken, the Committee discussed Ferol's applications. This time, Alderman Kovacs moved to recommend that the Common Council deny them. He cited the overwhelming objections by the residents and businesses in the neighborhood and potential parking and traffic problems. The Committee unanimously voted to recommend that the Common Council deny Ferol's applications.
The next day, September 21, 2010, the Common Council voted to accept the Licensing Committee's recommendations on Six Star's and Ferol's applications for tavern and tavern-amusement licenses.
Approximately one year later, Six Star decided that it would attempt to operate the Old World Third location as a "dry" gentlemen's club — i.e., a night club that featured erotic dance entertainment but that did not serve alcohol. Six Star thought that it needed a theater license under Chapter 83 of the Code of Ordinances to operate such an establishment, and on September 14, 2011, it applied for such a license. Pursuant to its usual practice, the City Clerk's office notified the alderman for the district that the application had been filed. That was Alderman Bauman, and he instructed the City Clerk to "hold" Six Star's application. Because of this hold, Six Star's application was not set for a hearing before the Licenses Committee, and no action was ever taken on
The plaintiffs' primary claims are that the tavern-amusement ordinance, which, before March 1, 2012, appeared in Chapter 90 of the Milwaukee Code of Ordinances,
Turning to these challenges, the plaintiffs' first argument is that the City imposed a "prior restraint" on speech without complying with the strict procedural requirements governing prior restraints. See, e.g., FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990); City of Lakewood v. Plain Dealer Publ'g Co., 486 U.S. 750, 108 S.Ct. 2138, 100 L.Ed.2d 771 (1988); Freedman v. Maryland, 380 U.S. 51, 85 S.Ct. 734, 13 L.Ed.2d 649 (1965). However, the Seventh Circuit rejected that very argument in Blue Canary Corp. v. City of Milwaukee, 251 F.3d 1121 (7th Cir.2001). There, the Seventh Circuit considered a challenge to a City of Milwaukee tavern-licensing decision that was in all material respects the same as the challenge the plaintiffs bring in the present case — a challenge involving the City's denial of a tavern license and an appropriate tavern-amusement license for a tavern that wanted to present erotic entertainment.
Blue Canary also establishes that a city's decision to deny tavern licenses on the basis of the "character" of the applicant's proposed entertainment is, in general, a permissible regulation of the time, place, or manner of expressive activity. As the court explained, a city is permitted to consider the secondary effects of the entertainment, such as noise, safety, parking and traffic problems, and the general incompatibility of the entertainment with the normal activity of the neighborhood, when making licensing decisions. See 251 F.3d at 1123-25. In the present case, the transcript of the licensing hearing indicates that the City denied the plaintiffs' license applications for reasons having to do with these secondary effects rather than with disapproval of the content of the proposed expressive activity. The primary reason for denying the licenses for Silk East was that its presence in the neighborhood would have deterred the kind of retailers the community was trying to attract. As the alderman for the district testified, a retailer like American Girl® is unlikely to open a shop next to a gentlemen's club. This was a permissible basis for denying the licenses. See id. at 1124 ("Countless cases allow municipalities to zone strip joints, adult book stores, and like erotic sites out of residential and the classier commercial areas of the city or town. Establishments that purvey erotica, live or pictorial, tend to be tawdry, to be offensive to many people, and to attract a dubious, sometimes a disorderly, clientele. Liquor and sex are an explosive combination, so strip joints that sell liquor are particularly unwelcome in respectable neighborhoods."). Likewise, the decisions to deny the licenses for Satin were based on its incompatibility with the neighborhood — the community members testified that the proposal was out-of-scale and that it would present parking, traffic, and safety issues. Again, a decision based on such secondary effects rather than on disagreement with the content of the expressive message qualifies as a permissible time, place, or manner regulation.
The plaintiffs also argue that the City cannot satisfy the prong of the time, place, or manner test requiring the government to leave open reasonable alternative avenues of communication. See City of Renton v. Playtime Theatres, Inc., 475 U.S. 41, 47, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986).
To that end, the City has offered evidence as to the number of taverns allowed to present erotic dance entertainment in the City of Milwaukee between 2006 and 2010. There were fifteen taverns that presented erotic entertainment on a regular basis in 2006, fourteen in 2007, ten in 2008, twelve in 2009, and eleven in 2010. Each year, a few other taverns offered erotic entertainment on a part-time or occasional basis. (In 2010, for example, five taverns offered occasional erotic entertainment.) The plaintiffs contend that these numbers are insufficient for a city with a population close to 600,000. However, no evidence in the record indicates that any person who wanted to view erotic dance entertainment in the City of Milwaukee between 2006 and 2010 found it unreasonably difficult to do so.
The plaintiffs contend that even if the number of erotic dance establishments in Milwaukee was sufficient to meet the needs of consumers of such entertainment, a time, place, or manner restriction must also allow those who wish to present such entertainment a reasonable opportunity to present it. That general proposition is true. See North Avenue Novelties, Inc. v. City of Chicago, 88 F.3d 441, 444 (7th Cir.1996) (noting that, when examining availability of reasonable alternatives, "it is necessary to focus both on the ability of producers as a group to provide sexually explicit expression, as well as on the ability of the public as a whole to receive it"). However, the evidence in the record does not show that the licensing requirements left purveyors of erotic entertainment with no reasonable opportunities to operate in the City. True, the licensing ordinance prevented the plaintiffs from opening erotic dance establishments at their chosen locations, but the plaintiffs have not shown that they could not have found alternative locations in the City. Of course, because of the licensing requirements, the plaintiffs could not have known for sure whether they would have been permitted to offer erotic dance entertainment at any specific alternative location unless they actually applied for a license for that location and received a decision on the application, but the plaintiffs have offered no evidence suggesting that they even considered alternative sites, such as sites that were not located in the downtown area.
The plaintiffs also contend that the tavern and tavern-amusement ordinances granted City officials "unbridled discretion" to determine whether to grant or deny such licenses. "Unbridled discretion" is a phrase that derives from prior-restraint cases involving censorship, see Southworth v. Bd. of Regents, 307 F.3d 566, 575-78 (7th Cir.2002) (discussing history of unbridled discretion), but it has been applied in cases in which the prior restraint is analyzed as a time, place, or manner restriction, see Thomas v. Chicago Park Dist., 534 U.S. 316, 323, 122 S.Ct. 775, 151 L.Ed.2d 783 (2002). However, in either kind of case, the concern behind the unbridled-discretion standard is censorship — a risk that the licensing authority will use its unduly broad discretion to favor or disfavor speech based on content. Id. The standard is usually applied in circumstances where the law at issue either explicitly involves censorship, such as the law governing the Maryland board of censors at issue in Freedman v. Maryland, 380 U.S. 51, 85 S.Ct. 734, 13 L.Ed.2d 649 (1965), or when the law at issue presents a significant censorship risk, such as when a single person is granted power over a newspaper's ability to sell papers, see City of Lakewood v. Plain Dealer Pub'g Co., 486 U.S. 750, 108 S.Ct. 2138, 100 L.Ed.2d 771 (1988), or a single person is granted power to decide whether a group will be allowed to hold a rally in a public park, see Thomas, 534 U.S. at 323-24, 122 S.Ct. 775.
In the present case, the tavern and tavern-amusement licensing requirements did not explicitly involve censorship, and they did not present a significant censorship risk. As discussed, the purpose of the licensing requirements was not censorship but to ensure that a proposed form of tavern entertainment was basically compatible with the neighborhood in which it planned to locate. Moreover, it is difficult to envision a realistic scenario in which the Licenses Committee could have used its licensing power to favor or disfavor specific forms of expressive tavern entertainment. As the Seventh Circuit recognized in Blue Canary, the City of Milwaukee is a major city rather than a small town with a homogenous population that is likely to find certain forms of tavern expression offensive and to want to ban them from the City. 251 F.3d at 1124. Thus, there was never any realistic chance that the Licenses Committee would have used its licensing authority to facilitate a campaign to ban rock music, erotic dancing, or any other form of entertainment from the City's taverns. It is also important to take note of the procedural elements of the licensing ordinances, which required the Licenses Committee to hold a public hearing and make its recommendation to the Common Council in writing. See Milwaukee Code of Ordinances § 90-35-4-c; Stip. Facts ¶¶ 25-40, ECF No. 44. If the City's residents had found a particular form of tavern entertainment offensive and opposed
The plaintiffs also argue that the tavern and tavern-amusement ordinances do not satisfy United States v. O'Brien, 391 U.S. 367, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968). In that case, the Supreme Court held that a content-neutral regulation that has an incidental effect on expression satisfies the First Amendment if it meets a four-pronged test: "[1] if it is within the constitutional power of the Government; [2] if it furthers an important or substantial governmental interest; [3] if the governmental interest is unrelated to the suppression of free expression; and [4] if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest." Id. at 377, 88 S.Ct. 1673. Plaintiffs argue that the tavern and tavern-amusement ordinances did not satisfy the first prong of the O'Brien test — that the ordinances be "within the constitutional power of the Government" — and they give two reasons in support of this argument: (1) the ordinances were contrary to Chapter 125 of the Wisconsin Statutes, which relates to alcoholic beverages, and (2) the ordinances were de facto zoning regulations that were not passed pursuant to the state-law procedures that apply to zoning regulations. In making these arguments, the plaintiffs assume that O'Brien's first prong allows a court to examine whether a municipality complied with state law when passing the regulation at issue. However, I can find no authority that supports this assumption. O'Brien's first prong is rarely discussed, but there is no indication that it was meant to "constitutionalize" matters of state law.
Finally, Six Star argues that the City's decision to deny its license applications was "discriminatory" because the City ultimately granted tavern and tavern-amusement licenses for the Old World Third premises to another applicant, Robert Smith. Six Star contends that the only difference between its proposal and Smith's proposal was that Smith did not propose to offer erotic entertainment. That appears to be true, but as discussed, the City was allowed to base its decision on "the character of the entertainment" that Six Star intended to present and whether such entertainment was compatible with the normal activity of the neighborhood. Blue Canary, 251 F.3d at 1123. Here, the decision to permit Smith's tavern but exclude Six Star's gentlemen's club is explainable by the fact that the presence of an ordinary tavern in the neighborhood would not have deterred respectable retailers from moving in, whereas the presence of a gentlemen's club would have. Thus, the City's having granted tavern and tavern-amusement licenses for the Old World Third premises to a different applicant does not show that the decision to deny Six Star's applications for the same licenses was based on impermissible factors.
Accordingly, the City's motion for summary judgment on plaintiffs' claims involving the tavern and tavern-amusement ordinances will be granted.
Former § 83-1-2 of the Milwaukee Code of Ordinances stated that "[n]o person, firm or corporation ... shall keep, maintain, conduct or operate for gain or profit, any theater or moving picture house in the city without first obtaining a license therefore." Section 83-1-1-b defined "theater" as "any edifice, or parts thereof, used for the purposes of dramatic or operatic or other exhibitions, plays or performances for admission to which remuneration or any other consideration is paid, charged or received." Section 83-1-5-b stated that an application for a theater license "shall be granted when the following requirements are met: the building, structure or premises for which the license is sought must conform in all respects to the provisions of this section and to the law of this state and the ordinances of the city applying to such buildings, structures, or premises."
In September 2011, Six Star applied for a license to operate the Old World Third location as a theater called the Outer Limits Gentlemen's Club. The theater would have offered erotic dance entertainment but no alcohol. It is undisputed that, pursuant to a "hold" placed on Six Star's application by Alderman Bauman, no decision was ever made on Six Star's application. The theater ordinance was repealed effective March 1, 2012.
The plaintiffs claim that former Chapter 83 was unconstitutional on its face and was unconstitutionally applied to Six Star. I begin with Six Star's as-applied challenge, which hinges on the fact that the City dragged its heels and never reached any decision on the licensing application before repealing the theater ordinance.
The City's primary argument is that Six Star applied for the wrong kind of license. It contends that, in September 2011, the license required for offering erotic dance entertainment in an establishment that does not serve alcohol was the public entertainment club license required by Milwaukee Code of Ordinances § 108-5-1-a (2010). However, even if that were true, it would not have justified the City's failure to render a decision on Six Star's application. If the City believed that Six Star had applied for the wrong license, it should have denied the application on that ground. Then, if Six Star thought it had applied for the correct license, it could have challenged the City's decision in an appropriate legal action.
In any event, the facts in the record do not establish that Six Star applied for the wrong type of license. The public entertainment club ordinance required any person who wanted to offer "public entertainment" to obtain an appropriate license or permit. Milwaukee Code of Ordinances § 108-5-1-a (2010). "Public entertainment" was defined as "any entertainment of any nature or description to which the public generally may gain admission, whether with or without the payment of a fee." Id. § 108-3-3. This definition included plays and other forms of entertainment that fell within the scope of the theater ordinance. However, one did not need both a theater license and a public entertainment club license to offer the kind of entertainment that fell within the scope of the theater ordinance. This was so because the public entertainment club ordinance stated that the holder of a theater license did not need to obtain a public entertainment club license. Id. § 108-5-2-c. Moreover, nothing in either ordinance indicated that an establishment that wanted to offer erotic dance entertainment could not have operated under a theater license instead of a public entertainment club license.
There is still the matter of Ferol's facial challenge to the theater ordinance. Ferol never applied for a license under Chapter 83. However, Ferol contends that because the theater ordinance was a prior restraint, it has standing to challenge the ordinance and to obtain damages. As a general matter, it is true that a plaintiff can bring a facial challenge to an allegedly unconstitutional licensing regulation without applying for a license. See City of Lakewood, 486 U.S. at 755-56, 108 S.Ct. 2138. However, in the present case, the ordinance has been repealed, and Ferol's Article III standing depends on its having sustained damages as a result of Chapter 83's existence. Yet, the summary-judgment record contains no affidavit or other evidence indicating that Ferol had concrete plans to open a dry gentlemen's club (as opposed to a tavern) at the Pittsburgh Avenue location or any other location in the City of Milwaukee during the time that Chapter 83 was in force. Thus, I do not see how Ferol could have been damaged by the mere existence of Chapter 83, and so I am not satisfied that Ferol has standing to challenge Chapter 83 on its face. See Summers v. Earth Island Inst., 555 U.S. 488, 499, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009) ("it is well established that the court has an independent obligation to assure that standing exists, regardless of whether it is challenged by any of the parties"). Therefore, I will not adjudicate Ferol's facial challenge to Chapter 83 on the merits at this time. However, should Ferol believe that it can establish Article III standing, it may submit appropriate affidavits to that effect and I will reconsider this ruling.
The remaining claims are the plaintiffs' facial challenges to the former public entertainment club ordinance, which appeared in Chapter 108 of the Milwaukee Code of Ordinances. As already discussed in the context of plaintiffs' claims involving the theater ordinance, Chapter 108 provided that no person could offer any form of public entertainment without obtaining either a public entertainment club license or a theater license. Having ruled that Six Star is entitled to damages in connection with its as-applied challenge to the theater ordinance, I do not need to separately consider Six Star's facial challenge to the public entertainment club ordinance, as both claims involve the same pool of damages — namely, damages attributable to Six Star's inability to offer erotic dance entertainment without also serving alcohol at the Old World Third location. Moreover, because the record contains no affidavits or other evidence indicating that Ferol had any concrete plans to offer erotic dance entertainment without also serving alcohol at the Pittsburgh Avenue location or any other location during the time that the public entertainment club license was in force, I am not satisfied that Ferol has Article III standing to bring a facial challenge to the public entertainment club ordinance. See Summers, 555 U.S. at 499, 129 S.Ct. 1142. Accordingly, I do not need
For the reasons states,