New Albany DVD v. City of New Albany, Indiana ( 2009 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 05-1286
N EW A LBANY DVD, LLC,
Plaintiff-Appellee,
v.
C ITY OF N EW A LBANY, INDIANA,
Defendant-Appellant.
Appeal from the United States District Court for the
Southern District of Indiana, New Albany Division.
No. 4:04-cv-00052-SEB-WGH—Sarah Evans Barker, Judge.
A RGUED S EPTEMBER 26, 2005—D ECIDED S EPTEMBER 10, 2009
Before E ASTERBROOK, Chief Judge, and R IPPLE and
R OVNER, Circuit Judges.
E ASTERBROOK, Chief Judge. New Albany DVD operates
an adult store in New Albany, Indiana. It does not pro-
vide live or recorded entertainment on site. Customers
buy books, magazines, or videos, which they read or
watch at home. Plaintiff bought land for this operation
in 2003, secured all necessary licenses, and renovated the
site’s store to meet its requirements. The land was
properly zoned for the business it proposed to operate. A
2 No. 05-1286
final inspection was scheduled for February 19, 2004. But
the City refused to carry out that inspection, so plaintiff
could not obtain the certificate of occupancy needed to
open its doors.
That very day the City Council enacted a six-month
moratorium on new adult businesses. In March 2004
the Council amended the zoning rules to forbid any
“sexually oriented business” at plaintiff’s site. (This
phrase includes a book or video retailer if more
than 30% of its inventory meets the City’s definition of
“sexually oriented”; plaintiff’s inventory qualifies.) The
law prohibits a sexually oriented business from
operating within 1,000 feet of a church or any tract
zoned for residential use. Plaintiff’s store is 175 feet
from the nearest church and 115 feet from the site of a
proposed residential building.
In this suit under 42 U.S.C. §1983, plaintiff contends
that New Albany’s ordinance violates the first amend-
ment (applied to the states by the fourteenth) because it
is based on the books’ and videos’ content or subject
matter; because it is inadequately justified by proof of
adverse secondary effects and therefore cannot find
shelter under the holdings of Los Angeles v. Alameda
Books, Inc., 535 U.S. 425 (2002), and Renton v. Playtime
Theatres, Inc., 475 U.S. 41 (1986); and because it is not
narrowly tailored to the City’s justification. Plaintiff
also argues that, as a matter of Indiana law, it is entitled
to operate for two years as a nonconforming use,
because the renovations were completed before the
zoning ordinance was amended and the store would
No. 05-1286 3
have opened before the zoning change had the City
conducted the final inspection on schedule. The district
court held that the ordinance likely is unconstitutional
because not narrowly tailored to its purpose. 362 F. Supp.
2d 1015 (S.D. Ind. 2005). The court also concluded that
Indiana law entitles plaintiff to the two-year grace pe-
riod. An injunction issued in January 2005 allowing
plaintiff to open its store.
The parties have devoted considerable attention to
the state-law question on appeal, but it has no con-
tinuing import because the two years have expired.
Plaintiff has been able to operate its store under the
protection of the district court’s holding that the zoning
rules likely violate the Constitution; it makes no dif-
ference whether state law also would have allowed
the store to operate for two years.
The injunction should not have issued, however—at
least, it should not have issued on the ground that the
district court gave. Although Alameda Books and Playtime
Theatres hold that regulation of adult businesses must
be tailored to the justification for the regulation, these
decisions also sustain laws that are no better tailored, and
may well be more restrictive, than New Albany’s. See
also, e.g., Richland Bookmart, Inc. v. Knox County, 555
F.3d 512 (6th Cir. 2009); Fantasyland Video, Inc. v. San Diego,
505 F.3d 996 (9th Cir. 2007); Matney v. Kenosha, 86 F.3d 692
(7th Cir. 1996). See also Ben’s Bar, Inc. v. Somerset, 316
F.3d 702 (7th Cir. 2003). Plaintiff does not contend that a
1,000-foot dispersal requirement leaves too little space
for it (and other adult establishments) to operate in por-
4 No. 05-1286
tions of the City suited to bookstores. See Illinois One
News, Inc. v. Marshall, 477 F.3d 461 (7th Cir. 2007). New
Albany maintains, and plaintiff does not deny, that more
land is available for adult establishments than is put off
limits by this ordinance.
The district court faulted New Albany for banning
adult establishments within 1,000 feet of land zoned for
housing and suggested that a more appropriately
tailored ordinance would limit the rule to occupied
residences. But there is no doubt that plaintiff’s premises
are within 200 feet of a church, so it is unaffected by
the distance-to-residential-land rule. It is unaffected, for
that matter, by the difference between a 1,000-foot dis-
persal rule and a 250-foot dispersal rule. The district
judge next suggested that New Albany allow the book-
store to be near a church but require it to close while
services are being held. Such a privileged position for
religious worship would cause problems of its own, see
Larkin v. Grendel’s Den, Inc., 459 U.S. 116 (1982), unless
there were similar closing requirements when schools
and other secular establishments were open.
No appellate court has required a city to adopt a rule
of the kind that the district court thought necessary.
“Narrow tailoring” does not mean that the ordinance
must be the least restrictive possible regulation. See Ward
v. Rock Against Racism, 491 U.S. 781 (1989). When some
regulation is justified, a city has considerable discretion
on matters of detail. The sort of zoning rule that
New Albany enacted has been too widely used, and too
often sustained, to be upset as “not narrowly tailored.”
No. 05-1286 5
This does not mean, however, that the injunction must
be reversed, for a prevailing litigant is entitled to defend
its judgment on any ground preserved in the district
court, even if the district judge rejected that argument.
Plaintiff defends its judgment with the argument that
New Albany has not established that book and video
stores offering only take-home items cause any
untoward secondary effects. The Supreme Court in
Alameda Books and Playtime Theatres held that proof of
such effects is essential if municipalities regulate adult
establishments differently from the way they regulate
other similar businesses—for the sellers of books and
movies enjoy constitutional protections that sellers of
snow shovels, shoes, and parakeets do not.
In the district court, New Albany relied on studies
conducted in cities across the country. Many of these
show that a concentration of adult businesses in a part
of a city is associated with higher crime and lower
property values nearby. As we observed in Annex Books,
Inc. v. Indianapolis, No. 05-1926 (7th Cir. Sept. 3, 2009),
however, these studies principally reflect the effects of
adult businesses that offer live entertainment or
peep shows; they do not necessarily demonstrate that
businesses selling books and DVDs have the same con-
sequences for morals offenses (prostitution, lewd exhibi-
tion) or other kinds of crime. New Albany’s own
expert “conceded that he knows of no research that
shows . . . effects for various subclasses of businesses,”
such as plaintiff’s retail-only store. 362 F. Supp. 2d at 1021.
Recognizing that prior studies had lumped bookstores,
peep shows, and exotic dancing establishments together,
6 No. 05-1286
New Albany offered some anecdotal justifications in
the district court. It cited testimony in some earlier cases
by people complaining about pornographic litter near
adult bookstores, and it suggested that these stores
may expose their customers to thefts. The former line of
argument rests on the fact that some customers are
bound to throw away wrappers, which may have
images inappropriate for children. The “theft” line of
argument starts with the premise that many customers
of adult establishments pay in cash, which makes them
a target for thieves.
The theft argument is paternalistic. Why can’t customers
make their own assessments of risk? The norm under
the first amendment is that government must combat
harm to readers with disclosures rather than prohibitions
of speech. See, e.g., Virginia State Board of Pharmacy v.
Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976);
American Booksellers Ass’n v. Hudnut, 771 F.2d 323 (7th
Cir. 1985), aff’d mem., 475 U.S. 1001 (1986). Just as there
is no hecklers’ veto over speech, there is no “thieves’
veto.” The police must protect the readers from the heck-
lers or thieves, rather than ease their workload by for-
bidding the speech.
Anyway, if an adult bookstore located 200 feet from
a church attracts thieves, won’t a bookstore located
1,500 feet from a church do the same? Maybe the City’s
concern is for the worshippers, who may become the
thieves’ targets when video buyers are unavailable. But
if that’s so, the City needs some evidence that thefts
from passers by are a serious problem—and a more
No. 05-1286 7
severe problem for outlets near churches than for
outlets father away. As the plurality opinion in Alameda
Books put it:
[A] municipality [cannot] get away with shoddy
data or reasoning. The municipality’s evidence
must fairly support the municipality’s rationale
for its ordinance. If plaintiffs fail to cast direct
doubt on this rationale, either by demonstrating
that the municipality’s evidence does not
support its rationale or by furnishing evidence
that disputes the municipality’s factual findings,
the municipality meets the standard set forth
in [Playtime Theatres]. If plaintiffs succeed in
casting doubt on a municipality’s rationale
in either manner, the burden shifts back to the
municipality to supplement the record with evi-
dence renewing support for a theory that justifies
its ordinance.
535 U.S. at 438–39. New Albany has not supplied evidence
that “fairly supports” the idea that adult bookstores
located near churches or residences attract thieves who
then steal from the local denizens as well as the stores’
customers. We don’t say that the City will be unable
to produce this evidence, but the lack of good evidence
to this effect in the record—coupled with evidence im-
plying that take-home adult stores do not have adverse
secondary effects—is enough to require an evidentiary
hearing. Our opinion in Annex Books expands on this
reasoning, which need not be repeated here.
Pornographic litter is the City’s other principal basis. The
printed word often is tossed away, but litter-control
8 No. 05-1286
justifications have fared poorly as reasons to regulate
pamphlets and other written materials. Compare
Schneider v. State, 308 U.S. 147 (1939), with Los Angeles
v. Taxpayers for Vincent, 466 U.S. 789, 808–10 (1984).
Perhaps smutty litter should be judged by different
standards, but first it is necessary to know how serious
the problem is. That one pedodontist in Spokane com-
plained about litter from one bookstore, see World Wide
Video of Washington, Inc. v. Spokane, 368 F.3d 1186, 1197 (9th
Cir. 2004), does not do much to establish that this is a
serious problem in New Albany (or even in Spokane).
The volume of complaints exceeds the number of
genuine problems. There are thousands of adult book-
stores; it should be easy to find out how much litter
they generate, how much of this litter falls into the
hands of minors, and whether this is a materially
greater problem when one store carries 40% adult books
than when lots of stores carry 10% apiece. (Many a conve-
nience store, newsstand, or video rental outlet has an
adult nook, which escapes regulation under New
Albany’s statute.) Plaintiff has been in operation for a
while now; is sexually themed litter a problem near
its store?
If litter is a problem, can it be curtailed without an
equal curtailment of speech? Justice Kennedy, whose
vote was essential to the judgment in Alameda Books, and
whose views therefore constitute the holding of that
case, stated that the reduction in adverse secondary
effects may not be achieved just by curtailing speech. “A
city may not assert that it will reduce secondary effects by
reducing speech in the same proportion.” 535 U.S. at 449.
New Albany’s “litter” justification comes perilously
No. 05-1286 9
close to this, because the amount of pornographic
litter may depend linearly on the volume of adult
materials sold. The only way to cut litter by 10% may be
to reduce sales by 10%, and such a justification would
fail under Justice Kennedy’s approach.
New Albany may be able to resuscitate its anti-litter
rationale by showing that the zoning law moves litter to
where children (and sensitive pedodontists) won’t see it.
Placing businesses where they will be equally productive
but less harmful is a lawful objective of zoning. Alameda
Books, 535 U.S. at 446–47 (Kennedy, J., concurring). But,
for this justification to work, it will be necessary to estab-
lish (a) how much sex-oriented litter an adult book-
store generates; (b) who is likely to see that litter in the
parts of New Albany where adult bookstores are
allowed to operate; and (c) how much adult litter will
remain in New Albany’s central business area (generated
by adult corners of other businesses) if plaintiff is exiled
to an industrial district or highway. Otherwise evi-
dence about litter cannot support the sort of regulation
that New Albany has enacted.
The district court needs to take evidence and apply
intermediate scrutiny to New Albany’s ordinance. The
case is remanded for proceedings consistent with this
opinion and Annex Books. The injunction should remain
in place pending the outcome of this hearing.
9-10-09