Jon Jon's Inc v. City of Warren ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
JON JON’S, INC. and WARREN PROPERTY UNPUBLISHED
INVESTMENTS, INC., October 26, 2017
Plaintiffs-Appellants,
v No. 332504
Macomb Circuit Court
CITY OF WARREN, LC No. 2013-002100-CZ
Defendant-Appellee.
Before: BORRELLO, P.J., and MURPHY and RONAYNE KRAUSE, JJ.
PER CURIAM.
In this case raising constitutional challenges to city ordinances regulating sexually
oriented businesses, plaintiffs, Jon Jon’s, Inc. and Warren Property Investments, Inc., appeal as
of right the trial court’s opinion and order granting summary disposition in favor of defendant,
the City of Warren. We affirm.
The underlying facts of this matter are undisputed and have been set forth amply
elsewhere.1 Plaintiffs own a parcel of real estate in Warren upon which a strip club was operated
for many years. In 1986, defendant enacted a zoning ordinance regulating the location of
“sexually oriented businesses,” which by definition included plaintiff’s strip club; the strip club
did not conform to the ordinance, but it continued to operate as a pre-existing nonconforming
use. In 2005, defendant also enacted an ordinance referred to as “Article X” that revised the
licensing process for sexually oriented businesses, forbade their operation without a license, and
imposed various other restrictions on their operation and conduct. In 2009, a part owner of
plaintiffs was granted a variance to augment the building. However, in 2010, defendant’s
Zoning Board of Appeals (ZBA) withdrew plaintiffs’ nonconforming use status when it
determined that, contrary to the variance, plaintiffs had essentially demolished the structure and
built a new one. Later that year, defendant amended the portion of Article X that prohibited
1
See, e.g., Jon Jon’s, Inc v City of Warren, ___ Fed App’x ___ (CA 6, June 27, 2017); Jon
Jon’s, Inc v City of Warren, 534 Fed App’x 541 (CA 6, 2013); Jon Jon’s, Inc v City of Warren,
162 F Supp 3d 592 (ED Mich, 2016). We direct those interested in a more exhaustive factual
history to these cases.
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alcoholic beverages at sexually oriented businesses to eliminate an exemption to that prohibition
for state liquor-licensed establishments.
A grant or denial of summary disposition is reviewed de novo on the basis of the entire
record to determine if the moving party is entitled to judgment as a matter of law. Maiden v
Rozwood, 461 Mich. 109, 118; 597 NW2d 817 (1999). Because it appears that the trial court
examined evidence beyond the pleadings, except with regard to the question of standing, we
consider the motion as having been granted pursuant to MCR 2.116(C)(10). DeHart v Joe
Lunghamer Chevrolet, Inc, 239 Mich. App. 181, 184; 607 NW2d 417 (1999). When reviewing a
motion under MCR 2.116(C)(10), which tests the factual sufficiency of the complaint, this Court
considers all evidence submitted by the parties in the light most favorable to the non-moving
party and grants summary disposition only where the evidence fails to establish a genuine issue
regarding any material fact. Maiden, 461 Mich. at 120. We also review de novo the
constitutionality of an ordinance. Houdek v Centerville Twp, 276 Mich. App. 568, 573; 741
NW2d 587 (2007).
Plaintiffs dispute the trial court’s finding that they lacked standing. We disagree in
relevant part. First, plaintiffs’ argument that the trial court erred in finding that they lacked
standing to challenge the zoning ordinance is misplaced, because the trial court made no such
finding and neither do we. Regarding plaintiffs’ standing to challenge Article X, the licensing
ordinance, plaintiffs claim it is overbroad, which the trial court correctly observed is an
exception to traditional standing rules. See Mich Up & Out of Poverty Now Coalition v
Michigan, 210 Mich. App. 162, 170; 533 NW2d 339 (1995). Finally, we accept defendants’
argument that because the zoning ordinance prohibits plaintiff from operating its strip club on the
premises, and as we will discuss, we reject plaintiff’s challenges to the zoning ordinance, the
application of Article X to plaintiff’s business is moot. “A case is moot when it presents only
abstract questions of law that do not rest upon existing facts or rights.” B P 7 v Bureau of State
Lottery, 231 Mich. App. 356, 359; 586 NW2d 117 (1998). Plaintiffs reasonably point out that
Article X may interfere with any effort on their part to reopen their strip club elsewhere in the
city, but in the absence of more than a mere hypothetical possibility that plaintiffs may make
such an effort, this argument merely “rests upon contingent future events” and is therefore
unripe. City of Huntington Woods v Detroit, 279 Mich. App. 603, 615-616; 761 NW2d 127
(2008). The trial court correctly held that plaintiffs lack standing to challenge Article X beyond
their overbreadth argument.
“Two forms of overbreadth challenges have been recognized: where a law or ordinance
sweeps too broadly, covering a substantial amount of protected free speech, and where every
application of a law or ordinance creates an unreasonable risk of censorship.” Mich Up & Out of
Poverty Now Coalition, 210 Mich. App. at 170. Plaintiffs do claim that Warren Ordinances, § 6-
308(3), which prohibits employees that regularly appear semi-nude from touching customers on
the premises of a sexually oriented business, is overbroad. Plaintiffs explain that an employee
might violate the ordinance if he or she regularly appears semi-nude, but while fully clothed,
accidentally brushes against a customer. The ordinance does not, however, prohibit accidental
touching, but rather prohibits “knowingly or intentionally” touching a customer. We appreciate
the possibility of a scenario under which proving whether a particular touch was or was not
accidental. However, such a proof problem may favor plaintiffs rather than harm them. In any
event, because the ordinance expressly does not prohibit accidental contact, plaintiffs fail to
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demonstrate that the no-touching provision of Article X is constitutionally overbroad. Plaintiffs
additionally assert that the no-touching provision is not narrowly tailored and vague, but provide
no coherent argument that we can discern, and we will invent none on their behalf. See 1031
Lapeer LLC v Rice, 290 Mich. App. 225, 236; 810 NW2d 293 (2010).
Plaintiffs further contend that the terms “lewdness” and “public indecency” are
impermissibly vague. “An ordinance is unconstitutionally vague if it (1) does not provide a fair
notice of the type of conduct prohibited or (2) encourages subjective and discriminatory
application by delegating to those empowered to enforce the ordinance the unfettered discretion
to determine whether the ordinance has been violated.” Plymouth Twp v Hancock, 236 Mich
App 197, 200; 600 NW2d 380 (1999). We need not address that particular quagmire, however,
because those terms only appear in what amounts to a preamble to the functional provisions of
Article X in a list of “adverse secondary effects” defendant hopes Article X will combat. Warren
Ordinances, § 6-276(b)(1). Thus, Article X does not actually prohibit “lewdness” or “public
indecency” at all, but rather prohibits specific and defined conduct for a purpose, the arguable
vagueness of which is largely irrelevant.
Plaintiffs challenge Article X’s prohibition against nudity and restrictions against “semi-
nudity” on First Amendment freedom of expression grounds. We need not deeply examine the
former, because the United States Supreme Court has already determined that the governmental
interest “in combating the negative secondary effects associated with adult entertainment
establishments . . . is unrelated to the suppression of the erotic message conveyed by nude
dancing.” Erie v Pap’s A M, 529 U.S. 277, 296; 120 S. Ct. 1382; 146 L. Ed. 2d 265 (2000). In
contrast to the prohibition against nudity, Article X unambiguously, albeit technically only by
implication, permits semi-nudity, but imposes restrictions on how far semi-nude employees must
remain from patrons or customers. Plaintiff does not articulate how such restrictions violate the
First Amendment. Similar restrictions have been upheld by federal courts, and in the absence of
any meaningful argument to the contrary, we are inclined to view those decisions as persuasive.
See Sensations, Inc v Grand Rapids, 526 F3d 291, 299 (CA 6, 2008); Lady J Lingerie, Inc v
Jacksonville, 176 F3d 1358, 1365 (CA 11, 1999); Peek-A-Boo Lounge of Bradenton, Inc v
Manatee Co, Fla, 630 F3d 1346, 1350 (CA 11, 2011).
Plaintiffs contend that there is no evidence that their club or any other sexually oriented
business has ever caused the negative secondary effects that the statutes at issue seek to prevent,
and any such problems were wholly invented by defendant. Whether or not the former
proposition is true, defendant appears to have based the perceived need for its ordinances on
conclusions drawn from numerous reports and judicial decisions. See Warren Ordinances, § 6-
276(b) Defendant is not required to conduct its own studies, nor is it required to do more than
reasonably anticipate the possibility of adverse effects before enacting regulations. See Erie, 529
U.S. at 296-297. The wisdom or surreptitious motivations of doing so is not a justiciable question.
See Straus v Governor, 459 Mich. 526, 531; 592 NW2d 53 (1999).
Plaintiffs contend that the ordinance revision that eliminated an exception to the
prohibition against alcohol inside sexually oriented businesses deprives them of a protected
property interest in their liquor license without due process of law. We disagree. A person
holding a liquor license indeed has a vested property right in that license. See Bundo v Walled
Lake, 395 Mich. 679, 691-692; 238 NW2d 154 (1976). However, plaintiffs have not been
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deprived of that license, but rather from serving liquor under certain circumstances, and they do
not have a due process right to the continuation of an existing law. See Van Buren Township v
Garter Belt, Inc, 258 Mich. App. 594, 632-633; 673 NW2d 111 (2003). Plaintiffs have not been
deprived of a property right to their liquor license without due process of law.
Finally, plaintiffs argue that the trial court erred when it concluded that defendant’s
zoning ordinance leaves open adequate alternative channels of adult expression. “An ordinance
that does not suppress protected forms of sexual expression, but which is designed to combat the
undesirable secondary effects of businesses that purvey in such activity, is to be reviewed under
the standards applicable to content-neutral time, place, and manner regulations.” Truckor v Erie
Twp, 283 Mich. App. 154, 163; 771 NW2d 1 (2009). Among other requirements, such regulations
cannot unreasonably limit alternative avenues of communication by functionally precluding a
reasonable opportunity to operate a business of this nature. Id. at 163-166. That opportunity
need not occur in the most desirable location, nor is there any particular minimal geographic
requirement. Id. at 164, 166. Furthermore, the whims of the real estate market are of no
concern. Renton v Playtime Theatres, Inc, 475 U.S. 41, 54; 106 S. Ct. 925; 89 L. Ed. 2d 29 (1986).
“In considering this issue, courts look to the number of lots or buildings available in the district
for these establishments, the physical size of the municipality and acreage available for these
businesses, the ratio of these establishments per population in the municipality, and the market
demand for opening such enterprises.” Truckor, 283 Mich. App. at 164.
Initially, however, the trial court relied heavily on an affidavit prepared by Michelle
Katopodes, a city planner employed by defendant. Plaintiffs contend that the trial court should
not have considered this affidavit for several reasons. First, plaintiffs argue that Katopodes was
not qualified to render expert opinion testimony under MRE 702. It appears to us that Katopodes
merely provided a compilation of data in her affidavit, not opinion testimony, and thus was
acting as a fact witness rather than an expert witness. Klabunde v Stanley, 384 Mich. 276, 282;
181 NW2d 918 (1970). Nonetheless, Katopodes has a master’s degree in urban planning, which
she obtained in 2005. She worked as an urban planner for New York City’s Transportation
Department. She has a professional certificate in “Geographic Information Systems” (GIS) from
Michigan State University’s Department of Geography. She has also been employed as a city
planner by defendant since January 2015. Based on these credentials, Katopodes clearly has the
educational background and experience to render an opinion under MRE 702 regarding what
sites satisfy the zoning ordinance at issue in this case.
Plaintiffs also contend that Katopodes’s affidavit cannot be relied upon because she relied
on an earlier report created by Ken Bouchard with no knowledge of how Bouchard created that
report, and because she failed to personally visit each site she listed. We disagree. Katopodes’s
affidavit makes clear that she referred to Bouchard’s report, but she also prepared her own
analysis, relying on GIS data and parcel attribute data from defendant’s assessing department.
Plaintiffs cite Young v Nationwide Mut Ins Co, 693 F3d 532, 540 (CA 6, 2012), a case involving
the administrative feasibility of a proposed class-action certification, for the principle that
“manual review” is required. That case did not involve zoning or land use issues of the kind
present in this matter, and in any event it merely described how manual review would occur in
that matter; it did not mandate it and certainly made no broad statements regarding what was
required of expert opinion testimony generally.
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Plaintiffs finally contend that Katopodes’s affidavit should have been stricken because
they were not presented with the information until the date defendant filed its motion for
summary disposition, causing plaintiffs surprise and depriving them of adequate time to obtain
their own expert. However, plaintiffs concede that they received Katopodes’s list of sites at her
deposition almost two months previously, and defendant had disclosed more than 50 such sites in
a supplemental discovery response several months before that. In any event, the trial court
permitted plaintiffs to file a supplemental brief after the hearing on the motion for summary
disposition. Plaintiffs filed a supplemental brief, to which they attached their own expert report
regarding the availability of sites that would satisfy the zoning ordinance. We are not persuaded
that plaintiffs were surprised or unable to make an adequate response. We decline to consider
plaintiffs’ remaining arguments that they raise for the first time on appeal. Booth Newspapers,
Inc v Univ of Mich Bd of Regents, 444 Mich. 211, 234; 507 NW2d 422 (1993).
Therefore, we conclude that the trial court properly relied on Katopodes’s affidavit. The
affidavit establishes that there are numerous alternative sites available for adult businesses to
operate within Warren. Katopodes identified 51 whole parcels, totaling approximately 75 acres,
available for use as an adult business under the ordinance. She identified another 59 parcels that
could be divided in order to satisfy the geographic limitations imposed by defendant’s zoning
ordinance. Katopodes explained that splitting these lots would, in the vast majority of cases, be a
ministerial task. Katopodes also explained that at present, no adult businesses operate in Warren,
and that only plaintiffs appear interested in operating an adult business in the city. Plaintiffs
have presented no evidence contradicting Katopodes on this point. Given that there is only one
entity seeking to operate an adult business in Warren, and there exist over 100 whole or partial
parcels where an adult business could be located, the zoning ordinance clearly does not deny
plaintiffs a reasonable opportunity to operate a sexually oriented business in Warren.
Plaintiffs contend that Katopodes’s report fails to consider whether any of those sites are
actually suitable, including reasonable accessibility to the public, access to proper infrastructure,
suitability for some generic commercial enterprise, and so on. Plaintiffs correctly note that the
Ninth District analyzed the United States Supreme Court’s decision in Renton and concluded that
because it was always possible to define physically unsuitable land in economic viability terms,
there had to be some way of evaluating whether a given parcel of real estate was even part of the
market at all. Topanga Press, Inc v Los Angeles, 989 F2d 1524, 1529-1531 (CA 9, 1993). This
case is not binding on us. See Abela v Gen Motors Corp, 469 Mich. 603, 606-607; 677 NW2d
325 (2004). In any event, plaintiff’s reading of Topanga Press gets bogged down in the details:
the Ninth Circuit did not mandate that all sites feature a list of characteristics, but, as noted,
merely that there must be some characteristic establishing that it is part of the market. Even if
we were to adopt Topanga Press as persuasive, Katopodes's affidavit unambiguously states that
"many of [the] parcels currently house commercial establishments," and Topanga Press also held
that commercially zoned sites are part of the market. Topanga Press, 989 F2d at 1531. We find
Katopodes’s report sufficiently establishes the suitability of the proposed sites.
Affirmed.
/s/ Stephen L. Borrello
/s/ William B. Murphy
/s/ Amy Ronayne Krause
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