Posted by: Patricia Salkin | August 4, 2010

Fourth Circuit Court of Appeals Upholds Alcohol Licensing Program for Adult Use Establishments

Under Virginia law, establishments where performers offered striptease routines could obtain licenses to sell beer, wine, or both, but could not get a mixed beverage license, which permitted the sale of distilled spirits.  The plaintiffs were three nightclubs (collectively referred to as “Papermoon”) featuring “erotic dance performances” of women clad in g-strings and pasties,  brought a First Amendment, vagueness, and facial overbreadth challenge against the alcohol licensing program. The state’s Alcoholic Beverage Control (ABC) Board member testified that the Board had reviewed at least 42 studies and numerous cases dealing with the negative effects on the surrounding community of sexually oriented businesses, and limited distilled spirits because these more readily led to intoxication because of their higher alcohol content. Papermoon argued a ban on mixed beverages at its clubs was pointless when beer and wine were still allowed. Further, Papermoon’s expert stated that he had reviewed crime data for the Papermoon locations and found that there was no increase in crime near the clubs after they obtained mixed beverage licenses (before the existing regime took effect), and that sexually oriented businesses in Richmond generally were not “hot spots” for crime.  The district court rejected the bulk of Papermoon’s claims, holding that Virginia’s policy prohibiting distilled spirits at establishments like the Papermoon clubs was constitutional.

On appeal, the judgment of the district court was affirmed. Regulations of sexually oriented entertainment receive intermediate scrutiny if they are not premised on a desire to suppress the content of such entertainment, but, rather, to address the harmful secondary effects it produced. While the government was required to “fairly support” its policy, “it need not settle the matter beyond debate or produce an exhaustive evidentiary demonstration,” and its policy was entitled to deference.  The Fourth Circuit began by noting that “Virginia’s policy regarding alcohol at erotic dancing locales [was] about as tame as one could imagine,” and “the degree to which it trenches upon First Amendment values [was] minimal at best” —“it bears reminding [that] Virginia has not asked Papermoon to stop the show or even to cease serving all alcoholic beverages in conjunction with it.” There was no controversy over the proposition that intoxication aggravated secondary effects, and, significantly, mixed beverages contained a higher concentration of alcohol in a smaller volume. Virginia had a “legitimate interest in reducing the chances of a person leaving a strip club intoxicated by eliminating the sale of distilled spirits and it could further legitimately believe that this modest step could reduce the harmful secondary effects.” Evidence rebutting the government’s justification for a secondary effects regulation had to do more than challenge the government’s rationale; it had to “convincingly discredit the foundation upon which the government’s justification rest[ed].” The evidence fell short of the “clear and convincing” standard necessary to sustain the challenge, because, for example: the expert’s before-and-after analysis focused only on Papermoon and a “narrow zone of geographic proximity he had designated”; the data did not include many relevant crimes (disorderly conduct, drunkenness, driving under the influence, homicide, interference with police, prostitution, threatening bodily harm, various weapons offenses, and so on); and the study was based on only nine months of data. 

The Court also dismissed the vagueness argument. It noted that it is clear what conduct the ABC mixed beverage policy reaches—and that what it reaches is what Papermoon’s dancers do. The risk that dancers at clubs like Papermoon will be ‘chilled’ into donning more clothing than the law requires is slim indeed.” The overbreadth challenge failed absent a showing that the overbreadth was substantial in relation to the statute’s plainly legitimate sweep.

 Imaginary Images, Inc. v. Evans, 2010 WL 2779987 (4th Cir. 7/15/2010).  

The opinion can be accessed at: 

This abstract is slightly edited from one that appears in the July 21, 2010 IMLA E-News.  For information about IMLA see:

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