Posted by: Patricia Salkin | December 30, 2011

Fed. Dist. Court in Mississippi Finds Likelihood of Prior Restraint Since The City Lacked Standards for Licensure Requirement Related Adult Retail Establishments

The plaintiff sought to establish a retail store that sold items of an adult nature, but said items would not constitute adult oriented material under the local code, nor would the retail establishment be considered an adult oriented business under the City Code or State of Mississippi law.  Nevertheless, the City, through the operation of defendant Happy Welch, the City’s Building Commissioner, denied the plaintiff’s merchant license, sign permit, and refused to hook up the water or sewage services, all on the basis of the establishment being erroneously conceptualized as an “adult oriented business.”  After some time, the plaintiff was granted a certificate of occupancy from the fire department, and the plaintiff put up a temporary sign and began to operate the establishment.  Shortly thereafter, the plaintiff received citations for operating without a license.

In order for the court to grant injunctive relief, the plaintiff had the burden of proving likelihood of success on the merits, risk of irreparable harm, that the balance of harm weighed in favor of the relief, and the amount harm inflicted on the public.  The court explained that the determination of whether injunctive relief lies is a function primarily of whether there is a likelihood of success, as the other factors turn with this determination.

The court determined that there was a likelihood of success that the plaintiff would succeed on the prior restraints claim.  First, the court explained that where a particular form of activity requires licensure prior to operation, this scheme will be analyzed as a prior restraint.  The court found that there is likely a prior restraint in this matter, as there are no statutory parameters outlining the review of merchant license applications.  There is no time period for review, no standards, nor is there an opportunity for the applicant to be heard on this issue.  Given the lack of any structure to the licensure process, the court found the City could act with “unbridled discretion,” constituting an unconstitutional prior restraint.  Thus injunctive relieve was granted by the court, providing the plaintiff-applicant a hearing before the City, allowing the applicant to educate the city about the retail use.

Truman Entertainment Mgmt. v. City of Pevely, 2011 WL 6010901 (U.S.D.C., E.D. Miss., 12/2/2011)

The opinion can be accessed: http://scholar.google.com/scholar_case?case=12449815312447636954&hl=en&as_sdt=2&as_vis=1&oi=scholarr.


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