7th Circuit Court of Appeals Holds Adult Entertainment Overly District Ordinance Constituted Prior Restraint that Violated First Amendment

Stars Cabaret is a nude dancing establishment in Neenah, Wisconsin, which lies in Winnebago County. The Town/County Zoning Ordinance 17.13 required adult entertainment establishments to locate within adult entertainment overlay AEO districts. An AEO district could be established only if the County issued a conditional-use permit to the adult entertainment operator. The zoning committee would issue such a permit only if it found that the proposed use complied with several requirements, including that it would “not be a detriment to the public welfare” and “in no way would contribute to the deterioration of the surrounding neighborhood” or “have a harmful influence on children residing in or frequenting the area.” The application also had to demonstrate that no alcoholic beverages would be sold within the AEO district, and that any adult use within the district would be located at least 1500 feet from any other adult use and at least 2000 feet from land zoned residential or institutional.

The owner of the adult entertainment establishment brought action against county, seeking declaration that, because zoning ordinance governing adult entertainment overlay districts violated First Amendment, its establishment had been legal from the outset, such that it had become legal nonconforming use that could not be banned by later ordinance. The United States District Court for the Eastern District of Wisconsin granted the County’s summary judgment motion and the owner appealed.
Here, the court found that the ordinance unquestionably imposed a prior restraint by requiring applicants such as Green Valley to apply to the County for permission to undertake their selected mode of expression—nude dancing. Since none of the safeguards the Court recognized including: the imposition on the censor of the burden of instituting judicial proceedings; the limitation of the restraint to a brief period for the purpose of preserving the status quo pending judicial review; and the assurance of a prompt judicial determination were present in this case, the permitting scheme set up in the 2006 ordinance created an unconstitutional prior restraint and could not be enforced.

In addressing the severability of the ordinance, the district court judge was satisfied that two parts of the truncated ordinance could function without the permitting scheme: the clause establishing setbacks for the locations of adult establishments relative to other land uses, and the provision banning the use of alcohol within AEO districts. However, whether the alcohol and setback parts of the County’s zoning ordinance could be severed and function on their own is squarely within the scope of state law. The court therefore concluded that the district court, after confirming that the 2006 ordinance violated the federal constitution in some respects, should have relinquished its jurisdiction over the supplemental state claims and dismissed them without prejudice.

Green Valley Investments, LLC v Winnebago County, 2015 WL 4509767 (7th Cir. CA 7/27/2015).

The opinion can be accessed at: http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2015/D07-27/C:14-2473:J:Wood:aut:T:fnOp:N:1594104:S:0