Posted by: Patricia Salkin | January 3, 2016

Seventh Circuit Court of Appeals Denies Motion for Preliminary Injunction Challenging an Ordinance Preventing the Operation of an Adult-Entertainment Club

Alva and Sandra Butler and their company, BBL, Inc., purchased a restaurant in the City of Angola, Indiana, and planned to convert it to an adult-entertainment venue featuring nude dancing. Within days of the purchase, Angola amended its zoning and other ordinances to make this use of the property impossible. The Butlers and their company brought this suit alleging claims for violation of their rights under the First Amendment and Indiana law, and moved for a preliminary injunction. The district court denied the motion, and the plaintiffs took this interlocutory appeal seeking review of that decision.

BBL alleged that the 2012 licensing and zoning amendments violated its right to expressive conduct and that the permit requirement was an impermissible prior restraint on speech. As to the prior restraint issue, the City’s requirement that sexually oriented businesses obtain an Improvement Location Permit was removed in the 2012 zoning amendments, so any challenge to that provision was correctly rendered moot. BBL did not have grounds to challenge the permit requirement as applied either, since the City relied on reasons unrelated to speech or expression in denying BBL’s application for an Improvement Location Permit: such as the application being incomplete. Furthermore, BBL reserved its right to contest the City’s secondary-effects justification later in the litigation but made a tactical decision not to do so at the preliminary-injunction stage. The court found that decision was fatal to its effort to win interim injunctive relief, since the City provided an extensive catalog of secondary-effects research that it claimed justified the 2012 amendments to its zoning and licensing ordinances.

The court then addressed whether the ordinances left open adequate “alternative avenues of communication.” BBL acknowledged on appeal that the City identified plenty of sites where an adult business can currently locate, but argued that adult businesses couldn’t locate anywhere in the City for the two-month period between September 17, 2012, when the licensing ordinance was adopted, and November 19, 2012, when the zoning ordinance was amended. The court found this temporary period to be insufficient grounds for a preliminary injunction. Finally, BBL argued that it had vested nonconforming use rights; however, BBL’s construction at the site was conducted unlawfully in violation of the City’s building-permit requirement. Therefore, the court affirmed the denial of the preliminary injunction.

BBL, Inc. v City of Angola, 2015 WL 8021983 (7th Cir. CA 12/7/2015)

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