USDC IN/ND case 1:18-cv TLS-SLC document 1 filed 07/19/18 page 1 of 12 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF INDIANA

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1 USDC IN/ND case 1:18-cv TLS-SLC document 1 filed 07/19/18 page 1 of 12 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF INDIANA 1407, LLC 1407 S. Calhoun Street Fort Wayne, Indiana Plaintiff, v. City of Fort Wayne, Indiana c/o Tom Henry, its Mayor, and Carol Helton, its Attorney 200 East Berry St., Suite 425 Fort Wayne, IN and Fort Wayne Board of Zoning Appeals, c/o Paul Blisk, its Secretary and Robert Ehrenman, its Attorney 200 East Berry Street, Suite 150 Fort Wayne, Indiana Defendants CASE NO. JUDGE VERIFIED COMPLAINT FOR DECLARATORY JUDGMENT, PRELIMINARY AND PERMANENT INJUNCTION, DAMAGES AND ATTORNEYS FEES, AND PETITION FOR JUDICIAL REVIEW UNDER STATE LAW PARTIES AND JURISDICTION 1. Plaintiff 1407 LLC, an Indiana limited liability company, is the purchaser and occupant of the property located at 1407 S. Calhoun Street, in Fort Wayne ( the Property under a land contract with Fort Wayne Building, LLC, an Indiana limited liability company. 2. Defendant City of Fort Wayne is a municipality organized and existing under the Constitution and laws of the State of Indiana. Defendant Fort Wayne Board of Zoning Appeals is a board organized and existing under the laws of the State of Indiana and the ordinances of the City of Fort Wayne. 1

2 USDC IN/ND case 1:18-cv TLS-SLC document 1 filed 07/19/18 page 2 of Jurisdiction is conferred upon this Court by 28 U.S.C. 1331, this being a civil action arising under the Constitution and the laws of the United States. 4. Jurisdiction is also conferred upon this Court by 28 U.S.C. 1343(a(3 and (4, 28 U.S.C and 2202 and 42 U.S.C and 1988, this being an action for declaratory judgment, equitable relief, and damages authorized by law to redress deprivations under color of law of rights, privileges and immunities secured by the Constitution of the United States. Jurisdiction over Plaintiff s state law claim and petition for judicial review is conferred by 28 U.S.C and Chicago v. Illinois College of Surgeons, 522 U.S. 156 ( At all times pertinent to this Complaint, and in taking all of the actions described in this Complaint, Defendants, their officers, agents and employees, acted under color of law and were effecting, and will effect, the custom, policy and laws of the State of Indiana and City of Fort Wayne. FACTS GIVING RISE TO PLAINTIFF S CLAIMS 6. Plaintiff s property is located in an area of the City of Fort Wayne zoned DC Downtown Core, and plaintiff desires to use its property as an adult cabaret, or adult nightclub as those terms are defined in the Fort Wayne Zoning Code. 7. An adult cabaret is defined in of the Zoning Code, in pertinent part, as, a nightclub, bar, restaurant theater or other establishment, whether or not alcoholic beverages are served, which displays: (1 Persons who appear nude or semi-nude, (2 Live performances which are characterized by the exposure of specified anatomical areas or by specified sexual activities.... Specified anatomical areas is defined to include less than completely and opaquely covered: human genitals, pubic regions, cleft of buttocks, anus, or female breast below 2

3 USDC IN/ND case 1:18-cv TLS-SLC document 1 filed 07/19/18 page 3 of 12 a point immediately above the top of the areola. 8. An adult nightclub is defined in that same section of the Zoning Code as, A nightclub devoted to adult entertainment, presenting material distinguished or characterized by an emphasis on matter depicting, describing, or relating to specified sexual activities or specified anatomical areas, or, a nightclub that features topless dancers, go-go dancers, strippers, male or female impersonators, or entertainers for observation by patrons. 9. Both adult cabarets and adult night clubs are types of sexually oriented businesses under the City s Zoning Code. Sexually oriented businesses are allowed only in the areas of the City zoned C4 Intensive Commercial Zoning District. In addition, of the Zoning Code, which governs the C4 zoning district, requires sexually oriented businesses to be more than 500 feet from any Allen County or Fort Wayne A or R district; 1000 feet from any existing or pending sexually oriented business; and, 750 feet from any existing or pending religious institution or school. 10. Sexually oriented businesses, including adult cabarets and adult night clubs, are not permitted in the DC zoning district where the Property is located. However, from 1976 until 2015, an adult cabaret/nightclub operating under the trade name Poor John s was located on the Property. In or around May 2015, an adult cabaret/nightclub known as The Rabbit operated on the Property until October The use of the Property for an adult cabaret/nightclub use was permitted because that use was a grandfathered, pre-existing nonconforming use and allowed to continue at that location under the terms of Section (C(1 of the City s zoning code, which provides: 3

4 USDC IN/ND case 1:18-cv TLS-SLC document 1 filed 07/19/18 page 4 of 12 Except as otherwise provided in this section, a use that existed as of March 2, 1998, or that subsequently becomes nonconforming as a result of an amendment to this ordinance, may be continued. 12. In or around October 2016, the tenant that had been operating The Rabbit on the Property lost its tenancy. After the Rabbit vacated the property, Fort Wayne Building, LLC, obtained a number of permits in November 2016, to remodel the interior of the adult cabaret/nightclub to prepare it to re-open it as an adult cabaret/nightclub, either by a new tenant or new owner. 13. Ft. Wayne s Finest, DT, Inc., was to be the new tenant at the Property and operate an adult entertainment/nightclub there. Beginning in November 2016, and continuing over the next several months, a substantial sum of money in excess of $230,000 was invested to renovate the property with a view towards re-opening an adult cabaret/nightclub at the premises. 14. When attempts were made to have the City conduct a final inspection of the renovations, the City was not responsive. 15. On November 15, 2017, Fort Wayne s Finest DT, Inc. s counsel sent an to Mr. Blisk and other city officials attempting to ascertain the status of the final inspections, since no one from the city had been in contact for the previous three weeks. He reiterated in that that this is a grandfathered facility and that it wanted to reopen before November 25, 2017, which he understood to be the one- year anniversary of the prior business s closing. 16. At no time during the course of the renovation to the property was there any intention expressed by Fort Wayne Building or Fort Wayne s Finest DT, Inc., to abandon or relinquish the valuable nonconforming use status of the property as an adult cabaret/nightclub. Indeed, all communications with the City expressed precisely the opposite intention. 4

5 USDC IN/ND case 1:18-cv TLS-SLC document 1 filed 07/19/18 page 5 of Despite that fact, on December 1, 2017, Kimberly Bowman, the City s Zoning Administrator, wrote to Fort Wayne Building, LLC and Fort Wayne s Finest DT, Inc., and, based on the language of Section (F(1(a of the Zoning Code, stated that the non-conforming use status of the adult cabaret/nightclub use had been abandoned because the business on the Property had been closed for more than a year. 18. Fort Wayne s Finest DT, Inc., was unable to finalize its improvements in the Property, and in February 2018, Plaintiff took over the occupancy. It requested an inspection of the property and on March 27, 2018, applied for a certificate of use to operate an adult cabaret/nightclub on the Property. 19. The City s Zoning Administrator denied Plaintiff s application on the ground that an adult nightclub is a sexually oriented business and not a permitted use in the DC Downtown Core zoning district. 20. Plaintiff appealed the Zoning Administrator s decision denying its application for a certificate of use to the Fort Wayne Board of Zoning Appeals. The Board of Zoning Appeals sustained the Administrator s decision on June 21, In contrast to the City s treatment of Plaintiff, it treated another applicant whose adult cabaret/nightclub had been closed for 17 months quite differently. 22. Specifically, an adult cabaret/nightclub known as Stewie s, had operated in the City of Fort Wayne at 4030 Coldwater Road ( Coldwater property, from April 1993 until November It was a non-conforming use at that location under the zoning code. 23. The property at which Stewie s was located was sold, and a deed transferring the Coldwater property to B &B Property Holdings, LLC, was recorded on September 1,

6 USDC IN/ND case 1:18-cv TLS-SLC document 1 filed 07/19/18 page 6 of On September 6, 2016, B & B Holdings applied for a certificate of use to continue to use the Coldwater property as an adult nightclub, and a certificate of use was issued to it two days later. But it did not open its adult cabaret/nightclub within a year after Stewie s had closed. In fact, the adult cabaret/nightclub on the Coldwater property, Club 44, did not reopen until April 2017, some 17 months after the prior business at that location had closed. 25. In both cases, the City was aware that the owners of the property intended to continue to operate adult cabaret/nightclub on their properties, but only Plaintiff was denied a certificate of use for an adult cabaret/nightclub use. rewritten. COUNT I 26. Plaintiff incorporates paragraphs 1 through 25 of its complaint as if fully 27. The portion of the Fort Wayne Zoning Code regulating sexually oriented businesses, being enforced against Plaintiff, is unconstitutional under the First and Fourteenth Amendments, both on its face and as applied, for each of the following reasons: a. it unconstitutionally abridges freedom of speech and expression and impose an impermissible restraint on constitutionally protected expression; b. it restricts the location of sexually oriented businesses in a manner that does not leave adequate alternative avenues of communication; c. it imposes an unconstitutional, content-based restriction on expression; and, d. the location restrictions are not narrowly tailored to further any governmental interest, substantial or otherwise. 28. As a result of the foregoing, Plaintiff is entitled to a declaration that that portion of 6

7 USDC IN/ND case 1:18-cv TLS-SLC document 1 filed 07/19/18 page 7 of 12 the Zoning Code violates its rights under the First and Fourteenth Amendments to the United States Constitution, both on its face and as applied. COUNT II 29. Plaintiffs incorporate paragraphs 1 through 28 of its complaint as if fully rewritten. 30. The Fort Wayne Zoning Code deprives and threatens to deprive Plaintiff of its rights secured by the First and Fourteenth Amendments to the Constitution to engage in protected expressive activity, which has caused and threatens to cause in the future, irreparable harm to Plaintiff for which there is no adequate remedy at law. 31. By reason of defendants misconduct and the irreparable harm Plaintiff has suffered and will continue to suffer, Plaintiff is entitled to a preliminary injunction and, after final hearing, a permanent injunction demanded hereunder. COUNT III 32. Plaintiffs incorporate paragraphs 1 through 31 of its complaint as if fully rewritten. 33. Defendants disparate treatment of Plaintiff denying its application for a certificate of use to operate an adult cabaret/nightclub at its premises, while issuing a permit to a similarly situated entity, violated Plaintiff s right to equal protection of the laws secured by the Fourteenth Amendment to the United States Constitution. 34. As a result of the Defendants misconduct, Plaintiff is entitled to a declaration that the Defendants violated its right to equal protection of the laws secured by the Fourteenth Amendment to the United States Constitution. 7

8 USDC IN/ND case 1:18-cv TLS-SLC document 1 filed 07/19/18 page 8 of 12 COUNT IV 35. Plaintiff incorporates paragraphs 1 through 34 of its complaint as if fully rewritten. 36. By reason of defendants misconduct and the irreparable harm Plaintiff has suffered and will continue to suffer as a result of the denial of its right to equal protection of the laws, Plaintiff is entitled to a preliminary injunction and, after final hearing, a permanent injunction demanded hereunder COUNT V 37. Plaintiff incorporates paragraphs 1 through 36 of its complaint as if fully rewritten. 38. As a direct and proximate result of defendant s application and enforcement of unconstitutional laws against it, and the disparate treatment to which it has been subjected, Plaintiff has been and continues to be deprived of its rights secured by the First and Fourteenth Amendments to the Constitution, of its ability to occupy and use its property for a lawful use, and to engage in the presentation of constitutionally protected expression. Plaintiff has suffered, and will continue to suffer the loss of business revenues, the loss of profit, and the loss of the value of its investment, for all of which it is entitled to recover compensatory damages. COUNT VI 39. Plaintiff incorporate paragraphs 1 through 38 of its Complaint as if fully rewritten. 40. Indiana Code et seq., provides that judicial review of a decision of a board of zoning appeals may be obtained in the judicial district in which the land affected by the zoning decision is located. 8

9 USDC IN/ND case 1:18-cv TLS-SLC document 1 filed 07/19/18 page 9 of This Court has jurisdiction to review the decision of the Fort Wayne Board of Zoning Appeals pursuant to 28 U.S.C. 1367, as authoritatively construed in Chicago v. Illinois College of Surgeons, 522 U.S. 156 ( Plaintiff 1407, LLC, hereby petitions for judicial review of the decision of the Fort Wayne Board of Zoning Appeals rendered on June 21, 2018, which sustained the denial of Plaintiff s application for a certificate of use for an adult cabaret/nightclub at its premises, on the ground that the Board s decision was arbitrary, capricious, an abuse of discretion and not otherwise in accordance with law; it was contrary to Plaintiff s constitutional rights, power, privilege and immunity; it was not supported by substantial evidence; Plaintiff was deprived of the opportunity to cross-examine witnesses; and, it violates Plaintiff s rights secured by the First and Fourteenth Amendments to the Constitution. 43. Plaintiff is therefore entitled to an order reversing and setting aside the Board s decision, and compelling the issuance to Petitioner of a certificate of use for an adult cabaret/nightclub use at its premises. WHEREFORE, Plaintiff demands upon Count I of its Complaint, a declaration that the portion of the Fort Wayne Zoning Code regulating sexually oriented businesses is unconstitutional on its face and as applied to Plaintiff; and, Upon Count II of its complaint, a preliminary injunction and after final hearing, a permanent injunction, enjoining Defendants, their officers, agents, servants, employees, attorneys, and those acting in concert of participation with them who receive actual notice of the injunction by personal service or otherwise, from enforcing the Fort Wayne Zoning Ordinance against Plaintiff; and, 9

10 USDC IN/ND case 1:18-cv TLS-SLC document 1 filed 07/19/18 page 10 of 12 Upon Count III of its Complaint, a declaration that the Defendants denial of Plaintiff s application for a certificate of use for an adult cabaret/nightclub on its premises violated its right to equal protection secured by the Fourteenth Amendment to the United States Constitution; and, Upon Count IV of its Complaint, a preliminary injunction and after final hearing, a permanent injunction, enjoining Defendants, their officers, agents, servants, employees, attorneys, and those acting in concert of participation with them who receive actual notice of the injunction by personal service or otherwise, to issue Plaintiff a certificate of use to operate an adult cabaret/nightclub at its premises; and, Upon Count V of its Complaint, compensatory damages in the amount of Five Hundred Thousand Dollars; and, Upon Count VI of its Complaint, an order reversing and setting aside the Board of Zoning Appeals decision and compelling the Defendants to issue Plaintiff a certificate of use for an adult cabaret/nightclub at its premises; and, Upon all counts of its complaint, the costs and expenses of maintaining this action, including Plaintiff s reasonable attorneys fees, as well as any other relief, whether legal or equitable, to which Plaintiff may be entitled. /s/ J. Michael Murray J. MICHAEL MURRAY ( jmmurray@bgmdlaw.com STEVEN D. SHAFRON ( sshafron@bgmdlaw.com BERKMAN, GORDON, MURRAY & DeVAN 55 Public Square, Suite 2200 Cleveland, OH ( ( (facsimile 10

11 USDC IN/ND case 1:18-cv TLS-SLC document 1 filed 07/19/18 page 11 of 12 JAMES P. BUCHHOLZ jbuchholz@tcrjlaw.com TOURKOW, CRELL, ROSENBLATT & JOHNSON, LLP 127 West Berry Street, Suite 1200 Fort Wayne, Indiana ( ( (facsimile Attorneys for Plaintiff 11

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