No UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT

Transcription

1 No UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT BBL INC., ALVA J. BUTLER, and SANDRA K. BUTLER, Plaintiff-Appellants, v. CITY OF ANGOLA, DEAN TWITCHELL in his official capacity, and VIVIAN LIKES in her individual capacity, Defendant-Appellees. Appeal from the United States District Court for the Northern District of Indiana Case No. 1:13-cv-076 The Honorable Judge Robert L. Miller REPLY BRIEF OF APPELLANTS BBL INC., ALVA J. BUTLER, AND SANDRA K. BUTLER SHAFER & ASSOCIATES, P.C. Bradley J. Shafer Matthew J. Hoffer 3800 Capital City Boulevard, Suite 2 Lansing, Michigan (517) Telephone (517) Facsimile brad@bradshaferlaw.com Attorneys for all Plaintiff-Appellants

2 TABLE OF CONTENTS I. ANGOLA HAS FAILED TO DEMONSTRATE THAT THE ORDINANCES ARE NOT CONTENT-BASED OR UNRELATED TO THE SUPPRESSION OF SPEECH... 1 II. III. IV. PLAINTIFFS STIPULATION DID NOT BAR ITS SECONDARY EFFECTS CHALLENGE; AND THE DISTRICT COURT ABUSED ITS DISCRETION IN THAT REGARD... 8 THE ORDINANCES ACTED AS AN UNCONSTITUTIONAL PRIOR RESTRAINT THROUGH THE USE OF SHIFTING CRITERIA...15 PLAINTIFFS HAVE STANDING TO RAISE THEIR PRIOR RESTRAINT AND ALTERNATIVE AVENUES CHALLENGES...17 V. THE LRO IS AN IMPROPERLY ENACTED ZONING ORDINANCE...19 VI. PLAINTIFFS LAND USE RIGHTS VESTED TO OPERATE SHOWGIRL UPON THE PREMISES...24 A. The Alleged Unpermitted Construction at the Premises Does Not Preclude Plaintiffs Nonconforming Use Rights from Vesting...24 B. Plaintiffs Expenditures are Sufficient to Vest Use Rights...28 CONCLUSION...30 ii

3 Cases TABLE OF AUTHORITIES 754 Orange Avenue, Inc. v. City of West Haven, 761 F.2d 105 (2d Cir. 1985)...29 ASF, Inc. v. City of Seattle, 408 F.Supp.2d 1102 (W. D. Wash. 2005)...18 Augusta Video v. Augusta-Richmond Cnty., Ga., 249 Fed. Appx. 93 (11th Cir. 2007)... 18, 25 Barnes v. Glen Theatres, Inc., 501 U.S. 560 (1991)... 11, 13, 14, 15 Ben s Bar, Inc., v. Village of Somerset, 316 F.3d 702 (7th Cir. 2003)... 2 Board of Commissioners of LaPorte County v. Town & Country Utilities, Inc., 791 N.E.2d 249 (Ind. App. 2003)...23 Chicago Joe s Tea Room v. Village of Broadview, 2008 WL (N.D. Ill. Sept. 11, 2008)...29 Church of the Lukumi Babalu Aye, Inc., v. City of Hialeah, 508 U.S. 520 (1983)... 4, 5, 6, 7 City of Carmel v. Martin Marietta Materials, Inc., 883 N.E.2d 781 (Ind. 2008)... passim City of Erie v. Pap s A.M., 529 U.S. 277 (2000)... 11, 13, 14 City of Los Angeles v. Alameda Books, Inc., 535 U.S. 425 (2002)... passim City of New Haven v. Flying J., Inc., 912 N.E.2d 420 (Ind. App. 2009)...29 City of Renton v. Playtime Theatres, 745 U.S. 41 (1986)... 1, 2, 4 Coronado v. Valleyview Public School Dist., 365-U, 537 F.3d 791 (7th Cir. 2008)...10 D.G. Restaurant Corporation v. City of Myrtle Beach, 9253 F.2d 140 (4th Cir. 1991)... 7 Dandy Co. v, City of South Bend, 401 N.E.2d 1380 (Ind. App. 1980)...28 DiMa Corp. v. Town of Hallie, 185 F.3d 823 (7th Cir. 1999)... 4 iii

4 G.M. Enterprises, Inc. v. Town of St. Joseph, Wisc., 350 F.3d 631 (7th Cir. 2003)...12 Gammoh v. City of Anaheim, 73 Cal.App.4th 186 (1999)... 15, 16, 17 International Eateries of America, Inc. v. Broward County, 941 F.2d 1157 (11th Cir.1991)...11 J & B Entertainment, Inc. v. City of Jackson, 152 F.3d 362 (5th Cir.1998)...11 Jacobs v. Miskawaka Bd. of Zoning Appeals, 395 N.E.2d 834 (1979)...28 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992)...17 Lutz v. New Albany City Plan Commission, 101 N.E.2d. 187 (1951)...29 McCullen v. Coakley, 134 S.Ct (2014)...13 McCutcheon v. FEC, 134 S.Ct (2014)...13 Metro. Dev. Com n of Marion Co. v. Goodman, 588 N.E.2d 1281 (Ind. App. 1992)...28 Metro. Dev. Com n v. Pinnacle Media, LLC ( Pinnacle II ), 846 N.E.2d 654 (Ind. 2006)...29 Metropolitan Development Commission of Marion County v. Pinnacle Media, LLC ( Pinnacle I ), 836 N.E.2d 422 (Ind. 2005)...29 Plaza Group Properties, LLC v. Spenser County Plan Commission, 887 N.E.2d 887 (Ind. Atpp. 2007), trans. denied 891 N.E.2d (Ind. 2008)...26 Pro-Eco, Inc., v. Board of Commissioners of Jay County, Inc., 956 F.2d 635 (7th Cir. 1992)... 23, 24 Pro-Eco, Inc. v. Board of Commissioners of Jay County, Indiana, 776 F.Supp (S.D. Ind. 1990)...23 R.V.S., L.L.C. v. City of Rockford, 361 F.3d 402 (7th Cir. 2004)... 3, 4, 12 Robinson v. Ada S. McKinley Cmty. Servs., 19 F.3d 359 (7th Cir. 1994)...22 Shaffer v. Globe Protection, Inc., iv

5 721 F.2d 1121 (7th Cir. 1983)...10 Stuckman v. Kosiusko County BZA, 506 N.E.2d 1079 (1987)...28 Triplett Grille, Inc. v. City of Akron, 40 F.3d 129 (6th Cir.1994)...11 Uniontown Retail # 36, LLC v. Board of Commissioners of Jackson County, 950 N.E.2d 332 (Ind. App. 2011) trans. denied, 962 N.E.2d 651 (Ind. 2011)... 19, 22 Other Authorities Angola Ordinance No ("LRO") Angola Ordinance No ("LRO") Angola Ordinance No ("LRO") Angola Ordinance No ("UDO Amendments") Angola Unified Development Ordinacne Carmel Indiana Ordinacne D Previous Angola Unified Development Ordinance , 8, 19 Previous Angola Unified Development Ordinance v

6 I. ANGOLA HAS FAILED TO DEMONSTRATE THAT THE ORDINANCES ARE NOT CONTENT-BASED OR UNRELATED TO THE SUPPRESSION OF SPEECH The City defends against the illicit motive claim by attempting to overextend the legal fiction that ordinances regulating adult businesses are contentneutral because the ordinances are aimed at the secondary effects of the expression rather than the expression itself to situations where there exists objective evidence of an illicit motive aside from the text of the ordinance. Here, Plaintiffs argument for strict scrutiny is not based solely on the fact that the ordinance is specifically aimed at adult entertainment, but rather that the sequence of events leading up to the enactment of the Ordinances and the direct effect of the Ordinances show that the purpose of the Ordinances was to preclude a specific business from operating. The district court below agree[d] with [Plaintiffs] that the timing of the enactment of the Angola ordinances is suspicious. [Dkt. 75 at 31, I Apx. 31]. [T]he timing seems to be in response to [Plaintiffs ] plans to open and operate Showgirl. [Id.]. In City of Renton v. Playtime Theatres, 745 U.S. 41, (1986), the Court concluded that the ordinance at issue was aimed not at the adult content of the films shown by defined businesses, but at the secondary effects the businesses were alleged to cause outside its walls. This approach was generally affirmed in City of Los Angeles v. Alameda Books, Inc., 535 U.S. 425, (2002). 1

7 However, as this Court explained in Ben s Bar, Inc., v. Village of Somerset, 316 F.3d 702, 721 n. 26 (7th Cir. 2003), five justices (J. Kennedy plus the four dissenters) in Alameda Books, Inc., 535 U.S. at , jettisoned the contentneutral fiction but maintained that such an ordinance is content neutral because it identifies the problem outside by the reference to the speech inside (quoting Alameda Books, 535 U.S. 455). However, neither Renton nor Alameda Books directly dealt with the issue presented here. In Renton, the ordinance was proposed two years prior and enacted one year prior to the plaintiff acquiring the land disqualified by the ordinance. 475 U.S The City attempts to obfuscate this fact and argues Plaintiffs position is directly foreclosed by Renton. The City cites language in the dissent discussing the suspiciously coincidental timing of the amendment. 475 U.S. at 59 (J. Brennan, dissenting). However, the amendment discussed was not the amendment disqualifying Plaintiffs property, but an amendment by the city after litigation commenced retroactively explaining why Renton had adopted the substance of the restrictions two years prior. Id. An amendment explaining why Renton had disqualified land a year before the plaintiff purchased it is categorically different than the Ordinances here, which actually disqualified the Premises Plaintiffs had already purchased. 2

8 In Alameda Books, the City of Los Angeles first conducted its own study and then enacted an ordinance prohibiting adult businesses from locating, expanding, or transferring ownership if the businesses were within 1,000 feet of one another. 535 U.S. at 430. An original intent of the ordinance was to prohibit multiple adult businesses within the same structure. Id. at When Los Angeles learned that the language of dispersal requirement, which measures from the exterior wall, permitted multiple adult businesses in the same structure, it amended the ordinance to prohibit multiple adult businesses in the same structure in order to comply with its original intent. Id. at 431. The amendment occurred in Id. at 432. Over a decade later, in 1995, the city learned that Alameda Books was operating two adult businesses in the same structure and Alameda Books sued to prevent enforcement of the ordinance. Id. at 432. Obviously, no argument was presented or discussed in Alameda Books that the ordinance was enacted a decade earlier to prevent a specific business from operating and, necessarily, Alameda Books was able to continue operating at least one business on its premises. Next, Angola cites R.V.S., L.L.C. v. City of Rockford, 361 F.3d 402, 410 (7th Cir. 2004), noting this Court applied intermediate scrutiny despite a legislator s postenactment testimony at trial that some people just don t like this type of 3

9 entertainment. Id. The testimony gave this Court concern, and it stated open and explicit hostility toward speech is not a permissible purpose for regulation. Id. However, the Court ultimately dismissed the comments as being those of a single legislator and determined, on balance, it seems that the predominant concerns motivating the enactment of the Ordinance related to secondary effects. Id. R.V.S. is further distinguishable because the ordinance was proposed some four months prior to being enacted. Id. at 405. It was the first ordinance regulating Exotic Dancing Nightclubs. Id. at 404. There was absolutely no argument that the Plaintiffs impending operation was a motivating factor in the enactment. Angola also cites to the statement in DiMa Corp. v. Town of Hallie, 185 F.3d 823, 828 (7th Cir. 1999), that [t]he actual motives of those who enacted the ordinance are irrelevant to our First Amendment analysis. DiMa Corp. too involved the impure comments of some board members. Again, the ordinance was not enacted in response to learning of the business s pending operation, nor did it prevent the business from operating. Id. at 826. This Court relied on Justice Scalia s concurring comments in Church of the Lukumi Babalu Aye, Inc., v. City of Hialeah, 508 U.S. 520, (1983) (Scalia, J., concurring), and clarified that the question was not whether the motives of the Board can be justified as content-neutral... but rather whether the ordinance itself can be so justified. Id. at 829 (citing Renton, 475 U.S. at 48). 4

10 Indeed, the High Court s Lukumi First Amendment decision defines the appropriate scope of the inquiry as follows: Here, as in equal protection cases, we may determine the city council's object from both direct and circumstantial evidence. [ ]. Relevant evidence includes, among other things, the historical background of the decision under challenge, the specific series of events leading to the enactment or official policy in question, and the legislative or administrative history, including contemporaneous statements made by members of the decisionmaking body. [ ]. These objective factors bear on the question of discriminatory object. [ ]. Id. at 540 (citations omitted). Plaintiffs are urge the Court to embrace the full scope of Lukumi and to consider all the relevant factors identified, not merely the inappropriate comments of a few legislators. The important Lukumi factors are present here and demonstrate that the object of the Ordinances is content-based. The first factor is the historical background of the Ordinance. As both Plaintiffs and Defendants have explained, Angola began prophylactically regulating adult businesses in It then changed the permissible zoning classifications for adult businesses in Angola repeatedly asks this court to accept that the 2008 decision to change the zoning classification for adult businesses from the former M- 2 district to the newly-created C-2 district was a mistake, an oops! Angola offers no support for its proposition that regularly enacted zoning amendments are presumed to be mistakes unless the reasoning for the classifications 5

11 are contained in the text of the ordinance itself. All it offers is the self-serving testimony of Vivian Likes. Likes became the Director of Economic Development and Planning for Angola in August of 2011, well after the 2008 amendments. [Dkt. 49-1, 2, II Apx. 415]. Her testimony that the 2008 changes were a mistake is based on her inability to locate any explanatory legislative history. [Id. at 13, II Apx ; Dkt. 71, 41:21-42:12, II Apx ]. Likes could not remember if she asked any of the then Plan Commission members or Common Counsel members still serving what the rationale had been. [Dkt. 71, 53:13-54:10, III Apx ]. In reality, she needed to look no further than the statement of purpose in PAUDO [Addendum G]. Angola is actually asking this Court to adopt a rule that if the purpose for a zoning ordinance regulating adult businesses is not stated in the text of the ordinance or the legislative history, the Court should presume that the ordinance was not enacted out of a desire to address allege secondary effects. As to the second Lukumi factor, the City s decision to further regulate sexually oriented businesses occurred on August 20, 2012, [Answer, Dkt. 18, 100, II Apx. 328] after it learned, on August 16, 2012, that Plaintiffs intended to operate a gentlemen s club [Id. at 99], and before it considered the secondary effects predicates for the Ordinances. 6

12 The third Lukumi factor, the legislative history and contemporaneous statements of legislators, was admittedly well controlled and choreographed to camouflage Angola s content-based objective. The fourth and most important Lukumi factor is: [a]part from the text, the effect of a law in real operation is strong evidence of its object. 508 U.S. at 535. Here, the effect was devastating: (1) the immediate effect of the LRO [Addendum C] was to disqualify all land in Angola for the operation of an adult business and (2) upon enactment of the UDO Amendments, the Premises remained disqualified. The moratorium effect was knowingly created when Angola used special emergency procedures to enact the LRO in a single meeting, rather than the typical three meetings [See Answer, 51-56, II Apx ], months before it enacted the curative UDO Amendments. Furthermore, the present situation is distinguishable even from the single case, D.G. Restaurant Corporation v. City of Myrtle Beach, 9253 F.2d 140, (4th Cir. 1991), the City cites for the proposition that courts frequently uphold adult business regulations adopted when a new establishment arrives. (Appellees Br., p. 24). The court in D.G. Restaurant Corporation emphasized the fact that the challenged ordinance did not regulate erotic dancing but nudity alone, meaning that erotic dance was unaffected by the ordinance so long as the dancers don pasties and G-strings. Id. at 146. In Angola, all erotic dance, even if the dancers wore pasties 7

13 and G-strings, was immediately banned throughout the City upon the enactment of the LRO. Also, unlike Myrtle Beach, Angola was not caught unprepared for adult businesses. It had carefully articulated, precise zoning classifications and buffer restrictions in place. See PAUDO 5.66 [Addendum G]. Viewing all of the relevant factors together, it is clear that the object and predominant motive of the Ordinances was to preclude showgirl from opening and operating in Angola. The City cannot meet its burden to demonstrate that the Ordinances are not content-based or are unrelated to suppression of speech. II. PLAINTIFFS STIPULATION DID NOT BAR ITS SECONDARY EFFECTS CHALLENGE; AND THE DISTRICT COURT ABUSED ITS DISCRETION IN THAT REGARD While the City quotes a portion of the transcript containing the Plaintiffs stipulation that they were not challenging the secondary effects predicate for the Ordinances for purposes of the motion for preliminary injunction [Appellees Br., p. 26], it fails to inform this Court of the context in which that stipulation was made and thereby materially misleads this Court. As the record demonstrates, Plaintiffs offered that stipulation in light of their objection to Angola s proposed Exhibit R; which was, in fact, the supposed secondary effects materials upon which the Angola Common Council claims to have relied in enacting the challenged Ordinances. [T. 11/13/2013, Dkt. 71, pp ]. Based upon that stipulation, the City withdrew its proposed Exhibit R. [Id., p. 77]. 8

14 Immediately following the statement quoted by the City in its brief, the following colloquy occurred: THE COURT: I think it's [the Plaintiffs secondary effects challenge] in one of the other motions, as well, isn't it? MR. BERGTHOLD: It is. 1 THE COURT: In light of that stipulation, that they're not challenging it here, do we need it? And my reason for asking is I may well be able to rule on the preliminary injunction motion before I'm able to rule on the motion for judgment on the pleadings or summary judgment. I mean, if I was going to do it all at once and knew I was, obviously, I have to look at it, and I can look at it for several things at once. But in light of that stipulation, does that affect your proffer? MR. BERGTHOLD: It does affect my proffer. I'll withdraw it. I'll take the stipulation. Id. (emphasis and clarification added). Consequently, for purposes of the motion for preliminary injunction there was not supposed to be any secondary effects skirmishing either way in the record. Yet, for whatever reason, the district court decided to go beyond that motion evidentiary record and rely on the secondary effects materials that Angola attached to its answer [Opinion and Order, Dkt. 75, p. 32, I Apx. 32], which they filed after the District Court struck Plaintiffs amended complaint (as being too long and unnecessarily detailed) [Opinion and Order, Dkt. 25, pp. 9-11, II Apx ], 1 Indeed, Plaintiffs made this challenge in response to Defendants motion to dismiss. [Brief, Dkt. 40, pp ]. 9

15 which was the document that itself contained Plaintiffs exhaustive challenge to those very secondary effects materials. It is for these reasons that the rulings by the district court granting, in great measure, the City s motion for judgment on the pleadings (which the court then used as basis for his secondary effects decision in regard to the Plaintiffs motion for preliminary injunction) [Opinion and Order, Dkt. 75, pp , 70-72; I Apx , 70-72], are inextricably bound and central to, and bear upon, the preliminary injunction ruling. As admitted by Angola, such rulings are then properly the subject of review in this appeal. [Appellees Br., p. 27, citing Coronado v. Valleyview Public School Dist., 365-U, 537 F.3d 791, 795 (7th Cir. 2008) (appellate review limited to the injunction decision itself and those issues inextricably bound to it ); and Shaffer v. Globe Protection, Inc., 721 F.2d 1121, (7th Cir. 1983) (other orders may be reviewed only to the extent that they bear upon and are central to the grant or denial of the injunction )]. Nevertheless, while the Plaintiffs made a limited stipulation that they were not challenging the secondary effects materials in their motion for preliminary injunction, they never stipulated that the Ordinances were content neutral (or as the courts now state, content correlated ); that the Ordinances were subject only to intermediate scrutiny; or that the Ordinances satisfied intermediate scrutiny. And, it is here where Angola s argument completely breaks down. 10

16 First, Plaintiffs pointed out in their initial brief to this Court [pp ] that none of the supposed secondary effects materials examined whether pastie and g- string facilities in Indiana (which are so limited by statute to -- as the Supreme Court has observed -- ameliorate the secondary effects of nude or topless dancing facilities; see Barnes v. Glen Theatres, Inc., 501 U.S. 560, (1991) (Souter, J. concurring)) 2, engender adverse secondary effects so as to justify the restrictions contained in the Ordinances. Nowhere in their response does the City even attempt to refute that claim or cite to this Court any of the supposed secondary effects materials that examined that question. Second, Plaintiffs pointed out that none of the supposed secondary effects materials justified moving Plaintiffs type of desired business from commercial to industrial zoning districts [Appellants Br., p. 31]. Again, Angola does not even attempt to identify any supposed study or report that would justify such a move. Third, Plaintiffs also argued that the secondary effects materials and the District Court opinion below were completely devoid of any type of analysis 2 Justice Souter s concurring opinion was later determined to be the constitutional holding of that plurality decision. See, e.g., J & B Entertainment, Inc. v. City of Jackson, 152 F.3d 362 (5th Cir.1998); Triplett Grille, Inc. v. City of Akron, 40 F.3d 129 (6th Cir.1994); International Eateries of America, Inc. v. Broward County, 941 F.2d 1157 (11th Cir.1991); and City of Erie v. Pap s A.M., 529 U.S. 277, , 296 (2000) (plurality) (adopting Justice Souter s secondary effects approach in Barnes). 11

17 required under Justice Kennedy s proportionality test contained in his controlling concurring opinion in Alameda Books, supra. [Appellants Br., p ]. Yet, still again, Angola does not even attempt to respond to those critical failings. Fourth, this Circuit has recognized the distinction between regulating nude and topless dancing (in order to ameliorate adverse secondary effects) versus pastie and g-string entertainment (which is limited in such a fashion in Indiana specifically to reduce claimed secondary effects). See R.V.S., supra. In distinguishing G.M. Enterprises, Inc. v. Town of St. Joseph, Wisc., 350 F.3d 631 (7th Cir. 2003), upon which the City relies [Appellees Br., pp ], and in invalidating a zoning scheme that applied to clothed dancing as well, this Court stated: [T]he requirement that municipalities be allowed a reasonable opportunity to experiment with solutions to an admittedly serious problem might render the offered evidence sufficient if the Ordinance applied to bars and clubs that present nude or semi-nude dancing.... In contrast, the regulation targets clothed dancers who convey an erotic message through their movements. Within the confines of this record evidence does not exist to support a connection between establishments offering dancing by entertainers who are clothed and adverse secondary effects. R.V.S., 361 F.3d at 412 (emphasis added). Consequently, this Court further concluded that as a direct restriction on erotic expression, speech fares worse under the Ordinance than it did under the laws 12

18 at issue in similar cases, 361 F.3d at 413, and the ordinance there was therefore invalidated. Nothing is different here. Fifth, it is important to note that since the rulings in Barnes, City of Erie v. Pap s A.M., 529 U.S. 277 (2000), and Alameda Books (and indeed since the ruling of the District Court below here), the Supreme Court has enhanced the obligation of the government to establish the narrow tailoring component for even intermediate constitutional scrutiny when laws impact upon protected expression (as obviously do these Ordinances). See, e.g., McCullen v. Coakley, 134 S.Ct. 2518, (2014) (in ruling unconstitutional a 35 foot buffer zone for abortion protesters around abortion clinics, the Court noted that [t]o meet the requirement of narrow tailoring, the government must demonstrate that alternative measures that burden substantially less speech would fail to achieve the government s interests, not simply that the chosen route is easier ) (emphasis added). See also McCutcheon v. FEC, 134 S.Ct. 1434, (2014) (in invalidating aggregate campaign contribution limits, the Court observed that [i]n the First Amendment context, fit matters. Even when the Court is not applying strict scrutiny, we still require a fit that is not necessarily perfect, but reasonable; that represents not necessarily the single best disposition but one whose scope is in proportion to the interest served,... that employs not necessarily the least restrictive means but... a means narrowly tailored to achieve the desired objective, and that [i]mportantly, there are multiple 13

19 alternatives available to Congress that would serve the Government s... interest, while avoiding unnecessary abridgement of First Amendment rights ) (citations omitted). 3 The district court analysis below did not apply these limitations of the furthering the governmental interest component because they simply did not exist at the time. For that reason and for the reason that the City did not establish that the Ordinances satisfied those standards, the ruling below should be reversed. Finally, Angola argues that the challenged Ordinances satisfy intermediate scrutiny because other laws have been upheld that regulate adult businesses. [Appellees Br., pp ]. Angola, however, misses the mark. Even forgetting about the clothing/nude distinction, Plaintiffs point out that their motion for preliminary injunction was restricted to the zoning provisions found in the Ordinances, and did not include challenges at that point to the type of regulatory provisions that the City asserts have been upheld in other cases in other contexts. In addition, merely because one zoning ordinance has been upheld 3 These decisions clarify that the Supreme Court has now abandoned its previous highly-deferential-to-government narrow tailoring approach for intermediate scrutiny set forth in United States v. Albertini, 472 U.S. 675, 689 (1985) (narrow tailoring is satisfied so long as the... regulation promotes a substantial governmental interest that would be achieved less effectively absent the regulation ), and as utilized in Barnes and its successors. See, e.g., Pap s A.M., 529 U.S. at

20 certainly does not mean that all zoning schemes are fully constitutional. For example, a 1,000 foot buffer zone between adult uses and sensitive areas (such as churches, schools, etc.) may provide for sufficient alternative locations in a city the size of Chicago, but may provide nowhere to locate in a community of only one square mile. One size does not fit all. Moreover, and most importantly, to accept Angola s argument in this regard would be to assume the fact that the statutory anti-nudity restrictions at issue in Barnes (that govern Plaintiffs facility, which is located in Indiana) have had no real effect whatsoever upon claimed adverse secondary effects; 4 thereby justifying the enactment of an ever-expanding array of restrictions upon protected expression predicated upon the mere whisper of the phrase adverse secondary effects. Plaintiffs are unaware of any precedent that would permit such a result. III. THE ORDINANCES ACTED AS AN UNCONSTITUTIONAL PRIOR RESTRAINT THROUGH THE USE OF SHIFTING CRITERIA Angola responds [Appellees Br., p. 42] that Plaintiffs misapply Gammoh v. City of Anaheim, 73 Cal.App.4th 186 (1999). Plaintiffs argument [Appellants Br., pp ] sets forth established prior restraint jurisprudence that prohibits the use of shifting criteria in a prior restraint. City of Lakewood v. Plain Dealer Publ g 4 Of course, such a conclusion would otherwise render those statutory provisions unconstitutional as failing to further the claimed governmental interests, irrespective of the rulings of the Supreme Court and this Court upholding them. 15

21 Co., 486 U.S. 750, 758 (1988). In Gammoh, the court found that city impermissibly exercised discretion by amending its prior restraint permitting scheme to prohibit an applicant s otherwise suitable property for use as an adult business. 73 Cal.App.4th at 191. The court wisely reasoned that a criterion that is changed legislatively during the permitting process is no different than a discretionary criterion. Id. Angola latches on to the fact that Gammoh had applied for the permit before the criterion was changed, rather than before the application was submitted. Id. at 191 n Plaintiffs submit that there is a distinction without a difference. Here, rather than an application, the City was presented with a letter form Plaintiffs counsel seeking verification that the Premises was duly zoned for a gentlemen s club, which spurred the change. [Hearing Exhibit 19, IV Apx. 875]. This letter was, of course, an obvious precursor to an application to establish Showgirl. There is no reason Angola should be permitted to escape the prior restraint scrutiny applied in Gammoh simply because the City rushed to enact the LRO before Plaintiffs were able to submit an application. 5 We do say that a city cannot take a section of industrial property otherwise amenable for adult business and after someone makes an application to put an adult business there, preclude adult businesses in the zone on the theory that the area must now be redeveloped because more upscale development is desired. Gammoh, 73 Cal.App.4th at 191 n

22 Angola does not dispute the fact that the LRO is obviously a prior restraint. It requires a license before an adult business may open and operate. LRO 3 [Dkt. 1, pp. 69; Appellants Addendum C]. Because the LRO changed the permissible locations for adult businesses with direct knowledge of the location of a soon-to-be applicant, it unconstitutionally employed shifting criteria contrary to Lakewood and Gammoh. IV. PLAINTIFFS HAVE STANDING TO RAISE THEIR PRIOR RESTRAINT AND ALTERNATIVE AVENUES CHALLENGES Plaintiffs satisfy the well-known test for determining standing: injury in fact, causation, and redressability. See Lujan v. Defenders of Wildlife, 504 U.S. 555, (1992). The idea that Showgirls has not been injured by this shifting regulatory scheme that has violated First Amendment rights by operating as a prior restraint effectively so, since Showgirls has never opened its doors strains credulity. H.D.V.-Greektown, LLC v. City of Detroit, 586 F.3d 609, 617 (6th Cir. 2009) (Sixth Circuit rejecting a nearly identical argument made by the City of Detroit in a factually analogous case). Angola attempts to frame Plaintiffs alternative avenues argument as nonsensical for relying on some theoretical combination of the residential-buffer rule and separate location requirements found in the PAUDO. [Appellees Brief p. 32]. But the combination is not theoretical. In order to operate in Angola, Plaintiffs 17

23 had to comply with all applicable laws and the illicit PAUDO-LRO combination chilled its speech and prevented it from operating from at least September 17, 2012, through November 19, 2012, when Plaintiffs should have been able to move forward on their ILP application and operation. Instead they were left to consider the utility of even submitting an ILP application in light of the zone-out. Undeniably, the PAUDO and LRO operated together to create a de facto moratorium on the vesting of use rights and the exercise of First Amendment rights, itself an unconstitutional prior restraint. See ASF, Inc. v. City of Seattle, 408 F.Supp.2d 1102, (W. D. Wash. 2005) (moratorium an unconstitutional prior restraint). The injury was directly caused by the City s conduct. It chose to enact the LRO on an emergency basis, knowingly ensuring a zone-out moratorium would exist until the UDO Amendments were eventually enacted. Further, a ruling in Plaintiffs favor on this issue will provide the relief that they deserve. Stated simply, because Plaintiffs sought and applied to do business when there was no valid zoning ordinance in place prohibiting the operation, the land use rights vested. A similar situation was present in Augusta Video v. Augusta- Richmond Cnty., Ga., 249 Fed. Appx. 93, 97 (11th Cir. 2007) where the court determined that in order to assess the plaintiff s vested use rights argument, it first 18

24 had to assess the constitutionally of the prior restrictions prohibiting the use. Upon finding prior restrictions unconstitutional, the court deemed the property a lawful nonconforming use under the current zoning ordinance. Id. at The same result should follow here and Plaintiffs clearly have standing to challenge both the PAUDO 5.66 ILP prior restraint and the PAUDO-LRO moratorium. V. THE LRO IS AN IMPROPERLY ENACTED ZONING ORDINANCE To argue that the LRO is not an improperly enacted zoning ordinance, Angola takes an improperly narrow reading of City of Carmel v. Martin Marietta Materials, Inc., 883 N.E.2d 781 (Ind. 2008) which, like the opinion in Uniontown Retail # 36, LLC v. Board of Commissioners of Jackson County, 950 N.E.2d 332 (Ind. App. 2011) trans. denied, 962 N.E.2d 651 (Ind. 2011), cannot be squared with Carmel. The narrow reading of Carmel offered by Angola on appeal differs from the district court s reasoning below. As explained in the Opening Brief [p. 48] the district court s opinion [Dkt. 75, p. 12, I Apx. 12] erroneously reasoned that ordinances which specify where a land use can locate are zoning ordinances, whereas ordinance which specify where a land use cannot locate are not zoning ordinances. Even the district court was plain that the distinction might be a brittle one. [Id.]. No one supports that position on appeal and for good reason. 19

25 Instead, Angola argues that Carmel sets up a distinction between how land is used and where a type of land use may locate. The fatal flaw in the City s position is that it inappropriately places the LRO only in the how and not in the where classification, when in fact it occupies both. The language of the LRO makes clear that it regulates where a defined type of land use may locate in addition to how the land use can be conducted. The LRO regulates where businesses presenting semi-nude dance may locate, but not where semi-nude dance may occur. LRO 19(a) [Addendum C] provides that it is unlawful to establish or operate a sexually oriented business... unless the sexually oriented business is at least 750 feet from every residence. The measurement is made not from the situs of any defined activity or use but rather from the closest part of any parcel containing a sexually oriented business to the closes part of any parcel containing a residence (LRO 19(b)), i.e., from one type of land use to another. A sexually oriented business is a land use classification comprised of several subtypes, including: an adult bookstore or adult video store, an adult cabaret, an adult motion picture theater, a semi-nude model studio, or a sexual device shop. LRO 2. Angola asserts Showgirl would be an adult cabaret. Adult Cabaret means a nightclub, bar, juice bar, restaurant, bottle club, or similar commercial establishment that regularly features live conduct characterized by semi-nudity. No establishment shall avoid classification as an adult cabaret by offering or featuring nudity. 20

26 Id. Regularly is defined to mean, the consistent and repeated doing of an act on an ongoing basis. Id. Angola cannot and does not attempt to argue that sexually oriented businesses is anything but a class of land uses. Any possible doubt is removed by the fact that the UDO Amendments, which Angola admits to being a zoning ordinance, uses the exact same definitions. [UDO Amendments, 5, Addendum D]. The LRO does not regulate where the activity of semi-nude dancing may occur, only where commercial businesses regularly featuring semi-nude dance may operate. This is completely different than the regulations in Carmel, where: Among many other regulations, the Ordinance addresses water and air pollution (id (h)(11)), lateral support to prevent collapse of underground tunnels (id (a)), uncontrolled movement of loose material (id (c)), perimeter fencing to keep out unauthorized persons (id (d)), and blasting practices and the handling of explosives to minimize the risk of injury or property damage (id ). 883 N.E.2d at 784. Grasping for some provision of the Carmel ordinance which might resemble the LRO s locational restrictions, Angola cites to provisions of the Carmel ordinance not discussed in the Carmel opinion (Appellees Br., p. 48, citing Carmel Ind. Ord. 21

27 D , 6-173(b) and 175(b)(7), available at However, neither 6-173(b) (prohibiting all stockpiles from being located within 200 feet of a residence and stockpiles over 50 feet in height from being within 500 feet of a residence) nor 175(b)(7) (prohibiting blasting with 500 feet of protected structures) regulate to location of any land use classification, such as a mine. Instead, those sections specifically regulate activity. Neither stockpiles nor blasting is a land use classification, it is simply the use to land. In contrast, under the LRO, a Sexually Oriented Business is a class of land uses, as explained above. Therefore, Angola cannot avail itself of the use of land how v. land use location where distinction it attempts to assert. For these same reasons, Uniontown Retail conflicts with Carmel and should not be followed under the Erie Doctrine. Robinson v. Ada S. McKinley Cmty. Servs., 19 F.3d 359, 363 (7th Cir. 1994). Angola further erroneously argues that in order to regulate where a land use may locate, a zoning ordinance must divide land into zones (Appellees Br., p. 48). However, all Carmel stated in this regard was that a typical zoning ordinance divides the jurisdiction in to districts, specifying the use or uses of land permitted in each. 883 N.E. 2d at 787 (emphasis added). Thus, dividing land into districts is a 22

28 common sufficient condition to be a zoning ordinance, but it is not a necessary condition. In fact, this statement was in the very same paragraph where the Indiana Supreme Court agreed that this Court s decision in Pro-Eco, Inc., v. Board of Commissioners of Jay County, Inc., 956 F.2d 635 (7th Cir. 1992), and the Indiana Court of Appeals prior decision in Board of Commissioners of LaPorte County v. Town & Country Utilities, Inc., 791 N.E.2d 249 (Ind. App. 2003) correctly found the ordinances at issue in each to be zoning ordinances. However, neither of those ordinances divided land and/or specified uses by district. Veritably, the ordinance in Pro-Eco was a moratorium on the construction of any new sanitary land fill, just as the LRO acted as a moratorium when enacted. 956 F.2d at 635. The ordinance in Town & Country required all sanitary landfill developers to first obtain written permission from the LaPorte Solid Waste District Board before applying to the BZA for zoning approval. Both simply applied to the entire jurisdiction of the municipality. The district court in Pro-Eco, Inc. v. Board of Commissioners of Jay County, Indiana, 776 F.Supp. 1368, 1371 (S.D. Ind. 1990) said it best:... [T]he moratorium is a zoning ordinance. The plain fact is that the ordinance is an attempt by the county to regulate the use of a piece of property. To say, as does the County, that this ordinance is not a zoning ordinance by districts is to ignore the general notion that the object of 23

29 zoning is to regulate the use of land.... To say that an ordinance which furthers the goals of zoning is not a zoning ordinance is less than convincing. And the Supreme Court of Indiana in Carmel confirmed, referring to the ordinances in Pro-Eco and Town & County, which prohibited without respect to zoning districts, that they dictated what type of land use was permitted where quintessential zoning. The LRO is quintessential zoning and Angola s maneuvering to the contrary is less than convincing. VI. PLAINTIFFS LAND USE RIGHTS VESTED TO OPERATE SHOWGIRL UPON THE PREMISES Angola attacks Plaintiffs assertion of vested use rights in three fashions, it claims: (a) that Plaintiffs are barred from vested use rights due to unpermitted construction; (b) that Plaintiffs efforts and expenditures are insufficient to warrant vesting of nonconforming use rights; and (c) that nonconforming use rights do not apply to non-zoning licensing or regulatory ordinances. As to the latter, Angola s argument is unconvincing since the LRO is unequivocally a zoning ordinance, as explained above. Hence, both Ordinances are subject to Plaintiffs vested nonconforming use rights. A. The Alleged Unpermitted Construction at the Premises Does Not Preclude Plaintiffs Nonconforming Use Rights from Vesting As explained in the Opening Brief, Plaintiffs have incurred at least $456, in expenses purchasing and improving the premises. [Appellants Br., 24

30 p. 7-9]. Angola asserts that none of these expenditures count because its Building Commissioner, Dean Twitchell, successfully duped Plaintiffs into making certain improvements which it later contended required a building permit. [Id.]. Angola goes so far as to admit that it precluded Plaintiffs from further vesting their nonconforming use rights by enacting the LRO (Appellees Br., p. 52), which prohibited any adult business from operating at the Premises or anywhere else in Angola. This is precisely the reason this court must adjudicate the merits of Plaintiffs challenges to the prior restraint moratorium and lack of alternative sites. [ See Section IV, supra]. The City cannot dissuade or prohibit activity that would vest use rights by enacting an unconstitutional ordinance and then rely on the lack of vesting activity to defend against nonconforming use rights. Augusta Video, supra. Angola attempts to cast nonconforming use rights as a mine field where no matter how much lawful progress is made toward the rights having vested, or even if the landholder is across the finish line, if he steps on a single landmine by undertaking an unpermitted activity (even if encouraged to do so by the municipality itself) the nonconforming use rights are destroyed. This extreme position finds no support in either state law or the Angola ordinances. 25

31 The City most heavily relies on Plaza Group Properties, LLC v. Spenser County Plan Commission, 887 N.E.2d 887, (Ind. Atpp. 2007), trans. denied 891 N.E.2d (Ind. 2008). There, the court recognized that: Id. at courts have been willing to hold that the developer acquires a vested right such that a new ordinance does not apply retroactively if, but only if, the developer (1) relying in good faith, (2) upon some act or omission of the government, (3) has made substantial changes or otherwise committed himself to his substantial disadvantage prior to a zoning change. However, Spencer County s municipal ordinance provided that the use must be lawfully existing in all respects under the law to be deemed legally nonconforming. Also, the ordinance in Plaza Group operated much differently than Angola s nonconforming use provisions. Spencer County s ordinance provided that a building permit must be obtained in situations where the cost of renovations exceeds $5,000. Id. at 885. Because the court found that the cost of the renovations clearly exceeded $5,000 all of the work undertaken was deemed unlawful. Id. at 886 That is simply not the case here. The expenditures in support of nonconforming use rights include the $350,000 for the Premises, Front Lot, and Liquor Permit, which included nonrefundable deposit of $27, for the properties and $8,840 for the Liquor Permit. [Appellants Br., p. 1 and 54]. Other expenditures included $3, for existing fixtures, $6, for parking lot improvements; $85, for a metal roof, $3, for an architect, and 26

32 $3, in legal fees related to the purchase. [Butler Affidavit, Dkt. 43-1, 13-22, II Apx. 3-4]. Plaintiffs purchased the properties and fixtures and committed to the purchase of the liquor license before the enactment of the LRO, and at least $447, was expended prior to the end of October and the enactment of the UDO in December The only work that the City contends to be unlawful (though explicitly approved by Building Commissioner Twitchell) is replacing the East Wall with a beam and construction a partition for a dressing room. However, at this point, Plaintiffs nonconforming use had already vested. Angola does not dispute that vested land use rights, under AUDO 8.06(C), can only be lost through abandonment. Angola does repeatedly assert that Showgirl cannot show nonconforming rights because the use was not operating on the effective dates of the Ordinances. However, it is not necessary that a nonconforming use be operating on the precise 6 For the timing and expenses in addition to the cost of the property see Butler Dec., Dkt. 43-1, 13, II Apx. 3 (fixtures); Alva Butler, T 10/25/2013, Dkt. 67, p , II Apx , Hearing Exhibit 18, Receipt for Joel Ray s Asphalt Paving (parking lot); Butler Dec., Dkt. 43-1, 20, II Apx. 4, Alva Butler, T 10/25/2013, pp. 145:19-146:14, III Apx , Hearing Exhibit 17, Pro Build Receipt (roof); Butler Dec., Dkt. 43-1, 21, II Apx. 4, Hearing Exhibit 16, Checks to CE&M, Inc; Alva Butler, T 10/25/2013, Dkt. 67, pp. 143:9-144:24, III Apx (architect); Butler Dec., Dkt. 43-1, 23, II Apx. 4 (architect); Id. at 22 (legal fees for properties); and Id. at 23 (legal fees for liquor permit). Summarized at Dkt. 72,

33 day the zoning ordinance changes. Metro. Dev. Com n of Marion Co. v. Goodman, 588 N.E.2d 1281, 1286 (Ind. App. 1992) (citing Dandy Co. v, City of South Bend, 401 N.E.2d 1380 (Ind. App. 1980)). Once a nonconforming use is established, it is the government s burden to prove it was abandoned. Id. at 1286 (citing Jacobs v. Miskawaka Bd. of Zoning Appeals, 395 N.E.2d 834 (1979)). Additionally, abandonment must a voluntary act. Id. (citing Stuckman v. Kosiusko County BZA, 506 N.E.2d 1079, 1080 (1987)). Thus, because Angola precluded Plaintiffs from operating, it cannot leverage the nonoperation to defeat nonconforming use rights. B. Plaintiffs Expenditures are Sufficient to Vest Use Rights As set forth in Section IV, supra, Plaintiff cannot be faulted for not taking additional steps to secure vested nonconforming use rights after Angola enacted the unconstitutional LRO some six days after Plaintiffs closed on the Premises. For the same reason, Plaintiffs cannot be faulted for not sooner applying for an Improvement Location Permit from the City or Construction design release from the state. The City s actions were calculated to halt Plaintiffs in their tracks. Further, Plaintiffs were (and are) free to seek an ILP at any time [PAUDO 9.05(D)(5), but by the time their original application had been delayed and denied as incomplete, the City had conveniently adopted the UDO precluding an adult business from operating on the Premises. 28

34 As in 754 Orange Avenue, Inc. v. City of West Haven, 761 F.2d 105, 113 (2d Cir. 1985), and Chicago Joe s Tea Room v. Village of Broadview, 2008 WL (N.D. Ill. Sept. 11, 2008), Angola s retaliatory enactment of the ordinances should weigh heavily in the Court s determination of whether nonconforming use rights vested, as approved by City of New Haven v. Flying J., Inc., 912 N.E.2d 420, 427 (Ind. App. 2009). Plus, the City erroneously relies on the supposed reaffirmation of Lutz v. New Albany City Plan Commission, 101 N.E.2d. 187 (1951) in Metropolitan Development Commission of Marion County v. Pinnacle Media, LLC ( Pinnacle I ), 836 N.E.2d 422 (Ind. 2005) for the proposition that a building permit is necessary for use rights to vest. The Indiana Supreme Court expressly retreated from this position in Metro. Dev. Com n v. Pinnacle Media, LLC ( Pinnacle II ), 846 N.E.2d 654, (Ind. 2006). ( We acknowledge, as perhaps our original opinion should have, that vested rights may accrue prior to the filing of certain applications). Plaintiffs properly rely upon the application of Pinnacle II in Flying J., supra. [Appellants Br., pp ]. 29

35 CONCLUSION WHEREFORE, for the forgoing reasons and those stated in the Opening Brief, Plaintiffs respectfully request this honorable court reverse the decision below and grant the relief requested. Dated: October 9, 2014 Respectfully Submitted, s/ Bradley J. Shafer SHAFER & ASSOCIATES, P.C. 30

36 CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION TYPEFACE REQUIREMENTS, AND TYPE STYLE REQUIREMENTS 1. This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because this brief contains 6,928 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii). 2. This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this brief has been prepared in a proportionally spaced typeface using Word 2013 in 14-point font Times New Roman style. /s/ Bradley J. Shafer SHAFER & ASSOCIATES, P.C. Attorney for Plaintiffs BBL Inc., Alva Butler, and Sandra Butler. 31

37 CERTIFICATE OF SERVICE I hereby certify that on October 9, 2014, I electronically filed the foregoing with the Clerk of the Court for the United States Court of Appeals for the Seventh Circuit by using the CM/ECF system, thereby causing a copy of the foregoing document to be served upon all counsel for all opposing parties by operation of the CM/ECF system. /s/ Bradley J. Shafer SHAFER & ASSOCIATES, P.C. 32