REGULATION OF ADULT BUSINESSES -TRAPS FOR THE UNWARY Deborah J. Fox, Fox & Sohaghi, LLP Jeffrey B. Hare, A Professional Corporation

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1 City Attorneys Department Spring Conference League of California Cities May 3-5, 2000 Jeffrey B. Hare Attorney at Law San Jose Deborah J. Fox Fox & Sohagi Los Angeles REGULATION OF ADULT BUSINESSES -TRAPS FOR THE UNWARY Deborah J. Fox, Fox & Sohaghi, LLP Jeffrey B. Hare, A Professional Corporation I. OVERVIEW A. ADULT BUSINESSES ARE A UNIQUE FORM OF LAND USE 1. May be regulated pursuant to City's Police Power authority 2. Expressive conduct within "outer ambit" of 1st Amendment protection a. City of Erie v. Pap's A.M. (aka "Kandyland") (2000) 529 U.S. - (2000 Daily Journal DAR 3255) b. Barnes v. Glen Theatre, Inc. (1991) 501 U.S Reasonable Time, Place and Manner restrictions permitted B. ORDINANCES SUBJECT TO O'BRIEN ANALYSIS IF CONTENT NEUTRAL 1. United States v. O'Brien (1968) 391 U.S. 367: Four part test. 2. Is ordinance aimed at reducing secondary effects or suppressing speech? 3. Cities may continue to rely on evidence from other jurisdictions and case law that it reasonably believes is relevant to the community. C. NINTH CIRCUIT SCRUTINY OF PROCEDURAL AND NEXUS ISSUES 1. Procedural due process - prior restraint (Baby Tam I and Baby Tam II) 2. Adequacy of findings to support regulation (Alameda Books) 3. Adequacy of alternative sites (Lim v. Long Beach; Diamond v. Taft) II. CURRENT TRENDS AND DEVELOPMENTS A. MEGA-BILLION DOLLAR INDUSTRY IS BIG BUSINESS I 1. Adult entertainment interests are organizing politically. 2. Intensive lobbying efforts; sponsoring legislation. 3. Employee efforts to organize for recognition and benefits 4. Franchise operations ("Gentlemen's Clubs") replacing smaller clubs 5. Industry seeking mainstream acceptance. B. "KANDYLAND" DECISION 1. Content-neutral ordinance upheld under intermediate O'Brien scrutiny 2. Regulation aimed at reducing secondary effects, not suppressing speech 3 Requirement of pasties and "G"-string only a de minimis restriction 4. Reaffirms rule that cities can rely on evidence from other cities a. Renton v. Playtime Theatres, Inc. (1986) 475 U.S. 41 b. Young v. American Mini Theatres, Inc. (1976) 427 U.S Reaffirms holding in Barnes v. Glen Theatre, Inc. (1991) 501 U.S. 560

2 III. BACKGROUND A. AUTHORITY TO REGULATE ADULT BUSINESSES 1. Cities may enact content-neutral ordinances imposing reasonable a. Time b. Place, and c. Manner restrictions. d. Codified: (1) Gov't Code (2) Penal Code 318.5, If content-neutral, ordinance subject to four-part O'Brien analysis: a. Government authority to regulate: police power. b. Does regulation further a government interest. c. Is government interest unrelated to suppression. d. Is restriction no greater than essential to the furtherance of the government interest. 3. Regulation of expression aimed at controlling adverse secondary effects a. City of Renton v. Playtime Theatres, Inc. 475 U.S. 41 (1986) b. Young v. American Mini Theatres, Inc. (1976) 427 U.S Must be narrowly tailored to serve legitimate government interests a. Ward v. Rock Against Racism (1989) 491 U.S. 781 b. Colacurcio v. City of Kent, (9th Cir. 1998) 5. And must provide reasonable alternative channels of communication a. City of National City v. Wiener, 3 Cal. 4th 832 (1992) b. Topanga Press, Inc. v. City of L.A., 989 F.2d 1524 (9th Cir 1993) c. Internet as an alternative avenue. 6. Remember, cities can regulate, but not ban protected expressive conduct. a. Schad v. Borough of Mount Ephraim, (1981) 452 U.S. 61 b. Courts will scrutinize overzealous zoning restrictions. Gammoh v. City of Anaheim (1999) 73 Cal.App.4th 186. B. AUTHORITY TO REGULATE "MANNER" OR OPERATION OF BUSINESS 1. Cities can impose reasonable operational conditions a. No touching; no direct tipping; management supervision Hang-On v. City of Arlington 65 F.3d 1248 (5th Cir 1995) Kev, Inc. v. Kitsap County 793 F.2d 1053 (9th Cir 1986) Spokane Arcade v. City of Spokane 75 F.3d 663 (9th Cir. 1996) Colacurcio v. City of Kent (9th Cir 1998) b. Licensing requirements FW/PBS, Inc. v. Dallas, (1990) 493 U.S Cities can restrict total nudity (Pasties and a G-string) a. City of Erie v. Paps A. M. (Kandyland) b. Tily B., Inc. v. Newport Beach 69 Cal.App.4th 1 (1998) 3. Cities can regulate live entertainment whether or not alcohol served. a. Penal Code 318.5, (AB 726). b. 44 Liquormart v. Rhode Island (1996) 517 U.S And "theater exemption" no longer required (unless grandfathered) a. Penal Code 318.5, But cities cannot "criminalize" sexual conduct a. In re Lane (1962) 58 Cal.2d 99 b. People v. Janini (1999) 75 Cal.App.4th 347 (Depublished)

3 IV. CURRENT ISSUES A. PROCEDURAL DUE PROCESS (BABY TAM I AND BABY TAM II) 1. Baby Tam and Co. v. City of Las Vegas 154 F.3d 1097 (9th Cir. 1998) a. All First Amendment activities subject to "prior restraint" scrutiny b. Requires "expedited judicial review" c. Code of Civil Procedure Ordinance optional 2. Baby Tam and Co. v. City of Las Vegas 199 F.3d 111 (9th Cir. 1999) a. Discretionary conditions precedent operate as prior restraint b. Practice tip: Make all discretionary conditions subsequent B. IMPORTANCE OF FINDINGS 1. Adult business industry is challenging "old" studies a. Court will scrutinize nexus of findings and application b. Gammoh v. City of Anaheim 73 Cal.App.4th 186 (1999) c. Alameda Books v. City of Los Angeles (pending). C. PENDING DECISIONS: 1. Lim v. City of Long Beach (9th Cir. -argued Feb 8, 2000) Amortization; burden re: reasonable range of alternative sites; Analyzing reasonableness of sites for existing users. 2. Diamond v. City of Taft (9th Cir. -argued Feb 8, 2000) Reasonableness of alternative sites for new adult businesses. 3. Alameda Books, Inc., v. City of Los Angeles (9th Cir. -Feb 8, 2000). Do findings justify zoning restrictions. V. PRACTICAL RECOMMENDATIONS A. ADOPT NEW OR UPDATE EXISTING ORDINANCE 1. Consider revised "Model" in your packet 2. Modify and adapt to local conditions B. DELETE ALL REFERENCES TO "THEATER EXEMPTION" 1. No longer required per AB 726 (Penal Code 318.5, 318.6) C. BABY TAM AMENDMENTS 1. Provide for expedited judicial review (CCP ) (Baby Tam I) a. Separate ordinance provisions are optional, but recommended. b. Include all First Amendment protected activities (parades, permits) 2. Eliminate discretionary conditions precedent (Baby Tam II). D. DELETE CRIMINAL PENALTIES FOR VIOLATIONS RE: SEXUAL ACTIVITIES. E. IDENTIFY AND DOCUMENT EVIDENCE OF "SECONDARY EFFECTS." F. CAREFULLY EVALUATE NUMBER OF ADEQUATE ALTERNATIVE SITES. VI. PRACTICE TIPS A. MODIFY AND ADAPT MODEL ORDINANCE TO LOCAL CIRCUMSTANCES 1. Evaluate urbanization and regional factors in determining site availability 2. Include findings to support each regulatory component. 3. Make certain that ordinance regulates, but does not ban, adult uses. B. WATCH OUT FOR TRAPS 1. Avoid overzealous, overbroad regulations. 2. Direct regulations at secondary effects, not expressive conduct. 3. Avoid discretionary requirements that constitute "prior restraint." C. OTHER

4 VII. CONCLUSION A. MONITOR NINTH CIRCUIT DECISIONS. f B. MONITOR LEGISLATION. C. MONITOR LEAGUE BULLETINS. D. SUPPORT REQUESTS FOR AMICUS ASSISTANCE.

5 ATTACHMENT 1 GOVERNMENT CODE (a) The legislative body of any county or city may regulate, pursuant to a content neutral ordinance, the time, place, and manner of operation of sexually oriented businesses, when the ordinance is designed to serve a substantial governmental interest, does no unreasonably limit alternative avenues of communication, and is based on narrow, objective, and definite standards. The legislative body is entitled to rely on the experiences of other counties and cities and on the findings of court cases in establishing the reasonableness of the ordinance and its relevance to the specific problems it addresses, including the harmful secondary effects that the business may have on the community and its proximity to churches, schools, residences, establishments dispensing alcohol, and other sexually oriented businesses. (b) For purposes of this section, a sexually oriented business is one whose primary purpose is the sale or display of matter that, because of its sexually explicit nature, may, pursuant to state law or local regulatory authority, be offered only to persons over the age of 18 years. (c) This section shall not be construed to preempt the legislative body of any city or county from regulating a sexually oriented business or similar establishment in the manner and to the extent permitted by the United States Constitution and the California Constitution. (d) It is the intent of the Legislature to authorize the legislative body of any city or county to enter into a legally sanctioned and appropriate cooperative agreement, consortium, or joint powers authority with other adjacent cities or counties regarding regulation of established negative secondary effects of adult or sexually oriented businesses if the actions taken by the legislative body are consistent with this section. (e) The Legislature finds and declares that in order to encourage the legislative body of a city or county in regulating adult or sexually oriented businesses or similar businesses under this section, the legislative body may consider any harmful secondary effects such a business may have on adjacent cities and counties and its proximity to churches, schools, residents, and other businesses located in adjacent cities or counties.

6 ATTACHMENT 2 PENAL CODE (a) Nothing in this code shall invalidate an ordinance of, or be construed to prohibit the adoption of an ordinance by, a county or city, if that ordinance directly regulates the exposure of the genitals or buttocks of any person, or the breasts of any female person, who acts as a waiter, waitress, or entertainer, whether or not the owner of the establishment in which the activity is performed employs or pays any compensation to that person to perform the activity, in an adult or sexually oriented business. For purposes of this section, an "adult or sexually oriented business" includes any establishment that regularly features live performances which are distinguished or characterized by an emphasis on the exposure of the genitals or buttocks of any person, or the breasts of any female person, or specified sexual activities that involve the exposure of the genitals or buttocks of any person, or the breasts of any female person. (b) The provisions of this section shall not be construed to apply to any adult or sexually oriented business, as defined herein, that has been adjudicated by a court of competent jurisdiction to be, or by action of a local body such as issuance of an adult entertainment establishment license or permit allowing the business to operate on or before July 1, 1998, as, a theater, concert hall, or similar establishment primarily devoted to theatrical performances for purposes of this section. This section shall be known and may be cited as the "Quimby-Walsh Act." (a) Nothing in this code shall invalidate an ordinance of, or be construed to prohibit the adoption of an ordinance by, a city or county, if that ordinance relates to any live acts, demonstrations, or exhibitions occurring within adult or sexually oriented businesses and involve the exposure of the genitals or buttocks of any participant, or the breasts of any female participant, and if that ordinance prohibits an act or acts which are not expressly authorized or prohibited by this code. (b) For purposes of this section, an "adult or sexually oriented business" includes any establishment that regularly features live performances which are distinguished or characterized by an emphasis on the exposure of the genitals or buttocks of any person, or the breasts of any female person, or sexual activities that involve the exposure of the genitals or buttocks of any person, or the breasts of any female person. (c) The provisions of this section shall not be construed to apply to any adult or sexually oriented business, as defined herein, that has been adjudicated by a court of competent jurisdiction to be, or by action of a local body such as issuance of an adult entertainment establishment license or permit allowing the business to operate on or before July 1, 1998, as, a theater, concert hall, or similar establishment primarily devoted to theatrical performances for purposes of this section. (d) This section shall not be construed to preempt the legislative body of any city or county from regulating an adult or sexually oriented business or similar establishment, in the manner and to the extent permitted by the United States Constitution and the California Constitution.