United States Court of Appeals,
Fifth Circuit.
No. 93-1703.
MD II ENTERTAINMENT, INC., d/b/a The Fare West, Plaintiff-
Appellee-Cross-Appellant,
v.
CITY OF DALLAS, TEXAS, et al., Defendants-Appellants-Cross-
Appellees.
Aug. 11, 1994.
Appeals from the United States District Court for the Northern
District of Texas.
Before WISDOM and JONES, Circuit Judges, and COBB,* District Judge.
WISDOM, Circuit Judge:
In this case we must decide whether the restrictions imposed
by the defendant/appellant, the City of Dallas ("the City"), on the
advertising of "Class D Dance Halls" are consistent with the First
and Fourteenth Amendments. We conclude, as did the district court,
that the restrictions imposed by the City are not allowable under
the First Amendment, and accordingly, we AFFIRM the district
court's summary judgment for the plaintiff. We also AFFIRM the
district court's judgment on the plaintiff's cross-appeal.
I.
On January 22, 1992, the City amended its Dance Halls
Ordinance to create a new category of business called a "Class D
Dance Hall". The ordinance defined a Class D Dance Hall as any
place
*
District Judge of the Eastern District of Texas, sitting by
designation.
1
(A) where dancing is permitted one day a week or more by
a person in a state of semi-nudity or simulated nudity; or
(B) that is advertised either on or off the premises:
(i) as topless;
(ii) as a gentleman's club, bar, or saloon;
(iii) as adult entertainment;
(iv) as x-rated; or
(v) by any other term calculated to attract patrons
with nudity, semi-nudity, or simulated nudity.1
The ordinance defined "semi-nudity" as "a state of dress in which
clothing covers no more than the genitals, pubic region, buttocks,
and areolae of the female breast, as well as parts of the body
covered by supporting straps or devices".2 The ordinance defined
"simulated nudity" as "a state of dress in which any device or
covering, exposed to view, is worn that simulates any part of the
genitals, buttocks, pubic region, or areolae of the female
breast".3
The amended Class D Dance Halls ordinance imposed zoning
restrictions on Class D Dance Halls. Specifically, the ordinance
provided that no Class D Dance Hall may operate within 1,000 feet
of a church, school, residential area, park, or another Class D
Dance Hall.4 After the amendment to the ordinance, every single
operating business in the City of Dallas that fitted the definition
1
Dallas City Code, ch. 14, § 14-1(5).
2
Id. § 14-1(14).
3
Id. § 14-1(15).
4
Id. § 14-2.2.
2
of a Class D Dance Hall was in violation of the zoning
restrictions.
Plaintiff/appellee MD II Entertainment, Inc. ("MD II") owns
and operates The Fare West, a club in Dallas that features topless
dancing. By having its dancers dance in a state of "simulated
nudity",5 MD II avoided the strictures of the City's Sexually
Oriented Business Ordinance.6 MD II did, however, fall within the
purview of the City's Class D Dance Halls ordinance. MD II has a
Class D Dance Hall license, but The Fare West in its present
location violates the zoning restrictions of § 14-2.2 of the
ordinance. Accordingly, the ordinance requires The Fare West, as
a "nonconforming use", to cease operation as a Class D Dance Hall.
MD II challenged the ordinance in the district court. On
cross-motions for summary judgment, the district court upheld most
of the ordinance.7 It upheld the zoning distance requirements of
§ 14-2.2 and rejected the plaintiffs' vagueness and overbreadth
challenges to the definition of "simulated nudity" in § 14-1(15).
The district court struck down two provisions: (1) section 14-
1(5)(B), which imposes the zoning requirements of § 14-2.2 on
5
MD II's female dancers wear opaque latex pasties that cover
the areolae of their breasts. The district court noted that
these pasties "are clearly designed to simulate female areolae".
The dancers also wear opaque bikini bottoms. There is no
disagreement that this mode of attire fits the ordinance's
definition of "simulated nudity".
6
The Sexually Oriented Business ordinance defines "nudity"
in a fashion that excludes "semi-nudity" or "simulated nudity".
7
MD II Entertainment, Inc. v. City of Dallas, 1993 WL 227774
(N.D.Tex. Apr. 15, 1993).
3
businesses only because of terms used in their advertising, and (2)
section 14-3(a), which allows the Chief of Police to deny an
application for a Class D Dance Hall license to applicants who are
not of "good moral character" without providing any standards to
protect against an arbitrary denial. The City has appealed to this
court only the striking down of § 14-1(5)(B).8 The district court
also ruled that MD II has no standing to assert a state-law sex
discrimination challenge to the ordinance. MD II cross-appeals
from this ruling. Finally, the district court also awarded MD II
its attorneys' fees as a prevailing party, a ruling the City
challenges on this appeal.
II.
We begin by reviewing the district court's summary judgment
holding that § 14-1(5)(B) is unconstitutional. Our standard of
review is de novo. There are no disputed issues of fact, so we
need only decide whether the district court correctly ruled that MD
II was entitled to judgment as a matter of law.
A. The Ordinance Regulates Speech
The city's first argument is that § 14-1(5)(B) is merely a
8
Only the constitutionality of § 14-1(5)(B) is before us.
The City conceded at oral argument that MD II now has clothed its
dancers sufficiently to remove it from the purview of § 14-
1(5)(A), but has not altered its advertising. The district
court's opinion noted that "MDII ... uses off-premises newspaper
and radio advertising which frequently employs the terms
"gentleman's entertainment,' "gentleman's party complex,' and
"gentleman's club' to attract customers. MDII also uses
on-premises signs to advertise its business which include the
term "topless' to describe the entertainment which MDII offers."
1993 WL 227774, at *11 n. 15. Accordingly, there is still a live
controversy between the parties, but only so far as § 14-1(5)(B)
is involved.
4
definition that does not regulate speech at all, and accordingly is
beyond First Amendment scrutiny. This argument exalts form over
substance. Under the ordinance, businesses which use certain terms
in their advertising must close and relocate, while businesses
which do not use those terms are unaffected. The connection is one
of cause and effect: the City says MD II must close The Fare West
because of the advertising it employs. Section 14-1(5)(B) plainly
is a regulation of speech.
B. Which Test Applies?
Section 14-1(5)(B) of the ordinance is a content-based
restriction on commercial advertising.9 The forbidden content is
stated expressly in the terms of the ordinance. Accordingly, until
very recently it would have been clear that the appropriate test
was the four-part intermediate scrutiny analysis laid out by the
Supreme Court in Central Hudson Gas & Electric Corp. v. Public
9
Because § 14-1(5)(B) regulates the content of protected
commercial speech, we need not evaluate it under the "secondary
effects" test often applied to content-neutral regulations of
nonobscene erotic entertainment. See City of Renton v. Playtime
Theatres, Inc., 475 U.S. 41, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986),
reh'g denied, 475 U.S. 1132, 106 S.Ct. 1663, 90 L.Ed.2d 205
(1986); Young v. American Mini Theatres, Inc., 427 U.S. 50, 96
S.Ct. 2440, 49 L.Ed.2d 310 (1976), reh'g denied, 429 U.S. 873, 97
S.Ct. 191, 50 L.Ed.2d 155 (1976); cf. TK's Video, Inc. v. Denton
County, Tex., 24 F.3d 705 (5th Cir.1994). We do consider some of
the "secondary effects" the City alleges, however, as relevant to
the question whether there is a "substantial governmental
interest" served by the ordinance. See infra part II.C.2.
Similarly, because § 14-1(5)(B) regulates MD II's
advertising, rather than regulating the attire of the
dancers at The Fare West, we need not evaluate the
restriction under the approach of Barnes v. Glen Theatre,
Inc., 501 U.S. 560, 111 S.Ct. 2456, 115 L.Ed.2d 504 (1991)
(plurality opinion).
5
Service Commission.10 More recent cases, however, have questioned
the continued vitality of Central Hudson as it applies to
content-based restrictions on commercial speech. Our resolution of
this case renders it unnecessary to decide which standard applies,
but we note the existence of the debate to inform counsel and
future panels.
In R.A.V. v. City of St. Paul, Minnesota,11 the Supreme Court
subjected a content-based restriction of "fighting words" to strict
scrutiny. The strict scrutiny test requires a regulation of speech
to be narrowly tailored to a compelling governmental interest. The
Supreme Court in R.A.V. concluded that the municipal ordinance at
issue failed the strict scrutiny test, and the Court struck the
ordinance down. Because commercial speech traditionally has
received greater First Amendment protection than "fighting words",12
some district courts have concluded that the strict scrutiny
standard must apply to content-based restrictions of commercial
speech as well.13 Of course, it is undisputed that Central Hudson
continues to govern content-neutral regulations of commercial
10
447 U.S. 557, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980).
11
505 U.S. ----, 112 S.Ct. 2538, 120 L.Ed.2d 305 (1992).
12
See R.A.V., 505 U.S. at ----, 112 S.Ct. at 2564-65, 120
L.Ed.2d at 343-44 (Stevens, J., concurring in the judgment); see
also Rodney A. Smolla, Information, Imagery, and the First
Amendment: A Case for Expansive Protection of Commercial Speech,
71 Tex.L.Rev. 777, 791 & nn. 56-57 (1993).
13
Citizens United for Free Speech II v. Long Beach Township
Bd. of Comm'rs, 802 F.Supp. 1223, 1232 (D.N.J.1992); cf. Hornell
Brewing Co., Inc. v. Brady, 819 F.Supp. 1227 (E.D.N.Y.1993)
(applying both the Central Hudson and R.A.V. tests without
deciding which is required).
6
speech.14
Because we conclude that, on the record before us, § 14-
1(5)(B) does not survive the intermediate scrutiny of Central
Hudson, we need not consider whether that test, rather than the
strict scrutiny of R.A.V., must guide our inquiry.15
C. Applying the Central Hudson Factors
Central Hudson laid out a four-part test for evaluating a
restriction of commercial speech:
At the outset, we must determine whether the expression is
protected by the First Amendment. For commercial speech to
come within that provision, it at least must concern lawful
activity and not be misleading. Next, we ask whether the
asserted governmental interest is substantial. If both
inquiries yield positive answers, we must determine whether
the regulation directly advances the governmental interest
asserted, and whether it is not more extensive than is
necessary to serve that interest.16
1. Legality and Truthfulness of the Communication
This issue is not contested. MD II's advertising is related
to lawful activity and is not misleading.
2. The Governmental Interest
This part of Central Hudson requires us to "identify with care
the interests the [City] itself asserts" for the restriction on
speech; we may not "supplant the precise interests put forward by
14
See, e.g., Ibanez v. Florida Dep't of Business &
Professional Regulation, Bd. of Accountancy, --- U.S. ----, 114
S.Ct. 2084, --- L.Ed.2d ---- (1994); United States v. Edge
Broadcasting Co., 509 U.S. ----, 113 S.Ct. 2696, 125 L.Ed.2d 345
(1993); Joe Conte Toyota, Inc. v. Louisiana Motor Vehicle
Comm'n, 24 F.3d 754 (5th Cir.1994).
15
See Hornell Brewing, 819 F.Supp. at 1228 n. 1.
16
Central Hudson, 447 U.S. at 566, 100 S.Ct. at 2351.
7
the [City] with other suppositions".17 The chief interest the City
asserts to justify its regulation focuses on the deleterious
effects topless bars have on the surrounding community. There is
a correlation between the presence of topless dancing
establishments, depressed property values, and increased crime.
The City in formulating its ordinance relied on studies finding
these correlations to exist. The district court relied on just
these effects in upholding the location restrictions contained in
§ 14-2.2 of the Class D Dance Halls ordinance. MD II gives us no
cause to question the validity and importance of the governmental
interest in preserving property values and deterring crime.
3. Direct Advancement of the Governmental Interest
This is the most difficult part of the Central Hudson test for
the City. The Supreme Court has repeatedly emphasized the
substantial burden this requirement places on the proponent of a
restriction on commercial speech.18 The burden is on the City to
show that its restrictions on MD II's advertising "will in fact
alleviate ... to a material degree"19 the harms identified above.
"[T]he regulation may not be sustained if it provides only
ineffective or remote support for the government's purpose".20
17
Edenfield v. Fane, 507 U.S. ----, ----, 113 S.Ct. 1792,
1798, 123 L.Ed.2d 543, 553 (1993).
18
See Ibanez, --- U.S. at ----, 114 S.Ct. at 2088-89, ---
L.Ed.2d at ----, and cases collected therein.
19
Fane, 507 U.S. at ----, 113 S.Ct. at 1800, 123 L.Ed.2d at
555.
20
Central Hudson, 447 U.S. at 564, 100 S.Ct. at 2350.
8
The district court found that "the city has failed to show
that its regulation of Plaintiff's use of the term "gentleman's
club' in any way furthers its stated interest" in preserving
property values or reducing crime. "[T]he city has made no
finding", the district court continued, "that advertising that
employs the term "gentleman's club' produces the deleterious
effects which the city seeks to curb". The City has not on this
appeal persuaded us that the district court's findings were
incorrect. In formulating its ordinance, the city relied on no
studies showing a link between advertising and property values or
crime.21 We have no doubt that the interests the city seeks to
protect merit protection, but like the district court, we are
21
See Fane, 507 U.S. at ----, 113 S.Ct. at 1800, 123 L.Ed.2d
at 555.
After the district court granted summary judgment for
MD II, the City submitted a motion for reconsideration.
Attached to the City's motion was the affidavit of James
Moncrief, an employee of a real estate consulting firm.
Moncrief's affidavit for the first time asserted a link
between advertising and depressed property values, and
attached a one-page "asset performance monitor" report. The
district court, however, refused to consider the new
evidence and denied the city's motion. Thus, Moncrief's
affidavit is not properly part of the record before this
Court. The district court also ruled that "even if
admitted, this [new] evidence would not be sufficient to
alter the Court's decision ...". We note for the sake of
completeness that the "asset performance monitor" provides
decidedly mixed support for the City's argument, because it
shows a higher property value and revenue growth rate for
the area around MD II's property than for "comparable
properties". Cf. Fane, 507 U.S. at ----, 113 S.Ct. at 1801,
123 L.Ed.2d at 556, rejecting affidavit "which contains
nothing more than a series of conclusory statements that add
little if anything to the Board's original statement of its
justifications". In any event, Moncrief's affidavit (dated
July 1, 1993) plainly was not considered by the City when it
amended the Dance Halls Ordinance on January 22, 1992.
9
unable to conclude on this record that those interests are served
by banning the advertising prohibited by the ordinance. This
factor weighs in favor of affirming the district court.
4. Narrow Tailoring
Finally, Central Hudson requires that a regulation of
commercial speech "extend only as far as the interest it serves".22
In this respect, too, the ordinance is deficient. Section 14-
1(5)(B)(v) is particularly broad, forbidding the use of any "term
calculated to attract patrons with nudity, semi-nudity, or
simulated nudity". The City conceded at oral argument that the
literal wording of this provision reaches the advertising of events
that have never been shown to harm property values or promote
crime.23 The City has put no evidence in the record that forbidding
the use of any "term calculated to attract patrons with nudity,
semi-nudity, or simulated nudity" in commercial advertising is
narrowly tailored to prevent the erosion of property values or
reduce crime rates. Therefore, this factor also supports the
district court's judgment.
On balance, we conclude that application of the Central Hudson
factors supports affirmance of the district court. There has been
a failure of proof on this record.24 Because the burden of
22
Central Hudson, 447 U.S. at 565, 100 S.Ct. at 2350.
23
In response to a question from the panel, the City's
attorney acknowledged that advertising of "regular performances"
of the musical Oh! Calcutta would fall within the prohibition in
§ 14-1(5)(B).
24
Cf. Ibanez, --- U.S. at ----, 114 S.Ct. at 2091, ---
L.Ed.2d at ---- ("We have never sustained restrictions on
10
justifying its speech regulation is on the City, the district
court's summary judgment for the plaintiff was correct.
Because we uphold the district court's summary judgment for
the plaintiff, we reject the City's challenge to the district
court's award of attorneys' fees to MD II.
III.
We turn next to MD II's cross-appeal. MD II attempted in the
district court to assert a state-law sex-discrimination challenge
to § 14-1(14) and (15) of the ordinance. MD II argued that the
definitions contained in those sections define "semi-nudity" and
"simulated nudity" differently for males and females. Wearing an
opaque covering designed to simulate the areolae of the female
breast constitutes "simulated nudity", but the same definition does
not apply to the male breast.25
The district court ruled that MD II lacked standing to assert
a sex-discrimination challenge. Although the district court
acknowledged the existence of Article III standing, it rejected MD
II's standing under the prudential rules of Warth v. Seldin.26
Specifically, the district court ruled that MD II may not rely on
jus tertii—the rights of its employees to be free from sex
constitutionally protected speech based on a record so bare as
the one on which the Board relies here.").
25
Cf. SDJ, Inc. v. City of Houston, 837 F.2d 1268, 1279-80
(5th Cir.), reh'g denied, 841 F.2d 107 (5th Cir.1988), cert.
denied, 489 U.S. 1052, 109 S.Ct. 1310, 103 L.Ed.2d 579 (1989),
rejecting a similar sex-discrimination challenge against a
sexually oriented business ordinance.
26
422 U.S. 490, 499-502, 95 S.Ct. 2197, 2205-2207, 45
L.Ed.2d 343 (1975).
11
discrimination.27 We review a district court's rulings on standing
to sue de novo.28
Article I, section 3a of the Texas Constitution provides:
Equality under the law shall not be denied or abridged because
of sex, race, color, creed, or national origin. This
amendment is self-operative.
This provision obviously protects MD II's dancers, not MD II
itself, against sex discrimination. None of MD II's dancers have
joined as plaintiffs in this lawsuit, however. MD II gives us no
reason to think that there is any practical obstacle to its dancers
asserting their own rights to freedom from sex discrimination if
they wish to do so. Granting standing to MD II may, however,
result in the unnecessary litigation of a question those parties
most immediately affected may not dispute.29 Accordingly, we see
no error in the district court's ruling that prudential
considerations prevent MD II from litigating its dancers' rights.
MD II's reliance on SDJ, Inc. v. City of Houston30 is
misplaced. Although it is true that we addressed the merits of a
27
"[E]ven when the plaintiff has alleged injury sufficient
to meet the "case or controversy' requirement, this Court has
held that the plaintiff generally must assert his own legal
rights and interests, and cannot rest his claim to relief on the
legal rights or interests of third parties". Seldin, 422 U.S. at
499, 95 S.Ct. at 2205 (citations omitted).
28
United States v. $38,570 U.S. Currency, 950 F.2d 1108,
1111 (5th Cir.1992).
29
See generally 13 Charles A. Wright, Arthur R. Miller &
Edward H. Cooper, Federal Practice and Procedure § 3531.9 (2d ed.
1984 & supp. 1994).
30
837 F.2d 1268 (5th Cir.), reh'g denied, 841 F.2d 107 (5th
Cir.1988), cert. denied, 489 U.S. 1052, 109 S.Ct. 1310, 103
L.Ed.2d 579 (1989).
12
sex-discrimination challenge brought by the owners of topless clubs
in SDJ, we did not hold that club owners always must be allowed to
raise their dancers' rights. We note also that the
sex-discrimination challenge in SDJ was unsuccessful, suggesting
that MD II likely would lose on the merits even if we did consider
its jus tertii argument.
IV.
We AFFIRM the district court's judgment in all respects.
EDITH H. JONES, Circuit Judge, concurring:
I concur in the majority opinion in this case with two
additional observations. First, one must step back in wonder
occasionally and ask, as to some areas of law, what have judges
wrought? It makes little practical sense to say that the Fare West
has to relocate if it permits certain forms of adult entertainment
but not if, clothing its "dancers" with minuscule additional
amounts of tape, it advertises—truthfully—that the entertainment
has not changed. This is a silly consequence of first amendment
jurisprudence that results from categorizing "zoning" regulations
differently from "content-based" advertising regulations.
Second, the City of Dallas could have avoided this adverse
ruling if it had adopted regulations such as that for "simple
signs," SDJ, Inc. v. City of Houston, 837 F.2d 1268, 1278 (5th
Cir.1988), or that upheld in In re Town of Islip v. Caviglia, 73
N.Y.2d 544, 540 N.E.2d 215, 542 N.Y.S.2d 139 (1989).
13