Woodall v. City of El Paso

United States Court of Appeals,

Fifth Circuit.

Nos. 93-8674, 93-8739.

Phyllis WOODALL, et al., Plaintiffs,

Phyllis Woodall, et al., Plaintiffs-Appellees,

v.

The CITY OF EL PASO, et al., Defendants,

The City of El Paso, Defendant-Appellant.

Phyllis WOODALL, et al., Plaintiffs,

Phyllis Woodall, Jeannie Coutta d/b/a the Naked Harem, Jedjo,
Inc., SMD Enterprises, Inc., d/b/a The Lamplighter d/b/a Red Flame
and Marc Diedrich, President, Plaintiffs-Appellants,

v.

The CITY OF EL PASO, et al., Defendants-Appellees.

April 14, 1995.

Appeals from the United States District Court for the Western
District of Texas.

Before HIGGINBOTHAM, SMITH and PARKER, Circuit Judges.

ROBERT M. PARKER, Circuit Judge:

At issue in this case is the constitutionality of the City of

El Paso's (the City) zoning ordinances (the Ordinances) regulating

sexually-oriented or adult businesses. Shortly after the City

began enforcing the Ordinances, various adult businesses and adult

business owners (the Adult Businesses) filed suit seeking damages

and injunctive relief. After this case was tried, appealed,

reversed, remanded, and retried, the jury returned a verdict in

favor of the Adult Businesses. The district court entered a

judgment awarding damages to the Adult Businesses and enjoining

1
enforcement of the Ordinances against the Adult Businesses. The

City appeals, contending that the jury could not have reached the

verdict it did under the correct legal standard. The Adult

Businesses cross-appeal, contending that the district court erred

in applying only federal constitutional standards rather than the

greater protections the Adult Businesses claim they enjoy under the

Texas Constitution. We decide two issues on appeal: whether the

City was entitled to judgment as a matter of law due to the lack of

evidence that the Adult Businesses were denied reasonable

alternative avenues of communication, and whether Article 1 Section

8 of the Texas Constitution provides greater protection under the

circumstances of this case than that provided by the First

Amendment to the United States Constitution. After a thorough

review of the record, we conclude that the jury could only have

reached its verdict based on an incorrect view of the law, and that

there is no constitutional infirmity with the City's zoning

ordinances. We also hold that the Adult Businesses are entitled to

the same protection under the Texas Constitution as under the

United States Constitution.

I.

In the 1970s the City of El Paso began passing a series of

zoning ordinances regulating sexually-oriented or adult businesses

such as adult bookstores, adult movies, topless bars and live nude

entertainment establishments. By March, 1988, the Ordinances

prohibited these businesses from locating within 1000 feet of

churches, schools, residences, nurseries, parks, and each other.

2
See El Paso, Tex.Ordinances 6169 (1978), 8926 (1987), 9326 (1988);

El Paso, Tex., Code art. II § 20.08.080.A (March 1989).

In April, 1988, El Paso police began ticketing adult

businesses which failed to comply with the Ordinances. The Adult

Businesses filed suit in state court for damages under 42 U.S.C. §

1983 and for injunctive relief, alleging that the Ordinances

violated the First and Fourteenth Amendments of the United States

Constitution and Article 1 Section 8 of the Texas Constitution.

The City removed the cause to federal court alleging jurisdiction

under 28 U.S.C. §§ 1331 and 1343.

Erotic non-obscene printed matter, films, and live

entertainment are sheltered by the First Amendment, but enjoy less

protection than some other forms of speech, such as political

speech. TK's Video, Inc. v. Denton County, Texas, 24 F.3d 705, 707

(5th Cir.1994). Although the Constitution looks askance at

attempts to regulate such "speech" based solely on its content, we

distinguish between regulating the content and regulating the

consequence of protected activity. City of Renton v. Playtime

Theatres, Inc., 475 U.S. 41, 46-48, 106 S.Ct. 925, 928-29, 89

L.Ed.2d 29 (1986). A content-neutral time, place, or manner

restriction must (1) be justified without reference to the content

of the regulated speech; (2) be narrowly tailored to serve a

significant or substantial governmental interest; and (3) preserve

ample alternative means of communication. Id.

The Adult Businesses stipulated in the first trial that the

Ordinances contained facially valid time, place and manner

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restrictions, so the only issues presented to the first jury were

whether the Ordinances afforded the Adult Businesses reasonable

alternative avenues of communication and if not, what damages

should be awarded. The jury returned a verdict in favor of the

City, finding that 39 adult businesses operated in El Paso on March

22, 1988, that the Ordinances allowed for 59 adult business sites

on 1,165 acres, and that the Ordinances had not denied the Adult

Businesses "a reasonable opportunity to open and operate their

adult entertainment businesses." After the trial the district

court dismissed the Adult Businesses' claims under the Texas

Constitution.

On appeal, the Adult Businesses argued that the jury had been

misled about the proper law to apply in answering the district

court's special interrogatories. We reversed and remanded for a

new trial, holding that the district court should have instructed

the jury that land cannot be found to be reasonably available if

its physical or legal characteristics made it impossible for any

adult business to locate there. Woodall v. City of El Paso, 950

F.2d 255 (5th Cir.1992) (Woodall I ). We also ordered that the

district court reconsider the Adult Businesses' claim under the

Texas Constitution. The opinion in Woodall I contained a lengthy

discussion on the meaning of available land under Renton, which

suggested that an alternative site is not reasonably available

unless it is economically suited to the needs of adult businesses.

See id. at 260-61.

On rehearing, we reiterated our prior holding that land with

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physical characteristics which render it unavailable for any kind

of development, or legal characteristics which exclude adult

businesses, may not be considered "available" for constitutional

purposes under Renton. Woodall v. City of El Paso, 959 F.2d 1305

(5th Cir.1992) (Woodall II ). We withdrew our prior discussion

regarding economic unavailability and stated that we did not

endorse the Adult Businesses' theory that land is not available for

use by adult businesses if it would be "unreasonable" to expect

adult businesses to relocate there.

Shortly before the second trial, the Adult Businesses filed a

motion to reinstate their claims under the Texas Constitution. The

district court determined that their rights under the Texas

Constitution mirrored those under the United States Constitution

and denied the motion. On retrial, the parties again stipulated

that the Ordinances were content neutral time, place and manner

restrictions and that they served a substantial government

interest. The parties also stipulated to the amount of damages to

be awarded in the event of an outcome favorable to the Adult

Businesses. At the close of the Adult Businesses' evidence, the

City moved for directed verdict. The motion was denied and the

matter was submitted to the jury. The jury was asked to determine

the number of adult businesses in operation in 1988 and 1992, the

number of sites and total acreage available in both of those years,

and whether the Adult Businesses were denied a reasonable

opportunity to open and operate their businesses. For 1988, the

jury found that there were 39 adult businesses in operation, 12

5
sites available, 12 acres available, and that the Adult Businesses

were denied a reasonable opportunity to open and operate their

businesses. For 1992, the jury found that there were 22 adult

businesses in operation, 12 sites available, 12 acres available,

and that the Adult Businesses were denied a reasonable opportunity

to open and operate their businesses. The City timely filed a

motion for judgment as a matter of law and for new trial.

The City appealed, contending that the Adult Businesses staked

their entire case on principles espoused in Woodall I, withdrawn in

Woodall II, and expressly repudiated in Lakeland Lounge of Jackson,

Inc. v. City of Jackson, Mississippi, 973 F.2d 1255, 1260 (5th

Cir.1992), and that the jury rendered its verdict based on those

wrong principles. The Adult Businesses filed a cross appeal,

renewing their argument that the Texas Constitution provides them

broader protections than the United States Constitution, and

alleging that the district court erred in denying their motion to

reinstate their claims brought under the Texas Constitution.

II.

A.

The City and the Adult Businesses tried this case under

different views of the applicable legal standard. The City

approached this case under the theory that a site is available

unless it is physically or legally unavailable as we stated in

Woodall II. The Adult Businesses apparently took their cue from

the portion of this Court's opinion in Woodall I that was withdrawn

in Woodall II as "unnecessary" to the Court's decision. The Adult

6
Businesses' position at trial and on appeal has been that a site is

only available if it would be commercially reasonable for an adult

business, or, more equivocally, for some hypothetical "generic"

retail business that has all the requirements of a topless bar, to

locate there. In any event, the Adult Businesses' evidence

overwhelmingly concerned whether a topless bar could expect to make

a reasonable profit at a particular site.

It is plain after a thorough review of the record that the

jury decided this case based on a misapprehension of the questions

presented to it. The Adult Businesses' entire case was founded on

the premise that it would not be commercially reasonable for an

adult business, or more particularly a topless bar, to locate on

the alternative sites proposed by the City. This was the theory of

the case that the Adult Businesses presented to the jury in their

opening statements, it is what the Adult Businesses argued to the

jury, and to a lesser extent it is what the Adult Businesses argued

on appeal. The Adult Businesses presented extensive evidence upon

which a jury could have found that none of the sites suggested by

the City were commercially desirable locations for adult

businesses, but scant evidence that the proposed sites were

physically or legally unavailable, and virtually no relevant

evidence at all about numerous alternative sites not specifically

designated by the City. The jury's verdict is clearly against the

great weight of the evidence. The Court must now determine whether

the record is so devoid of evidence upon which the jury could have

reached its verdict that the City was entitled to a judgment as a

7
matter of law.

In determining whether the district court should have granted

the City's motions for judgment as a matter of law, this Court must

review the decision of the district court by examining all of the

evidence before the jury and the reasonable inferences drawn from

such evidence. The aim of the Court on review is to determine

whether a rational jury could reach the conclusion that the jury

actually reached. Fields v. J.C. Penney Co., 968 F.2d 533, 536

(5th Cir.1992). If the facts and reasonable inferences therefrom

point so strongly and overwhelmingly in favor of the moving party

that reasonable persons could not arrive at a contrary verdict,

viewing the facts in the light most favorable to the party against

whom the motion is made, and giving that party the advantage of

fair and reasonable inferences which the evidence justifies, then

a motion for judgment as a matter of law should be granted.

Hamilton v. Grocers Supply Co., Inc., 986 F.2d 97 (5th Cir.1993).

B.

The inquiry into whether the record contains evidence to

support the jury's determinations begins with the meaning of the

questions the jury was asked to answer. The jury was asked to

determine how many alternative sites were reasonably available to

the Adult Businesses under the Ordinances, and whether the

Ordinances left reasonable alternative avenues of communication.

In Renton, the Supreme Court set out two principles that infuse

successive cases dealing with zoning ordinances restricting

permissible locations of adult businesses: (1) the ordinances must

8
allow for reasonable alternative avenues of communication and (2)

commercial viability is not a factor. 475 U.S. at 54, 106 S.Ct. at

932. In Woodall II, we interpreted Renton as standing for the

proposition that "land with physical characteristics that render it

unavailable for any kind of development, or legal characteristics

that exclude adult businesses, may not be considered "available'

for constitutional purposes under Renton." 959 F.2d at 1306.

Physical availability may be thought of in terms of the cost

of altering or developing the area to change its physical

characteristics to make it suitable for some generic commercial

enterprise. The relevant consideration is whether the physical

characteristics of the site present an unreasonable obstacle to

opening a business; an obstacle that can be overcome without

incurring unreasonable expense does not make a site unavailable,

but an obstacle that cannot reasonably be overcome renders the site

unavailable. Thus, in determining whether there are sufficient

sites available, the finder of fact may exclude land under the

ocean, airstrips of international airports, sports stadiums, areas

not readily accessible to the public, areas developed in a manner

unsuitable for any generic commercial business, areas lacking in

proper infrastructure, and so on. See Topanga Press, Inc. v. City

of Los Angeles, 989 F.2d 1524, 1532 (9th Cir.1993). However, the

fact that a site may not be commercially desirable does not render

it unavailable. It is not relevant that a relocation site will

result in lost profits, higher overhead costs, or even prove

commercially unfeasible for an adult business. Id. at 1531. There

9
is no requirement that an adult business be able to obtain existing

commercial sites at low cost and with market access to ensure its

prosperity. Grand Brittain, Inc. v. City of Amarillo, Texas, 27

F.3d 1068, 1069 (5th Cir.1994). As we have stated time and again,

commercial viability is not a relevant consideration. See id.;

Lakeland Lounge, 973 F.2d at 1260; SDJ, Inc. v. City of Houston,

837 F.2d 1268 (5th Cir.1988).

C.

The jury found that there were 39 adult businesses in

operation in 1988 but only 12 sites available and only 12 acres

available, and the jury determined that the Adult Businesses had

been denied an opportunity to open and operate their businesses.

The City contends that none of the jury's findings for 1988 is

supported by the evidence. The jury also found that there were 22

adult businesses in operation in 1992 but only 12 sites reasonably

available and only 12 acres available, and determined that the

Adult Businesses had been denied a reasonable opportunity to open

and operate their businesses. The jury's finding that 22 adult

businesses were in operation is unchallenged, but the City contends

that the jury's other findings relative to 1992 are unsupported.

Where a zoning ordinance requires that adult businesses

maintain a certain distance from one another, merely knowing the

number of acres available is not particularly enlightening.

Assuming a 1000 foot separation requirement and that each business

requires one acre, 100 available acres could support as few as two

or as many as 100 locations depending on how the acreage is

10
situated within the city and how the available acreage is utilized.

We are therefore not particularly concerned with determining how

much acreage was actually available. It is enough to note that the

jury's findings on available acreage were clearly based on a

misapprehension of the meaning of available land and that the

findings find no support in the record. What is important is the

number of adult business locations that the acreage will support

given the spacing requirements. That is what determines whether

there are sufficient alternative sites available, and that is our

focus in reviewing the sufficiency of the evidence.

D.

The City identified 50 specific sites meeting the Ordinances'

spacing requirements which it contended were physically and legally

available in 1988. The sites were located on 1433 acres of land

complying with the Ordinances, though the City did not contend that

all 1433 acres were physically and legally available. In addition

to the 50 sites identified as available in 1988, the City

identified 16 additional sites that had become available due to

rezoning that it contended were physically and legally available in

1992 located on 1690 acres of land meeting the zoning

requirements.1 The uncontroverted evidence is that all of the

sites specifically identified by the City had road access in 1992,

1
Patricia Aduato (known as Patricia Garcia in Woodall I ),
El Paso's Planning Coordinator, stated that the City had
identified 64 sites that were available in 1992, but this is
clearly a misstatement. Aduato gave testimony about each of the
66 specific sites that the City contended were available and both
the City and the Appellees entered into evidence photographs of
all 66 sites.

11
that utilities were put in at the time that the roads were

constructed, and that all sites either had existing structures or

had no physical impediments to building.2 The evidence for 1988

was substantially the same, except that there was some evidence

that three sites may not have had road access in 1988.3

The Adult Businesses advanced a number of reasons why they

considered various sites unavailable. Some are patently

irrelevant. The Adult Businesses claimed that some sites were

unavailable because the owner of the site probably would not rent

or sell to an adult business, or because the building was currently

occupied or leased,4 neither of which is of any obvious concern

2
Phyllis Woodall testified that many areas identified by the
City were undeveloped desert with no road access. She testified
that some areas did not have roads or the closest roads
dead-ended in the middle of nowhere, that some areas were covered
with sagebrush and sinkholes, and that some had no utilities;
but Woodall never tied her testimony to any of the specific sites
identified by the City as available. Indeed she could not,
because both the Adult Businesses and the City entered into
evidence photographs of the specific sites identified by the City
which indisputably show that the sites have road access and that
those sites without existing structures have no visible
impediments to constructing a building.
3
Patricia Aduato testified that, although all the roads
appeared on 1988 zoning maps, she did not know whether the roads
on which three of the proposed sites were located had actually
been built at that time.
4
We suggested in Woodall I that: "[When a] business is
operated pursuant to a lease that commits the property to the
present tenant for its business purposes for a term of years, the
property may be effectively unavailable to adult businesses or
any business enterprise. Such a leasehold could legally bar
appellants' use in the same manner as restrictive covenants or
zoning prohibitions." 950 F.2d at 262. In Topanga Press, the
Ninth Circuit expressed some mystification about this suggestion,
but declined to pass on its correctness, and stated that
"property is not "potentially' available when it is unreasonable
to believe that it would ever become available to a commercial

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under Renton. Renton 's prohibition against consideration of

economic impact forecloses inquiry into whether a relocation site

is only "potentially" as opposed to "actually" available. Topanga

Press, 989 F.2d at 1529. The Adult Businesses' complaints about

most sites amounted to nothing more than the fact that some of the

sites were on less travelled roads or away from other commercial

development, though there was no evidence that any site with road

access was actually inaccessible to the general public. The Adult

Businesses' only real objection to these sites was that they did

not believe the locations could generate sufficient business to

support a topless bar, which is to say that the Adult Businesses

deemed them to be not commercially viable. See Lakeland Lounge,

973 F.2d at 1260; see also D.G. Restaurant Corporation v. City of

Myrtle Beach, 953 F.2d 140 (4th Cir.1991) (holding that ordinance

that restricted adult businesses to a remote area of town away from

other businesses and tourist areas did not violate Renton ).

The Adult Businesses complained that some sites had existing

structures that were unsuitable for any small retail business. In

many cases these were large multi-tenant office-warehouse

buildings, and the uncontroverted evidence was that retail

businesses could and occasionally did locate in such buildings. A

few sites were occupied by rather large single use building like a

warehouse or factory, which could arguably be outside the

enterprise." 989 F.2d at 1531. We need not speculate here about
what lease terms would make a property unavailable to any
commercial enterprise. The record is devoid of evidence that any
site was subject to a long term lease, much less one with such
terms as would take it out of the commercial real estate market.

13
commercial real estate market. The Adult Businesses also

complained that some sites lacked adequate parking to meet the

City's requirements for retail businesses, but made no attempt to

show that any site's parking problem could not be cured at a

reasonable cost. The Adult Businesses had other similar complaints

about other sites. However, even if we agreed that the these sites

suffered from defects so severe as to take them out of the

commercial real estate market and render them physically

unavailable, there was no evidence that surrounding sites suffered

from the same impediments so as to render them likewise

unavailable.

There is simply no evidence in the record from which a

reasonable inference could be drawn that the sites proposed by the

City were the only sites potentially available. Rather, the

collection of specific sites suggested by the City was but one

possible arrangement of adult business locations that could coexist

under the spacing requirements of the Ordinances. The zoning maps

show that each site suggested by the City was part of a larger area

of potentially available sites, and virtually every site could be

shifted to some nearby location without significantly upsetting

other sites or reducing the total number of sites available. In

almost every case, if the suggested site proved physically or

legally unavailable, there was another site next door or across the

street that was also potentially available.

The Adult Businesses had the burden of proving that the

Ordinances denied them a reasonable opportunity to open and operate

14
their businesses by failing to provide reasonable alternative

avenues of communication. To meet their burden, the Adult

Businesses had to show that the areas left open to them were

inadequate to satisfy the demand for adult business locations.

Under the circumstances of this case, in order show that the number

of adult businesses that could coexist under the Ordinances was

smaller than the number of sites suggested by the City, the Adult

Businesses had to show not only that a specific site was

unavailable, but that its surrounding area was unavailable as well.

The Court can identify few proposed sites where there was even

a suggestion that the site suffered from an impediment that might

also reasonably be attributed to the surrounding area. Although

Phyllis Woodall testified generally that the areas which the City

claimed were available under the Ordinances lacked street access,

were covered with sinkholes, or were otherwise unsuitable for any

sort of development, the photographs of the specific sites entered

into evidence by both sides make it clear that the actual sites

suggested by the City and their immediate vicinity were not the

areas about which Woodall testified. The record suggests only

three situations in which the evidence might support an inference

that a specific site and its surrounding area were physically or

legally unavailable: three sites and their surrounding areas may

have been subject to reciprocal easements barring adult businesses,

four sites may have been within 1000 feet of prohibited uses, and

three sites might not have had road access in 1988. However, even

assuming that there was sufficient evidence to support findings

15
that all the aforementioned areas were actually unavailable, the

Ordinances still left a sufficient area physically and legally

available for at least forty adult businesses to operate

simultaneously in 1988, and for significantly more in 1992. When

we compare this with the jury's findings that there were 39 adult

businesses in operation in 1988 and only 22 in 1992, we see that,

as a matter of arithmetic, there were at all relevant times more

"reasonable" sites available than businesses with demands for them.

The Ordinances therefore afforded the Adult Businesses adequate

alternative means of communication. See Lakeland Lounge, 973 F.2d

at 1260.

III.

The Adult Businesses contend that the district court erred in

denying their motion to reinstate their claims under Article 1

Section 8 of the Texas Constitution. The Adult Businesses maintain

that the standard for determining the validity of El Paso's

Ordinances under the Texas Constitution and the United States

Constitution are different, and thus they are entitled to pursue a

separate claim under Texas Constitution.

Article 1, Section 8 of the Texas Constitution provides in the

relevant part:

Every person shall be at liberty to speak, write or publish
his opinions on any subject, being responsible for the abuse
of that privilege; and no law shall ever be passed curtailing
the liberty of speech or of the press....

Similarly, the First Amendment of the United States Constitution

provides:

Congress shall make no law ... abridging the freedom of

16
 speech, or the press; or the right of the people peaceably to
assemble, and to petition the Government for a redress of
grievances.

The Texas Supreme Court has held that free speech rights under

the Texas Constitution may be broader than those provided by the

Federal Constitution in certain cases. E.g., Ex Parte Tucci, 859

S.W.2d 1 (Tex.1993); Davenport v. Garcia, 834 S.W.2d 4 (Tex.1992);

O'Quinn v. State Bar of Texas, 763 S.W.2d 397 (Tex.1988); Channel

4, KGBT v. Briggs, 759 S.W.2d 939 (Tex.1988). The Adult Businesses

argue that under Davenport the free speech clause of the Texas

Constitution requires the City to show that the Ordinances protect

a "compelling government interest" and are the "least restrictive

means" possible to protect this interest, whereas under Renton the

United States Constitution only requires the City to show that the

Ordinances protect a "substantial government interest" and do not

"unreasonably limit" alternative avenues of communication.

The district court determined that the greater protections set

out in Davenport apply only to prior restraints and not to time,

place and manner restrictions in land use restrictions of sexually

oriented businesses. The district court noted that Lindsay v.

Papageorgiou, 751 S.W.2d 544 (Tex.App.—Houston [1st Dist.] 1988,

writ denied), the only Texas case directly on point, held that the

Renton standard applies under Texas Constitution as well as under

the United States Constitution. The Adult Businesses contend that

the Davenport standard was extended to land-use cases in Ex Parte

Tucci, 859 S.W.2d 1, and that Lindsay has been impliedly overruled.

We are unpersuaded.

17
 In Tucci, a plurality of Justices held that the Davenport

standard should have been applied to a temporary restraining order

which regulated abortion protest during the 1992 Republican Party

Convention in Houston, Texas. The Tucci Court addressed the

applicability of Davenport to restrictions on political protest.

It did not address whether the more stringent standard was

applicable in land-use cases involving adult businesses. The

simple fact of the matter is that there is no direct Texas

authority supporting the Adult Businesses' position that the

Davenport standard should be expanded to land-use cases involving

adult businesses, and the only Texas authority directly on point

opted for the Renton standard. See Lindsay v. Papageorgiou, 751

S.W.2d 544 (Tex.App.—Houston [1st Dist.] 1988, writ denied), see

also Maloy v. City of Lewisville, 848 S.W.2d 380 (Tex.App.—Fort

Worth 1993, no writ). If the intermediate Texas courts are wrong

about Texas law in this area, we are content to wait until the

Texas Supreme Court corrects their error. We hold that the Adult

Businesses' claims under the Texas Constitution should be

determined under the same standard as used under the United States

Constitution.

IV.

We conclude that the City was entitled to judgment as a matter

of law, and that the district court did not err in denying the

Adult Businesses' motion to reinstate their claims under the Texas

Constitution. We therefore REVERSE and REMAND with instructions to

dissolve the injunction entered by the district court prohibiting

18
enforcement of the Ordinances and for entry of judgment in

accordance with this opinion.

19