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NAKATOMI INVS. v. CITY OF SCHENECTADY

January 3, 1997

NAKATOMI INVESTMENTS, INC., and AEB ENTERPRISES, INC., Plaintiffs, against CITY OF SCHENECTADY; ALBERT JURCZYNSKI, Mayor of Schenectady; JAMES KALOHN, Zoning Officer; JAMES PONE, Building Inspector; and MICHAEL MOFFITT and GREGORY T. KACZMAREK, Police Chiefs, Defendants.


The opinion of the court was delivered by: MCAVOY

 I. BACKGROUND

 This is a case about non-obscene nude dancing. At issue is Plaintiffs Nakatomi Investments and AEB Enterprises' desire to operate clubs, within the city of Schenectady, that feature nude and topless dancers.

 The City of Schenectady ("City") has two local laws that govern Plaintiffs' business activities. The City's Public Amusement Law regulates specific entertainment businesses and prohibits any person from exposing certain portions of the human body. See Schenectady City Code § 128-8. *fn1" In addition, the City Zoning Law requires that all "adult entertainment businesses" must be established, subject to the issuance of a Special Permit, solely within two designated zoning districts--districts G and H--as defined by the City Zoning Law. See Schenectady City Code § 264-91.

 In early 1996, the City began an investigation into several business that were believed to be operating in violation of the City Zoning and Public Amusement laws. As a result of this investigation, various principals and employees of the Plaintiffs were arrested and charged with violating Sections 128-8 and 264-91 of the City Code.

 On July 31, 1996, Plaintiffs brought this action under 42 U.S.C. §§ 1983 and 1985, claiming, inter alia, that the City's Zoning and Amusement laws violated their rights under the First and Fourteenth Amendments to the United States Constitution. Presently before the Court is Plaintiffs' Motion for a Preliminary Injunction seeking to enjoin Defendants from enforcing the above referenced ordinances during the pendency of this case, as well as Defendants' Cross-Motion for Summary Judgment.

 II. DISCUSSION

 A. Preliminary Injunction Standard

 In this Circuit, the standard for obtaining a preliminary injunction is well established. In order to obtain a preliminary injunction, the movant must make an affirmative showing of: (1) irreparable harm; and either (2) likelihood of success on the merits; or (3) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in favor of the movant. See, e.g., Covino v. Patrissi, 967 F.2d 73, 77 (2d Cir. 1992); Resolution Trust Corp. v. Elman, 949 F.2d 624, 626 (2d Cir. 1991); Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir. 1979). The Second Circuit, however, has also held that "where the moving party seeks to stay governmental action taken in the public interest pursuant to a statutory or regulatory scheme, the district court should not apply the less rigorous fair-ground-for-litigation standard and should not grant the injunction unless the moving party establishes, along with irreparable injury, a likelihood that he will succeed on the merits of his claim." Plaza Health Laboratories, Inc. v. Perales, 878 F.2d 577, 580 (2d Cir. 1989); see also Union Carbide Agricultural Products Co. v. Costle, 632 F.2d 1014, 1018 (2d Cir. 1980).

 Courts in this circuit have repeatedly stated that "'perhaps the single most important prerequisite for the issuance of a preliminary injunction is a demonstration that if it is not granted the applicant is likely to suffer irreparable harm before a decision on the merits can be rendered.'" Borey v. National Union Fire Ins. Co., 934 F.2d 30, 34 (2d Cir. 1991) (quoting Bell & Howell: Mamiya Co. v. Masel Supply Co., 719 F.2d 42, 45 (2d Cir. 1983)). Moreover, the party seeking the preliminary injunction must demonstrate that "it is likely to suffer irreparable harm if equitable relief is denied." Borey, 934 F.2d at 34 (quoting JSG Trading Corp. v. Tray-Wrap, Inc., 917 F.2d 75, 79 (2d Cir. 1990)) (emphasis in original). Hence, a mere possibility of irreparable harm is insufficient to justify the drastic remedy of a preliminary injunction. Borey, 934 F.2d at 34. It must be noted that "irreparable injury means injury for which a monetary award cannot be adequate compensation." Jackson Dairy, 596 F.2d at 72 (citing Studebaker Corp. v. Gittlin, 360 F.2d 692, 698 (2d Cir. 1966) and Foundry Srvs. Inc., v. Beneflux Corp., 206 F.2d 214, 216 (2d Cir. 1948)).

 Turning our attention to the first prong of this test, it is clear that if the City's enforcement will deprive Plaintiffs of their First Amendment right of expression, this constitutes per se irreparable injury to Plaintiffs. See Elrod v. Burns, 427 U.S. 347, 49 L. Ed. 2d 547, 96 S. Ct. 2673 (1976). In Elrod v. Burns, the Supreme Court instructed that "the loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury." 427 U.S. at 373; see also Paulsen v. County of Nassau, 925 F.2d 65, 68 (2d Cir. 1991) (stating that even a temporary abridgment of the First Amendment right to free expression constitutes irreparable injury).

 Accordingly, inasmuch as the City's enforcement of its ordinances against Plaintiffs for even one day would result in a loss of First Amendment rights, that enforcement constitutes irreparable injury to these plaintiffs. Thus, Plaintiffs have satisfied the first of the two elements required for a preliminary injunction.

 Having found that Plaintiffs will suffer irreparable harm in the absence of injunctive relief, the Court must determine whether Plaintiffs are likely to succeed on the merits of their constitutional challenge. Contrary to the position asserted by the City, the burden rests squarely on the City to justify its infringement of Plaintiffs' rights. Indeed, it has long been axiomatic that once a party shows that a regulation deprives them of a protected First Amendment interest, the burden shifts to the Government to justify the infringement. See, e.g., Members of City Council v. Taxpayers for Vincent, 466 U.S. 789, 803 n.22, 80 L. Ed. 2d 772, 104 S. Ct. 2118 (1984); City of Los Angeles v. Preferred Communications, Inc., 476 U.S. 488, 496, 90 L. Ed. 2d 480, 106 S. Ct. 2034 (1986). The Supreme Court reiterated this burden shifting in Schad v. Borough of Mt. Ephraim, 452 U.S. 61, 66, 68 L. Ed. 2d 671, 101 S. Ct. 2176 (1981). In Schad, after reaffirming that nude dancing is expressive conduct within the scope of the First Amendment, the Supreme Court shifted the burden to the government to justify "its substantial restriction of protected activity." 452 U.S. at 66, 72. Ultimately, the Schad Court invalidated the anti-nudity statute because the government could not justify the infringement. 452 U.S. at 72; cf. Travis v. Owego-Apalachin School Dist., 927 F.2d 688, 694 (2d Cir. 1991) (invalidating statute because defendant school district failed to justify its restriction on speech and religion).

 Here, it is not unreasonable to expect that a City purporting to infringe upon a First Amendment right be prepared to defend that infringement; if the City cannot adequately justify its encroachment, then the restriction is rightfully unconstitutional. See O'Malley v. City of Syracuse, 813 F. Supp. 133, 141; cf. Landmark Communications, Inc. v. Virginia, 435 U.S. 829, 843-44, 56 L. Ed. 2d 1, 98 S. Ct. 1535 (1978) (initial burden is on government to justify restriction; defendant then has opportunity to challenge the government's proffered justification).

 Here, Plaintiffs are challenging the constitutionality of two City ordinances. The Court will review these challenges seriatim.

 B. Likelihood of Success on the Merits

 In a republic founded on a democratic ideal, there is perhaps no greater safeguard of freedom than the unfettered exchange of ideas. The First Amendment protects the expression of ideas, especially unpopular ideas. See, e.g., Texas v. Johnson, 491 U.S. 397, 404, 414, 105 L. Ed. 2d 342, 109 S. Ct. 2533 (1989); Hustler Magazine, Inc. v. Falwell, 485 U.S. 46, 55-56, 99 L. Ed. 2d 41, 108 S. Ct. 876 (1988); Federal Communications Comm'n v. Pacifica Foundation, 438 U.S. 726, 745-46, 57 L. Ed. 2d 1073, 98 S. Ct. 3026 (1978). "If there is a bedrock principle underlying the First Amendment, it is that the government may not prohibit the expression of an idea simply because society finds the idea itself offensive . . . ." Johnson, 491 U.S. at 414 (citations omitted); see also Street v. New York, 394 U.S. 576, 592, 22 L. Ed. 2d 572, 89 S. Ct. 1354 (1969). The fact that the expression is not in the form of verbal communication is irrelevant. It is now settled, for example, that performances in theatres are entitled to First Amendment protection even though they do not square with the traditional definition of speech because such performances "may affect public attitudes and behavior in a variety of ways, ranging from direct espousal of a political or social doctrine to the subtle shaping of thought which characterizes all artistic expression." California v. La Rue, 409 U.S. 109, 129, 34 L. Ed. 2d 342, 93 S. Ct. 390 (1972) (Marshall, J., dissenting); see also Johnson, 491 U.S. at 404-06 (First Amendment protection is not limited to the spoken word but extends to the expression of ideas).

 Not surprisingly, an individual's interest in freedom of expression sometimes clashes with the government's interest in societal order so directly that the two positions are irreconcilable. In these cases, one interest must give way to the other. See, e.g., International Soc'y for Krishna Consciousness, Inc. v. Barber, 506 F. Supp. 147, 148-49 (N.D.N.Y. 1980), rev'd on other grounds, 650 F.2d 430 (2d Cir. 1981). The instant case presents the Court with the difficult task of balancing these important but competing interests.

 For almost twenty-years the Supreme Court has recognized that nude dancing of the kind involved here is expressive conduct protected by the First Amendment. The Court first addressed this issue in the context of adult entertainment in California v. LaRue, 409 U.S. 109, 34 L. Ed. 2d 342, 93 S. Ct. 390 (1972), where local bar owners sought a declaratory judgment that regulations promulgated by California's Department of Alcohol Beverage Control regulating the type of entertainment that could be presented in nightclubs or bars were unconstitutional. The regulations in question "provided that liquor by the drink shall not be served in places where certain grossly sexual exhibitions are performed." LaRue, 409 U.S. at 119 (Stewart, J., concurring). In overturning the district court's grant of declaratory judgment, the LaRue Court held that the State was empowered under the Twenty-First Amendment to regulate such entertainment in establishments that serve liquor. However, the Court stated that "some of the performances to which these regulations address themselves are within the limits of the constitutional protection of freedom of expression." LaRue, 409 U.S. at 118.

 Two years later, the justices strengthened their recognition that nude dancing is protected expression. In Doran v. Salem Inn, 422 U.S. 922, 45 L. Ed. 2d 648, 95 S. Ct. 2561 (1974), owners of three topless bars sought a temporary injunction against a Northhampton, New York town ordinance that prohibited topless dancing in "any public place." 422 U.S. at 922. Justice Rehnquist wrote that "although the customary 'barroom' type of nude dancing may involve only the barest minimum of protected expression, we recognized [in LaRue ] that this form of entertainment might be entitled to First and Fourteenth Amendment protection in some circumstances." Doran 422 U.S. at 932.

 Moreover, in Schad v. Mount Ephraim, 452 U.S. 61, 68 L. Ed. 2d 671, 101 S. Ct. 2176 (1981), the majority's position on nude dancing was accepted by the entire Court. In Schad, the Court noted that "as the state courts in this case recognized, nude dancing is not without its First Amendment protections from official regulation." 452 U.S. at 66. Since Schad, the Supreme Court has consistently reaffirmed its position that nude dancing performed as entertainment falls within the scope of the First Amendment. For example, in Young v. Arkansas, 474 U.S. 1070, 88 L. Ed. 2d 801, 106 S. Ct. 830 (1985), Justices White and Brennan, dissenting from denial of certiorari, noted the Court's "repeated indications that barroom nude dancing is a type of expression that is protected under the First Amendment" and urged an explicit holding regarding the scope of that protection. 474 U.S. at 1070. In Sable Communications v. FCC, 492 U.S. 115, 109 S. Ct. 2829, 2836, 106 L. Ed. 2d 93 (1989), the majority wrote that "sexual expression which is indecent but not obscene is protected by the First Amendment." See also New York State Liquor Auth. v. Bellanca, 452 U.S. 714, 719, 69 L. Ed. 2d 357, 101 S. Ct. 2599 (1980) (Stevens, J., dissenting) (stating that in LaRue the Court recognized "the protected expression implicated by nude dancing"). In addition, in Paris Adult Bookstore II v. City of Dallas, 493 U.S. 215, 110 S. Ct. 596, 107 L. Ed. 2d 603 (1990), the Court addressed a challenge to an ordinance enacted by the City of Dallas regulating "sexually oriented businesses" through a scheme incorporating zoning, licenses, and inspections. In Paris Adult Bookstore II, various adult establishments, including several providing nude dancing, sued for declaratory relief and a temporary as well as a permanent injunction. 110 S. Ct. at 596. Six justices agreed that the ordinance violated the First Amendment by establishing a licensing scheme without adequate procedural safeguards, although the majority split as to what safeguards are required. Paris Adult Bookstore II, 110 S. Ct. at 604.

 The high Court's most recent exegesis on this issue came in Barnes v. Glen Theatre, Inc., 501 U.S. 560, 115 L. Ed. 2d 504, 111 S. Ct. 2456 (1991), in which eight of the nine Justices again stated that nude dancing is expressive conduct within the protection of the First Amendment. Although the plurality held that an Indiana Public Indecency law requiring that erotic dancers wear pasties and G-strings *fn2" was constitutional, Barnes engendered four separate opinions, none of which commanded a majority of the Justices. See Barnes, 501 U.S. at 561-63 (opinion of Rehnquist, C.J., joined by O'Connor and Kennedy, JJ.); id. at 571-72 (Scalia, J., concurring); id. at 580-82 (Souter, J., concurring); id. at 587 (White, J., dissenting, joined by Marshall, Blackmun, and Stevens, JJ.). Chief Justice Rehnquist's attempt to win acceptance for the proposition that the enforcement of morality is a proper basis for limiting freedom of speech did not win majority support: only Justices O'Connor and Kennedy joined the Rehnquist opinion. Barnes, 501 U.S. at 561-63. While Justice Souter agreed with the Chief Justice that the Indiana statute was properly analyzed under the traditional First Amendment four-part test articulated in United States v. O'Brien, 391 U.S. 367, 20 L. Ed. 2d 672, 88 S. Ct. 1673 (1968), he identified secondary effects, not moral concerns, as the basis for restricting First Amendment protection of expressive conduct. Barnes, 501 U.S. at 582 ("I nonetheless write separately to rest my concurrence in the judgment, not on the possible sufficiency of society's moral views to justify the limitations at issue, but on the State's substantial interest in combating the secondary effects of adult entertainment establishments of the sort typified by respondents' establishments."). *fn3"

 As the Sixth Circuit has remarked, deriving the significance of the Barnes decision is like "reading tea leaves." Triplett Grille, Inc. v. City of Akron, 40 F.3d 129, 134-35 (6th Cir. 1994). Nevertheless, the Supreme Court has instructed that "when a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, 'the holding of the Court may be viewed as that position taken by those Members who concurred in the judgment on the narrowest grounds.'" Marks v. United States, 430 U.S. 188, 193, 51 L. Ed. 2d 260, 97 S. Ct. 990 (1977) (emphasis added) (citing Gregg v. Georgia, 428 U.S. 153, 169 n. 15, 49 L. Ed. 2d 859, 96 S. Ct. 2909 (1976)). Indeed, this is not the first time a lower federal court has had to divine the meaning from an increasingly polarized Supreme Court. See, e.g., Tyler v. Bethlehem Steel Corp., 958 F.2d 1176, 1183 (2d Cir.) ("Despite the inarguable fact that only four justices in Price Waterhouse [v. Hopkins, 490 U.S. 228, 104 L. Ed. 2d 268, 109 S. Ct. 1775 (1989)] would have imposed a 'direct evidence' requirement for 'mixed-motives' cases, most circuits have engrafted this requirement into caselaw."), cert. denied, 113 S. Ct. 82 (1992). While "there is some awkwardness in attributing precedential value to an opinion of one Supreme Court justice to which no other justice adhered, it is the usual practice when that is the determinative opinion." Blum v. Witco Chemical Corp., 888 F.2d 975, 981 (3d Cir. 1989) (following Justice O'Connor's concurring opinion in Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 483 U.S. 711, 97 L. Ed. 2d 585, 107 S. Ct. 3078 (1987)).

 Regardless of the precise approach taken, this Court must derive a controlling standard from two apparently conflicting opinions: the plurality opinion and Justice Souter's concurrence. See Redner v. Dean, 29 F.3d 1495, 1499 (11th Cir. 1994) ("When faced with a fragmented Court, we may distill the various opinions down to their narrowest grounds of concurrence to derive any binding precedent.") (citing Marks, 430 U.S. at 193). Moreover, the determination of which opinion resolved the issue in Barnes on "the narrowest grounds" does not end the inquiry required here. Rather, this Court is still left with the daunting task of obtaining a workable standard from the two concurrences that comports with the plurality's overall holding in Barnes as well as with the Supreme Court's prior precedent, and applying that standard to the facts presented here.

 Applying the Marks rule to the decision in Barnes, at least one court has concluded that Justice Souter's concurring opinion set forth a subset of the principles articulated in the plurality opinion. In Triplett Grille, Inc. v. City of Akron, the Sixth Circuit concluded: "As a logical consequence of their approval of morality justifications for regulations of speech, Chief Justice Rehnquist, Justice O'Connor and Justice Kennedy implicitly agreed with Justice Souter that governmental efforts to control the harmful secondary effects associated with adult entertainment can serve as a basis for restricting activities that enjoy First Amendment protection." 40 F.3d 129, 134-35 (6th Cir. 1994). The Triplett court quoted the following language in support of its conclusion that the Barnes plurality's rationale implicates material harms as one of the legitimate governmental interests justifying the regulation of speech:

 
This and other public indecency statutes were designed to protect morals and public order. The traditional police power of the States is defined as the authority to provide for the public health, safety, and morals, and we have upheld such a basis for legislation . . . . Thus, the public indecency statute ...

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