New Jersey bars may now post signs this like this one. Source: steezdesign.com.

Last month, a federal court ruled that New Jersey’s prohibition on “BYOB” advertising—that is, advertising by drinking and entertainment establishments allowing patrons to bring their own alcoholic beverages—violated the First Amendment.  As a result of the court’s ruling, Garden State restaurants will now be allowed to post advertisements encouraging their patrons to bring their own wine and beer.

New Jersey law allowed patrons to bring wine or beer onto the premises of establishments that are not licensed to serve alcoholic beverages, but prohibited such establishments from advertising that it was permissible to do so.  An Atlantic City nightclub, Stiletto, filed suit in federal district court against Atlantic City and the state, seeking to invalidate the state law.  Stiletto wished to advertise that patrons could bring their own beverages to the nightclub. Continue Reading New Jersey Prohibition On “BYOB” Advertising Found Unconstitutional

The Gentleman’s Playground in Rocky Mount, North Carolina. Source: Yelp

This post was authored by Otten Johnson summer associate Lindsay Lyda.  Lindsay is a rising third-year law student at the University of Colorado Law School.

A few weeks ago, the Fourth Circuit Court of Appeals affirmed a district court’s summary judgment order upholding Rocky Mount, North Carolina’s sexually-oriented business regulations against a First Amendment challenge by an exotic dance club known as “The Gentlemen’s Playground.”  As this is a professional blog, we will refrain from further commentary on the combination of the parties’ names, but invite our readers to conjure up whatever creative taglines come to mind.

American Entertainers has operated the club in Rocky Mount since 2002.  The city requires that all sexually oriented businesses obtain a license.  After discovering that The Gentlemen’s Playground was not licensed, the city sought to enforce its ordinance against the owner.  In response, American Entertainers challenged the constitutionality of the ordinance under the First and Fourteenth Amendments.  The district court granted summary judgment for the city.  On appeal the Fourth Circuit affirmed in part and reversed in part.

American Entertainers asserted that the definition of “sexually oriented business” in the ordinance was overbroad, so as to encompass “conventional, mainstream arts and entertainment.”  The Fourth Circuit rejected the claim and found that the ordinance was adopted for a purpose unrelated to suppression of expression, i.e. to offset the deleterious consequences, like lower property values and increased rate of crime, that accompany exotic dance clubs.  The court further found that the licensing requirement materially advanced the city’s substantial interest.  According to the court, the licensing fee was an acceptable way for the city to counteract some of the administrative and enforcement burdens that exotic dance clubs bring to a city.  The court also found that the ordinance was narrowly tailored to this important interest, noting that American Entertainers offered no evidence that the license itself restricted free speech.

Additionally, American Entertainers challenged two of the license-denial provisions, including one that allowed the city’s police chief to deny a license if the business would not comply with “all applicable laws,” and another that prohibited any applicant under twenty one years old from obtaining a license to operate a sexually oriented business.  The appeals court held that the provision allowing denial for violation of applicable laws was an unconstitutional prior restraint.  It failed to limit the phrase “applicable laws” and was susceptible to the chief of police creating trivial reasons to deny a license.  Ultimately, the court remanded this issue to the district court to determine whether and to what extent this provision is severable from the rest of the ordinance.

Finally, the plaintiff argued that the age restriction infringed upon equal protection and the First Amendment right to freedom of expression.  However, because the equal protection clause of the Fourteenth Amendment does not recognize age as a suspect class, the age restriction needs only to be rationally related to the city’s interest.  The court had no difficulty reasoning that because alcohol is typically served at exotic dance venues, the age restriction was rationally related to the city’s interest in ensuring the business owners of sexually oriented businesses are of legal drinking age.  Therefore, the court affirmed the district court’s denial of the Equal Protection challenge.

American Entertainers, L.L.C. v. City of Rocky Mount, 888 F.3d 707 (4th Cir. 2018).

One of the big questions coming out of the Supreme Court’s decision in Reed v. Town of Gilbert was whether Reed’s standard for content neutrality analysis would change past Supreme Court jurisprudence regarding regulations of adult businesses.  Under the precedents set in Young v. American Mini-Theatres, Inc. and City of Renton v. Playtime Theatres, Inc., adult businesses can be specially regulated by local governments under the theory that the regulations are content neutral because they are targeted at the “secondary effects” of such businesses.  Reed held that any facially content based law should be subject to strict scrutiny.  Laws that apply to adult businesses are arguably facially content based, since they apply to particular forms of speech and expression.  Thus, there was skepticism that Reed might portend an overruling of prior cases regarding adult businesses.   Continue Reading Seventh Circuit Hints That Reed Does Not Apply In Adult Business Regulation Cases