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Federal Court Upholds City's Sexually Oriented Business Ordinance

5.11.2017

A local adult entertainment club known as “Gentlemen’s Playground” filed a lawsuit in July, 2014 challenging the constitutionality of the City of Rocky Mount’s Sexually Oriented Business Ordinance (“SOBO”). Not only did the club challenge the SOBO’s constitutionality, it asserted its dancers did not perform in such a way as to bring its operation within the scope of the SOBO. However, after extensive discovery and briefing, United States District Court Judge James Dever, Eastern District of North Carolina, granted summary judgment on September 8, 2016 for the City upholding the major provisions of the SOBO and also holding the female dancers’ performances were done in a manner that the SOBO was applicable to the club. Therefore, the SOBO’s clothing requirements, dancing regulations and “VIP room” restrictions were enforceable. Judge Dever further denied Plaintiff’s Motion for Reconsideration on April 14, 2017.

Rocky Mount, like most municipalities, has a local ordinance governing the operations of adult entertainment clubs. In particular, its SOBO includes definitions describing performances of dancers and if the dancers fall within those definitions, then they must obtain adult entertainer licenses and the club must obtain a sexually oriented business license. Neither Plaintiff nor any of its dancers had such licenses. After local police conducted an investigation, the City advised Plaintiff of the consequences of operating an adult club without the required licenses. Plaintiff countered by filing this lawsuit and initially contended the dancers did not perform in such a way as to make the SOBO applicable. Discovery in this case focused on how and where the dancers performed and how they were clothed during those performances. Specifically, the evidence demonstrated and the court found the dancers performed with certain anatomical parts exposed so that they were required to obtain licenses under the SOBO. Further, surveillance video obtained by the City’s Police Department demonstrated dancers violating the SOBO by performing in a “VIP lounge”.

After concluding Plaintiff operated its club so that it was required to obtain a license under the SOBO, the Federal Court next addressed Plaintiff’s facial challenges under the United States Constitution, which were based on arguments that the SOBO was an unconstitutional prior restraint of free speech. The court addressed each one of these contentions and upheld all but two provisions in the SOBO challenged by Plaintiff as being unconstitutional. This included a prohibition against adult entertainers touching patrons, a requirement that owners or operators of adult business be 21 years or older and that performances of adult live entertainment needed to take place in view of all customers rather than in private “VIP” booths. While a zoning setback provision and a timeline for reviewing an application for a sexually oriented business license were found to be problematic, those provisions had not actually impacted Plaintiff because it never applied for any such license. That left the SOBO overwhelmingly in conformity with requirements under the US Constitution, which led to summary judgment being granted for the City. Having been denied twice by the federal district court, the club has now appealed to the Fourth Circuit Court of Appeals.

With many adult business operators looking to challenge local ordinances regulating such activity, this ruling emphasizes the need to draft regulations in a precise way that conforms to requirements under the United States Constitution. If those provisions are drafted with those protections in mind, such ordinances should fare well when challenged in court. Feel free to contact me for assistance in drafting such ordinances or enforcing them in court.

Physical Address: 130 S. Franklin Street Rocky Mount, NC 27804

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