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Law for Adult Stores Can’t Be Taken at Convenience

(CN) - The owner of an adult business in Memphis, Tenn., cannot reinstate a city law regulating sexually oriented business - one that he helped invalidate as unconstitutional in 1996 - now that the county has adopted a more restrictive law about 15 years later.

Steve Cooper and Southern Entertainment Management appealed to the 6th Circuit after a Memphis federal judge denied their motion for relief from the 1996 consent judgment, which effectively struck down a 1991 city ordinance that sought to regulate adult businesses.

But the three-judge appellate panel from Cincinnati voted to affirm, finding that Cooper had failed to point out any "exceptional circumstances" that warrant relief.

"We will not grant relief from a consent decree for the mere convenience of a party," Judge Eric Clay wrote for the court on Feb. 24. "Instead, we proceed with the understanding that 'modification of a consent decree is an extraordinary remedy that should not be undertaken lightly.'"

Cooper had claimed that the 1991 law deserved a second chance because "intervening changes in statutory and decisional law" had obliterated the earlier constitutional defects that the court had found.

But it was Cooper who brought those defects to the court's attention in 1990 when he claimed the law restricted free speech. The court concluded then that the ordinance violated the First Amendment by not providing a means for prompt judicial review when businesses were denied permits or had their permits challenged. It also found four other problems, including impermissibly vague requirements and an excessive $5,000 licensing fee.

Both parties adopted the court's decision in an October 1996. The Memphis ordinance was never repealed, but it was never enforced and no adult business ever applied for a permit.

Cooper made no legal claims over the judgment until 2007 when Shelby County, which encompasses Memphis, adopted the Tennessee Adult-Oriented Establishment Registration Act of 1998. Unlike the older law, the 1998 law prohibits alcohol service or consumption in adult businesses.

The court describes the business affected by the law as being "like adult arcades, bookstores, video stores, cabarets, motels, movie and other theaters, escort agencies, nude modeling studios, 'sexual encounter centers,' and some adult telecommunications businesses."

Shelby's ordinance also requires an annual $500 license fee, the names of stockholders with a stake of at least 50 percent and other reasonable regulatory actions, like regular inspections, according to the ruling. The law took effect in January 2008.

If Cooper managed to revive the city law, his business would not have to comply with county regulations under the act's preemption clause, the court noted.

Although some legislative changes have resolved parts of the 1991 law, Judge Clay noted that there are still several other defects that render it unconstitutional.

Specifically, the law required business to disclose all shareholders - a provision that the District Court and 6th Circuit found was overly broad and could not be severed.

Judge Raymond Kethledge, who concurred with the majority in part, disagreed on severance issue and said the differences in the two laws are worth exploring. Ultimately, however, he found that Cooper failed to make a showing of public interest.

Judge Clay's ruling also took issue with that defect, finding that Cooper had failed to demonstrate inequities in the status quo. Cooper only sought to advance his private business interest in preferring "the less strict guidelines of the Memphis ordinance instead of the more restrictive county ordinance," Clay wrote.

To show that the 1996 consent judgment was no longer equitable, "Cooper would have to convince this court that the city's decision to leave adult businesses alone to operate as they please, free from a restrictive licensing scheme, is somehow unfair or unjust to those businesses," the judge continued. "This position is difficult to countenance straight-faced. Nor is it reasonable for Cooper to suggest that it is inequitable that he should be regulated under the fully constitutional, democratically promulgated county ordinance."

"As for Cooper's newfound concern regarding Memphis' ability to 'benefit from the ability to enforce a local and locally adopted ordinance instead of a generally applicable county ordinance, [and] enjoy the democratic benefit of seeing a law it had enacted ... revived again,' he need not worry.

"As Cooper has convincingly demonstrated, the county ordinance addresses substantially all of the areas addressed by the Memphis ordinance (and more), and regulates all of the adult businesses that the Memphis ordinance was intended to cover." (Parentheses in original.)

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