Strip Club Loses Bid to Quash City Ordinance

(CN) - A Connecticut strip club lacked standing to challenge the City of Milford's requirements that sexually-oriented businesses publicly post the names of their owners and operators, the Second Circuit ruled.

Keepers, formerly known as Sidepockets, is a cabaret-style nightclub that presents clothed and topless "dance entertainment to the consenting adult public," originally sued the City of Milford on Dec. 11, 2003.

In its original lawsuit, it sought declarative and injunctive relief to block Milford's enforcement of an ordinance that requires adult nightclubs to publicly post the names of owner and "passive owners" who hold at least a 30 percent interest in the business.

On Aug, 15, 2008, the U.S. District Judge Alvin Thompson rejected the city's motion to dismiss and also declared that while core issues in the case were moot because the ordinance was no longer in effect at that time the case could continue because the club still had legitimate claims for damages arising out of the city's past conduct.

A revised version of the ordinance went into effect in May 2007, prompting the filing of the a new lawsuit by the strip club.

The Keeper's complaint was filed on Aug. 13, 2007, to reflect the club's name change, but effectively advanced the same arguments as the original lawsuit. Namely, that the ordinance was an unconstitutional violation of the club owners' right to anonymity while it engaged in "expressive activities."

Judge Thomas consolidated the two lawsuits in October 2008, and in 2013 granted partial summary judgment awards to each party that satisfied no one.

Thomas found the city had a "substantial interest" in knowing who was responsible for operating a sexually oriented business.

That court upheld the 2003 ordinance posting requirement, but went onto find that the 2007 ordinance was "unconstitutionally broad," explaining that the names of owners and officers not involved in the actual operation of the business should not have to be listed.

Both sides appealed.

Keepers challenged the partial summary judgment granted the city on the grounds that the district court erred while exploring the question of whether the ordinance was "unconstitutionally vague."

When a former city attorney, Marilyn Lipton, was deposed for the case, she proved unable to answer a number of questions regarding the potential application and interpretation of the ordinance. Keepers said Lipton's deposition proved its case.

But the city responded by submitting an affidavit from Chief of Police Keith Mello, who offered "additional guidelines regarding the interpretation and enforcement" of the ordinance.

Keepers maintained at the time, and reiterated on appeal, that it believed affidavit was impermissible on the grounds it contradicted Lipton's deposition testimony.

Thomas concluded it would be unfair to ignore the Mello affidavit rely solely on Lipton's deposition, granting the city partial summary judgment on that claim.

For its part, the city challenged the lower court's ruling that the ordinance was unconstitutional as it applied to passive owners and officers of the club.

But the circuit said before it dealt with those motions, it wanted to consider two other issues not addressed by the parties or the district court: whether Keepers had standing to challenge the public-posting requirements; and, if it did, whether the public-posting requirements violate the First Amendment's prohibition of "compelled speech."

The Second Circuit affirmed Judge Thomas's consideration of the Mello Affidavit for two reasons: That Milford had a right to supplement or amended legal interpretations offered by its designated witness, and that, even if the district court had erred, the error was harmless.

As to the question of whether Milford's public-posting requirement violates the First Amendment when it comes to passive owners of adult establishments, the court concluded the query is unanswerable because it never should have been raised in the first place.

"We need not -- indeed, we cannot -- resolve ... [the] issue today," said Justice Jose Cabranes wrote in the panel's decision. "Undertaking our constitutional duty to assure ourselves that the case is justifiable, we have determined that three distinct jurisdictional barriers preclude Keepers from challenging the public-posting requirements.

"We conclude that Keepers lacked both (1) prudential and (2) constitutional standing to challenge the public-posting requirements based on third parties' rights to anonymous expression, and (3) even if Keepers had standing below based on its right against compelled speech, a justifiable controversy no longer exists at this stage of the litigation," Cabranes wrote.

The panel vacate the judgment of the district court with respect to the 2003 and 2007 public-posting requirements and remanded the case with instructions to dismiss Keepers' challenge to those requirements for lack of subject matter jurisdiction.

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