Adult Use Zoning in New York

The existence of a study that supports the municipality's ordinance shifts the burden to an adult use to cast doubt on the municipality's use of the study, “either by demonstrating that the municipality's evidence does not support its rationale or by furnishing evidence that disputes the municipality's factual findings.” City of Los Angeles v. Alameda Books, Inc., 535 U.S. 425. If the challenger succeeds in casting doubt on the municipality's rationale, the burden shifts back to the municipality “to supplement the record with evidence renewing support for a theory that justifies its ordinance.” Id.

Alameda Books, which established the burden-shifting framework, involved a Los Angeles ordinance that prohibited maintenance of more than one adult entertainment business in the same building. The U.S. Supreme Court held that a prior study showing that concentration of adult establishments was associated with a higher rate of various crimes sufficed to meet the city's initial burden. As a result, the challengers were not entitled to summary judgment.

The Court's opinion, however, commanded the votes of only four justices. Justice Kennedy concurred in result, but cautioned that a municipality may not act to reduce secondary effects by suppressing speech; instead, he argued that a municipality may act to reduce secondary effects by changing the location of adult uses, but not by reducing speech. He emphasized that the city's ordinance survived the first step in the burden-shifting analysis because dispersion “is reasonably likely to cause a substantial reduction in secondary effects while reducing speech very little.” Id. at 453. But he also warned that the city's assumptions would have to withstand intermediate scrutiny at trial.

The New York Experience

In 1995, the New York City Council adopted a zoning provision substantially limiting the location of adult establishments. The 1995 provisions were based on a 1994 study conducted by the Department of City Planning, and the ordinance defined “adult establishment” as one in which a “substantial portion” was devoted to specified adult uses. In 1998, the Department of Buildings and the Planning Commission acted to clarify the meaning of “substantial portion” by issuing a notice that an establishment devoting at least 40% of customer-accessible space to adult uses would be treated as an adult establishment. The city soon discovered, however, that adult establishments were technically complying with the 60/40 test without altering their focus on sexually explicit materials.

When the Court of Appeals held that the ordinance must be enforced as written (City of New York v. Les Hommes, 94 NY2d 267), the City Council amended the ordinance to remove the “substantial portion” language with respect to live performances, instead providing that regular performances with an emphasis on specified anatomical areas or sexual activities qualified as adult eating or drinking establishments regardless of square footage. The 2001 amendments engendered immediate litigation.

In 2005, the Court of Appeals applied Alameda Books' burden-shifting framework, and held that the City had met its initial burden of establishing that the 1994 study was sufficient to support the 2001 amendments, but remanded for trial because the adult establishments challenging the ordinance had furnished evidence disputing the city's factual findings. For the People Theaters of N.Y. v. City of New York, 6 N.Y.3d 63. The court indicated that to sustain the ordinance, the city would have to establish that the targeted businesses “display a predominant, ongoing focus on sexually explicit materials or activities, and thus their essential nature has not changed.” Id. at 84.

After two trials, with an intermediate trip to the Appellate Division, Supreme Court struck down the city's ordinance, finding that the establishments no longer operated in an atmosphere placing dominance of sexual matters over nonsexual ones, making the 2001 amendments unnecessary, and therefore violative of the First Amendment. A divided Appellate Division affirmed, and the city appealed.

A unanimous Court of Appeals reversed and upheld the ordinance. The court started by indicating that at the third state of the Alameda Books analysis, the city should have to meet the same modest evidentiary burden as at the first stage. Judge Fahey, writing for the court, concluded that there was no conflict between intermediate scrutiny and a “light” burden of proof. The court then found that there was substantial evidence to demonstrate that the adult establishments had a continued focus on sexually explicit activities, even if their signage had become less garish. In particular, the court focused on the fact that adult bookstores had an average of 17 peep booths per store, and that topless dancing and lap dancing was offered in all of the adult establishments.

Implications

The court's standard should make it easy for any New York municipality to sustain an adult use ordinance, so long as the municipality permits adult uses somewhere within its borders. The municipality could point to the 1994 New York City study, then note the Court of Appeals focus on the existence of sexually explicit activities, and thereby sustain its burden at all stages of any litigation. Whether this standard meets the concerns expressed in Justice Kennedy's concurrence in AlamedaBooks remains an open question that will only be resolved by further clarification from the Supreme Court.

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Stewart E. Sterk, Mack Professor of Law at Benjamin Cardozo School of Law, is the Editor-in-Chief of New York Real Estate Law Reporter.

New York City's 2001 ordinance regulating adult uses has been the subject of litigation for more than 15 years. In September, the Court of Appeals put an apparent end to the litigation by denying reargument of its June decision upholding the ordinance. For the People Theaters of N.Y., Inc. v. City of New York , 29 NY3d 340, rearg. den 29 NY3d 1115. Unless the United States Supreme Court intervenes, the court's analysis should make it significantly easier for New York municipalities to defend adult use ordinances against First Amendment attack.

The Constitutional Framework

The First Amendment does not permit municipalities, under the guise of zoning, to regulate the content of speech, but also does not prohibit municipalities from regulating adult uses when there is evidence that those uses generate “secondary effects” for the surrounding community. To establish that particular adult uses create adverse secondary effects, a municipality may rely on studies conducted in another municipality. See City of Renton v. Playtime Theaters, Inc. , 475 U.S. 41 (City of Renton can rely on study prepared by the City of Seattle).

The existence of a study that supports the municipality's ordinance shifts the burden to an adult use to cast doubt on the municipality's use of the study, “either by demonstrating that the municipality's evidence does not support its rationale or by furnishing evidence that disputes the municipality's factual findings.” City of Los Angeles v. Alameda Books, Inc. , 535 U.S. 425. If the challenger succeeds in casting doubt on the municipality's rationale, the burden shifts back to the municipality “to supplement the record with evidence renewing support for a theory that justifies its ordinance.” Id.

Alameda Books, which established the burden-shifting framework, involved a Los Angeles ordinance that prohibited maintenance of more than one adult entertainment business in the same building. The U.S. Supreme Court held that a prior study showing that concentration of adult establishments was associated with a higher rate of various crimes sufficed to meet the city's initial burden. As a result, the challengers were not entitled to summary judgment.

The Court's opinion, however, commanded the votes of only four justices. Justice Kennedy concurred in result, but cautioned that a municipality may not act to reduce secondary effects by suppressing speech; instead, he argued that a municipality may act to reduce secondary effects by changing the location of adult uses, but not by reducing speech. He emphasized that the city's ordinance survived the first step in the burden-shifting analysis because dispersion “is reasonably likely to cause a substantial reduction in secondary effects while reducing speech very little.” Id. at 453. But he also warned that the city's assumptions would have to withstand intermediate scrutiny at trial.

The New York Experience

In 1995, the New York City Council adopted a zoning provision substantially limiting the location of adult establishments. The 1995 provisions were based on a 1994 study conducted by the Department of City Planning, and the ordinance defined “adult establishment” as one in which a “substantial portion” was devoted to specified adult uses. In 1998, the Department of Buildings and the Planning Commission acted to clarify the meaning of “substantial portion” by issuing a notice that an establishment devoting at least 40% of customer-accessible space to adult uses would be treated as an adult establishment. The city soon discovered, however, that adult establishments were technically complying with the 60/40 test without altering their focus on sexually explicit materials.

When the Court of Appeals held that the ordinance must be enforced as written ( City of New York v. Les Hommes , 94 NY2d 267), the City Council amended the ordinance to remove the “substantial portion” language with respect to live performances, instead providing that regular performances with an emphasis on specified anatomical areas or sexual activities qualified as adult eating or drinking establishments regardless of square footage. The 2001 amendments engendered immediate litigation.

In 2005, the Court of Appeals applied Alameda Books' burden-shifting framework, and held that the City had met its initial burden of establishing that the 1994 study was sufficient to support the 2001 amendments, but remanded for trial because the adult establishments challenging the ordinance had furnished evidence disputing the city's factual findings. For the People Theaters of N.Y. v. City of New York , 6 N.Y.3d 63. The court indicated that to sustain the ordinance, the city would have to establish that the targeted businesses “display a predominant, ongoing focus on sexually explicit materials or activities, and thus their essential nature has not changed.” Id. at 84.

After two trials, with an intermediate trip to the Appellate Division, Supreme Court struck down the city's ordinance, finding that the establishments no longer operated in an atmosphere placing dominance of sexual matters over nonsexual ones, making the 2001 amendments unnecessary, and therefore violative of the First Amendment. A divided Appellate Division affirmed, and the city appealed.

A unanimous Court of Appeals reversed and upheld the ordinance. The court started by indicating that at the third state of the Alameda Books analysis, the city should have to meet the same modest evidentiary burden as at the first stage. Judge Fahey, writing for the court, concluded that there was no conflict between intermediate scrutiny and a “light” burden of proof. The court then found that there was substantial evidence to demonstrate that the adult establishments had a continued focus on sexually explicit activities, even if their signage had become less garish. In particular, the court focused on the fact that adult bookstores had an average of 17 peep booths per store, and that topless dancing and lap dancing was offered in all of the adult establishments.

Implications

The court's standard should make it easy for any New York municipality to sustain an adult use ordinance, so long as the municipality permits adult uses somewhere within its borders. The municipality could point to the 1994 New York City study, then note the Court of Appeals focus on the existence of sexually explicit activities, and thereby sustain its burden at all stages of any litigation. Whether this standard meets the concerns expressed in Justice Kennedy's concurrence in AlamedaBooks remains an open question that will only be resolved by further clarification from the Supreme Court.

*****
Stewart E. Sterk, Mack Professor of Law at Benjamin Cardozo School of Law, is the Editor-in-Chief of New York Real Estate Law Reporter.