Real Estate & Property Law

11th Circuit: County Reasonably Concluded Something Might Be Going On In The Champagne Room

By Robert Thomas (inversecondemnation.com)

Contradicting Chris Rock's dictum (caution, may be very offensive), Fulton County, Georgia concluded there might be something untoward going on in the Champagne Room, at least in those serving alcohol. In Flanigan's Enterprises, Inc. of Ga. v. Fulton County, No. 08-17035 (Feb. 16, 2010), the U.S. Court of Appeals for the Eleventh Circuit held the County's conclusion was not irrational.

The county commissioners believed that strip clubs featuring nude dancing might have a relationship to crime and lowered property values, so they commissioned local studies of the issue and gathered studies from other areas. The local studies revealed no relationship between strip clubs and crime or property values. But relying on the "foreign studies" which showed otherwise, the commissioners barred alcohol in strip clubs and other "adult entertainment establishments."

For its troubles, the County was sued by the owner of a strip club for First Amendment violations, and the 11th Circuit eventually agreed. The County was not required to study the issue, but having done so, it could not ignore the results. Flanigan?s Enters., Inc. of Ga. v. Fulton County, 242 F.3d 976, 986 (11th Cir. 2001).

Back to the drawing board the County went. It commissioned two more local studies. The first again showed that alcohol-serving strip clubs did not have a large impact. The second, however, showed they do. Appended to the second report were more studies from other jurisdictions showing the negative effects of adult entertainment establishments such as increased crime and lowered property values. After a public hearing and testimony, the County adopted another ordinance barring alcohol in strip clubs.

Predictably, strip club owners brought another suit claiming the ordinance violated their constitutional rights. The district court agreed, holding the ordinance did not further an important governmental interest, because the first report (showing no relationship) was the most probative.

On appeal, the 11th Circuit applied the intermediate standard of review, noting that the only real area of contention was whether the ordinance furthered some governmental interest. See slip op. at 23-24. To meet that test, the government must have some factual basis for the claim that the adult establishments cause the problems the ordinance is designed to address. Read pages 24 to 27 for a summary of the kind of evidence the government needs to have in order to be deemed to have acted reasonably. The court was satisfied that the second report and the additional foreign studies provided a sufficient basis for the County to conclude the alcohol ban was needed.

The strip club pointed out the other study which showed the opposite, but the court held that it wasn't its job to select which report it thought was the best, only to determine whether the County was reasonable when it relied on one report versus the other. Here's the money quote:

The foundation upon which the County relied need not be perfect; it need only be reasonable. We emphasize that, in this context, the County need not offer advanced statistical evidence, nor refute every conceivable interpretation of the data, even if those interpretations may be more compelling than the one reached by the municipality. It need only show that it acted reasonably, and here, Fulton County has met this burden.

Slip op. at 32.

Full post as published by inversecondemnation on February 17, 2010 (boomark / email).