“It’s Time to Have X-Rated Vision”

By Dennis M. Galvin
Published in Local Government Law Review, August, 2011

The Federal and State Courts have recently rendered some interesting and instructive cases in the area of “Adult Entertainment.”  This article will review these cases and suggest a procedure for managing adult entertainment uses in your community.

In the unreported Federal case of MAG Realty, LLC, d/b/a Cheerleaders Too v. Gloucester City,[i]   the plaintiff was a bar that had given up its liquor license in order to offer nude dancing.  New Jersey does not permit the mixing of nudity and alcohol.  Apparently, Cheerleaders Too’s management saw greater benefit from nude dancing than from the service of liquor.  Gloucester City’s Ordinance prohibited adult uses everywhere in the city; and it was this blanket prohibition on adult uses which left Gloucester City exposed.  In spite of the best efforts made by the City’s attorney, the Federal District Court concluded that performances by naked female dancers were not obscene; that their conduct was protected by the First Amendment; that Gloucester City had unconstitutionally zoned out all adult entertainment uses; and that, as a result, the city had to permit Cheerleaders Too.

Many elective officials may be afraid to provide appropriate zoning for Adult Entertainment Uses because of community backlash.  But by failing to do so, the community is exposed to the possibility that an adult entertainment use might be located anywhere within the municipality; perhaps on Main Street or some other highly visible location.

In New Jersey, a criminal statute regulates sexually oriented businesses.  The purpose is to keep such uses separate from other incompatible uses, such as homes and churches.  N.J.S.A. 2C:34-7 provides:

No person shall operate a sexually oriented business within 1,000 feet of any existing sexually oriented business or church or school or bus stop or playground or public resort or hospital or child care or area zoned for residential use.

However, while the Courts have found this statute constitutional on its face, they have repeatedly set it aside “as applied” to particular circumstances.

The MAG Realty Court explained that if Gloucester City had wanted to implement nothing more than the one thousand foot buffer zones created by N.J.S.A. 2C:34-7, all it had to do was expressly permit sexually oriented businesses in all districts.  That is a politically unpalatable suggestion.

In MAG Realty, the Court opined that the city had also failed to carry its burden proof, because it had failed to demonstrate the availability of alternate avenues of expression, and had failed to establish the limits of the relevant market.    As to the latter, the Court suggested that:

To undertake this analysis, courts have, amongst other things, looked to the percentage of accessible land in a given municipality available for the expression.  See City of Renton, 475 U.S. at 53 (suggesting that an ordinance that leaves more than five percent of a municipality’s accessible land open to the adult uses provides adequate alternative avenues); Dia v. City of Toledo, 937 F.Supp. 673, 678 (N.D. Ohio 1996).  Of course, the available land need not be “commercially viable” in the sense that it is presently available for sale or lease.  See Renton, 475 U.S. at 53.  Apparently, post-Renton, courts “have generally found the number [of sites] to be inadequate if fewer than a dozen sites, or under 1% of the city acreage, is potentially available.”  University Books and Videos, Inc. v. Miami-Dade County, 132 F.Supp.2d 1008, 1014 (S.D. Fla. 2001) (quoting Dia, 937 F.Supp. at 678) (internal quotation marks omitted).  

Gloucester City is a suburb of Philadelphia; and while it might seem obvious to some that Philadelphia has sufficient adult entertainment uses to satisfy itself and the Philadelphia metropolitan region, the Court said that Gloucester City had failed to establish that it was part of Philadelphia’s adult entertainment market.   So, municipal planners will have to provide a far greater quantum of proof if they hope to establish that either New York City or Philadelphia adequately provide for some of New Jersey’s adult entertainment needs.  The Courts will not accept our generalized beliefs, understanding or impressions.  Solid documentary evidence is required.

Two fascinating cases have been decided in the New Jersey Courts.  The first made its way to the New Jersey Supreme Court.  But the core issue decided by the Supreme Court had to do only with when a Consent Judgment could be set aside under 4:50-1, not the location of adult entertainment.

In DEG v. Fairfield Township[ii], Fairfield Township had settled a dispute permitting the establishment of an adult entertainment store, based upon a false premise that there was no place in town where an adult entertainment store could be located, without violating N.J.S.A. 2C:34-7.  The Township subsequently learned that 5% of the Township could be zoned for adult entertainment without violating that statute.

The Supreme Court offered some insight to municipalities looking to regulate adult entertainment uses, explaining that:

Regulations intended to govern the secondary effects that particular businesses may have on the surrounding community are permissible so long as those restrictions are limited to time, place and manner, are content neutral, are designed to serve a substantial government interest and allow for reasonable alternative avenues of communication. [iii]  [Emphasis added.]

The Supreme Court emphasized:

It is a regional inquiry and entails among other things expert assessments of the size of the relevant market; the absolute number of available locations; the relative number of such locations to land mass; the ratio of locations to population; and the qualitative availability of particular properties in light of their own unique characteristics.[iv]

Identifying some properties on which sexually oriented uses may be permitted is only the first step in a complicated and fact sensitive analysis.  The burden is squarely on the municipality to provide the necessary proofs, which must come from a detailed planning report.

If your municipality fails to provide zoning for adult uses, it had better be able to show that alternative avenues of communication exist.

In Borough of Sayreville v. 35 Club, L.L.C [v],  Sayreville, smartly suggested that the internet might provide the necessary alternative avenue of communication.  But, the Appellate Division soundly rejected that notion, at least as to live nude dancing.    The 35 Club LLC., was doing business as “The Gentleman’s Club,” serving up live erotic dancing.   The Law Division held a six-day bench trial, and once again found N.J.S.A. 2C:34-7 to be valid, but found its application under Sayreville’s Ordinance to be unconstitutional, because this use was not permitted anywhere within the Borough.  Sayreville had relied heavily upon the New Jersey Supreme Court Decision in Saddle Brook v. A.B. Family Center[vi].  The Court in Saddle Brook set forth the following requirements that must be met by a municipality, in order to refuse to grant an adult use within its borders:

  1. The municipality must be able to establish the relevant market area for proposed sexually oriented businesses;
  2. The municipality must show the availability of alternative sites within the relevant market; and
  3. Finally, the municipality must show that there are sufficient available sites in relation to the size of the market area, and that there are enough suitable alternative sites to satisfy the constitutional standards.

In the Saddle Brook case, the New Jersey Supreme Court had commented that the relevant market could include areas located in other municipalities, provided they are reasonably proximate.[vii]   In Sayreville, the Supreme Court suggested that the  municipal experts had failed to address regional marketing patterns, the availability of public transportation and access by automobiles, the geographical distribution of customers at comparable sexually oriented businesses, and other factors deemed relevant by the parties and the Court.   Applying these factors to the second and third of the three basic elements of the Saddle Brook test, the municipality must establish the relevant market and prove that alternative sites that provide alternate avenues of communication exist within that  market to withstand constitutional scrutiny.[viii]

In Sayreville the Appellate Decision commented:

We have never suggested that the First Amendment compels the Government to ensure that adult theaters, or any other kinds of speech-related businesses for that matter, will be able to obtain sites at bargain prices.[ix]

Nonetheless, the Appellate Division found that Sayreville had failed to adequately zone for this use and that its expert report had not adequately justified exclusion of the adult oriented business in question.  In discussing alternative sites, and whether to include New York or Philadelphia, a majority of the panel felt that a municipality could not consider other states’ adult uses in their analysis.  There was a dissent in which Judge Skillman expressed the opinion held by many municipal leaders that a local community should be free to eliminate a particular form of expression, so long as that form is available in an area reasonably nearby.[x]  The appeal as of right is currently pending in the Supreme Court and is awaiting oral argument.[xi]  It may provide some further guidance when decided.                                                                                    

The two leading Federal cases cited in all of these cases are Renton[xii] and Dade[xiii], both of which are communities with a large land masses and significant populations.  Renton has approximately 90,927 people over a 17.3 square mile area[xiv]; and Miami/Dade County has close to 433,136 people living in a 35.68 square mile area[xv].  It is possible that in New Jersey the Courts, by requiring smaller communities to provide for adult entertainment uses, may be construing Renton too narrowly.  For instance, Fairfield has a population of just about 7,063 people with a land mass of 10.4 square miles, half of which is in a flood hazard zone and is undevelopable[xvi].  Gloucester City has 11,456 people over a 2.8 mile area[xvii].  In addition, New Jersey is densely populated and has a myriad of adult entertainment uses centrally located throughout the state.

In light of these decisions, a local community would be wise to evaluate its community’s adult entertainment uses, those in neighboring communities, and the current zoning.  With the loss of the time of decision rule, the municipality cannot wait until an adult use looms.  If the community chooses to be proactive, its planner should create a matrix by measuring 1,000 feet from any church, school, bus stop, playground, public resort, hospital, child care facility, or any area zoned for residential use.  What will be left are the places in which an adult use could be located, without violating N.J.S.A. 2C:34-7.  This way, provided it is in the range of 1% to 5 % of the community, the ordinance can channel these uses to less intrusive locations.  It would be best to establish these uses as conditional uses in any zones established for adult entertainment businesses.

If a municipality fails to zone for adult entertainment uses, then an adult bookstore or a nude juice bar could wind up being located virtually anywhere within the community, even on Main Street or next to a house of worship.

Finally, the municipality may be able to argue that a neighboring town provides the constitutionally required alternative avenue of communications; but remember, the burden of proof will be squarely on the municipality.  A highly qualified planner will be needed to draft a substantial and well documented report to support the municipal argument.

Any municipality with the vision to deal with this issue must establish, from serious and competent evidence, what the relevant market is.  And, while the internet may not be the alternate avenue of communication for live erotic dancing, the Courts may yet find it to be sufficient for adult novelties, movies and literature.

[i] MAG Realty, LLC d/b/a Cheerleaders Too v. City of Gloucester City, Slip Copy, 2010 WL 3210441, D.N.J.,2010. August 12, 2010

[ii] 198 N.J. 242, 966 A.2d 1036 (2009)

[iii]  DEG v. Fairfield, at page 258/1045, Citing, City of Renton v. Playtime Theaters, Inc., 475 U.S. 41, 47-48, 106 S. Ct. 925, 928-929 (1986)

[iv]  DEG v. Fairfield, at page 258/1045

[v] 416 N.J.Super. 315, 3 A.3d 126 (App.Div.,2010)

[vi] Township of Saddle Brook v. A.B. Family Center, Inc., 156 N.J. 587, 722 A.2d 530 (1999)

[vii]  Citing the Appellate Court decision at 307 N.J.Super. 16, 33 (App.Div. 1998)

[viii]  Borough of Sayreville v. 35 Club, LLC, 416 N.J.Super. 315, 324, 3 A.3rd 1268, 1273 (App.Div. 2010)

[ix] Borough of Sayreville v. 35 Club, LLC, 416 N.J.Super. 315, 326, 3 A.3rd 1268, 1274 (App.Div. 2010)

[x] Justice Skillman, P.J.A.D. concurring and dissenting, stated that the Saddle Brook determination of the adequacy of available alternative sites for the conduct of sexually-oriented businesses should be determined on a regional basis without suggesting that the region must be confined to this State.   Justice Skillman did not endorse a reading of this alternative to be limited to regulation of the form of expression within the boundaries of the same political subdivision.    Borough of Sayreville v. 35 Club, LLC, 416 N.J.Super. 315, 324, 3 A.3rd 1268, 1273 (App.Div. 2010).

[xi] http://www.judiciary, state.nj.us/calendars/sc_appeal.htm (last visited 7/7/2011)

[xii] Renton v. Playtime Theaters, Inc., 475 U.S. 41, 106 S. Ct. 925 (1986)

[xiii] University Books and Videos, Inc. v. Miami-Dade County, 132 F. Supp. 2d 1008, 1014 (S.D. Fla. 2001).

[xiv] Renton, Washington; http://en.wikipedia.org/wiki/Renton_Washington

[xv] Miami; http://en.wikipedia.org/wiki/Miami

[xvi] Fairfield Township, Essex County, New Jersey; http://en.wikipedia.org/wiki/fairfield_Township,_Essex_County,_New_Jersey

[xvii] Gloucester City, New Jersey; http://en.wikipedia.org/wiki/Gloucester_City,_NJ