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7th Circuit rejects Hustler Hollywood’s zoning denial appeal

May 8, 2018

An adult entertainment business cannot set up shop at its desired Indianapolis location after the 7th Circuit Court of Appeals upheld a city ordinance that prohibits such businesses from operating in certain zoning districts.

When HH-Entertainment, Inc. decided to open one of its Hustler Hollywood adult retail stores in Indianapolis, the company selected commercial property at 5505 E. 82nd St. as its preferred location. The property in Castleton is separated from a Chuck E. Cheese’s restaurant by a driveway and, notably, is located in a C-3 zoning district, where “adult entertainment businesses” are prohibited without a variance. But based on conversations with city officials about proposed ordinance revisions, HH-Indianapolis, LLC entered into a 10-year lease on the property in July 2016.

However, the Department of Business and Neighborhood Services put HH’s permits on hold after it reviewed the company’s inventory and determined it was either an adult bookstore or adult service establishment. The DBNS specifically found that HH was engaged in “‘(t)he sale or display’ of media ‘characterized by an emphasis upon the depiction or description of specified sexual activities or specified anatomical areas’” and “the presentation of such media for observation by patrons.”

Hustler Hollywood appealed to the Board of Zoning Appeals, but after hearing opposition from local residents and a city councilor, the BZA unanimously upheld the decision to put the permit on hold. HH then filed a lawsuit alleging an as-applied challenge to its classification as an adult entertainment business and facial vagueness and overbreadth challenges to the definition of an “adult service establishment” under the Indianapolis-Marion County Zoning Ordinance, as well as Equal Protection and state law claims.

The company sued, seeking declaratory and injunctive relief, but the Indiana Southern District Court denied its motion after finding it was unlikely to succeed on the merits of its First Amendment or Equal Protection claims. The court also found HH had not alleged an irreparable injury in its state law claim.

The 7th Circuit Court of Appeals agreed with that analysis in HH-Indianapolis, LLC v. Consolidated City of Indianapolis and Marion County, Indiana, et al., 17-3023. Judge William Bauer wrote Monday that the ordinance does not prohibit HH from exercising free speech, but rather holds that HH cannot exercise that speech in a C-3 commercial district.

“Unquestionably, the City has provided HH with reasonable alternative avenues of communication in a number of other commercial districts, a fact HH does not dispute,” Bauer wrote. “… Moreover, HH does not dispute that the Ordinance is ‘content-neutral,’ or that the City’s interest in reducing the secondary effects of adult businesses, codified at length in the Ordinance, is a sufficient or substantial interest.”

HH also argued there was insufficient evidence to support the city’s ruling that it is an “adult entertainment business,” but Bauer said that question was better suited for state court.

 “That evidentiary issue does not present a First Amendment violation, nor does it justify the issuance of a preliminary injunction,” he wrote.

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