N W Enterprises Inc v. The City of Houston

Opinion

United States Court of Appeals Fifth Circuit F I L E D REVISED JUNE 3, 2004 May 28, 2004 UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT Charles R. Fulbruge III _______________________ Clerk

No. 98-20255 _______________________

N.W. ENTERPRISES INCORPORATED; AMETHYST ENTERPRISES INC; CAMPUS INVESTMENTS INCORPORATED; 1431 WEST 18TH, INC.,

Plaintiffs - Appellees,

FTU INC.; DAJO INC.; ICE EMBASSY INC.; TEXAS RICHMOND CORPORATION; ANDREA STAFFORD; FRANK I. KENT; NAOMI L. PARRISH; ANN MARIE HASSELBACH; JEANNE L GRIGSBY; SUSAN BOYLE; DANA LYNN THOMAS; KIMBERLY ANN DUSHMAN; MICHELLE HADLEY; COLLEEN CLOER; LEAH MARIE WILSON; CARLA K. EATON; CHERYL THOMPSON; ROBERT G. FUREY; HFR ENTERPRISES, INC.; ANDREA HILL; GINA OLIVER; HEATHER WELDIN; CHARISMA BARRY; DONNA SOTO; ANDREA ALLBRIGHT MARCO; AHD HOUSTON INC., a Texas Corporation d/b/a Centerfolds; DNW HOUSTON, INC; PARABAR CO, doing business as Paradise Club; JANE DOE ONE, Applicants; JANE DOE TWO, Applicants; DEE & DEE ENTERPRISES, INC.; 9924 I-45 NORTH, INC.; HI-HOUSTON, INC.; CHARLES WESLEY, INC.; CHIL SOUNG, INC., doing business as BJ's 24 Hour Newsstand; DARIS, INC., doing business as Riveria Cabaret; GNCD, INC., doing business as Fantasy South; RUDE DOG II, INC., doing business as Scores Cabaret; LONE STARR MULTI THEATRES, INC., doing business as Cinema West; AVW, INC., doing business as Adult Video Megaplexxx; CLMS, INC., doing business as 24 Hour Video & News; C-SNAP, INC., doing business as Interludes; EAST BAY, INC., doing business as East Tex 24 Hour News & Video, doing business as Hempstead Adult Bookstore, none, doing business as XTC Cabaret Center; TNT SERVICES, INC., doing business as Xcalibur; 9834 JENSEN, INC., doing business as Harlem Knights; 8503 NORTH FREEWAY, INC., doing business as Fantasy Cabaret; CORPORATE CLUBS OF TEXAS, INC., doing business as Fantasia I XTC; US CLUBS, INC., doing business as Fantasia III XTC; XTC CABARET, INC., doing business as XTC; DHL INC., doing business as Executive XTC; CHERIE FELDMAN, doing business as Executive Playmates; EVE ENTERPRISES, INC., doing business as Club Royale; LONG TRAN, doing business as Ellington Newsstand; NIEN X. NGUYEN, doing business as DT Video; WMF INVESTMENTS, INC., doing business as Chesapeake Bay; AKM, INC., doing business as Gigi's Cabaret; DHR, INC., doing business as Hi-10 Cabaret; PANAH, INC., doing business as Mirage Cabaret; R & R ENTERTAINMENT, INC., doing business as Moments Cabaret; SSD ENTERPRISES, INC., doing business as Ritz Cabaret; HHE, INC., doing business as Passion Cabaret; F & R CLUB, INC. doing business as Silk Bar & Grill Cabaret; ATCOMM SERVICES, INC., doing business as Broadsteets; HOUMAN SHAGHAGI, doing business as Foxxy's Cabaret; SOUTHEAST TEXAS VENTURES, A TEXAS JOINT VENTURE, doing business as The Trophy Club; KMRC, INC., doing business as LaChatte; ARIS MYLONAS, doing business as Baby Dolls Saloon; MK CLUB & RESTAURANTS, INC., doing business as Moulin Rouge; 10128 TDC 1, INC., doing business as Texas Dolls Cabaret; SOUTHWEST CLUBCO, INC., doing business as Playmates; DUNCAN BURCH, INC., doing business as Michael's International; OBSESSION CABARET, INC., doing business as Obession Cabaret; NORMAN R. GLENN, doing business as West Mt. Houston Newsstand, doing businessas Far West News, doing business as Highway 6 Newsstand; JAMES DREW, doing business as Gold Touch Stress Clinic and Velvet Touch Stress Clinic; PETE CASERLY, doing business as Northwest News; A TO X VIDEO, doing business as Pacific Management Enterprises; HUGHES & ST. CLAIR, INC., doing business as Pacific Management Enterprises; QUASAR INTERNATIONAL, INC., doing business as Pacific Management Enterprises; VIDEO NEWS, INC., doing business as Pacific Management Enterprises; CHUCK WESLEY, doing business as Pacific Management Enterprises; CHUCK WESLEY, INC., doing business as Northwest News; JACOB BORENSTEIN, doing business as Northwest News; 12851-59 WESTHEIMER, INC.; 608 WEST MT. HOUSTON, INC.; GINO A. BARONE, doing business as Ban Management Co., also known as Consolidated Video, doing business as Hillcroft News & Video, doing business as Telephone Road News & Video; HEAVEN VIDEO & NEWS; AIRLINE VIDEO AND THAI COMPANY; CITY WIDE GROUP, INC., doing business as Studz News; ANS, INC. DBA LONE STAR NEWS, doing business as Lone Star News, NORTHSTAR, INC. DBA NORTH FREEWAY NEWS; NORTHEAST, INC. DBA GULF FREEWAY NEWS, doing business as Gulf Freeway News; EASTEX 24-HOUR NEWSSTAND; G. W. ROGERS; R. GLASS; G. HUMPHREY; D. L. STONEHAM; L. J. PUTTERMAN; M. ROBERTS; V. L. AUZSTON; J. J. LANGEN; H. PEREZ; A. LUCKE; Y. HINOJOSA; A. N. MCMILLEN; B. WEBB; R. STERNES; S. MONGONIA; K. MARTIN; N. ROBERTS; V. GOBEA; D. QUICK; K. WARREN; R. SANCHEZ; S. JUREK; N. ESPINOZA; C. EMERY; K. MARTIN; C. COMBS; J. DAMPIER; W. KALINOWSKI; J. CRENSHAW; L. M. BATES; H. MACTAVISH; T. DOVE; E. CASTILLO; K. K. HANNAN; C. J. SHARPE; A. A. COOK; N. BAILEY; T. R. KING;

2 L. B. MEAGHER; N. HENRY; A. BAILEY; D. DODSON; J. SUAREZ; A. N. MCMILLAN; K. ROSENBERRY; C. GARCIA; M. FISHER; D. M. MUENZLER; T. J. OAKLEY; D. CARSWELL; A. KELLY; T. WESTERN; K. A. RADAR; L. PHILLIPS; T. JONES; A. GIBSON; G. PIERCE; N. NEUENFELDT; T. ALLEN; S. L. WHITTNEBURG; P. A. BUFFIN; C. VAUGHN; T. L. ALDAPE; S. Y. NORENO; L. TAUAREZ; T. DARDAS; N. BARRY; T. STANDRIDE; J. D. BURDEN; S. S. SALAZAR; H. L. LOCOCO; S. BRADY; S. NNOLI; E. I. STREET; D. JORGENSON; D. G. LEWIS; P. Z. GERMAN; J. M. ROGERS, J.R.; B. TEMPLEMIRE; R. DUNCAN; J. EASTERWOOD; J. C. ACRES; W. TEMPLEMIRE, JR.; TRUMPS, INC., doing business as Rick's Cabaret, A Texas Corporation; ANDREW SEFIA, doing business as Rumors, and others similarly situated; D. HOUSTON, INC., doing business as Treasures, a Texas Corporation S.E. MANAGEMENT, INC., doing business as Northshore Video and News, JEANA WILEY, Operator of Southeastern Management; NORMAN S. HARRISION,

Intervenor Plaintiffs - Appellees-Cross-Appellants,

ELGIN INVESTMENT COMPANY, LTD, doing business as French Quarter Theater; KQ INVESTMENTS, doing business as Amenity Caberet; MARK THAI DO; doing business as Dong Kyong Modeling Studio; DSSS ARIA MERICA, INC., doing business as Solid Platinum, a Texas Corporation; MARKETING ORGANIZATION OF AMERICA, INC., doing business as Exclusive Tanning, a Texas Corporation; BUDGET DISTRIBUTORS, INC., doing business as Franc's of Beverly Hills, a Texas Corporation; MICHAEL D'S RESTAURANT, INC., doing business as Houston Salon & Fitness Center, doing business as Texas Health Salon, a Texas Corporation; LE CRAZYHORSE CABARET ASTRODOME, INC., doing business as Malibu Resorts, doing business as Sensational Impressions, a Texas Corporation; EPZ TRADING COMPANY, doing business as Texas Health Salon, a Texas Corporation; DEUX SOEUR ENTERPRISES, INC., doing business as Native Tan, a Texas Corporation; LIMERICK, INC., doing business as Video Specials, a Texas Corporation; YOU’RE A TO X VIDEO OUTLET, INC., a Texas Corporation,

Intervenor Plaintiffs - Appellees,

v.

CITY OF HOUSTON,

Defendant - Appellant-Cross-Appellee.

3 _______________________

No. 98-20885 _______________________

N. W. ENTERPRISES INCORPORATED; AMETHYST ENTERPRISES, INC.; CAMPUS INVESTMENTS INCORPORATED; 1431 WEST 18TH, INC.;

Plaintiffs - Appellees-Cross-Appellants,

FTU INC.; DAJO, INC.; ICE EMBASSY, INC.; TEXAS RICHMOND CORPORATION; ANDREA STAFFORD; FRANK I KENT; AHD HOUSTON, INC., a Texas Corporation d/b/a Centerfolds; DNW HOUSTON, INC.; PARABAR CO, doing business as Paradise Club; JANE DOE ONE, Applicants; JANE DOE TWO, Applicants; DEE & DEE ENTERPRISES, INC.; 9924 I-45 NORTH, INC.; HI-HOUSTON, INC.; CHARLES WESLEY, INC.; D HOUSTON, INC., doing business as Treasures, a Texas Corporation; HFR ENTERPRISES, INC.; ANDREA ALLBRIGHT MARCO; NAOMI L. PARRISH; ANN MARIE HASSELBACH; JEANNE L. GRIGSBY; SUSAN BOYLE; DANA LYNN THOMAS; KIMBERLY ANN DUSHMAN; MICHELLE HADLEY; COLLEEN CLOER; LEAH MARIE WILSON; CARLA K. EATON; ANDREA HILL; GINA OLIVER; HEATHER WELDIN; CHARISMA BARRY; DONNA SOTO; CHERYL THOMPSON; ROBERT FUREY,

Intervenor Plaintiffs - Appellees-Cross-Appellants,

and

CHIL SOUNG, INC., doing business as BJ's 24 Hour Newsstand; ET AL (referred to as Chil Soung Appellants),

Intervenor Plaintiffs - Appellees-Cross-Appellants,

KQ INVESTMENTS, doing business as Amenity Cabaret; MARK THAI DO, doing business as Dong Kyong Modeling Studio; NORMAN S. HARRISON; DSSS ARIA MERICA, INC., doing business as Solid Platinum, a Texas Corporation; MARKETING ORGANIZATION OF AMERICA, INC., doing business as Exclusive Tanning, a Texas Corporation; BUDGET DISTRIBUTORS, INC., doing business as Franc's of Beverly Hills, a Texas Corporation; MICHAEL D'S RESTAURANT, INC., doing business as Houston Salon & Fitness Center, doing business as Texas Health Salon, a Texas Corporation; LE CRAZYHORSE CABARET ASTRODOME, INC., doing business as Malibu Resorts, doing business as Sensational Impressions, a Texas Corporation; EPZ TRADING COMPANY, doing business as

4 Texas Health Salon, a Texas Corporation; DEUX SOEUR ENTERPRISES, INC., doing business as Native Tan, a Texas Corporation; LIMERICK, INC., doing business as Video Specials, a Texas Corporation; YOU’RE A TO X VIDEO OUTLET, INC., a Texas Corporation; ELGIN INVESTMENT COMPANY, LTD, doing business as French Quarter Theater,

Intervenor Plaintiffs - Appellees,

v.

CITY OF HOUSTON,

Defendant - Appellant-Cross-Appellee.

Appeals from the United States District Court for the Southern District of Texas _________________________________________________________________

ORDER ON REHEARING (Opinion 11/25/03, 5th Cir., 352 F.3d 162)

Before GARWOOD, JONES, and STEWART, Circuit Judges.

PER CURIAM:

The court, having carefully considered the petitions for

rehearing and rehearing en banc filed on behalf of sexually

oriented businesses and entertainers in this case, GRANTS them IN

PART and DENIES IN PART as follows:

1. We agree with the argument of FTU appellees that the

district court lacked jurisdiction to enter an order of

reconsideration in August 1998, partially reversing the injunctive

relief that it granted on February 18, 1998, because this court had

already obtained appellate jurisdiction over the same issues

5 through the City’s timely filed notice of appeal. The specifics of

this jurisdictional reasoning need not be related here.

Because FTU is correct, it follows that the introductory

paragraph of Section IV and a part of IV.C of the panel opinion,

see 352 F.3d at 192, 196-97, must be vacated only to the extent

that those discussions appear to “affirm” the district court

decision, entered on reconsideration, which upheld the requirement

that SOB entertainers wear and conspicuously display a city-issued

identification card while performing. Instead, the proper

disposition is that we REVERSE the court’s earlier-issued

injunction against enforcement of that requirement. See N.W.

Enterprises, Inc., et al. v. City of Houston, 27 F.Supp 2d 754 at

848-50 (S.D. Tex. 1998) (striking the provision). We REVERSE, and

VACATE the injunction, because that provision of the Ordinance,

viewed under a standard of intermediate scrutiny, is narrowly

tailored to serve a substantial governmental interest in ensuring

that all entertainers are properly licensed and that their

licensure can be ascertained without interrupting the performances.

More precisely, we concur that “an important goal of the new

Ordinance was to allow police officers to enforce the law in adult

businesses from a distance, without having to get themselves

involved in illegal activity.” See 27 F.Supp 2d at 908. We uphold

this aspect of the Ordinance essentially for the reasons stated by

6 the district court in its (ineffective) reconsideration order. See

27 F.Supp 2d at 907-09 and 914-17.1

2. In all other respects, the Petitions for Rehearing are

DENIED, and no member of this panel nor judge in regular active

service on the court having requested that the court be polled on

Rehearing En Banc* (FED. R. APP. P. and 5TH CIR. R. 35), the Petitions

for Rehearing En Banc are also DENIED.

*Judge Smith did not participate in the consideration of the

Petitions for Rehearing En Banc.

1 FTU additionally argues that before upholding this provision, we ought to permit further briefing, as this precise issue was not briefed on the merits on appeal. At this point, given the hundreds of pages of briefing already presented to this court, and the incredibly thorough briefing before and reasoning of the district court in the case, including on this precise issue, further substantive briefing would be a waste of time.