Boardroom Entertainment MKE LLC v. City of Milwaukee

Filing 25

ORDER signed by Judge Rudolph T. Randa on 1/20/2016 DENYING 19 Defendant's Motion for Judgment on the Pleadings. (cc: all counsel) (cb)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

BOARDROOM ENTERTAINMENT MKE, LLC,
Plaintiff,
-vs-

Case No. 15-C-53

CITY OF MILWAUKEE,
Defendant.

DECISION AND ORDER
Plaintiff Boardroom Entertainment MKE, LLC (Boardroom) filed
this civil rights action pursuant to 42 U.S.C. § 1983 alleging that
Defendant

City

of

Milwaukee’s

(Milwaukee)

ordinances

requiring

Boardroom to obtain a public entertainment license prior to offering adult
entertainment at 730 North Old World Third Street, Milwaukee, Wisconsin
(the property) violate the First and Fourteenth Amendments.

This

Decision and Order addresses Milwaukee’s motion pursuant to Fed. R. Civ.
P. 12(c) for judgment on the pleadings dismissing the action for failure to
state a claim. (ECF No. 19.)
Portions of challenged ordinances have been amended since the
filing of this action, so any disputes over the version of those ordinances in
effect at the time this action was filed have been mooted. See MacDonald

v. City of Chi., 243 F.3d 1021, 1025 (7th Cir. 2001). Instead, the Court
addresses the current versions and has taken judicial notice of the
Ordinances as amended.1 See Driebel v. City of Milwaukee, 298 F.3d 622,
630 n.2 (7th Cir. 2002) (taking judicial notice of portions of the Milwaukee
Police Department Manual of Rules and Regulations); see also Newcomb v.
Brennan, 558 F.2d 825, 829 (7th Cir. 1977); Demos v. City of Indianapolis,
302 F.3d 698, 706 (7th Cir. 2002) (“The judicial notice issue is settled,
because a district court can always rely on public statutes”). Thus, the
Court has disregarded the affidavit of Assistant City Attorney Adam B.
Stephens (“Stephens”) with attached copies of Chapters 108 and 85 of the
Milwaukee ordinances regarding public entertainment premises and
regarding license and permit procedures, respectively. (ECF No. 23, 23-1,
23-2.)

1 In order for a fact to be subject to judicial notice, it must be one “not subject to
reasonable dispute because it (1) is generally known within the trial court’s territorial
jurisdiction; or (2) can be accurately and readily determined from sources whose
accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). Courts strictly adhere
to these criteria because “the effect of taking judicial notice under Rule 201 is to
preclude a party from introducing contrary evidence and, in effect, directing a verdict
against him as to the fact noticed.” Gen. Elec. Capital Corp. v. Lease Resolution Corp.,
128 F.3d 1074, 1083 (7th Cir.1997) (citation omitted).

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Background
Boardroom’s Complaint alleges that the public entertainment
ordinances impose an unconstitutional prior restraint that violates the
First Amendment as applied to the states pursuant to the Fourteenth
Amendment.2 The Complaint further alleges that some portions of
Milwaukee Code of Ordinances (“MCO”) Chapter 108 violate the First
Amendment because they do not impose any time constraints on the
licensing decision.
Boardroom also alleges that various subsections of Chapter 108 are
vague and indefinite because: (1) they lack objective criteria for a license’s
issuance or denial; (2) they allow the license to be denied for reasons that
are arbitrary and capricious; (3) the hearing procedures allow Milwaukee
to introduce evidence on matters that are vague and indefinite; (4) the
conditions and standards that Milwaukee may impose on such licenses are
vague and vest unbridled discretion with Milwaukee; (5) the license
procedures do not provide for prompt judicial review; (6) the license scheme
fails to serve a substantial governmental interest and is not narrowly
The Fourteenth Amendment's Due Process Clause applies the First
Amendment's protections to the states. Ben's Bar, Inc. v. Vill. of Somerset, 316 F.3d
702, 707 (7th Cir. 2003).
2

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tailored to serve any such interest; and (7) the Milwaukee ordinances were
adopted with a predominantly censorial purpose and without any evidence
or factual basis indicating they serve a substantial governmental interest.
Boardroom also alleges that Milwaukee’s ordinances regulating public
entertainment fail to do so by the least restrictive means available, fail to
provide for adequate alternative avenues of communication, and are
unconstitutional on their face as applied to Boardroom.
Count one seeks declaratory judgment finding that the subject
ordinances are preventing Boardroom from commencing the operation of a
lawful business and are unconstitutional on their face and as applied.
Count II seeks a permanent injunction barring Milwaukee from applying
its unconstitutional ordinances against Boardroom in whole or in part.
Boardroom sought a temporary restraining order/preliminary injunction
which was denied because it had not addressed the bond requirement of
Fed. R. Civ. P. 65(c). (ECF No. 11.)
Standard for Judgment on the Pleadings
A Rule 12(c) motion will only be granted if the moving party is able
to demonstrate that there are no material issues of fact to be resolved. N.
Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 452 (7th
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Cir. 1998). Rule 12(c) motions are reviewed under the same standard as
Rule 12(b) motions, so the facts set forth in the Complaint are viewed in
the light most favorable to the non-moving party. Id.
The pleading must include more than mere legal conclusions or a
recitation of the cause of the action’s elements, but it does not require
detailed factual allegations. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007). The pleading must meet a plausibility threshold; mere possibility
is not enough. Id. at 570. Plausibility means there are enough facts in the
complaint for a reviewing court to draw a reasonable inference that the
pleader is entitled to relief. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).
Some pleaded facts must support the claim. Id.; McCauley v. City of Chi.,
671 F.3d 611, 616-17 (7th Cir. 2011); Swanson v. Citibank, N.A., 614 F.3d
400, 405 (7th Cir. 2010).
The complaint must set “forth facts sufficient to support a cognizable
legal theory.” Scherr v. Marriott Int’l, Inc., 703 F.3d 1069, 1073 (7th Cir.
2013). Judgment should be granted “only if it appears beyond doubt that
the plaintiff cannot prove any facts that would support his claim for relief.”
Buchanan-Moore v. Cnty. of Milwaukee, 570 F.3d 824, 827 (7th Cir. 2009).

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Relevant Facts3
Boardroom entered into a 29-year lease for the first floor of the
property, and it intends to operate a cabaret which will offer public
entertainment—including adult entertainmentthe retail sale of alcoholic
beverages, and the incidental sale of other items. Boardroom obtained a
license from Milwaukee to serve alcoholic beverages at the property.
On January 14, 2015, Boardroom opened for business, offering
alcoholic beverages pursuant to its liquor license. That day, eight to ten
Milwaukee police officers entered, walked through the entire property, and
told its manager that the business lacked the required paperwork for
operation.

This disrupted the business and disturbed Boardroom’s

customers.

Boardroom has not yet offered any entertainment at the

property.

However, Milwaukee, through Stephens, advised counsel for

Boardroom that it would close the business and revoke its liquor license if
Boardroom offers adult entertainment to the public.
There

are

several

licensed

Class

B

Tavern

and

Public

Entertainment Premises in Milwaukee wherein patrons may observe erotic

3 The relevant facts are based on the factual allegations of the Verified
Complaint, which are accepted as true, and the factual allegations of the Answer.

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dance entertainment while consuming alcoholic beverages. Three of these
locations are in or near downtown:

Art’s Performing Center, 144 East

Juneau Avenue; Solid Gold Gentlemen’s Club, 813 South 1st Street; and
Ricky’s on State, 2601 West State Street.
Analysis
Milwaukee maintains that Boardroom’s action should be dismissed
on its pleadings.

It states that its public entertainment premises

ordinance, contained in MCO Chapter 108, is a constitutional time, place
and manner restriction that regulates facilities open to the public in order
to reduce or avoid the common negative secondary effects those facilities
have on a surrounding neighborhood by attracting crowds of patrons.
Milwaukee cites Blue Canary Corp. v. City of Milwaukee, 251 F.3d 1121
(7th Cir. 2001) and Six Star Holdings, LLC & Ferol, LLC v. City of
Milwaukee, 932 F. Supp. 2d 941 (E.D. Wis. 2013).
Boardroom asserts that the subject ordinances are prior restraints
that violate the First Amendment as applied to the states pursuant to
Fourteenth Amendment. Boardroom does not describe the nature of its
intended adult entertainment.

However, the Supreme Court has found

that “nude dancing . . . is expressive conduct, although . . . it falls only
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within the outer ambit of the First Amendment’s protection.” City of Erie
v. Pap’s A.M., 529 U.S. 277, 289 (2000).
The parties’ positions arise from the history underlying the First
Amendment and the grave dangers of prior restraints on speech. “In the
England of Shakespeare’s day and indeed for centuries afterwards, a play
could not be exhibited in a theater without a license from the Lord
Chamberlain. That was a classic prior restraint.” Blue Canary Corp., 251
F.3d at 1123. As explained in Blue Canary,
“prior restraint” . . . mean[s] censorship—an effort by
administrative methods to prevent the dissemination of ideas
or opinions thought dangerous or offensive. The censor’s
concern is with the content of speech, and the ordinary
judicial safeguards are lacking. “Prior restraints” that do not
have this character are reviewed under the much more
permissive standard applicable to restrictions merely on the
time, place, or manner of expression. See, e.g., MacDonald v.
City of Chi., [243 F.3d 1021, 1031 (7th Cir. 2001)]; Thomas v.
Chi. Park Dist., [227 F.3d 921, 923-24 (7th Cir. 2000]. Permit
requirements are routinely imposed on the use of public
parks and other public spaces for expressive uses, including
entertainment and political demonstrations . . .
Id.
If an ordinance is content-based, it is evaluated under strict scrutiny
and is presumptively invalid.

On the other hand, if an ordinance is

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content-neutral,4 the less-demanding intermediate scrutiny standard will
be applied. See Bens Bar, 316 F.3d at 723; Foxxxy Ladyz Adult World, Inc.
v. Vill. of Dix, 779 F.3d 706, 711 (7th Cir. 2015).

A content-neutral

restriction must be narrowly tailored to serve a substantial state interest
while not unreasonably limiting alternative avenues of communication.
City of Renton v. Playtime Theatres, Inc., 475 U.S. 41, 47 (1986).
The text of the ordinance, any preamble or express findings of the
common council, and studies and information of which the members of the
common council were clearly aware are relevant in determining whether
the ordinance targets the content of the expression or the negative
secondary effects. Ben’s Bar, 316 F.3d at 723 n.28. While a municipality
need not conduct new studies or produce evidence independent of that
already generated by other cities, there still must be some reasonably
relevant evidentiary basis for a municipality’s action. See Joelner v. Vill.
of Wash. Park, Ill., 378 F.3d 613, 624 (7th Cir. 2004).
By chapter 108, Milwaukee intends to regulate public entertainment
which it defines broadly as:
The issues in this case were briefed before the Supreme Court issued its most
recent decision on content-neutrality, Reed v. Town of Gilbert, 135 S. Ct. 2218, 2228
(2015).
4

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[A]ny entertainment of any nature or description to which the
public generally may gain admission, either with or without
the payment of a fee. Any entertainment operated commercially
for gain by membership, season ticket, invitation or other
system open or offered to the public generally shall be deemed
to constitute a public entertainment. This definition includes
dances, dancing by patrons to prerecorded or live music,
dancing by performers for or without compensation, shows and
exhibitions provided for a fee including plays, skits, musical
revues, children’s theater, dance productions, musical
concerts, opera and the production or provision of sights or
sounds or visual or auditory sensations which are designed to
or may divert, entertain or otherwise appeal to members of the
public who are admitted to a place of entertainment, which is
produced by any means, including radio, phonograph, jukebox,
television, video reproduction, tape recorder, piano, orchestra
or band or any other musical instrument, slide or movie
projector, spotlights, or interruptible or flashing light devices
and decoration. . . .
Ordinance § 108-3 (Sept. 22, 2015) (Emphasis added).

The ordinance

regulates entertainment that is open to the public, without regard to the
message intended to be conveyed through the medium.
The Milwaukee common council has expressed its regulatory
purpose in the findings of MCO § 108-1:
[P]ublic entertainment premises promote urban vitality and
enrich people’s lives through artistic, cultural and recreational
entertainment. However, various public entertainment
premises can also be a source of excessive noise and litter, large
and unruly congregations of people, traffic and parking
congestion that adversely affect the surrounding neighborhood
and the health, safety and welfare of the people of the city.
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This chapter is established pursuant to the responsibility of
the common council to protect the freedom of speech and
expression guaranteed under the United States and Wisconsin
Constitutions, to legislate and license for the protection of the
health, safety and welfare of the people of the city and to avoid
or diminish the negative secondary effects that can result from
these operations.
(Emphasis added).

Chapter 108’s express purpose is to regulate public

entertainment in order to dodge or reduce its harmful secondary effects,
including

inordinate

noise

and

refuse,

unwieldy

and

disruptive

concentrations of people and traffic, and overcrowded parking.
When faced with such a legislative justification, the Court of
Appeals for this Circuit has “presume[d] that the government did not
intend to censor speech, even if the regulation incidentally burdens
particular instances of expressive conduct.” Foxxxy Ladyz, 779 F.3d at 711
(citations omitted). This ordinance may be upheld under the secondary
effects rationale. See Six Star Holdings, 932 F. Supp. 2d at 949.
Milwaukee suggests that the Court should uphold the secondary
effects findings at this stage of the proceedings, relying upon Six Star
Holdings. However, that non-binding district court decision was issued on
the parties’ motion for summary judgment and a more complete record.
Milwaukee must “produce some specific, tangible evidence establishing a
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link between the regulated activity and harmful secondary effects.”
Foxxxy Ladyz, 779 F.3d at 715.
The ordinance is not content-based and is evaluated under the
intermediate scrutiny standard. As in Blue Canary, 251 F.3d at 1123,
Boardroom’s contention that chapter 108 is a prior restraint is a “red
herring.” To determine whether an ordinance serves a substantial state
interest, the court examines the “quality and quantum of evidence” the
city relied on and whether that research reasonably links the regulated
activity to the adverse secondary effects. G.M. Enters., Inc. v. Town of St.
Joseph, Wis., 350 F.3d 631, 638-39 (7th Cir. 2003). A municipality can
rely on any relevant information, including judicial decisions, land use
studies, police reports, news articles, and affidavits of investigators. See
Ben’s Bar, 316 F.3d at 725 (upholding summary judgment finding that the
village’s evidentiary record of judicial decisions and studies and reports
from different cities fairly supported its rationale). “The First Amendment
does not require a city, before enacting such an ordinance, to conduct new
studies or produce evidence independent of that already generated by
other cities, so long as whatever evidence the city relies upon is reasonably
believed to be relevant to the problem that the city addresses.” City of
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Renton, 475 U.S. at 51-52. The regulating body is not required to rely on
research that targets the exact activity it wants to regulate. G.M. Enters.,
350 F.3d at 639.
Here, Milwaukee may properly rely on Blue Canary’s determination
that there was not “anything amiss in the City’s taking into account . . .
the character of the entertainment served with its drinks.” Blue Canary,
251 F.3d at 1123. Blue Canary held that Milwaukee’s impairment of First
Amendment values was slight to the point of being laughable, “since the
expressive activity involved in the kind of striptease entertainment
provided in a bar has at best a modest social value and is anyway not
suppressed but merely shoved off to another part of town, where it
remains easily accessible to anyone who wants to patronize that kind of
establishment.” Id. at 1124. Based on the analysis in Blue Canary, which
addressed a similar Milwaukee ordinance, the Court concludes that
Milwaukee has established a substantial governmental interest in
regulating the harmful secondary effects of public entertainment,
including

inordinate

noise

and

refuse,

unwieldy

and

disruptive

concentrations of people, and traffic and overcrowded parking. See also
Six Star Holdings, 932 F. Supp. 2d at 948.
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Lack of Time Constraints on Decision
Citing § 108-5.1-b, Milwaukee asserts that the public entertainment
permit ordinance is constitutional because it imposes time constraints on
the permit decision. As amended effective October 9, 2015, § 108-5.1-b
provides:
[T]he common council shall approve every application for a
new public entertainment premises license or for a deviation
from the type of entertainment specified on a previouslyapproved plan of operation within 60 days after the city clerk
certifies that the application is complete, unless the
application is denied in writing by the common council
following a licensing committee hearing conducted in
accordance with the procedures of ch. 85. The August common
council recess shall not be included when determining the 60day period. The 60-day provision shall not apply if the
application relates to a premises for which one or more other
licenses subject to the licensing procedures of ch. 85 are
sought or held, in which case the timeline set forth in ch. 85
applies.
(Emphasis added.) Milwaukee maintains that any license must be issued
within 60 days of completion of an application.
However, Milwaukee has not addressed the question of time
constraints on a decision when a hearing has been held and there is a
possibility of denial.

See Ordinance §§ 85-2.7; 85-5.

In particular,

Ordinance § 85-2.7-6 provides that the “committee may make a

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recommendation immediately following the hearing or at a later date.”
The ordinance does not place any temporal limitation when that “later
date” may occur. Live entertainment is an activity protected by the First
Amendment. See, e.g., Barnes v. Glen Theatre, Inc., 501 U.S. 560, 565-66
(1991).

An ordinance requiring persons to obtain a license before

exercising a First Amendment right must include a time limit for the
decision-maker to act. See FW/PBS, Inc. v. City of Dallas, 493 U.S. 215,
226-28 (1990); see also BC Tavern of Kenosha, Inc. v. City of Kenosha, No.
11-C-959, 2013 WL 592888, at *4 (E.D. Wis. Feb. 14, 2013) reconsideration
denied in part, 2013 WL 3879911 (E.D. Wis. July 26, 2013).

Thus,

Milwaukee has not established that it is entitled to prevail on a portion of
its motion.
Vagueness and Indefiniteness
Milwaukee contends that the public entertainment ordinance is not
vague or indefinite because it provides that the common council may
determine whether to approve a public entertainment premises license
application by the considerations set forth in § 108-5-3, including review of
the license applicant’s completed plan of operation pursuant to § 108-5-3b-7.

It states that the objectively reasonable criteria for the common
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council to weigh includes: hours of operation, number of proposed patrons,
the legal occupancy limit of the premises, the number of off-street parking
spots available at the premises, whether or not the premises will make use
of sound amplification equipment, details regarding security provisions,
and the license applicant’s plans to ensure orderly appearance relative to
litter and noise.
Boardroom counters that the ordinance is vague, citing the following
application requirements: § 108-5-3-b-7-g which requires disclosure of
plans as to “the orderly appearance and operation of the premises with
respect to litter and noise” and “a description of how applicable noise
standards will be met for the subject premises;” § 108-5-3-b-7-i which
requires a description, “with particularity, of the type of entertainment,
exhibition, music, dancing, singing, floor show or other performances to be
held on the premises, in order for the common council to determine
‘whether or not the applicant’s proposed operations are basically
compatible with the normal activity of the neighborhood in which the
licensed premises is to be located;’” and § 108-5-3-b-9 which allows “[s]uch
other reasonable and pertinent information the common council or the
proper licensing committee may from time to time require.”
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Boardroom also cites the following with regard to matters to be
considered at a licensing committee hearing:
the appropriateness of the location and premises where the
licensed premises is to be located and whether use of the
premises for the purposes or activities permitted by the license
would tend to facilitate a public or private nuisance or create
undesirable neighborhood problems . . . [t]he fitness of the
location of the premises to be maintained as the principal
place of business, including but not limited to whether there is
an overconcentration of businesses of the type for which the
license is sought, whether the proposal is consistent with any
pertinent neighborhood business or development plans, or
proximity to areas where children are typically present . . .
[a]ny other factors which reasonably relate to the public
health, safety and welfare.
(ECF No. 21 at 8.)
The parties are focusing on two different facets of the Ordinances.
Milwaukee focuses on the well-defined portions; Boardroom focuses on
those portions which include terms such as “basically compatible,”
“normal,” “reasonable,” “pertinent” “undesirable,” and “fitness” and allow
more discretion.
Milwaukee states that the Complaint selects various provisions and
labels them as vague and indefinite without explaining why Boardroom
believes those adjectives are accurate. A complaint is sufficient if it sets
“forth facts sufficient to support a cognizable legal theory.” Scherr, 703
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F.3d at 1073.

However, a complaint should only be dismissed if “it

appears beyond doubt that the plaintiff cannot prove any facts that would
support [its] claim for relief,” see Buchanan-Moore, 570 F.3d at 827.
Milwaukee has not analyzed the challenged provisions; therefore, its
motion for judgment on the pleadings as to the alleged vagueness of the
foregoing Ordinance requirements is denied.
NOW, THEREFORE, BASED ON THE FOREGOING, IT IS
HEREBY ORDERED THAT:
Milwaukee’s motion for judgment on the pleadings (ECF No. 19) is
DENIED.
Dated at Milwaukee, Wisconsin, this 20th day of January, 2016.

BY THE COURT:
__________________________
HON. RUDOLPH T. RANDA
U.S. District Judge

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