Regulating Dick and Jane: First Amendment issues in SRE Real Estate vs. The City of Sturgis

Court case: The City of Sturgis denied the certificate of occupancy to Dick and Jane’s, pointing out its operation as an adult-themed business within one-fourth mile of residences, violating state law. Photo by Tom Baloun.

Court case: The City of Sturgis denied the certificate of occupancy to Dick and Jane’s, pointing out its operation as an adult-themed business within one-fourth mile of residences, violating state law. Photo by Tom Baloun.

by Ben Orsbon, FAICP, Pierre, South Dakota

A recent federal case in South Dakota has focused planners’ attention on regulating businesses consistent with the freedom of speech provisions of the First Amendment and emphasized the importance of language clarity.

The case focused on whether the statutory phrase “one of its principal business purposes” was specific enough to allow an adult business owner to identify prohibited conduct. The court held to avoid First Amendment due process problems both the administrator of the regulations and the entity subject to those regulations should understand what is disallowed.

SRE Real Estate wanted to open Dick and Jane’s of Sturgis, South Dakota. The proposed establishment would have sold some items that would have been an adult oriented business as defined by state law and a city ordinance requiring new businesses to obtain a certificate of occupancy illustrating compliance with municipal requirements.

The state statute imposes a spacing requirement that prohibits any adult oriented business from locating within one-fourth mile of a child welfare agency, a private or public school, a public playground, a public recreational facility, a residence, or a place of worship. The statutory definition of an adult oriented business lists a series of rent or sales items that depict the adult orientation of the business as one of its principal business purposes. Unfortunately, the statute does not define the term “principal business purposes.”

The proprietor of Dick and Jane’s stated that the adult component of the business, providing less than 50 percent of the inventory, would not be the principal business purpose. The business owner estimated 25-30 percent of his projected sales might come from products covered under state law.

The city denied the certificate of occupancy and linked its code decision to the state law regulating adult oriented businesses. The basis for denial was that Dick and Jane’s would be operating as an adult-themed business in violation of SDCL § 11-12 and the city noted there were “several residence[s] located within the one-fourth mile requirement.”

In a letter to the city, the legal counsel for Dick and Jane’s asserted the city had wrongly denied a certificate of occupancy. The letter requested the city to perform a visual inspection, to articulate its reasoning, and to provide the business with an opportunity to comply. The city did not conduct a further inspection nor did it provide Dick and Jane’s with any guidance on how to comply with state law to the city’s satisfaction. Instead, the city’s attorney suggested the owner of Dick and Jane’s bring a declaratory judgment action to have the state court decide whether Dick and Jane’s was in violation.

The attorney for Dick and Jane’s filed a complaint in federal district court arguing the regulations were unconstitutional on their face and as applied under the First and Fourteenth Amendments of the United States Constitution.

The court agreed. A summary of the judge’s opinion and reasoning follows.

  • The issue at the core of the legal challenge is the vagueness of the statute. Enforcement is left to the personal predilections of those officially empowered to enforce it. “How will the business know how to comply?” the court asked.
  • The United States Supreme Court has stated that laws should give the person of ordinary intelligence a reasonable opportunity to know what is prohibited so that unlawful conduct can be avoided. Also the law should be clear so that it can be administered consistently and not arbitrarily. Both the administrator of the law and the person subject to the law must understand the conduct prohibited.
  • Furthermore, the phrase “one of its principal business purposes” provides no clear guidelines to those charged with enforcing the statute and thus impermissibly delegates to them “basic policy matters...for resolution on an ad hoc and subjective basis, with the attendant dangers of arbitrary and discriminatory application.”

The judge granted a summary judgment to Dick and Jane’s in its favor. The judge suggested a remedy. The phrase “principal business purposes” needs to be defined in terms of a certain percentage of adult inventory, a percentage of gross sales of adult material, an amount of floor space dedicated to adult material, a combination of these, or some other way. The phrase needs a definition from the city, the legislature, and South Dakota state courts.

To address the results of the judge’s decision, the Sturgis City Council will consider a draft ordinance this summer that would create a zone for adult uses. According to Sturgis City Manager, Daniel Ainslie, the zone would provide spacing between adult uses and other uses such as churches and schools if approved by the council.

Please keep this case in mind when planning or regulating any activity associated with speech content or for that matter, any prohibited activity. Try to make the prohibited activity clear to both the enforcer and the person that must comply with the regulation or law.


Ben Orsbon, FAICP, serves as a special assistant to the Secretary for Policy and Legislation, in the South Dakota Department of Transportation. He served on the board and is a founder of Western Planning Resources Inc.


Endnotes

  1. SRE REAL ESTATE, LLC, a South Dakota Limited Liability Company; and DICK AND JANE’S OF STURGIS, LLC, a South Dakota Limited Liability Company vs. CITY OF STURGIS, a Municipal Corporation and STATE OF SOUTH DAKOTA, CIV. 10-5064, (D.S.D.March 8, 2013)
  2. South Dakota Codified Law (SDCL) Chapter 11-12; Sturgis Ordinance § 2.03.13. Sturgis, a community in South Dakota’s Black Hills, is known for its annual motorcycle rally.

Published in July/August 2013

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