In SP Star Enterprises v. City of Los Angeles, (— Cal.Rptr.3d —, Cal.App. 2 Dist., April 28, 2009), a California Court of Appeal considered whether a city’s denial of a permit to an adult entertainment club that featured nude dancers, for the on-site sale and consumption of alcoholic beverages, violated the club owner’s right to free speech.
The court, while acknowledging that the denial of a permit to sell alcoholic beverages might harm the club’s profitability, ruled that it did not legally impede the club’s right to feature nude dancers. Therefore, the court found, the denial did not violate the club’s protected right to free speech, but merely blocked its non-protected right to sell alcoholic beverages.
SP Star Enterprises (“Star”) operated an adult entertainment club featuring nude dancing in the Little Tokyo area within the City of Los Angeles (“City”). Star applied to the City’s zoning administrator for a conditional use permit (“CUP”) to sell alcoholic beverages at the club. The zoning administrator approved the permit.
Operators of a temple and a mortuary in the area appealed the approval to the City’s Central Area Planning Commission (“APC”), which upheld the appeal, resulting in the denial of the CUP. Star filed suit and the trial court denied its petition. Star appealed.
Challenges to administrative actions affecting land use are subject to either of two standards of review depending on the nature of the right involved. If the administrative action affects a “fundamental vested right,” such as speech, the court exercises its “independent judgment.” But if no such right is involved, the court’s review is limited to examining the record to determine if the decision is supported by substantial evidence.
Here, the court determined, Star’s challenge did not involve a fundamental right. The impact of the denial of the CUP was “purely economic,” the court said. Star retained the right to operate an adult club offering nude entertainment. It was therefore not defending its right to engage in protected activity, but merely the right to sell alcohol for on-site consumption. Therefore, the substantial evidence test was the proper one, the court concluded.
The record showed ample evidence to support the APC’s conclusion that the approval of Star’s CUP would have a negative impact on the neighborhood. The evidence included the concerns of neighboring businesses, of law enforcement, and testimony that it would pose a threat to the character and integrity of the neighborhood.
Since no fundamental vested right was affected, the trial court’s review properly considered whether substantial evidence existed supporting the denial of the CUP. The court found the evidence suggested that it did and the trial court correctly dismissed Star’s petition. The judgment was affirmed.
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