Ninth Circuit Upholds Denial of License for Las Vegas Adult Bookstore

In Baby Tam & Co. v. City of Las Vegas, 2001 WL 422582, the Ninth Circuit Court of Appeals decided the third appeal involving Baby Tam & Co.’s, quest for a license to operate an adult bookstore in the City of Las Vegas. In the first appeal, the Court of Appeals prevented Las Vegas from denying a license as long as Las Vegas’ licensing and zoning ordinance failed to provide for a prompt judicial hearing and decision on denial of a license. After Las Vegas attempted to remedy the problems with the ordinance, Baby Tam appealed the denial of a license. Again, the Court of Appeals found the licensing ordinance defective because it did not set a time limit within which an application for a license must be acted upon. Once again, Las Vegas amended its ordinance to cure the defect, which resulted in Baby Tam having to close its store. Baby Tam again appealed.

In this third appeal, Baby Tam argues that, once Las Vegas’ licensing scheme was found to be unconstitutional in the first appeal, it was entitled to a license and Las Vegas could not use the amended ordinance to take away its license. The Court of Appeals rejected this argument, noting that Baby Tam presented no authority to support its argument that a zoning ordinance may not prohibit a use in existence before enactment of the ordinance. The Court held that, to the contrary, city zoning may “eliminate features of the landscape that pre-existed the zoning code and have been found objectionable under it.”

The Court also rejected Baby Tam’s argument that the new licensing scheme is unconstitutional because it would allow the Director of the Department of Finance and Business Services to “stall” in deciding whether the required fees have been paid. However, according to the Court, the ordinance does not give the Director discretion; therefore, the he cannot “stall” or “procrastinate.”

The Court next rejected Baby Tam’s free speech arguments. Baby Tam argued that the first semiannual license fee is a tax levied in advance of the exercise of speech. The Director arrives at the amount of the first semiannual license fee based on the cumulative average semiannual license fee paid by other businesses in the same industry. According to the Court, the license fee falls on all businesses in Las Vegas, is not imposed on the exercise of free speech, and does not burden free speech because it is minimal. Furthermore, the requirement that licensed businesses list the owner of the business does not have a chilling effect on freedom of expression, because, contrary to Baby Tam’s argument, businesses are not required to list stockholders.

Even though Las Vegas’ licensing scheme requires the person seeking a license to request a judicial hearing rather than providing a hearing without a request, the Court found the licensing scheme constitutional. According to the Court, under the licensing scheme, Las Vegas does not pass judgment on the content of any protected speech and does not deter businesses from challenging a decision that suppresses speech.

Finally, the Court rejected Baby Tam’s challenge to the ordinance on the ground that it was vague and gave too much discretion to Las Vegas regarding the definition of “adult” materials. The ordinance specifically spells out the sexual acts, the parts of the human body, and the sexual toys that are considered “sexual.”

The Court concluded that the amended licensing scheme was valid and that Baby Tam had not shown that it was entitled to a license as an adult bookstore.