104 West Washington Street II Corp. v. City of Hagerstown

KRAUSER, J. Appellant 104 West Washington Street II Corporation brought a declaratory judgment action in the Circuit Court for Washington County against the City of Hagerstown (“City”). The City’s “Adult Businesses Ordinance,” it claimed, violated appellant’s right to free speech under the First Amendment of the United States Constitution and Article 40 of the Maryland Declaration of Rights. The Ordinance required, among other things, that “certain adult-oriented businesses” in the City apply for and obtain licenses, limit their hours of operation, and ensure that their booths, cubicles and other enclosed areas for viewing adult videos were not completely closed. The complaint also included a claim against P.L. Smith, a Hagerstown police officer who had, it alleged, “threatened and intimidated” appellant’s employees for failing to comply with the terms of the Ordinance.

But this claim was later dropped, leaving the City as the only defendant. The City responded with a motion for summary judgment. The circuit court granted that motion in part, declaring that the Ordinance was “constitutional in every other respect” except for its failure to provide a time limit for issuing or ⁵⁵⁸ rejecting an adult business’s application for a license. The City promptly amended the Ordinance so that it included a time limit for issuing or denying an adult business license and renewed its motion for summary judgment.

That motion was granted in full, triggering this appeal. Appellant presents three issues for our review. As set forth in its brief, they are: I. Whether the circuit court erred in declaring the Ordinance constitutional, given the absence of any evidence in the legislative record, according to appellant, showing that the restrictions placed upon communication serve a significant state interest and that the Ordinance is narrowly drawn so as to render any incidental restriction upon freedom of speech no greater than necessary; II. Whether the circuit court erred in considering documents that the City provided in support of its motion for summary judgment because these documents, according to appellant, did not meet the affidavit requirements under the Maryland Rules; III.

Whether the circuit court erred in finding that the Ordinance was not an unconstitutional prior restraint of speech, despite its failure, according to appellant, to provide for appellate-level judicial review of the City’s decision to deny, revoke, or suspend an adult business license. For the reasons that follow, we affirm the judgment of the circuit court. Background There is no dispute as to the facts of this case. Appellant owns and operates a business at 23 E. Washington Street in Hagerstown that sells books, magazines, video, lingerie and novelties that are “adult” in nature.

At the back of its store, appellant provides booths for customers to view adult videos. The store has been Hagerstown’s only adult business since 1990. ⁵⁵⁹ Prior to September 2002 1 , Hagerstown Chief of Police Arthur Smith reportedly received complaints of illegal drug activity occurring at appellant’s place of business during the early morning hours before 6:00 a.m. The complaints were made by employees of WHAG, a local television station that occupied a building adjacent to appellant’s business, and by tenants of two nearby apartment complexes. According to Chief Smith, the employees and the tenants expressed considerable concern as to their personal safety.

Chief Smith conveyed their concerns to the Hagerstown Police Department’s Street Crimes Division for further investigation and passed them along to other city officials as well. During this time, Chief Smith met with a man who claimed he had contracted Autoimmune Deficiency Syndrome (“AIDS”) after engaging in “hundreds” of homosexual encounters at appellant’s place of business. “Heterosexual men,” he informed Smith, were performing homosexual acts at appellant’s business in exchange for money to support their drug habits. The acts took place by means of “glory holes” in the partitions that separated the video-display booths at the back of appellant’s store. He feared that the heterosexuals, who had contracted sexually transmitted diseases by engaging in homosexual acts at appellant’s business, might retaliate against the City’s gay community.

Chief Smith notified City officials of the man’s concerns. Some time later, Chief Smith, accompanied by Hagerstown City Attorney Mark Boyer and City Administrator Bruce Zimmerman, conducted an on-site inspection of appellant’s business. At that time, Chief Smith stated, he “personally observed the ‘glory holes’ which had been described to [him] by the man who [had] contracted AIDS.” On May 30, 2002, the Washington County Health Department issued an order requiring appellants to “cease and desist all structural activities [glory holes] that enable sexual contact ⁵⁶⁰ [to] tak[e] place” because “said structural activity constitutes a dangerous condition and/or nuisance that could facilitate the spread of Sexually Transmitted Diseases and must be abated immediately.” The Ordinance On September 5, 2002, City Interim Planning Director Deborah Everhart sent City Administrator Bruce Zimmerman a memorandum proposing an Adult Business Ordinance. The ordinance, according to Everhart, would regulate the “time, place, and manner” in which the City’s adult businesses operated.

Copies of Everhart’s memorandum were sent to the Mayor and City Council members, as well as to the City Clerk, City Attorney, and City Finance Director. On October 22, 2002, “the Mayor and City Council,” as noted in the minutes of the Council’s 22nd Session, “unanimously agreed by voice vote to adopt [the] Ordinance,” which was incorporated into Chapter 46 of the Hagerstown City Code as §§ 46-1, 46-2, 46-3, 46-4, 46-5 and 46-6: § 46-1. Purpose. The purpose of this Ordinance is to protect the health, welfare, safety, morals and general welfare of the citizens of the City by addressing the deleterious secondary effects of certain adult oriented businesses operating within the City; to prevent the impairment of, or detriment to neighboring properties; to promote safe, sanitary conditions and combat the spread of sexually transmitted disease; and to protect children who may be attracted to such establishments.

This chapter does not have, and is not intended to have the purpose or effect of imposing a limitation or restriction on the content of any communicative material, or to infringe upon the reasonable exercise of a legitimate business. § 46-2. Definitions. For purposes of this chapter the following terms shall have the following meanings: A. Adult business. Any commercial establishment located in the City that: ⁵⁶¹ I. has 5% or more of its stock on the premises, or has 5% or more of its stock on display, in books, magazines, periodicals, photographs, drawings, sculptures, motion pictures, films, videos or other similar images by any medium which depict specified sexual activities or anatomical areas; II. displays on its premises, or provides for display or viewing on its premises, any motion pictures, films, videos or other similar images by any medium which depict specified sexual activities or specified anatomical areas; III. has 5% or more of its stock on the premises, or more of its stock on display in products, devices or novelties designed or sold primarily for the purpose of stimulation of human genitalia, or other sexual gratification. § 46.-3 License required.

It shall be unlawful for any person to own, operate, manage or maintain an adult business in the City without first obtaining an adult business license from the Department ... § 46-4 Application for license; fee An applicant for an adult business license shall register with and provide the following information on the appropriate application form provided by the Department: A. The address at which the adult business will be operated. B. The name, street address and telephone number of all owners of the adult business. C. If the owner of the adult business is not an individual, the applicant shall provide the name, street address, resident agent, resident agent address and telephone number of the owner. Applicant shall further provide the names, addresses and telephone numbers of all individuals or entities who own or have any interest in the entity which owns the adult business.

D. The name, street address and telephone number of a designated contact person for the owner(s) ⁵⁶² E. A non-refundable annual license fee of $250.00. § 46-5. Adult business regulations. The following regulations shall apply to all adult businesses in the City: A. No adult business shall operate or be open to the public between the hours of 1:00 a.m. and 6:00 a.m. B. No adult business shall be located within 500 feet of another legally operating and licensed adult business.

Adult businesses existing and actually operating on the effective date of this chapter shall be exempt from this regulation. C. No adult business shall permit anyone under the age of 18 years of age to be on the premises of the adult business for any purpose. D. No booth, cubicle or area used for viewing motion pictures, films, movies, videos or other similar images by the general public shall be capable of being completely closed. Any such booth, cubicle or area shall be and remain open at all times.

E. No booth or cubicle used for viewing motion pictures, films, movies, videos or other similar images by the general public shall have any holes or openings, nor shall any booth or cubicle be accessible by any adjacent booth or cubicle, except for the primary opening for ingress and egress to said booth or cubicle. § 46.6. Denial; revocation or suspension. An adult business license may be denied, revoked or suspended at any time by the Department if after receipt of written notice, the owner fails to immediately eliminate any violations of the regulations contained herein. Denial, revocation or suspension of an adult business license shall be in addition to, and in substitution of the penalties provided for in § 46-8 of this chapter.

Of particular relevance to the issue that gave rise to this action were § 46-4(C), § 46-5(E) and § 46. 6. Section 46-4(C) required each adult business license applicant to disclose the names, addresses and telephone numbers of all individuals or entities having an ownership interest in the business. Section ⁵⁶³ 46-5(E) prohibited licensed adult businesses from “complete[ly] closing” any “booth, cubicle or area used for viewing motion pictures, films, movies, videos or other similar images by the general public.” And § 46.6 set forth the requirements for denying an adult business license and revoking or suspending a license that had already been issued. Appellant’s Complaint On March 6, 2003, appellant filed a complaint in the Circuit Court for Washington County against the City and Hagerstown Officer P.L. Smith.

The complaint alleged that, on March 3, 2003, Officer Smith and an unnamed city attorney went to appellant’s place of business and threatened to arrest its employees unless they complied with the terms of the Ordinance 2 which required them to shut down the store between 1 a.m. and 6 a.m. and ensure that none of the video booths located on the premises were, at any time, completely closed. Count one of appellant’s complaint sought a declaration that the Ordinance violated Article 40 of the Maryland Declaration of Rights because it was “not narrowly drawn ... [did] not provide for alternative avenues of communication ... lack[ed] effective limitations of the time for an administrative decision ... fail[ed] to provide for prompt judicial review” and “constitute[d] an unreviewable prior restraint on free speech.” Count two requested that Officer Smith be enjoined “from further acts of intimidation and acts of reprisal against [appellant],” which “constitute^] a chilling effect upon [appellant’s] free speech” and “caused [appellant] economic harm.” And appellant requested that the circuit court “enter judgment ... in the amount of One Hundred Thousand Dollars ($100, 000)” against the officer and the City. ⁵⁶⁴ Proceedings Below At the City’s request, the case was removed to the United States District Court for the District of Maryland because appellant, in the City’s words, “[wa]s alleging that [the City] violated its rights of free speech, presumably under the First Amendment to the United States Constitution.” But the federal court ultimately sent the case back to the circuit court after appellant abandoned that claim. Then, in September 2003, the Court of Appeals, in Pack Shack v. Howard Co., 377 Md. 55 , 832 A.2d 170 (2003), declared a Howard County ordinance unconstitutional because it conditioned the grant of licenses to operate adult businesses on certain mandatory disclosures: specifically, that each adult business license applicant state the name and address of all natural persons having a financial interest in the business. Relying solely on that decision, appellant moved for partial summary judgment, asserting that “[t]he requirements for licensure set forth” under the Hagerstown Adult Business Law were “unconstitutional and in violation of the Maryland Declaration of Rights Article.” Filed on June 24, 2004, appellant’s motion for partial summary judgment was still pending before the circuit court one month later when the City Council repealed § 46^4(C), as it required the same type of information requested by Howard County in Pack Shack .

Following that amendment, the City filed a cross motion for summary judgment. To its summary judgment motion, the City attached copies of the Health Department order requiring appellants to “cease and desist all structural activities that enable sexual contact,” the agenda and minutes for the September 10th, September 24th and October 22nd Mayor and City Council meetings; appellant’s adult business license application; and answers to interrogatories propounded by both sides. On August 2, 2004, appellant filed a motion to strike the City’s exhibits, principally the City’s answers to interrogatories. Appellant argued that the answers were hearsay and ⁵⁶⁵ inadmissible under Rule 2-501(c) as “an affidavit supporting or opposing a motion for summary judgment.” In response, the City supplemented its motion with the following exhibits: an affidavit signed by Chief Smith, a copy of the September 5th memorandum from City Interim Planning Director Deborah Everhart to Administrator Bruce Zimmerman containing the proposed Adult Businesses Ordinance, and a copy of the amended Ordinance.

Thereafter, the circuit court denied appellant’s motion to strike on the grounds that the City had “supplied the appropriate affidavit,” apparently referring to Chief Smith’s sworn statement. A hearing on the City’s motion for summary judgment ensued. Following that hearing, on November 3, 2004, the court issued a memorandum opinion denying the City’s request for summary judgment as to count one of appellant’s complaint, while noting that the Ordinance was, in fact, “enforceable, except for the deficiency found due to there being no time standard to decide to issue or reject a business license.” But it granted the City summary judgment as to count two of appellant’s complaint, pointing out that the police officer, whom appellant claimed had threatened and intimidated its employees, was no longer a party to the suit, and that appellant “had admitted in its answer to interrogatories that ... [count two] applie[d] to the police officer and not to the [City].” On February 25, 2005, the City amended the Ordinance again. It inserted § 46-4(F), mandating that adult business licenses be issued or denied within 30 days of application.

It also added a sentence to § 46-6, stating that “[a]ny applicant or licensee who has a license denied, revoked or suspended shall have the right to appeal such action of the Department to the Circuit Court for Washington County, Maryland, within (30) days of receipt of the notice of said action.” On March 15, 2005, the City again moved for summary judgment based on the re-amended Ordinance. Two weeks later, appellant modified its complaint to include the contention that “[t]he disclosure requirements in the Hagerstown ⁵⁶⁶ Adult Bookstore Law, as provided in § 46.4 thereof, constitute an unconstitutional prior restraint on free speech.” On June 30th, the court issued an order granting the City’s motion for summary judgment. It held that the Ordinance, as amended, was “constitutional and violate[d] nether [sic] Maryland Declaration of Rights, the Maryland Constitution, nor The Constitution of the United States.” DISCUSSION I. Appellant contends that the circuit court erred in holding that the Ordinance was constitutional. It claims that there is nothing in the legislative record to indicate that the City Council had information or evidence before it, prior to the enactment of the Ordinance, sufficient to establish that the law would serve a significant state interest and would be narrowly tailored so as to render any incidental restriction upon freedom of speech no greater than necessary.

Consequently, the Ordinance, appellant claims, violates both Article 40 of the Maryland Declaration of Right 3 and the First Amendment of the United States Constitution. 4 In alleging that the Ordinance is unconstitutional under the First Amendment, appellant has revived a claim that it previously abandoned when its complaint was before the United States District Court for the District of Maryland. In fact, it ⁵⁶⁷ was appellant’s abandonment of that claim that prompted the federal district court to send appellant’s case back to the circuit court for resolution. In any event, because there is no dispute that appellant’s Article 40 claim was properly before the circuit court and because Article 40 of the Maryland Declaration of Rights is “in pari materia with the First Amendment” and, thus, the “legal effect” of both provisions “is substantially the same,” Sigma Delta Chi v. Speaker, 270 Md. 1, 4 , 310 A.2d 156 (1973) we shall consider appellant’s two contentions — that the Ordinance violates Article 40 and the First Amendment — as a single claim. To survive constitutional scrutiny, an ordinance regulating speech must be a “ ‘content-neutral time, place and manner [speech] restriction’ ” which is “ ‘narrowly tailored to serve a significant governmental interest’ ” and “ ‘leave[s] open ample alternative channels for communication.’” Pack Shack, 377 Md. at 67 , 832 A.2d 170 (quoting State v. Sheldon, 332 Md. 45, 54 , 629 A.2d 753, 758 (1993)) (citations omitted).

The circuit court held, and we agree, that the Ordinance satisfies those requirements. In fact, appellant does not dispute the circuit court’s ruling that the Ordinance is a “content-neutral time, place and manner restriction,” or that it “leaves open ample alternative channels for communication.” Id. But it does insist that the circuit court had no basis for finding that the Ordinance was “ ‘narrowly tailored to serve a significant governmental interest.’ ” Id. To meet this requirement, appellant argues, the City was required to demonstrate, by means of “pre-enactment evidence” contained in the Ordinance’s legislative record, that this regulation was intended to address specific “negative secondary effects” and was narrowly drawn to render any incidental restriction upon speech no greater than necessary.

There was none, appellant claims. The legislative record underlying the Ordinance, it maintains, is devoid of any preenactment evidence of the specific “negative secondary effects” associated with businesses that sell adult books and ⁵⁶⁸ videos. And, absent such pre-enactment evidence, “[t]he supplemental materials submitted by the City to the Circuit Court,” appellant claims, “cannot sustain [the] regulation[ ]” at issue. To buttress its position, appellant cites City of Renton v. Playtime Theatres, Inc., 475 U.S. 41 , 106 S.Ct. 925 , 89 L.Ed.2d 29 (1986), and one of its offspring, 11126 Baltimore Boulevard v. Prince George’s County, 886 F.2d 1415 (4th Cir.1989).

But these cases, as we shall see, subvert more than they support appellant’s position. In Renton, Playtime Theatres filed an action in federal district court against the City of Renton, Washington, seeking a determination by that court that the