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HH-Indianapolis, LLC v. Consolidated City of Indianapolis

United States Court of Appeals, Seventh Circuit

May 7, 2018

HH-Indianapolis, LLC, Plaintiff-Appellant,
v.
Consolidated City of Indianapolis and County of Marion, Indiana, et al., Defendants-Appellees.

          Argued March 29, 2018

          Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 1:17-cv-00036-SEB-DML - Sarah Evans Barker, Judge.

          Before Bauer, Flaum, and Manion, Circuit Judges.

          BAUER, CIRCUIT JUDGE.

         HH-Indianapolis, LLC ("HH"), intended to open a retail establishment in Indianapolis under the name "Hustler Hollywood." After entering into a ten-year lease at 5505 E. 82nd St. ("the Property"), HH applied for sign and building permits. Problematically, HH's proposed store was located in a zoning district that prohibited "adult entertainment businesses, " as defined under the Indianapolis-Marion County Zoning Ordinance ("the Ordinance"). Upon review, the Department of Business and Neighborhood Services (DBNS) determined that HH was an adult entertainment business, a decision which the Board of Zoning Appeals (BZA) affirmed.

         HH filed this lawsuit against the Consolidated City of Indianapolis and County of Marion, Indiana, the DBNS, and the BZA (collectively, "the City") seeking a declaratory judgment that the Ordinance violated its First and Fourteenth Amendment rights and violated state administrative law, as well as asking for an injunction against the City's enforcement of the Ordinance against HH. HH challenged the Ordinance under the First Amendment both as applied to it, as well as facially for overbreadth and vagueness. The district court denied HH's motion for a preliminary injunction, and HH filed this interlocutory appeal challenging that decision only with respect to its as-applied First Amendment claim. We affirm.

         I. BACKGROUND

         HH-Entertainment, Inc., the parent company of HH, operates retail stores under the name "Hustler Hollywood" throughout the United States in over twenty locations. HH was incorporated in Indianapolis in order to open a store that would sell a variety of merchandise, including lingerie, gag-gifts, instructional DVDs and literature, marital aids, and sexual devices, such as dildos and vibrators. According to HH, when it seeks to open a new retail store, it studies the city's municipal ordinance in order to avoid being classified as an "adult" store.

         The Ordinance, which went into effect on April 1, 2016, establishes six different Commercial Zoning Districts. City of Indianapolis and Marion County Consolidated Zoning and Subdivision Ordinance, § 742-104(B)-(G) (April 1, 2016). "The C-3 District (Neighborhood Commercial District) is for the development of an extensive range of retail sales and personal, professional and business services required to meet the demands of a fully developed residential neighborhood, regardless of its size." § 742-104(C).

         The Ordinance also regulates "adult entertainment businesses." See § 743-305(A). An adult entertainment business is prohibited from operating in a C-3 district as a right, although it may obtain a variance to operate in a C-3 district. See § 743-305(A)(3)(b). However, an adult entertainment business may operate as a right in three of the six districts: C-4 (Community-Regional District); C-5 (General Commercial District); and C-7 (High-Intensity Commercial District). Id.

         The various types of adult entertainment businesses are defined under the Ordinance. See § 740-202(A). Relevant to this appeal, an "adult bookstore" is defined as follows:

         An establishment having at least 25% of its:

1. Retail floor space used for the display of adult products; or
2. Stock in trade consisting of adult ...

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