King's Grant Inn v. Gilford, et al. CV-03-249-SM 02/16/05 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

King's Grant Inn, Plaintiff

v. Civil No. 03-249-SM Opinion No.

Town of Gilford; and Gilford Board of Selectmen, Defendants

O R D E R

Defendants have filed a responsive memorandum designed to

show cause why the Town of Gilford's policy regulating exotic

dancing is not facially unconstitutional as a prior restraint on

protected speech, and arguing why the individual defendants are

entitled to gualified immunity from liability if the policy is

unconstitutional. Plaintiff objects.

Constitutionality of the Exotic Dancing Policy

The Town's policy with respect to issuing permits for exotic

dancing is facially unconstitutional as an invalid prior

restraint on speech protected by the First Amendment. The key

issue, as defendants recognize, is the degree of discretion

placed in the hands of the Board of Selectmen. The Gilford exotic dancing policy places discretion in the

hands of government officials at least as broad as that found

unconstitutional in Fly Fish, Inc. v. City of Cocoa Beach,

(11th Cir. 2003). In Fly Fish, the court noted:

Ordinance 1204 provides that the City may deny an applicant a license [for adult entertainment] if "the granting of the application would violate either a statute or ordinance or an order from a Court of law that effectively prohibits the applicant from obtaining an adult entertainment establishment license," or if the applicant fails to comply with Florida law regarding corporations, partnerships, or fictitious names.

(citation omitted). Here, the relevant and

comparable portion of the Gilford policy provides:

(3) The town shall grant or conditionally deny authorization to provide exotic dancing or other types of unusual entertainment based upon:

(e) Whether the licensee or the proposed performers have a significant history of violating alcoholic beverage control laws or laws relating to public performances in any jurisdiction in the United States, or whether the licensee and the proposed performers may not otherwise be relied upon to comply fully with all state, federal and local laws, ordinances, and rules with regard to their activities in promoting or providing the proposed entertainment.

2 (Def.'s Mem., Ex. 1 at 4.) If it "exceeds the limits of

permissible ''ministerial discretion,'" Fly Fish,

, to allow a licensing authority to determine whether a

statute, ordinance, or court order would be violated by the

granting of a license application, which might ordinarily appear

to be a relatively straightforward and objective yes-or-no

proposition, then it necessarily follows that an entertainment

licensing decision cannot rest upon a public official' subjective

sense of what constitutes a significant as opposed to an

insignificant history of liguor law violations. The discretion

involved in making such decisions is essentially unguided under

the policy, and the range is too broad - one selectman's

"significant history" will be insignificant to another, and no

objective standard is articulated by which either perception can

be fairly or consistently measured.

Among other things, the policy provides no guidance as to

how many violations, over what period of time, and of what

character, will constitute a "significant history." Some liguor

law violations are comparatively minor, of course, and others are

decidedly major; some are substantive (selling to minors) while

3 others are administrative (record keeping).1 Absent objective

criteria, it is impossible for a licensee to know what is

required, or how long it must wait after a violation, or

violations, before it will, if ever, qualify again for a permit.

Defendants' own memorandum makes the case against

constitutionality of the policy: "Two of the three members of the

[Board of Selectmen] deemed this record to be a 'significant'

record of alcohol violations within the meaning of the Town

Policy . . . ." (Def.'s Mem. at 3.) The fact that two selectmen

deemed the Inn's history of liquor law violations to be

"significant" while the third selectman deemed that history not

to be "significant" demonstrates the subjective and discretionary

character of the policy's permit-qualifying standard. Even more

troubling, but seemingly not at issue in this case, is that part

of the policy calling upon selectmen to predict whether an

applicant can be "relied upon to comply fully with all state,

federal and local laws, ordinances, and rules with regard to

1 Such guidance would seem especially important in a case such as this, where the violations at issue range rather widely, from serving an intoxicated person and allowing an underage person to possess and/or consume alcoholic beverages, on the one hand, to advertizing special drink prices and failing to attend an educational seminar, on the other.

4 their activities in promoting or providing the proposed

entertainment." Basing licensing decisions on speculation of the

sort invited by that provision is inconsistent with the

obligation to provide a "narrow, objective, and definite

s t a n d a r d [ ] Fly Fish,

(guoting Shuttlesworth

v. Birmingham,

(1969); citing Lakewood v. Plain

Dealer Publ'g Co.,

(1988)).

Defendants have not shown cause why the Town's exotic

dancing policy is not unconstitutional as an invalid prior

restraint on speech protected by the First Amendment. King's

Grant Inn is entitled to judgment as a matter of law on Count I

of its complaint, and on its petition for declaratory judgment,

to the extent the petition seeks to have the exotic dancing

policy declared facially unconstitutional. Because the policy is

found to be facially unconstitutional. Count II, King's Grant

Inn's as-applied challenge, is moot.

Qualified Immunity

Defendants argue that even if the Town's exotic dancing

policy is unconstitutional, the individual members of the Board

5 of Selectmen are entitled to qualified immunity from liability

for enforcing it. King's Grant Inn counters, summarily, that "a

reasonable person would know that denial of permits for exotic

dancing based upon personal beliefs and not on a consistent

objective application of Town Policy is unlawful." (Pl.'s Obj.

to Summ. J. at 13.)

At first blush, this dispute would seem to be covered by the

doctrine of quasi-judicial immunity. See Destek Group, Inc. v.

N.H. Pub. Util. Comm'n,

(1st Cir. 2003). But

defendants do not raise that defense, perhaps out of concern that

their argument for the constitutionality of the exotic dancing

policy would be undermined by a simultaneous claim that selectmen

exercise quasi-judicial discretion when ruling on permit

applications. In any event, the apparent lack of an appeal

process available to those seeking to challenge decisions made by

the selectmen distinguishes this case from Diva's, Inc. v. City

of Bangor,

(D. Me. 2001) (granting

individual city council members both absolute quasi-judicial

immunity and qualified immunity), and might well be fatal to a

claim of quasi-judicial immunity under the three-part test

6 established in Bettencourt v. Board of Registration in Medicine,

904 F .2d 772, 783 (1st Cir. 1990).

Turning to qualified immunity - a defense that protects

"government officials performing discretionary functions,"

Anderson v. Creighton,

(1987) - the court must

consider a sequence of questions: (1) whether the facts as alleged make out a constitutional violation; (2) whether that right was clearly established; and (3) whether a similarly situated reasonable official would have understood that her conduct violated clearly established law.

Fabiano v. Hopkins,

(1st Cir. 2003) (citing

Savard v. Rhode Island,

(1st Cir. 2003)). As a

general matter, "[q]ualified immunity is intended to shield

public officials 'from civil damages liability as long as their

actions could reasonably have been thought consistent with the

rights they are alleged to have violated.'" Fabiano,

-53 (quoting Anderson,

). The doctrine of

qualified immunity "provides ample protection to all but the

plainly incompetent or those who knowingly violate the law." Cox

v. Hainey,

(1st Cir. 2004) (quoting Malley v.

Briggs,

(1986)). It is unavailable only when a

7 government official violates a clearly established constitutional

right under circumstances in which a reasonable official would

have recognized the violation.

Here, it has been established that King's Grant Inn suffered

a violation of its First Amendment rights when it was denied a

permit under a facially unconstitutional policy.

Under the second factor, the guestion is "whether the

constitutional right . . . was 'clearly established' at the time

of the incident such that it would 'be clear to a reasonable

[official] that his [or her] conduct was unlawful in the

situation he [or she] encountered.'" Riverdale Mills Corp. v.

Pimpare,

(1st Cir. 2004) (guoting Saucier v.

Katz,

, 202 (2001)). Moreover, "the right allegedly

violated must be defined at the appropriate level of specificity

before a court can determine if it was clearly established."

Riverdale Mills,

(guoting Anderson,

) .

8 When the Gilford Board of Selectmen denied the Inn's permit

applications, in April, May, and June of 2003, it was clearly

established by the Supreme Court that "a law subjecting the

exercise of First Amendment freedoms to the prior restraint of a

license, without narrow, objective, and definite standards to

guide the licensing authority, is unconstitutional." Fly Fish,

(guoting Shuttlesworth,

),

and it was clearly established, as well, that exotic dancing of

the sort presented at King's Grant Inn is entitled to protection

under the First Amendment. See Barnes v. Glen Theatre, Inc.,

(1991). (That such dancing approaches "the

outer perimeters of the First Amendment,"

, or is only

"marginally" within the boundaries of the protection afforded

under the First Amendment, is, of course, immaterial to whether

exotic dancing is entitled to protection; it is.)

The general principle stated in Shuttlesworth, however, is

too abstract for useful application in considering gualified

immunity. See Riverdale Mills,

("The district

court below erred by posing the second prong as whether 'the law

regarding the necessity for a search warrant is clear.'"). Rather, the proper question here is whether a local government

official, in April, May, and June of 2003, should have

understood, based on established law, that it was unlawful to

deny a request for an exotic dancing permit based upon the

applicant's having a "significant history" of violating alcoholic

beverage control laws. See

("The proper question is whether

an officer on October 21, 1997, should have understood based on

prior law that it was unlawful, without a warrant or consent, to

take industrial wastewater from underneath a manhole cover on a

privately-owned street, but headed irretrievably to a public

sewer 300 feet away.").

When the constitutional right at issue here is properly

cast, it becomes apparent that the right was not clearly

established. The selectmen made their permit decisions pursuant

to an ordinance that had not, to that point, been challenged on

constitutional grounds. And, the ordinance was adopted pursuant

to the implicit mandate of a state statute, requiring that

holders of liquor licenses may "provide entertainment and dancing

. . . provided they have received written authorization by the

town or city." N.H. R e v . S tat . A n n . § 179:19. At the time the

10 individual defendants denied plaintiff's permit applications, no

decisional law was in place describing the permissible bases on

which written authorization for entertainment and dancing in

establishments licensed to serve liguor might, constitutionally,

be either granted or withheld.

Moreover, neither the Court of Appeals for the First Circuit

nor the United States Supreme Court has resolved a case

sufficiently similar to this one to provide clear notice that

defendants' denial of plaintiff's permit applications amounted to

a denial of First Amendment rights. The general principle

established in Shuttlesworth was applied, by the Eleventh

Circuit, in a somewhat similar factual setting, as described

earlier. But, it is not at all clear that the opinion in Fly

Fish, constitutes "a consensus of persuasive authority

elsewhere," Savard,

(citing Wilson v. Layne, 526

U .A . 603, 617 (1999); Brady v. Dill,

(1st Cir.

1999)). It cannot be said, then, that the constitutional right

at issue here, properly framed, was clearly established in

federal decisional law. Finally, the third permit denial (on

June 2, 2003) took place after the New Hampshire Superior Court

11 had held that the Inn was not likely to succeed on the merits of

its First Amendment claim. At the very least, then, on that

occasion, defendants' reliance on the decision of the New

Hampshire Superior Court, particularly given the absence of

specific federal precedent, was not unreasonable, and did not

result in forfeiture of their qualified immunity.

Because the contours of the legal right defendants violated

were not clearly established at the time they acted, the

individual defendants are entitled to qualified immunity from

personal liability, and they are entitled to partial summary

judgment on that point.

Conclusion

For the reasons given. King's Grant Inn is entitled to

summary judgment as to liability on Count I, its facial challenge

to the Gilford exotic dancing policy, but the individual

defendants are entitled to summary judgment on their qualified

immunity defenses. (As noted. Count II, the as-applied challenge

to the policy is moot.) Accordingly, all that remains is the

question of damages. The case shall continue on track for trial

12 for the limited purpose of establishing the damages, if any, to

which King's Grant Inn is entitled.

SO ORDERED.

Steven J/McAuliffe ’ Chief Judge

February 16, 2005

cc: David H. Bownes, Esq. R. Matthew Cairns, Esq.

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