The Law

Locating Adult‑Oriented Businesses by Michael Blahy Cities throughout the world have had the ability to dictate how land within their boundaries are used. Further as circumstances require, additional restrictions are imposed on certain businesses for the protection of the citizens. In 2007, based “on evidence of the adverse secondary effects of adult‑oriented businesses”, from cases throughout the USA, Arkansas enacted Act 387. It was meant to protect young people from secondary effects like “property crime, illicit drug use, prostitution, the potential spread of disease, and sexual assault.” The Act applies to “Adult bookstore[s] or video store[s]”, who “as one (1) of its principal business purpose” is to disseminate for profit any: A book, magazine, periodical or other printed matter, photograph, film, motion picture, videocassette, reproduction, slide, or other visual representation that depicts or describes a specific sexual activity An instrument, a device, or paraphernalia that is designed for use in connection with a specific sexual activity The Act prohibits those businesses from locating within 1,000 feet of a “child care facility, park, place of worship, playground, public library, recreational area or facility, residence, school, or walking trail.” The Act allowed cities to augment the rules by passing their own ordinance(s). Established adult‑oriented businesses were grandfathered in the Act and businesses which conform to the Act when beginning operations are protected, in the case where youth gathering facilities locate within the store’s catch area. In 2017, a franchise of Adam and Eve, who advertise themselves as “#1 Adult Toy Superstore” and the “leading sex toy company in the USA”, Applied for and received a privilege license to do business in Jonesboro. It came with instructions to coordinate with city planners to ensure that their proposed locations and uses comply with zoning laws. Unlike many Adam and Eve stores, this location proposed to limit its inventory to only lingerie, adult toys, costumes, novelties, games, massage oils, and personal lubricants. They felt no requirement to heed the license instructions; the franchise found a location and prepared for opening. On January 25, 2018, they were refused a certificate of occupancy because “it does not meet the distance requirement from churches, daycares, and residential uses”. Adam and Eve sued the Mayor of Jonesboro, alleging violations of its First, Fifth, and Fourteenth Amendment rights. Claiming the Act: “restrains the plaintiff’s retail sale of merchandise, based on the content of the merchandise” Is vague because it “doesn’t contain percentages, [and] it doesn’t contain definitions of what [] a principal business purpose is” violates equal protection because it has not been applied to Walmart and Spencer’s, who also sell regulated items. It held that “[t]here’s no other business similarly situated that’s been treated differently or better.” The State of Arkansas intervened in the case to defend the Act. Discovery hearings were held, in which they agreed to certain facts: Adam and Eve could open a store in the correct zoning area Adam and Eve would not sell pornographic DVDs, books, and magazines other Jonesboro stores, such as Walmart, sell regulated items like condoms a nonparty retailer, Spencer’s, opened prior to 2007 and its inventory contains less than 10% of such items Adam and Eve also conceded that more than 30% of its revenue derived from regulated items The District Court rejected all the claims, so Adam and Eve filed an appeal. The United States Court of Appeals rejected the violation to “the freedom of speech” arguments. Counsel for Adam and Eve repeatedly claimed that the Jonesboro store is not and will not be an “adult bookstore”. It will not “sell pornographic DVDs, books, and magazines . . . literature, periodicals, posters of any kind.” “Adam and Eve highlights that there are ‘no videos, there are no movie booths, no movie screens, and no live entertainment at the Appellant’s store’”. The Supreme Court has already ruled that each of these are protected under “freedom of speech”. Adam and Eve claimed “that ‘this is a restraint of speech based purely on content, they don’t like what [Adam and Eve is] selling.’”. Adam and Eve failed to provide supporting citing that selling sexually‑oriented devices is speech. The Appeals Court ruled “After disavowing any expressive conduct, we hold that Adam and Eve cannot state a claim under the First Amendment. Because there is no speech to protect”. Adam and Eve claimed that the Act is impermissibly vague because “[p]rincipal business purpose is undefined.” [T]he term lacks specificity because it does not declare how an entity’s ‘principal business purpose’ is quantified, e.g., floor space, gross revenue, net revenue, or amount in inventory. The Appeals Court said that: “A statute is unconstitutionally vague if it ‘fails to provide a person of ordinary intelligence fair notice of what is prohibited, or is so standardless that it authorizes or encourages seriously discriminatory enforcement.’ . . . Legislatures are not required to define every term in a statute. . . . In the absence of a definition, words are given their ordinary meaning”. The Appeals Court found that the ordinary meaning of principal business purpose is not vague. Adam and Eve concede[d] as much, agreeing that “principal means chief or main.” It also noted that with the use of the clause “one (1) of its”, the act accounts for the possibility of multiple principal business purpose[s]. The Appeals Court said We see no reason that there cannot be more than one principal business purpose and agree with the district court that an activity generating 30% of a store’s gross revenue is such a purpose. . . . It is undisputed that a substantial portion of Adam and Eve’s business involves selling items the statute reaches. Adam and Eve claimed for equal protection. It argued that “other stores in the city of Jonesboro [] sell condoms, lubricants, and one brand of personal massager”. It tried to compare itself to Spencer’s, Walgreen’s, Walmart, and CVS. The only evidence about Spencer’s is that ‘Spencer’s sells less than 10 percent of items prohibited by the statute’, but unlike Spencer’s Adam and Eve did not open before 2007. The comparisons to Walgreen’s, Walmart, and CVS cite no facts showing that these entities are similarly situated. As a result, there is no evidence that regulated items are staples of such general stores as they are to a franchise of America’s leading sex toy company. It is well‑established that “[d]issimilar treatment of dissimilarly situated persons does not violate equal protection.” The United States Court of Appeals ruled that: The judgment of the district court is affirmed. (Adam and Eve Jonesboro, LLC v Perrin (as Mayor of the City of Jonesboro, AR) (United States Court of Appeals, Docket: 18-2818 (Eighth Circuit))) Decided: June, 2019 Published: August, 2019 Feature Articles If you have an opinion on the retailing or retail real estate industries, take this opportunity to share your thoughts. Articles should run between 400 and 800 words. Topics can, be general in nature, consumer observation or specific to retail concepts or practices. 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