Pink Pony, Brookhaven battle heads to Supreme Court

22-year-old strip club claims ordinance banning booze sales and nude dancing is unconstitutional


The Pink Pony's ongoing legal fight to keep the booze a-flowing and exotic dancing a-happening in its Brookhaven location will land in Georgia Supreme Court on Monday. It's a slightly complicated story involving the Balkanization of DeKalb County and local government's war against adult entertainment. But in a nutshell, the strip club claims the new city's controversial ordinance banning the sale of alcohol and nude dancing is unconstitutional.

Jane Hansen, the court's public information officer, writes in the case summary:

FACTS: Brookhaven is a new Georgia city that became incorporated Dec. 17, 2012. The Pink Pony strip club has been in business for 22 years, serving food and alcohol, along with nude dancing, since licensed to do so by DeKalb County in November 1990. Trop, Inc. operates the club, which has always been on Corporate Boulevard and is now located in the southernmost area of newly incorporated Brookhaven.

From 1991 to 2001, the Pink Pony and other adult entertainment businesses filed several lawsuits against DeKalb County for enacting ordinances like Brookhaven's that prohibit total nudity and liquor in adult businesses. Eventually, a number of the establishments entered into a Settlement and Release Agreement with DeKalb County in which the businesses agreed to dismiss pending damages actions in exchange for the right to continue operations. The agreement was extended in 2007 for a minimum of 15 years. The establishments also agreed to pay the County an increased, graduated licensing fee, which for Pink Pony in recent years amounted to $100,000 a year.

On Jan. 14, 2013, less than a month after Brookhaven incorporated, its new City Council passed the "Sexually Oriented Business Code," an ordinance that bans consumption of alcohol combined with nude dancing. The Council found that sexually oriented businesses were associated with a wide variety of "adverse secondary effects," including crime, prostitution, public indecency, illegal drug use and trafficking, urban blight and sexual assault. The Council further found that alcohol consumption increased the risk of secondary effects.

In May 2013, Pink Pony sued the City, its Mayor, its City Council members and its City Clerk, claiming that the sexually oriented business ordinance was unconstitutional and that Pink Pony was exempt from it based on its settlement agreement with DeKalb County. The City responded with a motion asking the court to dismiss the case and to issue a "Judgment on the Pleadings," or a ruling in the City's favor based on its briefs and supporting documents. The trial court ruled in Brookhaven's favor, finding that the Code was constitutional and that the agreement Pink Pony had with DeKalb County violated Georgia Law, Official Code of Georgia § 36-10-3, which states that "one council may not, by an ordinance, bind itself or its successors so as to prevent free legislation in matters of municipal government." As a result, the trial court ruled that the agreement with DeKalb County did not give Pink Pony any vested right against the City's Code. The court further found that because Pink Pony was a sexually oriented business barred from serving alcohol, it was not subject to the regulations of the Alcohol Code and therefore lacked any right to challenge them. The trial court similarly ruled that Pink Pony lacked standing to challenge the Brookhaven Zoning Code because it alleged no harm stemming from its provisions. Finally, the trial court rejected Pink Pony's claim that the City of Brookhaven's incorporation had to be thrown out because people weren't given proper notification when the legislation to create the city was introduced. Pink Pony now appeals to the state Supreme Court.

ARGUMENTS: Pink Pony's attorneys argue the trial court made four mistakes, including that the lower court erred in ruling in favor of the City based on the briefs and documents submitted. A "judgment on the pleadings" "is granted only if, on the facts admitted, the moving party is clearly entitled to judgment," the attorneys argue in briefs. The trial court improperly found that the exhibits attached to the City's motion to dismiss the case disproved Pink Pony's "well-pleaded," or well-documented, facts. The lawyers point out that Pink Pony's complaint contained "152 paragraphs and 15 counts thoroughly and specifically challenging the incorporation of Brookhaven, the improper enactment and amendments to unconstitutional ordinances, the vesting of rights to continue to operate pursuant to a 2007 contract with DeKalb County, Georgia, and numerous free speech and due process challenges under the Georgia Constitution, as well as challenges to the Brookhaven alcohol, sexually oriented business and zoning ordinances." The trial court was required to accept as true facts that the rights and obligations of DeKalb County in the agreement have been assigned to Brookhaven under the law, the attorneys argue. Furthermore, the trial court was wrong that Pink Pony lacked standing to challenge Brookhaven's alcohol regulations because it could not show it was injured by those regulations. Pink Pony has in fact been injured by Brookhaven's alcohol and sexually oriented business ordinances. Furthermore, Pink Pony has since applied for an alcohol license from the City of Brookhaven and been denied. And, the attorneys contend, the trial court erred in holding that the Sexually Oriented Business Code "specifically allows sexually oriented business employees to appear semi-nude," and in stating that "banning nudity while allowing semi-nudity provides adequate alternative avenues for communication, as the U.S. Supreme Court has recognized." The trial court erred because "semi-nude" under the Brookhaven Code does not allow G-strings and it prohibits exposure of the buttocks, Pink Pony's attorneys argue. The trial court failed to take Pink Pony's well-documented materials as true, instead "applying the Brookhaven Code of Ordinances to Plaintiffs in an arbitrary and capricious manner, without due process of law, depriving Plaintiffs of their property and the use of their property." The trial court also erred by considering as true the attachments to the City's pleadings, which included unauthenticated copies of affidavits and more than 30 "studies" on the alleged secondary effects of adult businesses in jurisdictions all over the country. "In no case has a Georgia court, in granting a motion for judgment on the pleadings, ever considered 'exhibits' that are so lacking in indices of reliability as the trial court did here," the attorneys argue.

Attorneys for Brookhaven and its officials argue that for several years Pink Pony has paid $100,000 a year "for the privilege of ignoring the County's laws prohibiting public nudity and separating liquor from adult entertainment establishments. After the land where Pink Pony sits (less than 500 feet from residences) became part of the new City of Brookhaven in December 2012, Pink Pony offered the City the same deal. When the City declined, Pink Pony sued," the attorneys write in briefs. Pink Pony offers "a variety of disjointed and overlapping arguments (many of which are new on appeal and have thus been waived), but all of them collapse into the singular procedural argument that the trial court erred in granting judgment on the pleadings," the City's attorneys argue. In arguing that the trial court failed to accept its well-pleaded material allegations as true, "Pink Pony repeatedly misses the critical distinction between factual allegations (which the trial court must accept as true) and legal conclusions based on those facts (which the trial court is not bound to accept,)" the attorneys argue. "Even taking Pink Pony's factual assertions as true, the trial court properly ruled that the City was entitled to judgment as a matter of law." Pink Pony's claim that the ordinance does not allow G-strings and exposure of the buttocks is "wrong," the attorneys argue. The new Code does allow erotic dancers "to appear semi-nude in pasties and a G-string, which cover only the genitals, pubic area, anus, and the nipple and areola of the female breast," the City's attorneys argue. "The U.S. Supreme Court has held that this minimal restriction 'leaves ample capacity to convey the dancer's erotic message,'" - a message protected under the constitutional right to free speech. The new Code "not only serves the City's substantial interest in preventing secondary effects, but is also narrowly tailored to regulate only sexually oriented businesses, i.e., those businesses associated with secondary effects." The ordinance itself states that it is based on "evidence of the adverse secondary effects of adult uses presented in hearings and in reports made available to the City Council," and it lists the cases and studies. "The City adopted and incorporated that legislative record as part and parcel of that ordinance," the attorneys for the City argue. "Thus, the trial court properly considered it when resolving the motion for judgment on the pleadings." In adopting the Code, the City relied on the Georgia Supreme Court's 1997 decision in Goldrush II v. City of Marietta, which stated that the desire "to reduce crime and prevent neighborhood deterioration by separating alcohol from adult entertainment are important government interests unrelated to the suppression of speech." Pink Pony's arguments that the trial court improperly relied upon "unverified" exhibits attached to the pleadings, "fail as a matter of law for numerous reasons," the attorneys argue. Georgia law clearly states: "A copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes." The trial court correctly ruled that the DeKalb County agreement violated state law and does not bind the City of Brookhaven. It also correctly rejected the various constitutional challenges, including the claim that the Code is an unconstitutional prior restraint and violation of free speech, and it correctly ruled that Pink Pony lacked standing to challenge Brookhaven's alcohol and zoning regulations.