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Borough of Sayreville v. 35 Club

September 17, 2010

BOROUGH OF SAYREVILLE, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
v.
35 CLUB, L.L.C., A LIMITED LIABILITY COMPANY OF THE STATE OF NEW JERSEY, T/A XXXV GENTLEMEN'S CLUB, 35 CLUB, AND/OR THE XXXV CLUB, DEFENDANT-APPELLANT/CROSS-RESPONDENT.



On appeal from Superior Court of New Jersey, Chancery Division, Middlesex County, Docket No. C-247-07.

The opinion of the court was delivered by: Fuentes, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued February 4, 2010

Before Judges Skillman, Fuentes and Simonelli.

Defendant 35 Club L.L.C., t/a XXXV Gentlemen's Club, 35 Club, and/or XXXV Club (Club 35) operated a sexually oriented business featuring live nude erotic dancing in the Borough of Sayreville in Middlesex County. This controversy began when the Borough filed a verified complaint in the Chancery Division against Club 35 alleging that the location and nature of Club 35's activities violated N.J.S.A. 2C:34-7 and the licensing requirements of the Borough's General Revised Ordinance Chapter VIII, Section 8-2.2. The Borough sought to permanently enjoin Club 35 from operating this business at this location.

The trial court held a six-day bench trial during which a number of fact and expert witnesses testified. Ultimately, the trial court granted the Borough's application and permanently enjoined Club 35 from operating its sexually oriented business at that location. The court also ordered this injunction to be recorded in the Office of the Middlesex County Registrar of Deeds as a restriction on the use of this property in perpetuity.

Club 35 now appeals, arguing that, in granting the Borough's application for injunctive relief, the trial court failed to consider and apply all of the factors outlined by our Supreme Court in Township of Saddle Brook v. A.B. Family Center, Inc., 156 N.J. 587 (1999). Club 35 further argues that even if an injunction is warranted under Saddle Brook, the court lacked the authority to impose a permanent and recordable deed restriction on the use of the property.

The Borough cross-appeals, arguing that the trial court erred in refusing to consider the internet as an alternative site for Club 35 to express its otherwise constitutionally protected activities. Specifically, the Borough argues that live interactive sexually oriented content delivered through mass media channels, such as the internet, should have been considered by the trial court as a reasonable alternative to the live nude dancing offered by Club 35.

Responding to Club 35's motion for interim relief, we stayed the trial court's injunction pending the outcome of this appeal. We now reverse the judgment of the trial court and remand this matter for the court to reconsider its ruling by applying all of the relevant factors outlined by the Court in Saddle Brook. Regardless of how the trial court rules on remand, however, we find no legal grounds for sustaining the court's order imposing a judicially crafted restriction on the use of this property that runs with the land in perpetuity.

Finally, we reject the Borough's arguments in support of what it characterizes as a cross-appeal.*fn1

Despite the voluminous record developed over the six day hearing, we limit our recitation to the facts necessary to address the issues raised by the parties on appeal.

I.

In November 2007, Club 35 began operating an all nude gentlemen's club on Route 35 in Sayreville. Although the Club does not sell or otherwise dispense alcoholic beverages, customers are permitted to consume alcohol at the establishment if it was purchased off-site. It is not disputed that the Club qualifies as a "sexually oriented business" as defined by N.J.S.A. 2C:34-6(a)(2).*fn2 Given its location, it is equally undisputed that Club 35 violates N.J.S.A. 2C:34-7(a), which prohibits operating a sexually oriented business within 1000 feet of a public park and/or a residential zone.

That being said, the fact that Club 35's location, on its face, violates N.J.S.A. 2C:34-7(a) only begins the analysis required to determine whether such restrictions, as applied to Club 35, are constitutionally permissible. As the Court stated in Saddle Brook, supra, 156 N.J. at 596-97, "the statute's constitutionality as applied will depend on whether its application to [the sexually oriented business] allows adequate alternative channels of communication within the relevant market area." As the party seeking to enforce these restrictions, the Borough has the "burden of proving the adequacy of available alternative avenues of communications within the relevant market area." Id. at 597.

In an effort to meet its burden of proof, the Borough presented the testimony of Susan S. Gruel, a licensed professional planner. As a starting point, Gruel relied on the Urban Land Institute handbook "in order to evaluate and define the market area." Operating under the assumption that Club 35 was located in a "regional shopping center" area, Gruel used a twenty-minute drive-time test to determine the relevant market area. Gruel then drove twenty minutes from Club 35 on major transportation routes to determine the boundaries of the market area. Through this process, Gruel opined that the market area for Club 35 consisted of "all or portions of [sixty-five] municipalities in [five] counties in New Jersey and portions of Richmond County (Staten ...


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