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Borough of Sayreville v. 35 Club

January 19, 2012

BOROUGH OF SAYREVILLE, PLAINTIFF-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-RESPONDENT.



On appeal from the Superior Court, Appellate Division, whose opinion is at The opinion of the court was delivered by: Justice Hoens

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

Borough of Sayreville v. 35 Club, L.L.C.

(A-66-10) (067092)

Argued September 12, 2011

Decided January 19, 2012

HOENS, J., writing for a majority of the Court.

The question in this appeal is whether a court may consider, as part of its determination of an as-applied challenge to the State's statute limiting the places where sexually-oriented businesses may operate, the availability of alternative channels of communication that are located in another state.

In November 2007, defendant 35 Club L.L.C. began operating a business called "XXXV Gentlemen's Club" in the Borough of Sayreville. The business has been described as an "all-nude gentlemen's cabaret" and therefore is one which meets the statutory definition of a sexually-oriented business. Shortly after the business opened, plaintiff, the Borough of Sayreville, commenced a Chancery Division action seeking declaratory relief. In part, the Borough sought to permanently enjoin defendant from operating its business at the location it had chosen because that location violated the statute that prohibits the operation of a sexually-oriented business within 1,000 feet of a public park or residential zone. N.J.S.A. 2C:34-7(a).

Because defendant conceded that the Club's location violated the statutory prohibition, the issue that was presented to the trial court revolved around whether the statute's restriction could constitutionally be applied to defendant's business. That issue required the parties, and the trial court, to consider and apply the analytical framework for an as-applied challenge to the statute devised by this Court; i.e., whether there are "adequate alternative channels of communication [for the protected activity] within the relevant market area." Twp. of Saddle Brook v. A.B. Family Ctr., Inc., 156 N.J. 587, 597 (1999).

The trial court's analysis of the adequacy of alternative avenues of communication turned on its evaluation of the competing theories offered by the experts called by the two parties. Of particular relevance to this appeal, the Borough's expert included parts of Staten Island, New York, in the relevant market area. Defendant's expert, however, did not include Staten Island. At the close of evidence, the Chancery Division determined that the Borough had carried its burden of demonstrating, by a preponderance of the evidence, the availability of adequate alternative channels of communication within the market area relevant to defendant's business. The court concluded that there was no justification for excluding Staten Island, reasoning that Staten Island was "no different than any other site in the market area.except for a bridge and a toll." The court further concluded that including sites in New York, although that would potentially require the business to navigate another state's land use regulations, was reasonable in light of the fact that New Jersey's municipalities have different land use regulations. Accordingly, the trial court rejected defendant's as-applied constitutional challenge and ordered defendant to discontinue operating its sexually-oriented business at the location it had chosen in Sayreville.

The Appellate Division, for reasons expressed in the decision of its majority, reversed and remanded for reconsideration in light of the factors outlined by this Court in Saddle Brook. Borough of Sayreville v. 35 Club, L.L.C., 416 N.J. Super. 315 (App. Div. 2010). In the majority's view, the Borough failed to satisfy its burden of identifying defendant's relevant market area, in part because it included Staten Island as an available site, even though conceding that there was no information in the record about what zoning laws govern land use in that locality or in New York State as a whole. In addition, the majority reasoned that "neither the residents of Sayreville nor our State's citizens as a whole have an electoral voice in the affairs of Staten Island." Accordingly, the majority remanded the matter for the Chancery Division to review the record and identify available sites to defendant within the relevant market area, considering only local zoning restrictions and the feasibility of the site, and limiting consideration to sites in New Jersey.

The appeal is before the Supreme Court as a matter of right based on the dissent in the Appellate Division.

R. 2:2-1(a)(2),

HELD: In evaluating the adequacy of alternative channels of communication when deciding an as-applied constitutional challenge to the State's statute limiting the places where sexually-oriented businesses may operate, trial courts are not precluded from considering the existence of sites that are located outside of New Jersey but that are found within the relevant market area as defined by the parties' experts.

1. As a general proposition, adult-oriented forms of expression are entitled to the protections afforded by the First Amendment. The United States Supreme Court has considered challenges to ordinances that regulate the locations where businesses of this type may be conducted through the creation of buffer zones and has sustained such ordinances as consistent with the protections afforded by the First Amendment. In its seminal opinion on the subject, the Supreme Court concluded that for analytical purposes such ordinances are considered to be content neutral, because they do not prohibit these businesses, but instead are "designed to prevent crime, protect the city's retail trade, [and] maintain property values," thereby aiming to preserve quality of life in the communities that adopt them. City of Renton v. Playtime Theatres, Inc., 475 U.S. 41, 48 (1986). The focus of the inquiry, of necessity, is on whether enforcing the ordinance allows for reasonable alternative avenues of communication. That the owner of a sexually-oriented business will face some difficulty in securing an alternate site merely places that business on an equal footing with other potential users. In the United States Supreme Court's view, as long as the ordinance does not effectively deny a reasonable opportunity to open and operate the business, the First Amendment's protections have been sufficiently safeguarded. (pp. 16-20)

2. The Court considers this appeal in the context of New Jersey's statewide statutory restriction on the location of sexually-oriented businesses; the statute requires that there be a 1,000-foot buffer between a sexually-oriented business and certain enumerated sites including schools, public parks, and places of worship. The Legislature's statewide approach, consistent with Saddle Brook, demands that any ordinance be tested by means of a regional market rather than be confined to the borders of any particular municipality. This conclusion rests on several grounds. First, as a practical matter, it may be far more convenient for a patron to travel a few minutes into New York or Pennsylvania than to travel twenty minutes away to Newark or Elizabeth. Second, patrons of businesses like that of defendant's often travel from and to states other than the ones in which they reside to access this sort of entertainment. Third, when this Court announced its rule for the evaluation of such ordinances in Saddle Brook, it intentionally adopted a regional approach to the relevant market. Fourth, refusing to permit any consideration of locations that are found in nearby states would result in unequal treatment among our municipalities themselves. Finally, the suggestion that our courts cannot consider sites beyond our borders in evaluating whether there are adequate alternate avenues of communication because the operators of these businesses have no voice in the government of municipalities in our neighboring states ignores the fact that they have no more voice in the government of other municipalities within our borders. Today the Court does no more than hold that as a part of the evaluation of the regional market, it is permissible to consider not only the "neighboring communities" that lie within our State's borders, but to consider as relevant to the question those "neighboring communities" that are beyond those borders. The Court holds that the availability of such sites is an appropriate factor to consider as part of evaluating whether there are adequate alternative channels of communication within the relevant market area. (pp. 20-30)

The judgment of the Appellate Division is REVERSED only to the extent that it precluded consideration of alternative sites in Staten Island; in all other respects the judgment of the Appellate Division is AFFIRMED.

JUSTICE ALBIN filed a separate, DISSENTING opinion, stating that a sexually oriented business cannot be restricted based on the notion that such constitutionally protected expressive activity is permitted in a nearby state.

CHIEF JUSTICE RABNER, JUSTICES LONG, JUSTICE PATTERSON, and JUDGE WEFING (temporarily assigned) join in JUSTICE HOENS's opinion. JUSTICE ALBIN filed a separate, dissenting opinion. JUSTICE LaVECCHIA did not participate.

Argued September 12, 2011

JUSTICE HOENS delivered the opinion of the Court.

The First Amendment to the United States Constitution and Article I, Paragraph 6 of the New Jersey Constitution provide strong protections to our rights of free speech. So greatly do we in New Jersey cherish our rights of free speech that our Constitution provides even broader protections than the familiar ones found in its federal counterpart. In preserving and advancing those broad constitutional commands, we have been vigilant, jealously guarding the rights of the people to exercise their right to "freely speak," N.J. Const. art. I, par. 6, although their message may be one that is offensive to some, or even to many, of us.

So universally accepted are these principles that we need not address in any detail their application to the dispute now before this Court. Rather, we accept as part and parcel of our established body of law that free speech, and its related right, free expression, apply so as to protect the rights of individuals and entities to establish and operate sexually-oriented businesses as well as the rights of the individuals who choose to patronize those businesses.

As precious as our rights of free speech and free expression undoubtedly are, however, they are neither absolute nor unbounded. In particular, as it relates to sexually-oriented businesses, our Legislature has enacted a statute that limits the places in our State where such businesses may operate, see N.J.S.A. 2C:34-7, and many municipalities have taken steps, consistent with that statute, to use their zoning power to direct such businesses to operate in one or another area within their borders.

The statute that sets forth the Legislature's regulatory scheme for such businesses, N.J.S.A. 2C:34-7, has previously been sustained by this Court against a direct facial challenge to its constitutionality, see Hamilton Amusement Ctr. v. Verniero, 156 N.J. 254, 262 (1998), cert. denied, 527 U.S. 1021, 119 S. Ct. 2365, 144 L. Ed. 2d 770 (1999). Thereafter, this Court fixed the parameters that inform both the enforcement of the statute and the basis on which an as-applied constitutional challenge to it must be measured. See Twp. of Saddle Brook v. A.B. Family Ctr., Inc., 156 N.J. 587 (1999). That is, we held that the statute's ban on locating or operating sexually-oriented businesses within 1,000 feet of certain identified areas or uses is constitutional, but we also recognized that because the statute operates to limit free speech rights being exercised by the owners and patrons of such establishments, it can only do so if there are adequate alternative channels of the communication of this type of speech. Id. at 596-97.

It is in this larger context that this appeal comes before this Court. An appeal as of right brought to us by virtue of a dissent in the Appellate Division, this matter raises a single, narrow inquiry. Simply put, the question is whether a court may consider, as part of its determination of an as-applied challenge to the statute's constitutionality, the availability of alternative channels of communication that are located in another state. That is, the issue is whether an expert called to identify alternative channels of this form of communication may, as part of the evaluation of the relevant market area, include sites that are located outside of our State's borders and whether the trial court may consider those sites in deciding the as-applied challenge.

In answering that inquiry, our response is equally narrow. We hold that in evaluating the adequacy of alternative channels of communication, our trial courts are not precluded from considering the existence of sites that are located outside of New Jersey but that are found within the relevant market area as defined by the parties' experts. In reaching this conclusion, we do not suggest that a market area analysis that finds alternative channels of communication only outside of our borders will ever be sufficient to withstand an as-applied challenge.*fn1 Nor, for that matter, would we permit a market area analysis in which the majority of the alternative channels of communication are found in our neighboring states to suffice for this purpose. We hold only that in analyzing the adequacy of the alternative channels of communication, the trial court may consider that the relevant market area includes some sites located outside of this State's borders.

I.

The facts that are relevant to this dispute were compiled during a six-day bench trial, but that record can be summarized briefly for purposes of the narrow issue raised in this appeal.

In November 2007, defendant 35 Club L.L.C. began operating a business called "XXXV Gentlemen's Club" in the Borough of Sayreville. The business has been described as an "all-nude gentlemen's cabaret" and therefore is one which meets the statutory definition of a sexually-oriented business. See N.J.S.A. 2C:34-6(a). Shortly after the business opened, plaintiff, the Borough of Sayreville, commenced a Chancery Division action seeking declaratory relief. In part, the Borough sought to permanently enjoin defendant from operating its business at the location it had chosen because that location violated the statute that prohibits the operation of a sexually- oriented business within 1,000 feet of a public park or residential zone. N.J.S.A. 2C:34-7(a).

Because defendant conceded that the Club's location violated the statutory prohibition, the issue that was presented to the trial court revolved around whether the statute's restriction could constitutionally be applied to defendant's business. That issue required the parties, and the trial court, to consider and apply the analytical framework for an as-applied challenge to the statute devised by this Court. See Saddle Brook, supra, 156 N.J. at 596-97. That analytical framework rests on a determination of whether there are "adequate alternative channels of communication [for the protected activity] within the relevant market area." Id. at 597.

The trial court's analysis of the adequacy of alternative avenues of communication turned on its evaluation of the competing theories offered by the experts called by the two parties. The Borough offered expert testimony from Susan S. Gruel, P.P., who is a licensed professional planner with twenty-five years of experience and an adjunct professor at Rutgers University. Gruel began by establishing the relevant market area. She reasoned that a sexually-oriented business is analogous to a regional shopping center because both are considered to be regional establishments or businesses. She therefore based her analysis on a geographic area within a twenty-minute drive from the location where defendant's place of business had been opened, relying on the Urban Land Institute's Shopping Center Development Handbook (3d ed. 1999). That process generated a market area comprised of 303,997 acres of property where 1.47 million people live. Gruel's proposed geographic market covered all or part of sixty-five municipalities that are located in five New Jersey counties and in part of New York's Staten Island.

Gruel then applied a series of principles to determine the availability of alternative sites within the market area she had identified. First, she examined the zoning ordinances of all sixty-five municipalities in the market area and eliminated those that did not have a zoning ordinance expressly permitting sexually-oriented businesses. Second, she used zoning maps of the remaining municipalities to identify zones where sexually-oriented businesses were either permitted uses or conditionally permitted uses. Third, she conducted site visits to the areas in those municipalities where such a business would be a conditional use so that she could identify and plot locations that complied with both the statutory 1,000-foot buffer requirement and any additional buffer requirements set forth in local ordinances. For this aspect of her analysis, she used tax maps, aerial photography, and digital map data as guides. Finally, she excluded areas that were not reasonably part of the general real estate market, including natural bodies of water, rights of way, and public property.

Using this methodology, Gruel identified 3,218 acres in five municipalities that she considered to be well-suited for a business such as defendant's. Analyzing the areas by municipality, Gruel determined the available area for a business like defendant's included: (1) 953 acres in Newark; (2) 189 acres in Carteret; (3) twelve ...


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