HDV Cleveland, L.L.C. v. Ohio Liquor Control Comm.
101 N.E.3d 1025
| Ohio Ct. App. | 2017Background
- HDV Cleveland, LLC (Larry Flynt's Hustler Club) operates an adult nightclub holding D-5 and D-6 liquor permits; investigators witnessed a VIP private dance in which a performer exposed breasts and genitals and engaged in sexualized contact with an undercover agent.
- The Ohio Liquor Control Commission cited the club for violating Ohio Adm.Code 4301:1-1-52(B)(2) (appearing in a state of nudity); other related charges were dismissed.
- The Commission ordered revocation of the permit unless HDV paid a $100,000 forfeiture; HDV sought reconsideration and then appealed to the Franklin County Court of Common Pleas, which affirmed the Commission and denied HDV's request to supplement the administrative record.
- HDV appealed to the Tenth District Court of Appeals, raising (1) facial and as-applied free speech challenges under Article I, § 11 of the Ohio Constitution to Rule 52, (2) challenges to the forfeiture amount as violating due process and equal protection and lacking evidentiary support, and (3) error in denying supplementation of the record.
- The Tenth District reviewed constitutional claims (including whether Ohio's free-speech clause affords broader protection than the U.S. First Amendment), the impact of Reed v. Gilbert on the secondary-effects doctrine, and whether reliable, probative, and substantial evidence supported the forfeiture/remedy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 52 (prohibiting "appear[ing] in a state of nudity") violates Article I, § 11 of the Ohio Constitution (facial and as-applied) | Rule 52 is an unconstitutional prior restraint and Ohio's free-speech clause provides broader protection than the U.S. First Amendment | Rule 52 is content-neutral under the secondary-effects doctrine and previous federal and state decisions uphold Rule 52 as constitutional | Rule 52 does not violate Article I, § 11 either facially or as applied; Ohio protection is not broader here than the U.S. Constitution |
| Whether Reed v. Gilbert requires strict scrutiny and defeats the secondary-effects doctrine for Rule 52 | Reed renders Rule 52 content-based and triggers strict scrutiny | Reed did not expressly abrogate the secondary-effects doctrine for brick-and-mortar adult-entertainment regulation | Reed does not abolish the secondary-effects analysis for this regulatory context; intermediate scrutiny remains applicable |
| Whether the $100,000 forfeiture (or revocation) lacked substantial, reliable, and probative evidence or violated due process/equal protection | Forfeiture is excessive, disproportionate compared to others, and violates due process/equal protection; court should assess proportionality akin to punitive-damages review | Commission had statutory authority to revoke for one violation and to set forfeiture in lieu of revocation; record shows violations and prior similar citations supporting a severe penalty | Substantial, reliable, probative evidence supported the Commission's finding; under Henry's Cafe the court cannot reduce an authorized agency penalty merely because it seems harsh; challenges to amount fail |
| Whether the trial court erred by denying HDV leave to supplement the administrative record to support a facial overbreadth claim | HDV wanted to add evidence showing Rule 52 could sweep into artistic venues statewide (potentially substantial overbreadth) | Prior precedent (34 Jefferson) forecloses a substantial-overbreadth showing on these facts; supplementation unnecessary | Denial was not erroneous; HDV failed to demonstrate a substantial number of unconstitutional applications warranting facial invalidation |
Key Cases Cited
- Renton v. Playtime Theatres, 475 U.S. 41 (U.S. 1986) (upheld content-neutral time, place, manner regulation addressing secondary effects)
- Barnes v. Glen Theatre, Inc., 501 U.S. 560 (U.S. 1991) (applied O'Brien test to expressive conduct like nude dancing)
- Erie v. Pap's A.M., 529 U.S. 277 (U.S. 2000) (nude dancing is protected expressive conduct but only at outer bounds of First Amendment)
- Reed v. Town of Gilbert, 135 S. Ct. 2218 (U.S. 2015) (facially content-based laws trigger strict scrutiny regardless of benign intent)
- J.L. Spoons, Inc. v. Dragani, 538 F.3d 379 (6th Cir. 2008) (Rule 52 is content-neutral and justified by evidence of harmful secondary effects)
- Vail v. Plain Dealer Publishing Co., 72 Ohio St.3d 279 (Ohio 1995) (Ohio Constitution can provide independent free-speech protections in defamation/opinion context)
- Henry's Cafe, Inc. v. Bd. of Liquor Control, 170 Ohio St. 233 (Ohio 1959) (on administrative appeals, courts may not modify an agency penalty if supported by reliable, probative, substantial evidence)
- 34 Jefferson, LLC v. Liquor Control Comm., 2012-Ohio-3231 (Ohio App. 10th Dist.) (prior Tenth Dist. decision rejecting facial and as-applied First Amendment challenges to Rule 52)