Hustler Hollywood loses appeal for Castleton-area store

A racy retail store cannot open its shop in Castleton after a ruling on Monday from the 7th Circuit Court of Appeals that upheld a city ordinance that prohibits adult entertainment businesses from operating in certain zoning districts.

When HH-Entertainment, Inc. decided to open one of its Hustler Hollywood stores in Indianapolis, the company selected a site at 5505 E. 82nd St., between Allisonville Road and Interstate 465.

The area is zoned C-3, a classification in which adult-oriented stores and entertainment businesses are not permitted. The retailer's plan drew stern opposition from neighborhood groups and City-County Councilor Christine Scales—especially after they learned the site was next to a Chuck E. Cheese restaurant.

Beverly Hills-based Hustler Hollywood, which operates more than 20 stores around the country, is part of Flynt Management Group. Founder Larry Flynt is a well-known proponent of First Amendment free-speech rights. 

The company filed suit in January 2017 against the consolidated City of Indianapolis/Marion County as well as the Metropolitan Board of Zoning Appeals and the Department of Business and Neighborhood Services. The suit was filed in U.S. District Court for the Southern District of Indiana in Indianapolis.

In its suit, Hustler Hollywood said the city incorrectly classified the store as an adult business and denied it the permits that it needed in order to open. The plaintiff also said the city’s actions were depriving it of both its First Amendment right to free expression and its Fourteenth Amendment right to equal protection of law.

Early in 2016, the lawsuit said, Hustler Hollywood talked with city officials so it could understand what it needed to do to avoid being classified as an adult establishment under local zoning laws.

According to the zoning rules, a business is considered an adult bookstore if 25 percent or more of its retail floor space, stock or weekly sales are from adult products, including sexually oriented media, devices and other items. The rules also define an adult services establishment as one in which “a preponderance of services” involve specified sexual activities or display of specified parts of the body.

In its suit, Hustler Hollywood said it “analyzed its projected inventory, floor space and revenue, determining that it would easily operate below the threshold for triggering a designation of an adult entertainment business.” The plaintiff also noted that it operates stores in other locations that have zoning laws that are more restrictive than the ones in Indianapolis.

In July 2016, the plaintiff signed a 10-year commercial lease for the 5505 E. 82nd St. property. In August, it filed applications to remodel the store's interior and hang exterior signs at the location.

After the city's Board of Zoning Appeals in December 2016 upheld an earlier decision to put HH's permits on hold, the company sued, seeking declaratory and injunctive relief.

But the Indiana Southern District Court denied its motion after finding it was unlikely to succeed on the merits of its First Amendment or equal protection claims.

The 7th Circuit Court of Appeals agreed with that analysis. Judge William Bauer wrote Monday that the ordinance does not prohibit HH from exercising free speech, but rather holds that HH cannot exercise that speech in a C-3 commercial district.

“Unquestionably, the City has provided HH with reasonable alternative avenues of communication in a number of other commercial districts, a fact HH does not dispute,” Bauer wrote. “… Moreover, HH does not dispute that the Ordinance is ‘content-neutral,’ or that the City’s interest in reducing the secondary effects of adult businesses, codified at length in the Ordinance, is a sufficient or substantial interest.”

HH also argued there was insufficient evidence to support the city’s ruling that it is an “adult entertainment business,” but Bauer said that question was better suited for state court.

“That evidentiary issue does not present a First Amendment violation, nor does it justify the issuance of a preliminary injunction,” he wrote.

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