The U.S. District Court in Concord struck down the Town of Gilford's policy on exotic dancing permits, finding it facially unconstitutional as an invalid prior restraint on speech protected by the First Amendment. The court held that the selectmen's policy gave the board of selectmen too much discretion in determining whether or not to issue a permit.
The court said the case will continue for the purpose of determining the amount of damages, if any, King's Grant Inn is entitled to as a consequence of the town's enforcement of the policy. However, the court held that the selectmen, as individuals, are entitled to qualified immunity from liability for their actions regarding the policy.
The policy adopted by the selectmen was based on RSA 179:19, which requires holders of liquor licenses who want to provide entertainment and dancing to obtain written authorization from the municipality. The Gilford selectmen's policy provided that a permit to provide exotic dancing “or other types of unusual entertainment” would be issued depending on “[w]hether the licensee or the proposed performers have a significant history of violating alcoholic beverage control laws or laws relating to public performances in any jurisdiction in the United States, or whether the licensee and the proposed performers may not otherwise be relied upon to comply fully with all state, federal and local laws, ordinances and rules with regard to their activities in promoting or providing the proposed entertainment.”
The court wrote that “an entertainment licensing decision cannot rest upon a public official's subjective sense of what constitutes a significant as opposed to an insignificant history of liquor law violations.” The court said the range of the selectmen's discretion to issue a permit was too broad and their policy lacked an objective standard by which to measure whether a violation was significant or insignificant. The court noted that two selectmen thought the Inn's violations were significant while one selectmen did. This fact, the court said, was evidence of the “subjective and discretionary character of the policy's permit-qualifying standard.”
“Among other things,” the court wrote, “the policy provides no guidance as to how many violations, over what period of time, and of what character, will constitute a ‘significant history.' Some liquor law violations are comparatively minor, of course, and others are decidedly major; some are substantive (selling to minors) while others are administrative) record keeping). Absent objective criteria, it is impossible for a licensee to know what is required, or how long it must wait after a violation, or violations, before it will, if ever, qualify again for a permit.”
The court found “even more troubling” provisions of the policy that called on the selectmen “to predict whether an applicant can be ‘relied upon to comply fully' with federal, state and local laws. “Basing licensing decisions on speculation of the sort invited by that provision is inconsistent with the obligation to provide a narrow, objective and definite standard,” the court wrote.
Because the town did not show cause why the exotic dancing policy was not unconstitutional as a prior restraint on speech protected by the First Amendment, the court held that King's Grant Inn was entitled to judgment as a matter of law that the policy was unconstitutional on its face.
The town argued that even if the policy were facially unconstitutional, the selectmen were entitled to qualified immunity from liability for enforcing it. King's Grant Inn argued that a “reasonable person would know that denial of permits for exotic dancing based upon personal beliefs and not on a consistent objective application of town policy is unlawful” and a violation of federal civil rights.
Citing other federal court cases, the court stated that qualified immunity is “intended to shield public officials from civil damages liability as long as their actions could reasonably have been thought consistent with the rights they are alleged to have violated. … It is unavailable only when a government official violates a clearly established constitutional right under circumstances in which a reasonable official would have recognized the violation.”
The court said that when the selectmen denied the inn's permit applications in 2003, it was clearly established by the U.S. Supreme Court that “a law subjecting the exercise of First Amendment freedoms to the prior restraint of a license, without narrow, objective, and definite standards to guide the licensing authority, is unconstitutional” (citing Fly Fish, Inc. v. City of Cocoa Beach, 337 F.3d 1301 (11 th Cir. 2003), which quoted Shuttlesworth v. Birmingham, 394 U.S. 147, 151 (1969). It was also clearly established that exotic dancing is entitled to First Amendment protection, the court said, citing Barnes v. Glen Theatre, Inc., 501 U.S. 560, 565-566 (1991).
However, the court found that the constitutional right was not clearly established in this case because the selectmen's policy was “adopted pursuant to the implicit mandate of a state statute, requiring that holders of liquor licenses may ‘provide entertainment and dancing…provided they have received written authorization by the town or city' [quoting RSA 179:19]. At the time the [selectmen] denied plaintiff's permit applications, no decisional law was in place describing the permissible bases on which written authorization for entertainment and dancing in establishments licensed to serve liquor might, constitutionally, be either granted or withheld.”The court said that neither the Court of Appeals for the First Circuit nor the U.S. Supreme Court had “resolved a case sufficiently similar to this one to provide clear notice that [the selectmen's] denial of plaintiff's permit applications amounted to a denial of First Amendment rights.” The court noted that the third time the selectmen denied the exotic dancing permit was after the New Hampshire Superior Court held that the inn was unlikely to succeed on the merits of its First Amendment claim. “At the very least, then, on that occasion, [the selectmen's] reliance on the decision of the New Hampshire Superior Court, particularly given the absence of specific federal precedent, was not unreasonable, and did not result in forfeiture of their qualified immunity.”