STATE OF SUPREME

------

Case No. 97-1504

CITY NEWS AND NOVELTY, INC.,

Plaintiff-Appellant-Petitioner

v.

CITY OF WAUKESHA,

Defendant-Respondent-Respondent.

RESPONSE TO PETITION FOR REVIEW

CITY OF WAUKESHA Curt R. Meitz City Attorney State Bar No. 1017139 201 Delafield Street Waukesha, WI 53188 262/524-3520 262/624-3899

1 TABLE OF CONTENTS

TABLE OF AUTHORITIES ...... ii

CRITERIA FOR REVIEW ...... 1

ARGUMENT ...... 2

I. THE COURT OF APPEALS APPLIED WELL-SETTLED PRINCIPLES OF LAW AS SET FORTH BY U.S. IN FW/PBS...... 2

II. THE COURT OF APPEALS ATTEMPTED CERTIFICATION HAS NO BEARING ON CRITERIA FOR SUPREME COURT REVIEW...... 3

III. THE COURT OF APPEALS APPLIED THE APPROPRIATE BURDEN OF PROOF IN ANALYZING THE LICENSING SCHEME ...... 5

IV. THE LICENSING SCHEME PROVIDES OBJECTIVE STANDARDS OF RENEWAL TO GUIDE THE DECISIONMAKER IN ACCORD WITH U.S. SUPREME COURT DECISIONS...... 12

V. THE COURT OF APPEALS CORRECTLY APPLIED THE PRINCIPLES OF FW/PBS V. DALLAS IN DETERMINING THAT WAUKESHA’S LICENSING SCHEME CONTAINS THE APPROPRIATE PROCEDURAL SAFEGUARDS...... 17

VI. THE ORDINANCE DOES NOT VIOLATE THE DUE PROCESS RIGHTS OF THE PETITIONER...... 19

CONCLUSION ...... 24

CERTIFICATION ...... 25

Appendix ......

i TABLE OF AUTHORITIES

Cases

Alberti v. City of Whitewater, 109 Wis. 2d 592, 327 N.W.2d 150 (Wis. App. 1982) ...... 13

Berg v. Health & Hospital Corp., 865 F.2d 797 (7th Cir. 1989)...... 9

Brandmiller v. Arreola, 199 Wis.2d 528, 544 N.W.2d 894 (1996) ...... 11

Candee v. Egan, 84 Wis. 2d 348, 267 N.W.2d 890, 900 (1978) ...... 21

City News and Novelty, Inc. v. City of Waukesha 170 Wis. 2d 14, 487 N.W.2d 316 (Wis. App. 1992) .. 10, 11, 15

Clark v. Waupaca County Board of Adjustment, 186 Wis. 2d 300, 304, 519 N.W.2d 782, 784 (Ct. App. 1994) 16

Complaint Against Grady, 118 Wis. 2d 762, 348 N.W.2d 559 (1984) ...... 18

County of Sacramento v. Lewis, 118 S.Ct. 1708 (1998) ...... 22

Doe v. City of Minneapolis, 898 F.2d 612 (8th Cir. 1990)...... 9

East Brooks Books, Inc. v. City of Memphis, 48 F.3d 220, (6th Cir. 1995)...... 8

Freedman v. Maryland, 380 U.S. 51 (1965) ...... 5,6, 7, 8, 9

FW/PBS v. Dallas, 493 U.S. 215 (1990) .... 2, 3, 5, 6, 7, 8, 11, 12, 14, 17, 18

Graff v. Chicago, 9 F.3d 1309 (7th Cir. 1993)...... 7, 8, 18

Kenosha County v. C & S Management, 223 Wis.2d 373, 588 N.W.2d 236 (1999) ...... 10

ii Lakewood v. Plain Dealer Publishing Co., 486 U.S.780 (1988) ...... 12

Lounge Management, Ltd. v. Town of Trenton, 219 Wis.2d 13, 580 N.W.2d 156 (1998) ...... 10

Manos v. Green Bay, 372 F.Supp. 40 (E.D. Wis. 1974) ...... 16

Novak v. Madison Motel Associates, 188 Wis. 2d 407, 525 N.W.2d 123 (Wis. App. 1994.) ...... 13

Redner v. Dean, 29 F.3d 1495 (11th Cir. 1994)...... 18

Renton v. Playtime Theatres, Inc., 475 U.S. 41 (1986) ...... 6

Southeastern Promotions, Ltd. v. Conrad, 420 U.S. 546 (1975) ...... 5

State ex rel. DeLuca v. Common Council, 72 Wis.2d 672, 676, 242 N.W.2d 689 (1976) ...... 19, 20, 23

State v. McManus, 152 Wis.2d 113, 447 N.W.2d 654 (1989) ...... 11

State v. Ruesch, 214 Wis.2d 548, 571 N.W.2d 898 (Ct.App. 1997) ...... 11

State v. Steenberg Homes, Inc., 223 Wis. 2d 511, 589 N.W.2d 668 (Wis. App. 1998) ...... 21

State v. Stepniewski, 105 Wis. 2d 261, 314 N.W.2d 98 (1982) ...... 23

State v. Sweat, 208 Wis. 2d 409, 561 N.W.2d 695 (1997) ...... 13

State v. Zarnke, 224 Wis. 2d 116, 589 N.W.2d 370 (1999) ...... 22

Suburban Video, Inc. V. City of Delafield, 694 F. Supp. 585 (E.D. Wis. 1986) ...... 9

Thorp v. Town of Lebanon, ___ Wis. 2d ___, ___ N.W.2d ___ (Ct. App. 1999) ...... 22

iii TK’s Video, Inc. v. Denton County, 24 F.3d 705, 709 (5th Cir. 1994)...... 18

United States v. Salerno, 481 U.S. 739 at 746 (1987) ...... 17

Vulcan Last Company v. State, 194 Wis. 636, 643, 217 N.W. at 415 ...... 21

Ward v. Rock Against Racism, 491 U.S. 781 at 797, 98 ...... 15

Wolff v. City of Monticello, 803 F.Supp. 1568 (D. Minn. 1992) ...... 14

Young v. American Mini Theatres, 427 U.S. 50 (1976) ...... 6

Wisconsin Statutes

68.12(1) ...... 18 ch. 68 ...... 18, 19

Rule 809.19(8)(b) and (c) ...... 25

Rule 809.62(1) ...... 1, 2, 24

Rule 809.62(1)(c)(3) ...... 1

Rule 809.62(1)(d) ...... 4

Rule 809.62(4) ...... 24

Other Authorities

8.195 ...... 17

8.195(10) ...... 13, 15

8.195(9) ...... 13, 15

iv CRITERIA FOR REVIEW

Petitioner’s Statement of Criteria appears to allege three of the criteria set forth in Rule 809.62(1),

Wis. Stats.

Initially, the petitioner maintains that the criteria under Rule 809.62(1)(c)(3), Wis. Stats., have been met in that “this case provides the court with an opportunity to oversee and implement the statewide development of the law in the area of substantial interest and growing statewide concern.” (Petition at p. 2).

Secondly, the petitioner also argues that court of appeals decision is in conflict with controlling opinions of the U.S. Supreme Court as well as this court.

This is based upon petitioner’s argument that the court of appeals has not applied the proper standard of review in analyzing the constitutionality of the Waukesha ordinance at issue.

The petitioner argues that as the court of appeals has not applied the proper analysis to the license scheme that Supreme Court review is necessary to harmonize the court of appeals’ decision with existing state and federal case law.

1 Finally, the petitioner alleges as the issues of this case involve significant questions of federal or state constitution, Supreme Court review is required.

The respondent, City of Waukesha, respectfully requests the Supreme Court to deny the petition for review filed by City News and Novelty, Inc. This case is not worthy for further review because it fails to present in any significant manner any of the criteria for review set forth in Rule 809.62(1), Wis. Stats. Further, the petitioner fails to set forth any substantial or compelling reasons which warrant review.

ARGUMENT

I. THE COURT OF APPEALS APPLIED WELL- SETTLED PRINCIPLES OF LAW AS SET FORTH BY U.S. SUPREME COURT IN FW/PBS.

The respondent, City of Waukesha, agrees that the issues of this case presented significant questions of constitutional law to the court of appeals. However, both the trial court and court of appeals analyzed the City of

Waukesha’s licensing scheme under the guidance of the

United States Supreme Court’s decision of FW/PBS v. Dallas,

493 U.S. 215 (1990).

2 The law is clear in this area and the court of appeals has correctly applied the law to the particular facts of this case. The court of appeals unequivocally indicated that it applied the constitutional framework in

FW/PBS to its examination of the city’s licensing scheme.

(A-8). The petitioner concedes that the Supreme Court in

FW/PBS v. Dallas set forth the requirements for licensing schemes which purpose is to combat the secondary effects associated with sexually oriented businesses. (Petition p.

1.)

II. THE COURT OF APPEALS ATTEMPTED CERTIFICATION HAS NO BEARING ON CRITERIA FOR SUPREME COURT REVIEW.

Contrary to the assertions made by the petitioner, Supreme Court review is not necessary to develop, clarify or harmonize the law. Included in support of petitioner’s request is cited the fact that the court of appeals certified this case to the Supreme Court. The

Supreme Court denied certification.

The City of Waukesha submits that City News and

Novelty’s reliance on this criteria for review is misplaced. The simple fact that the court of appeals certified the appeal in this case does not lead to the conclusion that this case, after consideration of the court

3 of appeals’ decision, warrants review. In its decision, the Court of Appeals applied well-settled principles of law to the facts of this case. The decision by the court of appeals is not in conflict with controlling opinions by the

U.S. Supreme Court or the Wisconsin Supreme Court. See

Rule 809.62(1)(d), Wis. Stats. Nor is the court of appeals’ decision in conflict with decisions of other court of appeals decisions. The certification by the court of appeals prior to its decision on this case is not relevant to the criteria for review.

City News and Novelty also refers in its petition to the City’s request for oral argument in support of its request that the Supreme Court review the decision of the court of appeals. The criteria for oral argument, of course, are different than those for granting a petition for review. The City did assert that a decision by the court of appeals would provide some precedent which would guide municipalities with respect to their ability to regulate adult-oriented establishments. The decision of the court of appeals provides the guidance and further review is not warranted.

4 III. THE COURT OF APPEALS APPLIED THE APPROPRIATE BURDEN OF PROOF IN ANALYZING THE LICENSING SCHEME

The petitioner argues that the court of appeals erred by not placing upon the City the burden of proof to establish the constitutionality of the ordinance. As such, petitioner argues that this analysis by the court of appeals conflicts with controlling opinions of the U.S.

Supreme Court, this Court and other decisions.

The petitioner cites Southeastern Promotions,

Ltd. v. Conrad, 420 U.S. 546 (1975), as holding that any government licensing scheme must be interpreted as a prior restraint, and therefore must be presumed unconstitutional

(Pet. Br. at 8). However, in that case, the U.S. Supreme

Court held that a licensing scheme which directly regulated the content of protected speech must comply with all procedural safeguards set forth in Freedman v. Maryland,

380 U.S. 51 (1965), and therefore the burden was placed on the government to prove the regulation’s constitutionality.

Petitioner's comparison therefore fails because the City of

Waukesha's licensing scheme does not directly regulate the content of protected speech.

In fact, Petitioner cannot and does not cite a single case decided prior to FW/PBS v. Dallas, 493 U.S. 215

5 (1990), which interprets content neutral licensing schemes as necessitating prior restraint analysis under Freedman.

Prior to FW/PBS, did not apply prior restraint analysis to content neutral licensing schemes. Instead, courts limited their review to whether the regulations in question were content neutral time, place and manner regulations designed to serve a substantial government interest, and did not unreasonably limit alternative avenues of communication. See, e.g., Renton v. Playtime

Theatres, Inc., 475 U.S. 41 (1986); Young v. American Mini

Theatres, 427 U.S. 50 (1976).

FW/PBS v. Dallas was the first case that held that content neutral licensing ordinances required any sort of prior restraint analysis a la Freedman. In a plurality decision, the court concluded that two prior restraint safeguards set forth in Freedman apply to licensing schemes such as Waukesha. The court also concluded that the third prong of the prior restraint protections--that the governmental authority bore the burden of proving its constitutionality beyond a reasonable doubt--did not apply,

493 U.S. at 228, 246. Justice O'Connor stated that

The licensing scheme we examined today is significantly different from the censorship scheme examined in Freedman. In Freedman the censor engaged in direct censorship of a particular

6 expressive material. Under First Amendment jurisprudence, such regulation of speech is presumptively invalid and therefore the censor in Freedman was required to carry the burden of going to court if the speech was to be suppressed and of justifying its decision once in court…. We conclude the First Amendment does not require that the city bear the burden of going to court to effect the denial of a license application or that it bear the burden of proof once in court.

FW/PBS, 493 U.S. at 229-230 (emphasis added).

Following this decision, courts analyzing similar licensing schemes relied upon it to conclude that content neutral licensing schemes must meet the first two Freedman procedural safeguards, that (1) the status quo must be maintained prior to judicial review; and (2) expeditious judicial review must be available, but not the third, that the government bore the burden of proving its constitutionality. Most notably, the Seventh Circuit so concluded in Graff v. Chicago, 9 F.3d 1309 (7th Cir. 1993), stating that

In FW/PBS the Court held that the city of Dallas need not bear the burden of going to court nor the burden of proof once in court for two reasons: The ordinance was not presumptively invalid because the decision maker did not pass "judgment on the content of any protected speech." Also, "[b]ecause the license [or in this case, a permit] is the key to the applicant's obtaining

7 and maintaining a business, there is every incentive for the applicant to pursue a license denial through the court." 493 U.S. at 229-30.

Graff, 9 F.3d at 1324 n.11. See also East Brooks

Books, Inc. v. City of Memphis, 48 F.3d 220, (6th Cir. 1995)

("Although the court’s opinion was fragmented, six justices agreed that at least the first two requirements in Freedman were applicable"). Id. at 224 n. 4.

Petitioner's assertion that the "narrowest reading" of FW/PBS would entail applying a full prior restraint analysis to all content neutral licensing schemes is not supported by the law. The "narrowest reading" of

FW/PBS, to reiterate, as correctly applied by the court of appeals, would instead incorporate only the first two prior restraint safeguards. Thus, consistent with FW/PBS, later decisions such as Graff and East Brooks Books applied the first two prongs of prior restraint analysis but refused to apply the third and allocate the burden to the City to prove the regulations' constitutionality.

The City of Waukesha's adult establishment licensing scheme by its own terms has neither the purpose or effect of imposing a limitation or restriction on the content of any communicative materials. The licensing and regulation of adult oriented establishments as set forth in

8 the Waukesha code is for the purpose of combating and curbing secondary effects of such establishments. (A-

36&37). The Waukesha ordinance is in accord with many other ordinances that have been upheld across the nation that advance a substantial government interest of combating the secondary effects associated with sexually oriented businesses. Doe v. City of Minneapolis, 898 F.2d 612 (8th

Cir. 1990); Berg v. Health & Hospital Corp., 865 F.2d 797

(7th Cir. 1989). The court of appeals further recognized that an identical licensing scheme in relevant part was upheld as being narrowly tailored and furthering a substantial governmental purpose. (A-6, note 4.) Suburban

Video, Inc. V. City of Delafield, 694 F. Supp. 585 (E.D.

Wis. 1986) Therefore, there can be no question that the

City of Waukesha's adult establishment licensing scheme is content neutral and not subject to the third Freedman procedural safeguard.

The Petitioner asserts that "Wisconsin courts have been uniform in requiring that where a regulation restricts freedoms protected by the First Amendment, such regulation is presumed unconstitutional, and the burden to establish its constitutionality is on the proponent of such legislation." (Pet. Br. at 10-11). However, the

Petitioner once again cites nothing but cases which

9 interpreted content-based regulations in support of this contention. Unlike the content neutral Waukesha licensing scheme, the cases cited by the Petitioner involved laws which directly regulated or prohibited protected expressions. For example, the ordinance in question in

Lounge Management, Ltd. v. Town of Trenton, 219 Wis.2d 13,

580 N.W.2d 156 (1998), prohibited all public nudity.

Kenosha County v. C & S Management, 223 Wis.2d 373, 588

N.W.2d 236 (1999), involved an application of sec. 944.21,

Wis. Stats., which prohibits the sale of obscene material.

As explained by this Court, the standard is whether an ordinance is drafted in a manner which addresses the secondary effects of adult entertainment such as prostitution, sexual assault, and other criminal activity without also suffocating other protected expression in a real and substantial manner. Trenton, 219 Wis.2d 13, 580

N.W.2d 156, 161 (1998).

Unlike the ordinance in Trenton, there are no allegations, nor has there been any evidence shown that the

Waukesha ordinance is content based or encompasses

"expressive activities that do not implicate the secondary effects that the town may legitimately seek to regulate."

Id. at 580 N.W.2d 161. See also City News and Novelty, Inc.

10 v. City of Waukesha, 170 Wis.2d 14, 487 N.W.2d 316 (Wis.

App. 1992).

Although certainly content-based regulations restricting First Amendment protected speech certainly are presumed unconstitutional, that is not the case in

Wisconsin when content neutral restrictions are at issue.

See, Brandmiller v. Arreola, 199 Wis.2d 528, 544 N.W.2d 894

(1996); State v. Ruesch, 214 Wis.2d 548, 571 N.W.2d 898

(Ct.App. 1997) (citing State v. McManus, 152 Wis.2d 113,

447 N.W.2d 654 (1989), in support of its holding that the party challenging a content neutral statute must prove beyond a reasonable doubt that there are no possible interpretations of the statute which would be constitutional).

The Petitioner’s argument that the City needed to prove that its ordinance is constitutional beyond a reasonable doubt is in direct conflict with the U.S.

Supreme Court. The court of appeals' application of the law in this case is consistent and in accord with FW/PBS v.

Dallas and its progeny.

11 IV. THE LICENSING SCHEME PROVIDES OBJECTIVE STANDARDS OF RENEWAL TO GUIDE THE DECISIONMAKER IN ACCORD WITH U.S. SUPREME COURT DECISIONS.

The petitioner argues that the licensing ordinance does not contain sufficiently objective standards governing renewal decisions to prevent the exercise of unlawful discretion. It cites both FW/PBS v. Dallas and

Lakewood v. Plain Dealer Publishing Co., 486 U.S.780

(1988), in support of this contention.

The fundamental principles enumerated in City of

Lakewood v. Plain Dealer Publishing Co. require a permit or licensing scheme to establish clear guidelines limiting the discretion of the official designated to issue the permit or license to ensure that protected speech is not suppressed. The court of appeals applied this well settled principle of constitutional law in holding that the same pitfalls present in the Lakewood case were not present in

Waukesha’s licensing scheme. (A-11.)

Petitioner then argues the court of appeals has improperly applied rules of statutory construction in its examination of the licensing scheme and therefore its determination is not in accord with the principles enunciated in FW/PBS v. Dallas.

12 A cardinal rule in interpreting statutes is that the purpose of the whole act is to be sought and favored over construction that will defeat it. Novak v. Madison

Motel Associates, 188 Wis. 2d 407, 525 N.W.2d 123 (Wis.

App. 1994.)

In its attempt to create an argument favorable to its position, the petitioner adopts a construction designed to defeat the ordinance. The court of appeals will always reject unreasonable construction of a statute where reasonable construction is possible. Alberti v. City of

Whitewater, 109 Wis. 2d 592, 327 N.W.2d 150 (Wis. App.

1982). Different provisions of the law should be construed so as to harmonize them thus giving effect to the leading idea behind the law. State v. Sweat, 208 Wis. 2d 409, 561

N.W.2d 695 (1997).

Both the court of appeals and trial court properly applied the aforementioned rules of statutory construction. As stated by the court of appeals, “when read as a whole, it is clear that the standards of issuance are also meant to apply to renewal and that the guidelines for renewal set forth in sec. 8.195(9) and (10) provide narrow, objective and definitive standards to guide the licensing authority.” (A-9, A-10).

13 The petitioner also unsuccessfully attempted to skew the rules of statutory construction for the purpose of convincing the trial court and court of appeals that the ordinance did not provide for a timely decision making or the availability of prompt judicial review per FW/PBS v.

Dallas.

The court of appeals rejected Wolff v. City of

Monticello, 803 F.Supp. 1568 (D. Minn. 1992) offered by the petitioner in arguing that the ordinance was infirm as it failed to explicitly require renewal for an eligible applicant. The court of appeals indicated that Wolff had no application to the Waukesha licensing scheme. “Unlike

Wolff, the ordinance here has clear cut standards for licensing…the ordinance’s standards are plainly spelled out and are not contingent upon the type of ‘silent regulation’ at play in Wolff.” (A.-11).

Under the guise of arguing that the City does not have discernable standards to guide the decisionmaker, the petitioner also argues that the ordinance should have had a range of provisions for the City to choose between mild and severe punishments. This apparently is an attempt to convince the courts to apply the “least restrictive alternative” test. However, that test is not applicable to

14 neutral regulations that promote a substantial government interest.

Restrictions on the time, place and manner of protected speech are not invalid simply because there is some imaginable alternative that might be less burdensome on speech…less any confusion on this point remain, we reaffirm today that a regulation of time, place and manner of protected speech need not be the least restrictive or least intrusive means.

Ward v. Rock Against Racism, 491 U.S. 781 at 797, 98. See also, City News and Novelty v. City of Waukesha, 170 Wis.

2d 14, 487 N.W.2d at 320 (Wis. App. 1992).

Contrary to petitioner’s assertions, the court of appeals correctly determined that it was within the discretion of the City to deny renewal of a license based on a number of violations of the ordinance. The ordinance sets forth specific responsibilities of the operator set forth in sec. 8.195(9) and (10) of the Waukesha Municipal

Code.

As the ordinance provides provisions as to what are grounds for non-renewal, 8.195(9)&(10)) and the licensee was provided with proper notice of charges and an opportunity to respond and challenge the charges; the licensee was provided an opportunity to present witness and

15 cross examine opposing witnesses; it is then within the discretion of the decisionmaker to determine the appropriate sanction. (A-29). See also, Manos v. Green

Bay, 372 F.Supp. 40 (E.D. Wis. 1974). The court properly concluded it is within the appropriate exercise of discretion to impose a non-renewal sanction.

The court of appeals applied the proper standard of review as to this issue by concluding “substantial evidence is evidence of such convincing power that reasonable persons could reach the same decision as the board…the substantial evidence test is highly differential that we may not substitute our view of the evidence for that of the board.” Clark v. Waupaca County Board of

Adjustment, 186 Wis. 2d 300, 304, 519 N.W.2d 782, 784 (Ct.

App. 1994). (A-33).

In this case there was substantial evidence presented to the Administrative Review Board convened under ch. 68 of the Wisconsin Statutes to find that non-renewal was an appropriate sanction. Supreme Court review of the discretionary acts of an administrative review board which made its determinations based upon evidence presented it does not meet any criteria for review.

16 V. THE COURT OF APPEALS CORRECTLY APPLIED THE PRINCIPLES OF FW/PBS V. DALLAS IN DETERMINING THAT WAUKESHA’S LICENSING SCHEME CONTAINS THE APPROPRIATE PROCEDURAL SAFEGUARDS.

The petitioner makes a facial challenge to

Waukesha Ordinance 8.195. As such, it is the most difficult challenge to mount successfully since the challenger must establishment that no set of circumstances exists under which the act would be valid. United States v. Salerno, 481 U.S. 739 at 746 (1987). The U.S. Supreme

Court reiterated this standard in FW/PBS v. Dallas by stating that, “every application of the statute must create an impermissible risk of suppression of ideas.” FW/PBS

Inc. v. Dallas, 493 U.S. at 224. Thus, any attempt to integrate a factual scenario into a facial challenge such as set forth in the petition is totally inappropriate.

(See Petitioner’s Brief at p. 19). The petitioner has not made an applied challenge to the ordinance and has not alleged injury or harm or that the ordinance has been improperly administered to the petitioner.

The court of appeals applied the constitutional framework set forth in FW/PBS v. Dallas rejecting petitioner’s claims that the ordinance contained inadequate time limits and failed to preserve the status quo. The

17 court also affirmatively asserted that the ordinance provides prompt judicial determination as stated by the plurality in FW/PBS at 493 U.S. at 227, 228. With regard to the latter, the court of appeals cited several other federal court of appeals’ decisions such as Graff v.

Chicago, 9 F.3d 1309, 1324-25 (7th Cir. 1993), and TK’s

Video, Inc. v. Denton County, 24 F.3d 705, 709 (5th Cir.

1994) in support of its interpretation. In addition, the court indicated that the municipality did not have the authority to direct the state court to issue a decision within a specific brief period of time. (A-17). This is in accord with well settled principles of the separation of powers doctrine. See, Complaint Against Grady, 118 Wis. 2d

762, 348 N.W.2d 559 (1984).

In rejecting the petitioner’s argument that

Waukesha’s licensing scheme was the same scenario that was struck down in Redner v. Dean, 29 F.3d 1495 (11th Cir.

1994), the court of appeals applied the constitutional framework established in FW/PBS v. Dallas by concluding,

Unlike Redner, however, ch. 68 does not contain contingencies that leave an applicant at the mercy of the licensor’s discretion. Perhaps more importantly, once the administrative review appeals board has issued its final determination see §68.12(1),

18 Stats. appellant may obtain immediate judicial review. “The chapter 68 Stats’ framework for judicial review provides a fixed timetable from the time the municipal authorities initial determination to the date of the administrative review appeals board decision.” (A-18.)

VI. THE ORDINANCE DOES NOT VIOLATE THE DUE PROCESS RIGHTS OF THE PETITIONER.

Although substantive and procedural due process issues are always significant constitutional issue concerns, in the present case they do not rise to the level of requiring a decision by this Court. The fact is that the

City afforded Petitioner with the well-settled full panoply of procedural due process rights--the right to timely and adequate notice of the decision by the Common Council not to renew its license; an impartial decisionmaker; and an opportunity to confront and cross-examine its accusers.

State ex rel. DeLuca v. Common Council, 72 Wis.2d 672, 676,

242 N.W.2d 689 (1976).

Petitioner’s first argument is that its procedural due process rights were violated because it was not provided with an impartial decisionmaker due to the fact that the Mayor signed the Common Council Resolution denying the license, and then reviewed that resolution as part of the Administrative Review Board.

19 The determinative question becomes whether circumstances were present which led to a high probability of bias. DeLuca, 72 Wis.2d at 684, 242 N.W.2d at 693. The

DeLuca Court stated that the two most important factors in determining whether a high probability of bias exists are whether the adjudicator has a pecuniary interest in the outcome, and whether the adjudicator has been the target of personal abuse or criticism by the party involved. Id.

Neither situations are present in this case. The court of appeals noted that the petitioner did not present any evidence to refute the statements made by the mayor that she did no more than facilitate the common council meeting.

The court of appeals correctly applied this standard and correctly concluded that “the Mayor’s signature was a purely administrative act and was not indicative of her position on the merits of the matter.”

(App-25).

Petitioner’s second argument is premised on the argument that the petitioner had no knowledge of violations of its employees which formed the basis for non-renewal.

The licensee is a corporation. A basic principle is that a corporation can be held liable for the acts of its employees committed within the scope of employment.

20 State v. Steenberg Homes, Inc., 223 Wis. 2d 511, 589 N.W.2d

668 (Wis. App. 1998). As the Supreme Court stated:

Corporations must of necessity act through their agents. When these agents act within the scope of their authority their acts are the acts of the corporation for which the corporation is liable both civilly and criminally…

State v. Steenberg, 223 Wis. 2d 511, 589 N.W.2d at 672

(citing Vulcan Last Company v. State, 194 Wis. 636, 643,

217 N.W. at 415). See also, Candee v. Egan, 84 Wis. 2d

348, 267 N.W.2d 890, 900 (1978).

To argue that a corporate licensee had no knowledge or is not responsible for the acts of employees committed within the scope of employment is simply contrary to the law and without merit.

In addition, as noted by the court of appeals, non-renewal was based upon nine ordinance violations in a one year period. Four violations involved minors on the premises, three involved open booth violations, and two involved customers masturbating in the booths. Four of the violations were not solely at the hands of an employee but rather were based upon convictions by the municipal court of a director of the corporate petitioner for three open

21 booth violations and for permitting minors to loiter. (A-

30).

Unlike the scenario cited by the petitioner in

State v. Zarnke, 224 Wis. 2d 116, 589 N.W.2d 370 (1999), this does not involve an application of a criminal statute and whether the burden is upon the prosecutor of proving some level of scienter as an essential element of the particular crime.

Petitioner’s line of reasoning in this regard is also grounded in substantive due process. Substantive due process has been expressed as “protecting against ‘the exercise of power [by the government] without any reasonable justification in the service of a legitimate governmental objective.’” Thorp v. Town of Lebanon, ___

Wis. 2d ___, ___ N.W.2d ___ (Ct. App. 1999) (quoting County of Sacramento v. Lewis, 118 S.Ct. 1708 (1998)). In this case, making the licensee strictly liable for the acts of its employees can be reasonably justified. As noted by the court of appeals, the purpose of the City’s ordinance is to safeguard its citizens from the secondary effects of adult oriented establishments, such as the transmission of infectious disease and higher incidence of crime. (A-

36&37). The ability of a municipality to combat the

22 secondary effects would be totally frustrated if it could be successfully argued in any given instance that the licensee had no knowledge or responsibility for the acts of employees.

Therefore, instilling a higher duty of care on the part of the licensee is reasonably justified in the service of government’s objective to protect the health and safety of its citizens. See State v. Stepniewski, 105 Wis.

2d 261, 314 N.W.2d 98 (1982) (noting that strict liability offenses are acceptable where, to reduce the possibility of serious threats to health and safety, a high degree of care is required.)

Additionally, from a procedural due process standpoint, the petitioner was provided with the opportunity to confront and cross examine witnesses with regard to those violations before the administrative review board. The City, therefore, met the procedural due process requirements set forth in DeLuca.

To adopt the position of the petitioner would make it virtually impossible to establish corporate liability in any situation much less a municipality attempting to combat the secondary effects associated with adult oriented establishments.

23 At best, this issue involves the application of well-settled areas of law already addressed by the court of appeals and therefore does not require review by this court.

CONCLUSION

Petitioners fail to advance any significant or substantial reason for review. The court of appeals properly applied well-settled principles of constitutional law. Review by the Wisconsin Supreme Court will not fulfil any of the requirements or goals of Rule 809.62(1), Wis.

Stats. Petition for review should be denied.

Dated this ______day of November, 1999.

CITY OF WAUKESHA

______Curt R. Meitz City Attorney State Bar No. 1017139

201 Delafield Street Waukesha, WI 53188 414/524-3520 414/524-3899 - FAX

24 CERTIFICATION

I hereby certify that this brief conforms to the rules contained in Rule 809.19(8)(b) and (c) and Rule

809.62(4) for a Response to a Petition for Review produced with a monospaced font. The length of this brief is

_____pages.

Dated this ______day of November, 1999.

______Curt R. Meitz

25 APPENDIX APPENDIX TABLE OF CONTENTS

Decision of the Court of Appeals A-1 dated August 18, 1999

Preamble to sec. 8.195 of the A-36 Waukesha Municipal Code