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LLC v. City of Columbia

United States District Court, D. South Carolina, Columbia Division

March 31, 2015

Cricket Store 17, LLC d/b/a Taboo, PLAINTIFF
v.
City of Columbia, DEFENDANT

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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For Cricket Store 17 LLC, doing business as, Taboo, Plaintiff: Thomas R Goldstein, LEAD ATTORNEY, Belk Cobb Infinger and Goldstein, Charleston, SC.

For City of Columbia, Defendant: Scott Dean Bergthold, LEAD ATTORNEY, PRO HAC VICE, Law Office of Scott D Bergthold PLLC, Chattanooga, TN; Jeanne J Brooker, Office of the City Attorney, Columbia, SC; Peter M Balthazor, City of Columbia, Columbia, SC.

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ORDER

Terry L. Wooten, Chief United States District Judge.

This action, brought by Cricket Store 17, LLC d/b/a Taboo, alleges First, Fifth,

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and Fourteenth Amendment violations against the City of Columbia regarding the City's sexually oriented business ordinances. Before the Court are the City's Motion for Summary Judgment, ECF No. 25, and Taboo's Motion for Summary Judgment, ECF No. 38. The Court grants the City's motion and denies Taboo's motion.

I. Factual and Procedural History

Taboo is a sexually oriented business located on " highly commercialized United States Highways" in Columbia, South Carolina. ECF No. 5-2 at 2. After receiving its business license from the City, it opened for business on December 5, 2011. Id. at 3. It has operated continuously at its current location since opening.

[Taboo] is a small business that provides take home only retail merchandise. It is only 1,600 square feet, and it provides no on-site adult entertainment. There is no theater; there are no mini movies; and there are no live performances. What [Taboo] sells is a mixed inventory of clothing, lotions, candles, vitamins, massage oils, party supplies, batteries, contraceptives, smoking accessories, novelties, gifts, games, and DVDs and magazines.

Id. at 4.

On December 29, 2011, less than one month after Taboo opened, the City adopted Ordinance No. 2011-105 (" 2011 Ordinance" ), ECF No. 1-1, which is a comprehensive ordinance regulating sexually oriented businesses in the City and which amended its then-existing sexually oriented business ordinance.

The purpose of the 2011 Ordinance is described as follows:

It is the purpose of this Article to regulate sexually oriented businesses in order to promote the health, safety, and general welfare of the citizens of the City, and to establish reasonable and uniform regulations to prevent the deleterious secondary effects of sexually oriented businesses within the City. The provisions of this Article have neither the purpose nor effect of imposing a limitation or restriction on the content or reasonable access to any communicative materials, including sexually oriented materials. Similarly, it is neither the intent nor effect of this Article to restrict or deny access by adults to sexually oriented materials protected by the First Amendment, or to deny access by the distributors and exhibitors of sexually oriented entertainment to their intended market. Neither is it the intent nor effect of this Article to condone or legitimize the distribution of obscene material.

Columbia, S.C., Code § 11-601(a) (2015). The 2011 Ordinance also contains an extensive findings and rationale section that lists dozens of court opinions and orders, reports from various cities across the country, and several journal articles. Id. § 11-601(b). Based on this information, the City made the following findings:

(1) Sexually oriented businesses, as a category of commercial uses, are associated with a wide variety of adverse secondary effects including, but not limited to, personal and property crimes, prostitution, potential spread of disease, lewdness, public indecency, obscenity, illicit drug use and drug trafficking, negative impacts on surrounding properties, urban blight, litter, and sexual assault and exploitation. Alcohol consumption impairs judgment and lowers inhibitions, thereby increasing the risk of adverse secondary effects.
(2) Sexually oriented businesses should be separated from sensitive land uses to minimize the impact of their

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secondary effects upon such uses, and should be separated from other sexually oriented businesses, to minimize the secondary effects associated with such uses and to prevent an unnecessary concentration of sexually oriented businesses in one area.

(3) Each of the foregoing negative secondary effects constitutes a harm which the City has a substantial government interest in preventing and/or abating. This substantial government interest in preventing secondary effects, which is the City's rationale for this Article, exists independent of any comparative analysis between sexually oriented and non-sexually oriented businesses. Additionally, the City's interest in regulating sexually oriented businesses extends to preventing future secondary effects of either current or future sexually oriented businesses that may locate in the City. The City finds that the cases and documentation relied on in this Article are reasonably believed to be relevant to said secondary effects.

Id. The legislative record consists of almost 2,200 pages.

Among other provisions, the 2011 Ordinance does the following:

- requires a sexually oriented business to hold a sexually oriented business license, id. § 11-604(a);
- requires each individual employee to hold a sexually oriented business employee license, id. § 11-604(b);
- provides standards for issuance, suspension, revocation, denial, and transfer of licenses, as well as appeals of licensing decisions, id. § § 11-604--11;
- requires the business to be closed between midnight and 6:00 AM, id. § 11-612;
- restricts the location of the business, id. § 11-620(a)--(d); and
- provides a two-year amortization period for an existing business, in addition to the possibility of a hardship extension, id. § 11-620(e)--(f).

On November 13, 2012, the City adopted Ordinance No. 2012-093 (" 2012 Ordinance" ). ECF No. 7-7. The 2012 Ordinance provides substantially the same purpose, findings, and rationale section as the 2011 Ordinance. Columbia, S.C., Code § 17-371 (2015). Additionally, and relevant to this action, it alters the permissible locations for a sexually oriented business. Id. § 17-374. Its adoption requires Taboo to move from its current location.

Under the 2012 Ordinance, a sexually oriented business must be located within an M-1 (light industrial) or M-2 (heavy industrial) district. Id. § 17-374(b). Additionally, it must be at least 900 feet from a church, a residential district, an outdoor recreational facility at which minors are likely to congregate, a lot devoted to residential use, a day care facility, or a cemetery. Id. § 17-374(c). It also must be at least 1,000 feet from another sexually oriented business and at least 1,250 feet from any elementary or secondary school, and it may not be within the same building as another sexually oriented business. Id. § 17-374(d)--(f). The distance buffer is measured from the nearest portion of the building used by the sexually oriented business, not the property line of the parcel on which it is located. Id. § 17-374(g).

Prior to filing this action, Taboo sought a hardship extension of the amortization period under § 11-620(f). That section provides that an application for a hardship extension " shall include evidence of purchase and improvement costs, income earned and lost, depreciation, and costs of relocation." Id. § 11-620(f). It also provides that " [t]he hardship extension shall

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be granted only upon a showing that the nonconforming sexually oriented business is unable to recoup its investments, made prior to the effective date of this Article, in its current location unless the hardship extension is granted." Id.

The independent hearing officer denied Taboo's extension request on November 29, 2013. ECF No. 7-3 at 6. The hearing officer found that Taboo " failed to establish the amount of its investment made prior to December 29, 2011 and it has also failed to establish that it has not reasonably recouped its investment." Id. at 5. The hearing officer further found that its accounting paperwork " showed significant inaccuracies, rendering the statements of little or no evidentiary value," that " [t]he bank statements are, likewise, insufficient to show Taboo's investment prior to December 29, 2011 or the amount of investment recouped in that [Taboo's owner] comingled business and personal use of this account," and that " no evidence was presented regarding income and expenses for 2013, which, at the time of [the] hearing, represented an additional 10 1/2 months for Taboo to recoup its investment." Id. at 5--6. Accordingly, the hearing officer denied the extension request. Id. at 6.

On December 20, 2013, Taboo filed this action seeking monetary damages, injunctive relief, a declaration that the 2011 and 2012 Ordinances are unconstitutional (both facially and as-applied), and attorneys' fees. ECF No. 1 at 11--12.

At the same time that Taboo filed this action, it filed a motion for preliminary injunction, requesting a preliminary injunction prohibiting the City from taking any action to close the store upon the expiration of its 2013 business license on December 31, 2013, requiring the City to renew Taboo's 2014 business license, and prohibiting the use of law enforcement to close the store until the Court made a final ruling on the case. ECF No. 5. After briefing and a hearing, the Court denied the motion in a written order. ECF No. 19. The Court also denied Taboo's motion to reconsider. ECF Nos. 22, 57.

After the City filed its Answer to the Complaint, ECF No. 20, it filed its Motion for Summary Judgment, ECF No. 25. Taboo then filed its own Motion for Summary Judgment. ECF No. 38. The parties filed extensive briefs, affidavits, and expert reports regarding their respective motions. See ECF Nos. 29, 36, 39, 40, 48, 49, 50, 53, 58, 64, 68, 72. After briefing was completed, the Court held a hearing on the motions on January 22, 2015. The matter is now ripe for decision.

II. Standard of Review

Summary judgment shall be granted " if the movant shows that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). " By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247--48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). " Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. at 248.

" [A]t the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. at 249. The court should view the evidence in the light most favorable to the nonmoving party and draw all inferences in its favor. Id. at 255. However, " facts must be viewed in the light most favorable to the non-moving

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party only if there is a genuine dispute as to those facts." Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007).

In considering cross-motions for summary judgment, the court should " rule upon each party's motion separately and determine whether summary judgment is appropriate as to each under the Rule 56 standard." Monumental Paving & Excavating, Inc. v. Pa. Mfrs. Ass'n Ins. Co., 176 F.3d 794, 797 (4th Cir. 1999).

III. Discussion

Taboo makes both a facial and an as-applied challenge to the ordinances. However, the analysis for both is the same. See Independence News, Inc. v. City of Charlotte, 568 F.3d 148, 155 n.3 (4th Cir. 2009).

The analysis of sexually oriented business legislation consists of three steps. See City of Los Angeles v. Alameda Books, Inc., 535 U.S. 425, 434, 122 S.Ct. 1728, 152 L.Ed.2d 670 (2002) (plurality) (describing the three-step analysis from City of Renton v. Playtime Theatres, Inc., 475 U.S. 41, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986)). The first step is determining whether the regulation bans sexually oriented businesses outright or instead only restricts when and where they may operate. If it only restricts when and where they may operate, it is analyzed as a time, place, and manner regulation. See Independence News, 568 F.3d at 154 (citing Renton, 475 U.S. at 46). The second step is determining whether the ordinance is to be treated as content-neutral or content-based. See id. (citing Renton, 475 U.S. at 47--49). If the ordinance is to be treated as a content-neutral time, place, and manner regulation, then the ordinance is subject to intermediate scrutiny. Imaginary Images v. Evans, 612 F.3d 736, 742 (4th Cir. 2010). If the ordinance is subject to intermediate scrutiny, then the third step is determining whether the regulation is designed to serve a substantial government interest, whether it is narrowly tailored to achieve that interest, and whether it unreasonably limits alternative avenues of communication. See Independence News, 568 F.3d at 154 (citing Ward v. Rock Against Racism, 491 U.S. 781, 798, 109 S.Ct. 2746, 105 L.Ed.2d 661 (1989); Renton, 475 U.S. at 47). The Court will address each of these steps.

A. Time, place, and manner regulation

The City's ordinances are time, place, and manner regulations. An ordinance that does not ban sexually oriented businesses outright, and instead only restricts when and where they operate, is analyzed as a time, place, and manner regulation. See id. (citing Renton, 475 U.S. at 46). Here, the City's ordinances do not ban sexually oriented businesses outright. See Columbia, S.C., Code § 11-601(a) (providing that the ordinance has " neither the purpose nor effect of imposing a limitation or restriction on the content or reasonable access to any communicative materials, including sexually oriented materials" ); id. § 17-371 (same). Rather, like the ordinances in Renton and Independence News, the City's ordinances primarily seek to regulate the areas where a sexually oriented business may locate. See Renton, 475 U.S. at 44--45 (prohibiting adult movie theaters from locating within 1,000 feet of any residential zone, single-or multiple-family dwelling, church, park, or school); Independence News, 568 F.3d at 151 (prohibiting sexually oriented businesses from locating within various distances from various property uses). Because the City's ordinances are not an outright ban on sexually oriented businesses, they are properly analyzed as time, place, and manner regulations.

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B. Content-based or content-neutral

Having determined that the City's ordinances are time, place, and manner regulations, the next step is to determine whether they are to be treated as content-based or content-neutral. An ordinance that is aimed at the negative secondary effects of sexually oriented businesses, not the content of the speech, is treated as content-neutral legislation. Independence News, 568 F.3d at 154 (citing Renton, 475 U.S. at 47--49). When enacting legislation based on secondary effects, a city

is entitled to " rely heavily on the experience of, and studies produced by, other cities and states, as well as on court opinions from other jurisdictions," [ Mitchell v. Comm'n on Adult Entm't Establishments, 10 F.3d 123, 133 (3d Cir. 1993)], and need not, before enacting such ordinances, " conduct new studies or produce evidence independent of that already generated by other cities, so long as whatever evidence the city relies upon is reasonably believed to be relevant to the problem that the city addresses." [ Renton, 475 U.S. at 51--52].

Independence News, 568 F.3d at 155.

The " reasonably believed to be relevant" standard is not arduous. The evidence need not satisfy the demanding standard of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). Alameda Books, 535 U.S. at 439 (plurality); G.M. Enters., Inc. v. Town of St. Joseph, 350 F.3d 631, 640 (7th Cir. 2003). The Supreme Court has consistently held that cities " must have latitude to experiment" and that " very little evidence is required" to satisfy the evidentiary requirement. Alameda Books, 535 U.S. at 451 (Kennedy, J., concurring). If a city's conclusions appear reasonable, the Court should not find that they are unsupported. Id. at 452. Furthermore, as long as the evidence supports the necessary proposition, it is not necessary that the legislators actually reviewed or considered the evidence in passing the ordinance. See R.V.S., LLC v. City of Rockford, 361 F.3d 402, 411 n.6 (7th Cir. 2004).

The City's ordinances are explicit in targeting the secondary effects of the speech, not the speech itself. See Columbia, S.C., Code § 11-601(a) (" It is the purpose of this Article to regulate sexually oriented businesses in order to promote the health, safety, and general welfare of the citizens of Columbia, and to establish reasonable and uniform regulations to prevent the deleterious secondary effects of sexually oriented businesses within Columbia. The provisions of this Article have neither the purpose nor effect of imposing a limitation or restriction on the content or reasonable access to any communicative materials, including sexually oriented materials." ); id. § 17-371 (same).

Taboo argues that the ordinances are content-based and therefore subject to strict scrutiny. It primarily bases this argument on the timing and circumstances surrounding the 2011 Ordinance's enactment and on statements allegedly made by some of the members of City Council.

Regarding the timing of the 2011 Ordinance's enactment, Taboo argues that animus may be found because the 2011 Ordinance was enacted less than one month after Taboo opened its doors. However, the fact that Taboo's opening spurred the City into action is not controlling, as this does not demonstrate that a ban on Taboo's erotic message was a motive for the ordinances.[1] See D.G. Rest. Corp. v. City of Myrtle Beach,

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953 F.2d 140, 146 (4th Cir. 1991) (" That it took D.G. Restaurant's announced plans to spur the city to this realization [about negative secondary effects concerns] does not in any way impute illicit or unconstitutional motives to the Myrtle Beach city council." ).

Taboo also relies on the statements of several of the members of City Council, but those statements are both legally innocuous and irrelevant to the analysis of the issues in this case. Taboo references a newspaper article, which quotes one of the council members as saying, " I just don't think [sexually oriented businesses] belong on major thoroughfares," and that the City needs to " [g]et professionals to tell us where does it [sic] belong." ECF No. 14-3 at 2. That council member later remarked at a council meeting that the zoning changes took sexually oriented businesses away from major commercial corridors and that these businesses were an inappropriate use for general commercial areas. ECF No. 68-2 at 6. Another member said that " the only tragedy in his heart is that we can't zone them out of the city." Id.

Contrary to Taboo's assertions, these statements do not necessarily reflect a desire by the council members to ban Taboo's message and, instead, are arguably a recognition that the City cannot enact an outright ban, but that it may regulate the location of sexually oriented businesses. Furthermore, even if these statements could be construed as these council members' desires to ban businesses like Taboo's, courts will not strike down otherwise constitutional legislation based on alleged improper legislative motives or statements. Renton, 475 U.S. at 47--48; see also United States v. O'Brien, 391 U.S. 367, 384, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968) (declining to void an otherwise constitutional statute " which could be reenacted in its exact form if the same or another legislator made a 'wiser' speech about it" ); DiMa Corp. v. Town of Hallie, 185 F.3d 823, 828 (7th Cir. 1999) (concluding that " [t]he actual motives of those who enacted the ordinance are irrelevant to our First Amendment analysis" ); Ambassador Books v. City of Little Rock, 20 F.3d 858, 863 (8th Cir. 1994) (concluding that a handwritten statement from the city attorney that he wanted to " shut these places down!" was not sufficient to disregard the stated purpose of the ordinances); D.G. Rest., 953 F.2d at 146 (" [T]he individual motives of legislators, even if those motives are demonstrated to conflict with the expressed purpose of the enacted legislation, are rarely relevant to a court's consideration of the legitimacy of the legislation." ).

Taboo also argues that the Court should rely on the Eleventh Circuit's ruling in Flanigan's Enterprises, Inc. of Georgia v. Fulton County (Flanigan's I), 242 F.3d 976 (11th Cir. 2001), in which that court determined that a county ordinance prohibiting the sale of alcoholic beverages in adult establishments was unconstitutional. However, that case is clearly distinguishable from Taboo's case.

In Flanigan's I, the county conducted its own study on the secondary effects of adult entertainment establishments that

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served alcohol, which showed no increase in crime at such establishments, and, in fact, showed increased calls for service and crime at non-adult entertainment establishments. Flanigan's I, 242 F.3d at 979. Additionally, some of the adult establishments conducted their own study, which showed no negative economic impact caused by the clubs, and another study from the county showed the same. See id. at 979--80. Despite these local studies showing a lack of negative secondary effects, the county, relying on various foreign studies, passed the ordinance. Id. at 980--81. The Eleventh Circuit recognized that a government entity need not conduct its own studies, but, " having done so, the [county] cannot ignore the results." Id. at 986. The court found that " it was unreasonable for [the county] to rely on remote, foreign studies concerning secondary effects when the county's own current, empirical data conclusively demonstrated that such studies were not relevant to local conditions." [2] Id.

The holding in Flanigan's I is not applicable to this case because the City did not conduct its own local studies prior to enacting the ordinances. Instead, the City relied on dozens of court opinions and orders, reports from various cities across the country, and several journal articles as evidence that sexually oriented businesses have certain negative secondary effects. Columbia, S.C., Code § § 11-601(b), 17-371. This approach is constitutionally permissible and has been approved by both the Supreme Court and the Fourth Circuit. See, e.g., Alameda Books, 535 U.S. at 438 (plurality); Renton, 475 U.S. at 51--52; Imaginary Images, 612 F.3d at 745; Independence News, 568 F.3d at 155.

Taboo also argues that its business is different from the movie theaters and strip clubs in cases such as Renton and D.G. Restaurant because it is a retail-only store--there is no live entertainment on the premises. Thus, Taboo argues that the cases and other evidence discussing negative secondary effects do not apply to its store. However, the distinction Taboo attempts to make is not supported by the case law.

Under Renton and its progeny, the government need only rely on evidence that is " reasonably believed to be relevant to the problem that the [government] addresses." Renton, 475 U.S. at 51--52; accord Alameda Books, 535 U.S. at 437 (plurality), 451 (Kennedy, J., concurring). The City argues that under this standard, it did not need to rely on evidence specific to retail-only stores. The Court agrees. See, e.g., Richland Bookmart, Inc. v. Knox County, 555 F.3d 512, 526 (6th Cir. 2009) (" Requiring local governments to produce evidence of secondary effects for all categories created by every articulable distinction is a misapprehension of the Supreme Court's holding that governments may rely on any evidence 'reasonably believed to be relevant.'" (citing Alameda Books, 535 U.S. at 438--39 (plurality))); ILQ Invs., Inc. v. City of Rochester, 25 F.3d 1413, 1418 (8th Cir. 1994) (" ILQ argues that Rochester was constitutionally required to disregard these studies because none evaluated the secondary effects of a bookstore offering non-adult as well as

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adult materials and having no facilities for on-premises consumption. That is simply not the law." ).

Furthermore, even though the City was not required to, it did, in fact, rely on evidence about negative secondary effects arising from retail-only stores in enacting the ordinances, including H& A Land Corp. v. City of Kennedale, 480 F.3d 336 (5th Cir. 2007); World Wide Video of Washington, Inc. v. City of Spokane, 368 F.3d 1186 (9th Cir. 2004); Reliable Consultants, Inc. v. City of Kennedale, No. 4:05-CV-166-A, Findings of Fact and Conclusions of Law (N.D. Tex. May 26, 2005); People ex rel. Deters v. The Lion's Den, Inc., Case No. 04-CH-26, Modified Permanent Injunction Order (Ill. 4th Judicial Cir., Effingham County, July 13, 2005); the documentary evidence on negative secondary effects that the City of Spokane relied on in enacting its ordinances; and Richard McCleary, Rural Hotspots: The Case of Adult Businesses, 19 Criminal Justice Policy Review 153 (2008). The Constitution does not require more.

Taboo relies on the extensive filings and reports prepared by its expert, R. Bruce McLaughlin, who essentially concludes that the secondary effects evidence relied on by the City does not support the ordinances. See, e.g., ECF Nos. 40-1 at 27, 40-2 at 1, 40-7 at 26--27. He is primarily offered by Taboo as an expert in the area of land use planning. The issue of secondary effects evidence and its sufficiency under the relevant case law is a legal question beyond his area of expertise. Other courts that have considered his legal opinions have given them limited or no consideration. See, e.g., World Wide Video of Wash., Inc. v. City of Spokane, 227 F.Supp.2d 1143, 1149 n.3 (E.D. Wash. 2002), aff'd , 368 F.3d 1186 (9th Cir. 2004) (concluding that McLaughlin was " not qualified to render what are essentially legal opinions and conclusions" ); Colacurcio v. City of Kent, 944 F.Supp. 1470, 1473 n.2 (W.D. Wash. 1996), aff'd, 163 F.3d 545 (9th Cir. 1998) (" McLaughlin has no specialized knowledge, skill, training, education, or experience that would qualify him to offer an opinion on the purpose of the ordinance. Moreover, his opinion is based on speculation and conjecture." ).

Further, McLaughlin questions the validity of the City's fact-finding, concluding that " the City's predicate documents . . . offer not an iota of evidence" regarding any significant crime or disorderly conduct related to take-home only stores, ECF No. 40-1 at 27, and that " [n]o reasonable land use planner or governmental official could possibly believe that the City of Columbia 'predicate' offers any proof whatsoever that sexually oriented Adult Use cause [sic] unique 'adverse secondary effects,'" ECF No. 40-7 at 26. Again, the issue of secondary effects is a legal analysis, not a land planning one. The many hundreds of pages of paperwork and reports submitted by McLaughlin demonstrate, at most, that the City could have reached a different conclusion about the link between sexually oriented businesses and negative secondary effects.[3] However, the fact that the City could have drawn a different conclusion does not mean that the conclusion they did draw was without support. See G.M. Enters., 350 F.3d at 639. The Court is not required to re-weigh the evidence considered by the City, and the Court will not substitute its judgment for that of the Columbia City Council. See Imaginary Images,

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612 F.3d at 747; Fantasy Ranch, Inc. v. City of Arlington, 459 F.3d 546, 560--61 (5th Cir. 2006); G.M. Enters., 350 F.3d at 639--40; see also Alameda Books, 535 U.S. at 451--52 (Kennedy, J., concurring) (" As a general matter, courts should not be in the business of second-guessing fact-bound empirical assessments of city planners. The Los Angeles City ...


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