The City of Chicago v. Pooh Bah

Section 4–60–140(d) of the Municipal Code of Chicago prohibits establishments licensed to serve alcoholic beverages from permitting any employee, entertainer or patron to engage in "any live act, demonstration, dance or exhibition *** which exposes to public view *** [h]is or her genitals, pubic hair, buttocks *** or [a]ny portion of the female breast at or below the areola thereof." The issue we are asked to resolve today is whether this ordinance violates the first and fourteenth amendments to the United States Constitution (U.S. Const, amends. I, XIV) and article I, section 4, of the Illinois Constitution of 1970 (Ill. Const. 1970, art. I, §4). The circuit court of Cook County found that it does. The appellate court concluded that it does not. Nos. 1–01–0592, 1–01–1932 cons. (unpublished order under Supreme Court Rule 23). For the reasons that follow, we affirm the judgment of the appellate court.

The events which gave rise to this appeal began in 1993, when the Liquor Control Commission of the City of Chicago initiated administrative proceedings against Pooh Bah Enterprises, Inc. (Pooh Bah), to revoke various municipal licenses which had been issued to the company, including its municipal retail liquor license. The challenged licenses had been issued to the company in connection with its operation of a so-called "gentlemen's club" located at 1531 North Kingsbury Street in the City of Chicago. Footnote The basis for the revocation was that the company, by and through its agents, had permitted various female dancers at the club to expose their buttocks or portions of their breasts at or below the areola to public view in violation of section 4–60–140(d) of the Chicago Municipal Code.

The record shows that Pooh Bah was originally owned by an individual named Jim Levin. Under Levin's ownership, Pooh Bah operated the club as the "1531 Club." When Levin began experiencing financial problems, Perry Mandera, owner and president of a Chicago-area-based shipping company known as The Custom Companies, lent him $300,000 in exchange for a security interest in 50% of Pooh Bah's stock. Mandera subsequently lent Levin an additional $500,000 to finance improvements to the club undertaken in connection with its becoming a franchisee of a chain of "strip" clubs operated by Michael J. Peter Club Management, Inc., under the name "Thee Dollhouse."

Prior to the switch to the Thee Dollhouse format, no nude or seminude dancing was performed at the club. Strippers did not appear until the club became affiliated with the Michael J. Peter organization. Unfortunately for Levin, the introduction of strippers did not bring financial solvency, and he was unable to repay Mandera the money he owed. Mandera ultimately took over full ownership of Pooh Bah through an entity he owned called Ace Entertainment.

According to his testimony, Mandera, through Ace Entertainment, became the sole owner of Pooh Bah and thus the strip club in the summer of 1993. After taking over, Mandera terminated the club's connection with the Michael J. Peter organization. In place of that company, Mandera, through Pooh Bah, entered into management and licensing agreements with Frederick John "Rick" Rizzolo, owner of a Las Vegas strip club known as "The Crazy Horse Too." Rizzolo became active in the management of Pooh Bah's club in 1995, while the license revocation proceedings were still pending. Footnote For his services, Rizzolo was paid $20,000 per month, plus travel expenses.

Under Rizzolo's regime, the club dropped the name "Thee Dollhouse" and began operating under the same name as Rizzolo's club in Las Vegas, "The Crazy Horse Too." Mandera explained that he affiliated his club with Rizzolo because, when he came across The Crazy Horse Too in Las Vegas, "[he] liked what they did." He was impressed by the club's success and its desire to expand into other cities. According to Mandera, Rizzolo was willing to give him a far better financial arrangement than the one Pooh Bah had with the Michael J. Peter organization. Being affiliated with Rizzolo also provided Pooh Bah with access to the same pool of dancers Rizzolo used. In addition, Mandera testified that Rizzolo "seemed like a very nice person and operated a nice, up-scale operation ***." Footnote

The club operated under the name The Crazy Horse Too until 2003. According to the briefs and records of the Illinois Secretary of State, the establishment now does business under the name "VIP's" or "VIP's, A Gentlemen's Club." Absent any indication from the parties to the contrary, we assume that its ownership and operations remain unchanged.

At the time the license revocation proceedings against Pooh Bah commenced and throughout the period relevant to this litigation, its club at 1531 North Kingsbury Street has provided something that other licensed establishments selling liquor by the drink in Chicago do not: seminude dancers. Entertainment venues featuring nude and seminude female dancers operate within the City's limits in compliance with municipal ordinances. None of them, however, has a liquor license. Throughout all of Chicago, Pooh Bah's club is the only commercial establishment where the sale of liquor by the drink and dancing by seminude women are combined.

The mix of alcohol sales and nude or seminude dancing was not always so rare. Roger G. O'Brien, a veteran Chicago police officer who has worked in the Department's 18th District vice unit since 1979, testified that the City's Rush Street entertainment district was once home to 12 or 13 strip clubs, all of which served alcohol. During that time, prostitution in and around the clubs was pervasive. According to O'Brien, in the late 1970s and mid-1980s, there were prostitutes on every corner in the Rush Street area, and inside the clubs, waitresses and dancers frequently solicited customers for sex. Antiprostitution campaigns waged by the City during the 1980s ultimately resulted in the closure of all these establishments. O'Brien estimated that when the strip clubs serving alcohol were shut down, the number of prostitution arrests in the area declined by 80%.

Pooh Bah's club is not located in Chicago's Rush Street entertainment area and is not related to any of the City's 1970- and 1980-era strip clubs. The type of entertainment presented at Pooh Bah's club would, however, probably be familiar to patrons of those now-defunct establishments. After paying an admission charge, $15 in the year 2000, customers of the club enter a room containing a bar, an elevated stage area, and tables and chairs. Footnote Female performers take turns going on stage, where they remove their clothing while dancing to prerecorded background music. For the most part, the performers called to testify in this case had not received any formal dance training. One described taking dance lessons when she was a child. Another indicated that while she had never been taught dance steps, she had "either choreographed or hired choreographers" to assist her in her performance.

Over the course of an evening, more than 20 women may perform on stage. During those performances, waitresses take drink orders from patrons and serve them at their tables. When an entertainer has finished on stage, she will circulate through the club and mingle with the customers. Her objective in doing this is twofold. First, she is expected to earn money for the club by encouraging patrons to buy premium-priced drinks for themselves and for her. Alcohol sales are a major source of the club's income, which is substantial. According to testimony given by Mandera in 2000, the club's gross annual revenue was $7 million. By comparison, strip clubs in Chicago that did not serve alcohol had annual revenues of only one or two million dollars.

A performer's second objective when circulating through the club is to earn money for herself through tips. Footnote Dancers receive tips for providing two basic services: (1) sitting and talking with customers Footnote and (2) doing table dances. A table dance is simply a brief striptease which a dancer performs for a customer at the customer's table. An additional fee is charged for this service. At Pooh Bah's club, the basic charge for a table dance is $20, but dancers reported receiving as much as $100.

The dances performed on stage and at customers' tables are intended to be erotic. Footnote Performers typically move in a sexually suggestive fashion, often enhancing the effect by rubbing their breasts and pubic areas. Club policy specifies that dancers are to stay at least one foot away from customers during table dances, but evidence in the record suggests that this restriction is routinely ignored. The same is true of a club policy forbidding dancers to have physical contact with customers. The record shows that performers sometimes do deliberately touch customers during table dances. One report included earlobe nibbling. Dancer Tracey Lynn Sula admitted kissing customers on the cheek.

During both the on-stage performances and the table dances, performers become largely, although not totally, nude. By the conclusion of a strip tease, whether on stage or at a customer's table, the only item of clothing a dancer will still have on is a thong, sometimes referred to as a "T-bar." That garment consists of a narrow waistband to which is attached a panel of cloth intended to cover the woman's pubic area. A strip of material runs from the front panel, between the woman's legs, up through the cleft of her buttocks, then attaches to the waistband at the back. It is similar to a traditional G-string except that the cloth strip running between the woman's buttocks is wider. When a performer wears a thong, her anus is concealed. As with a G-string, however, her buttocks are left completely exposed.

Although performers at Pooh Bah's club remove all of their clothing but their thongs when they dance, they also apply flesh-toned makeup and latex to their nipples and areolas. The makeup and latex do not conceal the contours of the nipple area. They merely obscure the naturally darker color of that portion of the women's breasts. Evidence was presented that the dancers are also required by club policy and practice to extend the makeup and latex covering to a triangular area extending below the areola in the area in frontal portion of the breast. Whether any female performers at Pooh Bah's club ever actually did that is open to question. It is clear, however, that the entire sides of the dancers' breasts remained fully exposed with no latex or makeup coating. From photographs and video exhibits contained in the record, the dancers' breasts appear nude. But for the change in color of the nipples and areolas, one could not tell that the dancers' breasts had been covered in any way. Testimony from investigating police officers indicated that, in person, one could sometimes see through the makeup and latex and discern the difference in coloration between a dancer's areolas and the fleshy portion of her breasts.

While the name of Pooh Bah's club has changed over the years, the way dancers have appeared when interacting with customers has remained constant. The combination of "T-bars" and latex-covered nipples and areolas has been a hallmark of the club since it first adopted the "gentlemen's club" format in 1993. As we have previously indicated, and as we shall discuss again later, Chicago municipal ordinances do not prohibit women from dancing for customers in that state of undress. Throughout the period at issue here, clubs have been permitted to operate in the City featuring dancers who wear even less. Indeed, there are establishments where dancers perform in a state of complete nudity. What triggered this litigation is Pooh Bah's decision to present dancers in "T-bars" and latex makeup while continuing to serve alcoholic beverages to its patrons.

Pooh Bah's combination of nude or seminude dancing and liquor sales was opposed by municipal authorities as soon as the club attempted it. Pooh Bah introduced seminude dancing in February of 1993. City police were on the premises conducting investigations within two weeks. By the following month, the Liquor Control Commission of the City of Chicago had initiated administrative proceedings against Pooh Bah to revoke various municipal licenses which had been issued to the company, including its municipal retail liquor license. The basis for the revocation, as indicated at the outset of this opinion, was that the company, by and through its agents, had violated section 4–60–140(d) of the Chicago Municipal Code, which prohibits establishments licensed to serve alcoholic beverages from permitting any employee, entertainer or patron to engage in "any live act, demonstration, dance or exhibition *** which exposes to public view *** [h]is or her genitals, pubic hair, buttocks *** or [a]ny portion of the female breast at or below the areola thereof." For purposes of the ordinance, the foregoing body parts are considered to be exposed to public view if they are "uncovered or [are] less than completely and opaquely covered." Chicago Municipal Code §4–60–140(d) (2006).

Pooh Bah attempted to block the license revocation by filing a suit for declaratory and injunctive relief in the circuit court of Cook County. The circuit court denied Pooh Bah's request for a temporary restraining order. The Local Liquor Commissioner of the City of Chicago subsequently entered an order, following the requisite notice and a hearing, which revoked the City of Chicago retail liquor license and all other city licenses issued to Pooh Bah for its strip club at 1531 North Kingsbury Street based on its determination that the company had, in fact, violated section 4–60–140(d) of the Municipal Code.

Pooh Bah appealed the revocation of its liquor licence to the City of Chicago's liquor appeal commission pursuant to sections 7–5 and 7–9 of the Liquor Control Act of 1934 (235 ILCS 5/7–5, 7–9 (West 1996)). The Commission affirmed. Pooh Bah petitioned for rehearing. 235 ILCS 5/7–10 (West 1996). When that petition was denied, Pooh Bah sought judicial review in the circuit court of Cook County pursuant to this state's Administrative Review Law (735 ILCS 5/3–101 et seq. (West 1996)). See 235 ILCS 5/7–9, 7–11 (West 1996). The request for judicial review was asserted by Pooh Bah by means of a new count added to an amended complaint it filed in connection with its civil action for declaratory and injunctive relief, which remained pending. Footnote

Revocation of Pooh Bah's municipal licenses was stayed while judicial review of the revocation decision was underway and Pooh Bah's civil action continued. The City, however, did not wait for those matters to be resolved before taking further action. It filed a counterclaim against Pooh Bah for equitable and other relief. The basis for its counterclaim was that the strip club operated by the company at 1531 North Kingsbury Street violated section 8–4–090(a) of the Chicago Municipal Code. Under that statute,

"[a]ny premises used for prostitution, illegal gambling, illegal [drug] trafficking *** or any other activity that constitutes a felony, misdemeanor, business offense or petty offense under federal, state or municipal law is hereby declared to be a public nuisance ***." Chicago Municipal Code §8–4–090(a) (2005).

In the City's view, Pooh Bah was committing a business or petty offense within the meaning of this statute by allowing its entertainers to engage in live acts, demonstrations, dances or exhibitions which expose to public view portions of the buttocks and female breasts at or below the areolae in violation of section 4–60–140(d) of the Municipal Code.

The foregoing proceedings, which we shall designate as the license revocation case, were protracted. Because the license revocations had been stayed pending review, however, Pooh Bah's municipal licenses remained in effect and the company was able to continue operating its strip club at 1531 North Kingbury Street throughout the remainder of the 1990s. In 1999, further investigation by undercover police officers revealed that dancers at the club continued to engage in the type of conduct which had triggered the initial license revocation proceedings six years earlier. The City therefore filed a new action in the circuit court of Cook County to obtain injunctive relief to shut down the club.

The basis for the City's new claim was essentially the same as that asserted in connection with the original license revocation case. According to the City, Pooh Bah had violated and continues to violate section 4–60–140(d) of the Municipal Code of Chicago by "causing, encouraging or permitting" female performers at the club to engage in dances or exhibitions "which expose to public view portions of the female breast at or below the areola, the buttocks, the pubic hair regions and portions of the genitalia." The City further alleged that Pooh Bah was in violation of section 8–4–090(a) of the Chicago Municipal Code, the city's public nuisance ordinance. Unlike the City's counterclaim in Pooh Bah's civil action challenging the license revocation, the City's public nuisance claim in this case not only charged violation of the liquor ordinance, it asserted that Pooh Bah had caused, encouraged and permitted female performers to engage in prostitution and to solicit for prostitution.

After filing its new complaint for injunctive relief, the City moved for issuance of a preliminary injunction. Following discovery and a series of hearings extending over several months, the circuit court ruled in January of 2001 that section 4–60–140(d) of the Municipal Code of Chicago contravened the first and fourteenth amendments to the United States Constitution (U.S. Const, amends. I, XIV) and article I, section 4, of the Illinois Constitution of 1970 (Ill. Const. 1970, art. I, §4) and therefore could not serve as the predicate for the City's claim that Pooh Bah's strip club was being operated in a manner that constitutes a public nuisance. Concluding that the City had failed to establish that operation of the strip club created a public nuisance in any other way, the circuit court denied the City's motion for a preliminary injunction.

By agreement of the parties, the circuit court amended its ruling, nunc pro tunc, on May 3, 2001, to clarify certain of its provisions. In a separate order entered the same day, the circuit court also granted a joint motion by the parties to consolidate the license revocation case with the public nuisance case and to adopt the evidentiary record developed in connection with the motion for a preliminary injunction as the basis for resolution of the license revocation and public nuisance cases on the merits. Footnote In yet a third order dated May 3, 2001, the court entered judgment in favor of Pooh Bah and against the City on the City's public nuisance claims; reversed the decision of the liquor appeal commission upholding revocation of Pooh Bah's municipal licenses; vacated the revocation of those licenses; reserved for future consideration various related and subsidiary issues; and made an express written finding that there was no just reason for delaying enforcement or appeal.

The City took an interlocutory appeal from the circuit court's judgement. Footnote Rejecting the circuit court's position, the appellate court held that section 4–60–140(d) of the Municipal Code of Chicago does not violate either the federal or the Illinois Constitution. Because the ordinance is not unconstitutional, the appellate court further held that violation of the ordinance could serve as the basis for (1) revoking Pooh Bah's municipal licenses and (2) finding that Pooh Bah's operation of the strip club constituted a public nuisance. The appellate court therefore reversed the circuit court's judgment and remanded for further proceedings with respect to both the license revocation case and the City's public nuisance claim. Nos. 1–01–0592, 1–01–1932 cons. (unpublished order under Supreme Court Rule 23). After failing to persuade the appellate court to grant rehearing, Pooh Bah petitioned our court for leave to appeal. 177 Ill. 2d R. 315. Footnote We granted that petition, and the cause is now before us for review.

In resolving this appeal, the pivotal inquiry is whether section 4–60–140(d) of the Municipal Code of Chicago violates either the United States or the Illinois Constitution. When assessing the validity of municipal ordinances, our analysis is guided by the same standards applicable to statutes. City of Chicago v. Morales, 177 Ill. 2d 440, 447 (1997). As with statutes, municipal ordinances are presumed to be valid. Chavda v. Wolak, 188 Ill. 2d 394, 398 (1999). The burden of rebutting that presumption is on the party challenging the law's validity. La Salle National Bank v. Evanston, 57 Ill.2d 415, 428 (1974). Courts are obligated to uphold the constitutionality of ordinances whenever it is reasonably possible to do so. City of Chicago v. Alton R.R. Co., 355 Ill. 65, 75 (1933). Whether a legislative enactment is constitutional presents a question of law which we review de novo. See O'Brien v. White, 219 Ill. 2d 86, 98 (2006).

We consider first Pooh Bah's contention that section 4–60–140(d) of the Municipal Code of Chicago violates the first amendment to the United States Constitution. The first amendment is binding on the states through the fourteenth amendment's due process clause. People v. Alexander, 204 Ill.2d 472, 476 (2003). It provides, in part, that "Congress shall make no law *** abridging the freedom of speech." U.S. Const., amend. I.

Although the first amendment literally forbids only the abridgement of freedom of speech, the United States Supreme Court has long recognized that its protections are not limited to the written or spoken word. They may also extend to expressive conduct. Texas v. Johnson, 491 U.S. 397, 404, 105 L. Ed. 2d 342, 353, 109 S. Ct. 2533, 2539 (1989). Generally speaking, the first amendment prevents the government from proscribing speech or expressive conduct because of disapproval of the ideas expressed. Content-based regulations are presumptively invalid. Nevertheless, restrictions upon the content of speech have traditionally been permitted in a few limited areas which are " ‘of such slight social value as a step to truth that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality.' " R.A.V. v. City of St. Paul, 505 U.S. 377, 383, 120 L. Ed. 2d 305, 317, 112 S. Ct. 2538, 2543 (1992), quoting Chaplinsky v. New Hampshire, 315 U.S. 568, 572, 86 L. Ed. 1031, 1035, 62 S. Ct. 766, 769 (1942). Under the first amendment jurisprudence developed by the United States Supreme Court, freedom of speech does not include freedom to ignore these traditional limitations. R.A.V. v. City of St. Paul, 505 U.S. at 383, 120 L. Ed. 2d at 317, 112 S. Ct. at 2543.

The municipal ordinance challenged in this case pertains to live acts, demonstrations, dances or exhibitions which expose to public view the performer's genitals, pubic hair, buttocks or, in the case of female performers, any portion of the breast at or below the areola. The ordinance does not bar all such performances, only those that take place at establishments licensed to serve alcohol. At the time the license revocations were initiated in this case, the United States Supreme Court adhered to the view that where, as here, the sale of alcohol is involved, the regulatory authority conferred on states by the twenty-first amendment to the United States Constitution (U.S. Const., amend. XXI) gave states and their political subdivisions the power to ban nude dancing. Under the Court's analysis, the broad powers of the states to regulate the sale of liquor pursuant to the twenty-first amendment outweighed any first amendment interest in nude dancing. The state therefore had the authority to ban nude dancing as a part of its liquor licensing program. City of Newport v. Iacobucci, 479 U.S. 92, 95, 93 L. Ed. 2d 334, 339, 107 S. Ct. 383, 385 (1986), quoting California v. LaRue, 409 U.S. 109, 114, 34 L. Ed. 2d 342, 349-50, 93 S. Ct. 390, 395 (1972). As the Court noted in New York State Liquor Authority v. Bellanca, 452 U.S. 714, 718, 69 L. Ed. 2d 357, 361, 101 S. Ct. 2599, 2602 (1981):

"Whatever artistic or communicative value may attach to topless dancing is overcome by the State's exercise of its broad powers arising under the Twenty-first Amendment. Although some may quarrel with the wisdom of such legislation and may consider topless dancing a harmless diversion, the Twenty-first Amendment makes that a policy judgment for the state legislature, not the courts."

See also California v. LaRue, 409 U.S. 109, 34 L. Ed. 2d 342, 93 S. Ct. 390 (1972) (given broad sweep of twenty-first amendment, regulations prohibiting explicitly sexual live entertainment and films in bars and other establishments licensed to dispense liquor by the drink not facially invalid).

Under the foregoing authority, section 4–60–140(d) of the Municipal Code of Chicago, which prohibits nude entertainment in establishments licensed to sell alcohol by the drink, would clearly not be subject to challenge on first amendment grounds. During the pendency of this litigation, however, the United States Supreme Court altered its view of the interplay between the first and twenty-first amendments. In 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 516, 134 L. Ed. 2d 711, 736, 116 S. Ct. 1495, 1514 (1996), the Court held that while the twenty-first amendment

"limits the effect of the dormant Commerce Clause on a State's regulatory power over the delivery or use of intoxicating beverages within its borders, ‘the Amendment does not license the States to ignore their obligations under other provisions of the Constitution.' [Citation.]"

Noting its specific holdings in prior cases that "the Twenty-first Amendment does not in any way diminish the force of the Supremacy Clause [citations]; the Establishment Clause [citation] or the Equal Protection Clause [citation]," the Court concluded that the same should also be true with respect to the free speech clause. 44 Liquormart, 517 U.S. at 516, 134 L. Ed. 2d at 736, 116 S. Ct. at 1514-15. It therefore held "the Twenty-first Amendment does not qualify the constitutional prohibition against laws abridging the freedom of speech embodied in the First Amendment." 44 Liquormart, 517 U.S. at 516, 134 L. Ed. 2d at 736, 116 S. Ct. at 1515.

Although the Court thus disavowed the reasoning employed in City of Newport v. Iacobucci, New York State Liquor Authority v. Bellanca, and California v. LaRue, insofar as it relied on the twenty-first amendment, it distinguished cases such as LaRue, which involved the regulation of nude dancing in places where alcohol was served. The Court held that "[e]ntirely apart from the Twenty-first Amendment, the State has ample power to prohibit the sale of alcoholic beverages in inappropriate locations." 44 Liquormart, 517 U.S. at 515, 134 L. Ed. 2d at 735, 116 S. Ct. at 1514. One of those locations is an establishment where nude dancing is allowed. Accordingly, the Court held that its "analysis in LaRue would have led to precisely the same result if it had placed no reliance on the Twenty-first Amendment." 44 Liquormart, 517 U.S. at 515, 134 L. Ed. 2d at 735, 116 S. Ct. at 1514.

Four years after 44 Liquormart was decided, the United States Supreme Court examined the validity of a municipal public indecency ordinance which made it an offense to intentionally appear in public in a "state of nudity." Under that ordinance, whose provisions were similar to those at issue in this case, "nudity" was defined to include the "showing of the *** buttocks with less than a fully opaque covering; the showing of the female breast with less than a fully opaque covering of any part of the nipple; *** or the exposure of any device worn as a cover over the nipples and/or areola of the female breast, which device simulates and gives the realistic appearance of nipples and/or areola." City of Erie v. Pap's A.M., 529 U.S. 277, 283 n.*, 146 L. Ed. 2d 265, 274 n.*, 120 S. Ct. 1382, 1388 n.* (2000). Unlike the matter before us today, these prohibitions were not limited to establishments licensed to serve alcohol.

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