Before 2012, the City of Milwaukee, Wisconsin required strip clubs to obtain one of three business licenses: if the club included both alcohol and nudity, the club would require both a liquor license and a “tavern-amusement license”; a dry strip club required either a “theater license” or a “public-entertainment club license.”
Jon Ferraro, the principal of the two plaintiff entities in this case, Six Star Holdings, LLC and Ferol, LLC, applied for liquor licenses and tavern-amusement licenses for two new strip clubs in Milwaukee. The Milwaukee Common Council denied the applications for both clubs in September 2010 after (surprise!) significant public opposition arose. Later, Ferraro applied for a theater license for a dry club under the Six Star entity. That too went nowhere.
Turning to the courts, in 2010, Six Star and Ferol brought 42 U.S.C. § 1983 claims against the city for facial and as-applied violations of the First Amendment Free Speech Clause relating to each of the licensing requirements. Ferraro sought injunctive relief and damages. The city repealed the ordinances in question in March 2012, but the question of damages to the plaintiffs went forward. The district court granted the plaintiffs’ motion for summary judgment with respect to the theater ordinance and granted summary judgment to the city on the tavern-amusement license and liquor license requirements. Questions of causation and damages to Six Star and Ferol were tried to a jury from February 17-19, 2015. The jury found that the city’s ordinances were the cause of Ferraro’s decision not to open a dry club, and awarded damages in the amount of $435,000 to Ferol, even though it never applied for a permit.
The city appealed the question of whether Ferol had standing, since it never applied for a license Last week, the Seventh Circuit found that, because the city ordinance proscribed protected First Amendment activity, Ferol did not need to apply for a license to have standing to challenge the ordinance. The Seventh Circuit also affirmed the damage award to Ferol and the nominal damage award to Six Star.
As the Seventh Circuit said in the opening to its opinion, “strip clubs [are] establishments that no one seems to want, official, but that are somehow quite lucrative.” It apparently doesn’t hurt that they are a form of protected speech either.