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Phantom Ventures LLC v. Depriest

United States District Court, D. Massachusetts

March 7, 2017

PHANTOM VENTURES LLC, Plaintiff,
v.
JOHN DEPRIEST, JANICE TATARKA, ARTHUR ARSENAULT, JOSEPH MAHONEY, MARILYN VEGA-TORRES, and THE CITY OF CHELSEA, Defendants.

          MEMORANDUM & ORDER

          INDIRA TALWANI UNITED STATES DISTRICT COURT.

         Plaintiff Phantom Ventures, LLC, appeals the City of Chelsea Zoning Board of Appeals' (“Zoning Board”) denial of a building permit to renovate a building for a live nude dancing venue with the sale of food and alcohol. Am. Compl. 1 [#19]; Defs.' Resp. Pl.'s Facts Ex. 13 [#31-13].[1] The Zoning Board found that live nude dancing was not permitted where the building is located. Plaintiff's Amended Complaint (“Complaint”) [#19] seeks a declaratory judgment that the decision of the Zoning Board was incorrect or that the proposed use is grandfathered based on the prior owner's use of the property. In the alternative, Plaintiff challenges Chelsea's Code of Ordinances (the “Code”) as unconstitutional in several respects. Currently pending before the court is Plaintiff's Motion for Partial Summary Judgment [#22] and Defendants' Cross-Motion for Summary Judgment [#29]. For the following reasons, Plaintiff's Motion for Summary Judgment [#22] is GRANTED IN PART and DENIED IN PART. Defendant's Cross-Motion for Summary Judgment [#29] is GRANTED IN PART and DENIED IN PART, and the matter is REMANDED to the Zoning Board for further consideration of Plaintiff's permit application.

         I. Facts[2]

         A. The Code of Ordinances of the City of Chelsea at the Time the Dispute Commenced

         As adopted in 2005, the Code includes zoning regulations to “promote the health, safety and general welfare of the inhabitants of the city.” Chelsea, Ma., Code of Ordinances ch. 34 § 34-1. The Code divides the City of Chelsea (“the City”) into fourteen districts, delineating the types of buildings and activities that are permitted in each. Chelsea, Ma., Code of Ordinances ch. 34 § 34-27. The districts include various residential districts, business districts (including the Retail Business District, the Highway Business District, and the Shopping Center District), industrial districts (including the Industrial District where the property at issue is located), and other districts. Chelsea, Ma., Code of Ordinances ch. 34, §34-27(a).

         The purpose of the Industrial District “is to provide for research, manufacturing, wholesaling, and related distribution activities in locations with suitable access and where such activities can occur without an adverse impact on residential areas.” Chelsea, Ma., Code of Ordinances ch. 34, §34-27(k). The purpose of the Highway Business District “is to provide areas for retail businesses serving vehicles and for automotive sales and services.” Chelsea, Ma., Code of Ordinances ch. 34, §34-27(h). The purpose of the Shopping Center District “is to provide areas of retail and services development with more than one establishment on one lot with shared common facilities and on-site parking.” Chelsea, Ma., Code of Ordinances, §34-27(i). The purpose of the Retail Business District is to provide a downtown area with the range of business sales and services which generally constitute a central business district. Chelsea, Ma., Code of Ordinances ch. 34, §34-27(f).

         The Code provides a table of principal use regulations denoting where specific activities or buildings may be located within the fourteen districts in the City. Chelsea, Ma., Code of Ordinances, ch. 34 §34-300. The Code also states that if an activity can be classified under more than one of the described uses, the more specific, more restrictive classification shall govern. Chelsea, Ma., Code of Ordinances, ch. 34, §34-49(c). The Code states further that “[a]ny building or use of premises not herein expressly permitted is hereby prohibited.” Chelsea, Ma., Code of Ordinances ch. 34 §34-49(a).

         “Art use” is allowed within the Industrial District without any need for a special permit, and in the Retail Business District and Highway Business District with a special permit. Chelsea, Ma., Code of Ordinances, ch. 34 §34-300. The Code defines Art use as “the creation, manufacture or assemblage of visual art, including two or three dimensional works of fine art or craft, or other fine art objects created, manufactured or assembled for the purpose of sale, display, commission, consignment or trade by artists or artisans; or classes held for art instruction.” Chelsea, Ma., Code of Ordinances, ch. 34 §34-241.

         “Theaters, concert halls and cinemas” are allowed in the Retail Business District and Shopping Center District without a special permit, and in the Industrial District with a special permit. Chelsea, Ma., Code of Ordinances, ch. 34 §34-300. Restaurants, with or without the sale of alcohol, are allowed in the Retail Business District, Highway Business District, and Shopping Center District without a special permit, and are not allowed in the Industrial District. Chelsea, Ma., Code of Ordinances, ch. 34 §34-300.

         “Adult entertainment establishments” are allowed by special permit within the Highway Business District and Shopping Center District, and not permitted in the Industrial District. Chelsea, Ma., Code of Ordinances, ch. 34 §34-300. At the time of the permit denial, the Code provided that Adult entertainment establishments included and were defined as “(1) Adult bookstore means an establishment having as a substantial or significant portion of its stock in trade books, magazines and other matter which are distinguished or characterized by their emphasis depicting, describing or relating to sexual conduct or sexual excitement as defined in M.G.L. c. 272, § 31” and “(2) Adult motion picture theater means an enclosed building used for presenting material distinguished by an emphasis on matter depicting, describing, or relating to sexual conduct or sexual excitement as defined in M.G.L. c. 272, § 31.” Chelsea, Ma., Code of Ordinances, ch. 34 §34-241.

         B. The Property's Prior Use

         Beginning in the late 1970s, the property at 200 Beacham Street (“the property”) was operated under the name King Arthur's Motel and Lounge (“King Arthur's”) as an entertainment facility with live adult nude dancing. Pl.'s Rule 56.1 Statement Material Facts, Pl.'s Mem. Supp. Mot. Summ. J. (“Pl.'s Facts”) 3 [#23], Defs.' Resp. Pl.'s Facts (“Defs.' Facts”) ¶ 3 [#31]. King Arthur's closed in 2014. Defs.' Facts ¶ 20 [#31], Ex. 8 [#31-8].

         C. The Permit Request and Denial

         Plaintiff is a licensee of the lessee of the current property owner. Pl.'s Facts 2 [#23]. On June 10, 2015, Plaintiff applied for a building permit to renovate the property for use as a “nude adult cabaret/sports bar.” Id. at 3, Ex. A 28 [#24-1]; Defs.' Facts ¶ 4. Chelsea's Zoning Enforcement Officer denied the application, stating that “adult entertainment establishments are not a permitted use within the Industrial Zoning District, in which this structure is located.” Aff. of Thomas S. Fitzpatrick in Supp. Pl.'s Mot. Partial Summ. J (“Fitzpatrick Aff.”) [#24] Aff. Ex. 1 (“Denial Letter”) 18 [#24-1]; Pl.'s Facts 3 [#23]; Defs.' Facts ¶ 5 [#31]. The Denial Letter explained that “adult entertainment establishments” were permitted by special permit within the Highway Business District and Shopping Center District. Id. The Denial Letter further stated that while the previous use at the property was an adult entertainment establishment “as is defined in the City of Chelsea Ordinances, ” the proposed use did not have pre-existing, non-conforming use protection. Id. (citing Mass. Gen. Laws, ch. 40A § 6 (2016)).

         Plaintiff appealed the denial of the building permit, arguing that a nude adult cabaret/sports bar was an “Art use” under the Code, and was not an “adult entertainment establishment” as the Zoning Enforcement Officer found. Pl.'s Fact 3 [#23]; Defs.' Fact ¶ 6 [#31], Fitzpatrick Aff. Ex. A 2 [#24-1]. In the alternative, Plaintiff argued that the proposed use was grandfathered. Fitzpatrick Aff. Ex. A 13 [#24-1]. The Zoning Board held a public hearing on the appeal. Pl.'s Facts 3 [#23]; Defs.' Facts ¶ 8. At the close of the public hearing, the Zoning Board unanimously voted to uphold the denial of the building permit. Pl.'s Facts 4 [#23]; Defs.' Facts ¶ 9 [#31]. On October 5, 2015, the Zoning Board filed its written decision upholding the denial of the permit with the City Clerk. Pl.'s Facts 4 [#23]; Decision of Zoning Board of Appeals 3 [#24-1]. This action followed.

         D. The Amendment of the Code

         On November 7, 2016, while this action was pending, the Chelsea City Council voted to amend the definition of “adult entertainment establishment” under the Code. Defs.' Additional Papers in Supp. Pending Mot. Summ. J. 2 [“Defs.' Additional Papers”] [#55]. As amended, “adult entertainment establishments” now includes “adult bookstores, adult motion picture theaters, adult paraphernalia stores, adult video stores, or establishments which display live nudity for their patrons as defined by Chapter 40A, Section 9A of the Commonwealth of Massachusetts General laws, as amended . . . .” Id. (emphasis added).

         II. Standard

         The role of summary judgment is “to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.” Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir. 1990) (quoting Fed.R.Civ.P. 56 advisory committee's note). Summary judgment is proper when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A dispute is genuine if the evidence about the fact is such that a reasonable jury could resolve the point in the favor of the non-moving party. A fact is material if it has the potential of determining the outcome of the litigation.” Patco Constr. Co. v. People's United Bank, 684 F.3d 197, 206-07 (1st Cir. 2012) (internal quotation marks and citations omitted). In ruling on a motion for summary judgment, the court views the record in the light most favorable to the nonmovant and draws all reasonable inferences in the nonmovant's favor. Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir. 1990).

         III. Analysis

         A. The Revision to the Code Does Not Moot the Case

         Defendants contend that Plaintiff's suit has been mooted by the City of Chelsea's adoption of a revised definition of “adult entertainment establishment.” Defs.' Suppl. Mem. 6 [#47]. Plaintiff responds that regardless of the amendment, Plaintiff was wrongly denied its permit in June 2015, and that at the time, “the issuance of [the] permit [was] a matter of duty, not discretion.” Pl.'s Reply Defs.' Suppl. Mem. 15 [#50] (citing Framingham Clinic, Inc. v. Zoning Bd. Of Appeals of Framingham, 415 N.E.2d 840, 849 (Mass. 1981)). Plaintiff argues further that its facial challenges under both the First Amendment and Article 16 of the Declaration of Rights in the Massachusetts Constitution must be considered. Am. Compl. ¶¶ 98-106.

         A “case is moot when the issues presented are no longer ‘live' or the parties lack a legally cognizable interest in the outcome.” City of Erie v. Pap's A.M., 529 U.S. 277, 287 (2000) (plurality opinion) (internal quotation marks omitted). Here, Plaintiff continues to seek redress for the denial of the permit in 2015, and continues to challenge the constitutionality of the Code so that it may obtain a permit now. Except as to the question of whether the “adult entertainment establishment” included nude dancing at the time of permit decision, the issues presented remain live and the parties have legally cognizable interests in the outcome.

         B. Plaintiff Is Not Entitled to a Declaration that the ...


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