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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
FANTASY WORLD, INC., Petitioner, v. GREENSBORO BOARD OF
ADJUSTMENT and CITY OF GREENSBORO, Respondents
Filed: 17 February 2004
1. Zoning_privilege license_zoning compliance required
The City of Greensboro had the authority to deny a business privilege license to an adult
business based on zoning determinations by the tax collector. The City may require evidence of
compliance with applicable laws before approving an application for a privilege license, and the
City charter provided the authority to delegate zoning compliance assessment to the tax
2. Zoning_denial of privilege license_appeal to board of adjustment
The Greensboro City Charter and ordinances properly gave the Board of Adjustment the
authority to hear appeals from the denial of a business privilege license.
3. Collateral Estoppel and Res Judicata_prior motions to show cause and for
permanent injunction_denial not on the merits
Res judicata and collateral estoppel did not bar the City of Greensboro from asserting that
a company was violating local zoning ordinances as the reason for denying a privilege license.
The denial of a prior motion to show cause was not on the merits, and a permanent injunction
was denied based on lack of jurisdiction.
4. Zoning_amended ordinances_applicability
There was competent evidence for findings and conclusions that amended development
ordinances were applicable to a petitioner engaged in a longstanding dispute with the City of
Greensboro over the operation of adult businesses.
5. Zoning_adult business_zoning violations
There was competent and sufficient evidence to support findings and conclusions that
petitioner violated the city's zoning requirements in its operation of adult mini-motion picture
6. Constitutional Law_adult business_privilege license denied_not a prior restraint on
The denial of a privilege license for an adult business pursuant to a zoning ordinance was
not an unconstitutional prior restraint of free expression.
Appeal by petitioner from judgment entered 2 May 2002 by Judge
W. Douglas Albright in Guilford County Superior Court. Heard in
the Court of Appeals 15 October 2003.
Loflin & Loflin, by Thomas F. Loflin III; and Sirkin, Pinales,
Mezibov & Schwartz, L.L.P., by H. Louis Sirkin and Jennifer M.
Kinsley for petitioner-appellant.
Office of the City Attorney, City of Greensboro, by A. Terry
Wood, Becky Jo Peterson-Buie, and Clyde B. Albright, for
Petitioner-appellant Fantasy World, Incorporated, appeals from
a superior court order upholding a decision by the City of
Greensboro, North Carolina to deny the company a business privilege
license. We affirm.
The present appeal arises out of a lengthy dispute between the
parties over the legality of Fantasy World's use of the building
located at 4018 West Wendover Avenue in Greensboro, North Carolina.
Prior to 1994, the building housed two separate types of commercial
enterprises. A topless bar occupied one portion of the building,
and a space, which had formerly been a restaurant that was not a
sexually oriented business, occupied the other portion.
Petitioner-appellant Fantasy World took possession of both portions
of the building sometime before June 1994.
On 15 June 1994, the City issued a license to Fantasy World to
operate a business at the location. Fantasy World continued to use
the topless bar portion of the building for live adult
entertainment and subsequently sought to use the former restaurant
space for lingerie sales. On 1 September 1994, the Greensboro
Planning Department attached a note to the building plans
specifying that no adult entertainment would be permitted in theformer restaurant portion of the building. Adult-oriented uses of
the former restaurant space were prohibited because the topless bar
was a legal non-conforming use and a City development ordinance
did not permit non-conforming uses to be enlarged, increased, or
extended to occupy a greater area of land or floor area[.]
Greensboro Code of Ordinances § 30-4-11.2.
Following visits to the property by zoning enforcement
officers, the Greensboro Zoning Enforcement Division issued a
Notice of Violation to Fantasy World on 27 December 1994,
instructing the business to cease all adult sales and use of the
adult mini-motion picture theater on the premises because (1)
such uses did not comply with the development ordinance requiring
a five hundred foot spacing from residentially zoned property and
a twelve hundred foot spacing from another adult use, or
alternatively (2) such uses violated the ordinance prohibiting
enlarging, increasing, or extending a non-conforming use to occupy
a greater floor area. The Greensboro Zoning Board of Adjustment
upheld the Notice of Violation.
The superior court heard the matter on a petition for
certiorari pursuant to N.C.G.S. § 160A-388(e). Judge Ben F.
Tennille issued an order affirming the Board of Adjustment on 18
July 1996. Judge Tenille ruled that sufficient evidence existed
for the Board to conclude that Fantasy World was operating an
adult mini motion picture theater, which constituted a violation
of the prohibition against enlarging, increasing, or extending a
nonconforming use. This Court affirmed Judge Tennille's order in
Fantasy World, Inc. v. Greensboro Bd. of Adjustment, 128 N.C. App.703, 496 S.E.2d 825, disc. review denied, 348 N.C. 496, 510 S.E.2d
On 25 September 1998, the City filed a motion requesting the
superior court to issue an order requiring Fantasy World to show
cause why it should not be held in contempt for violating Judge
Tennille's order. Judge Henry E. Frye, Jr., denied this motion.
In an unpublished opinion, Fantasy World, Inc. v. Greensboro Board
of Adjustment, COA99-438, slip op. at 5 (N.C. App. Mar. 7, 2000),
this Court vacated Judge Frye's order denying the City's motion to
show cause, and directed him to clarify whether his decision was
based on the merits of the controversy. On 19 June 2000, Judge
Frye entered an order stating that his denial of the City's motion
to show cause had not been a decision based on the merits.
On 10 November 1998, after an appeal of Judge Frye's initial
order had been perfected, the City filed a motion for a permanent
injunction in superior court, requesting that Fantasy World be
ordered to comply with the City's development ordinance and to
cease operation of an adult mini motion picture theater
establishment at 4018 West Wendover Avenue. On 20 January 1999,
the superior court ruled that it was without jurisdiction to issue
the injunction because N.C.G.S. § 1-294 stayed further proceedings
while Judge Frye's order was on appeal.
The 27 December 1994 Notice of Violation cited Fantasy World
for operating an adult mini motion picture theater at 4018 West
Wendover. The City Code defined the term adult mini motion
picture theater to mean a mini motion picture theater in which a
preponderance of [the movies shown were] distinguished orcharacterized by an emphasis on matter depicting, describing, or
relating to specified sexual activities or specified anatomical
areas. Greensboro Code of Ordinances § 30-2-2.7 (definition
deleted 17 April 1995)(emphasis added). The court proceedings
between 1996 and 2000, including the two previous appeals heard by
this Court, were based on the 27 December 1994 Notice of Violation
employing the preponderance of materials test.
Sometime prior to 2000, the City replaced many of its
definitions relating to adult entertainment with new definitions.
Specifically, the City defined the term sexually oriented
business to include adult arcades and adult bookstores, which
were further defined as follows:
(1) Adult arcade (also known as peep show).
Any place to which the public is
permitted or invited, wherein coin-
operated or token-operated or
electronically, electrically, or
mechanically controlled . . . motion
picture machines. . . are maintained to
show images to persons in booths or
viewing rooms where the images so
displayed depict or describe specified
sexual activities and/or specified
(2) Adult bookstore or adult video store. A
commercial establishment which as one (1)
of its principal business purposes offers
for sale or rental, for any form of
consideration, any one (1) or more of the
a. Books, magazines, periodicals
or other printed matter, or
photographs, films, motion
pictures, video cassettes or
video reproductions, slides, or
other visual representations
that depict or describe
specified sexual activities
and/or specified anatomical
areas; or b. Instruments, devices, or
paraphernalia that are designed
for use in connection with
specified sexual activities.
Greensboro Code of Ordinances § 30-2-2.7. The Greensboro
development ordinances were amended to prohibit the location of a
sexually oriented business within one thousand two hundred feet
of another sexually oriented business. Greensboro Code of
Ordinances § 30-2-2.73.5.
In 2000, Fantasy World submitted an application for a business
privilege license to the City tax collector. The application
requested a license for a business operating under the name
Xanadu at 4018 West Wendover Avenue to engage in business
associated with retail sales, amusement machines, sale of sundries,
and movie sales and rentals. The tax collector visited the
business and, by letter dated 14 September 2000, denied Fantasy
World's application for a privilege license to operate Xanadu. The
letter indicated that the tax collector himself had made the
determination that the business was a sexually oriented business,
as defined by the amended City development ordinances. The letter
further indicated that the tax collector had determined that
Fantasy World's operation was in violation of the City's zoning
requirement that sexually oriented businesses be at least one
thousand two hundred feet apart because it was under the same roof
as and had an entry door . . . not more than ninety feet from
another business which the tax collector had determined to be a
sexually oriented business. On the basis of this determination,
the tax collector denied the privilege license. The letterindicated that the tax collector's decision could be appealed to
the City's Zoning Board of Adjustment.
Fantasy World's appeal was heard by the Greensboro Zoning
Board of Adjustment in October and November of 2000. At the
hearings, the City introduced evidence of inspections of Fantasy
World conducted by City Zoning Officers in 1995, 1998, and 2000.
The inspection reports showed that sometime in 1998, Fantasy World
began offering the option of viewing sixteen general release
films and fifteen sexually oriented films in their mini motion
picture theaters. Fantasy World did not call any witnesses to
testify at the hearing. The Board made findings of fact and
concluded that the tax collector had properly denied Fantasy
World's business privilege license on the grounds that its business
at 4018 West Wendover Avenue was not in compliance with the City's
current zoning requirements applicable to sexually oriented
Fantasy World filed a petition for certiorari in superior
court pursuant to N.C.G.S. § 160A-388(e) seeking review of the
decision by the Board of Adjustment. Following a hearing on the
petition, Judge W. Douglas Albright concluded that the Board's
decision was supported by competent, material, and substantial
evidence and was not the result of an error in law, and entered an
order affirming the Board. From this order, Fantasy World
The trial court's order was entered pursuant to petitioner's
appeal from a zoning board of adjustment, which upheld the decisionof the City tax collector. A trial court's review of a zoning
board of adjustment is as follows: Every decision of the [zoning]
board [of adjustment] shall be subject to review by the superior
court by proceedings in the nature of certiorari. N.C.G.S. §
160A-388(e) (2003). The trial court sits as an appellate court and
its scope of review includes:
(1) Reviewing the record for errors in law,
(2) Insuring that procedures specified by law
in both statute and ordinance are followed,
(3) Insuring that appropriate due process
rights of a petitioner are protected including
the right to offer evidence, cross examine
witnesses, and inspect documents,
(4) Insuring that decisions of . . . boards
are supported by competent, material and
substantial evidence in the whole record, and
(5) Insuring that decisions are not arbitrary
Fantasy World, Inc. v. Greensboro Bd. of Adjustment, 128 N.C. App.
703, 706-07, 496 S.E.2d 825, 827 (citation omitted), disc. review
denied, 348 N.C. 496, 510 S.E.2d 382 (1998).
On an appeal to this court from a superior court's review of
a municipal zoning board of adjustment, the standard of review is
limited to (1) determining whether the trial court exercised the
appropriate scope of review and, if appropriate, (2) deciding
whether the court did so properly. Westminster Homes, Inc. v.
Town of Cary Zoning Bd. of Adjustment, 140 N.C. App. 99, 102-03,
535 S.E.2d 415, 417, (2000), aff'd, 354 N.C. 298, 554 S.E.2d 634
(2001). The scope of our review is the same as that of the trial
court. Coastal Ready-Mix Concrete Co. v. Bd. of Comm'rs, 299 N.C.
620, 627, 265 S.E.2d 379, 383 (1980). Questions of law are to beconsidered by both the superior court and by this Court de novo.
Westminster Homes, Inc., 140 N.C. App. at 103, 535 S.E.2d at 417.
 We first address Fantasy World's contention that the City
lacked the authority to deny it a privilege license based on zoning
determinations made by the City tax collector. Given the facts and
circumstances of the present controversy, we conclude that the City
possessed the authority to allow the City tax collector to assess
zoning compliance as part of the administration of the privilege
license tax and to deny Fantasy World's privilege license on this
The law is well-settled that a municipality has only such
powers as the legislature confers upon it. Homebuilders Ass'n v.
City of Charlotte
, 336 N.C. 37, 41, 442 S.E.2d 45, 49 (1994)
(citation and internal quotation marks omitted). In determining
what authority a municipality possesses, the powers granted [to a
municipal corporation] in [its] charter will be construed together
with those given under the general statutes. Laughinghouse v.
City of New Bern
, 232 N.C. 596, 599, 61 S.E.2d 802, 804 (1950)
(citation and quotation marks omitted). [T]he provisions of
[N.C.G.S.] Chapter [160A] and of city charters shall be broadly
construed and grants of power shall be construed to include any
additional and supplementary powers that are reasonably necessary
or expedient to carry them into execution and effect. . . .
N.C.G.S. § 160A-4 (2003). [Our courts] treat [160A-4] as a
legislative mandate that we are to construe in a broad fashion the
provisions and grants of power contained in Chapter 160A.Homebuilders Ass'n
, 336 N.C. at 44, 442 S.E.2d at 50 (citation and
internal quotation marks omitted).
The Legislature has conferred upon the City the authority to
impose a privilege license tax on businesses and the authority to
regulate land use through zoning.
N.C.G.S. § 160A-211 (2003)
(privilege license tax); Greensboro City Charter ch. IV, § 4.61
(privilege license tax); N.C.G.S. § 160A-381(a) (2003) (zoning);
Greensboro City Charter ch. V, § 5.61 (zoning). In addition,
N.C.G.S. § 181.1(c) (2003) explicitly permits a municipality to
regulate sexually-oriented businesses through local zoning
The City has elected to exercise its taxation powers by
enacting an application procedure for obtaining a privilege
license, Greensboro Code of Ordinances § 13-36; and a prohibition
against operating a business without a privilege license where
. § 13-32. The City has elected to exercise its land
use powers to, inter alia
, prohibit the location of sexually
oriented businesses within one thousand two hundred feet of other
sexually oriented businesses, or within five hundred feet of
residential neighborhoods. Id
. § 30-2-2.73.5. Furthermore, the
City has enacted an ordinance providing its tax collector with the
limited authority to assess zoning compliance before issuing a
If it shall be made to appear to the tax
collector and the tax collector shall
determine that any licensee or applicant for a
[privilege] license is conducting
to conduct a business activity pursuant to his
privilege license which activity would be in
violation of any provision of [the Citydevelopment ordinances] with respect to
permitted and prohibited uses . . . he shall:
(1) Refuse to issue a license to such
applicant and so notify him in writing.
Greensboro Code of Ordinances § 13-48. The foregoing ordinance
places initial zoning compliance determinations concerning business
privilege license applicants in the hands of the tax collector.
The present appeal raises a question as to whether the City may
give the tax collector this authority.
The privilege license is not a regulatory
license of the sort
which municipalities may issue pursuant to N.C.G.S. §§ 160A-194 and
181.1(c). Rather, [t]he privilege license tax is a revenue-
generating measure and should not be used to regulate otherwise
legitimate business. William A. Campbell, North Carolina City and
County Privilege License Taxes 2 (Institute of Government 5th ed.
2000); see also
G.S. § 160A-211 (located within Article 9 of
Chapter 160A, titled taxation).
Therefore, although the power to
impose a privilege license tax must be construed broadly to include
incidental powers, G.S. § 160A-4, the privilege license tax,
standing alone, is only a tax and does not carry with it any powers
wholly unrelated to its imposition or administration.
The power to impose a tax . . . include[s] the power to
provide for its administration[.] N.C.G.S. § 160A-206 (2003).
The power to administer the privilege license tax includes the
authority to require that an application for a privilege license be
, at 2, 45. This application may
include questions designed to gather general information about an
applicant. See id
. at 45. Before approving an application, amunicipal taxing authority may require that an applicant provide
evidence of compliance with applicable law. See id
. at 3. It
follows that a city may require proof that a determination of
appropriate usage has been made by the proper zoning authority
before issuing a privilege license.
(See footnote 1)
Thus, a city may, as part of
the administration of the privilege license tax: (1) require that
an applicant submit documentation issued by zoning authorities, (2)
permit a municipal taxing authority to refer the matter to
municipal zoning officials, and/or (3) afford the taxing authority
the freedom to make inquiries of zoning officials concerning
whether an applicant's business complies with applicable laws.
In the instant case, in addition to the powers which generally
accompany the privilege license tax, the City is given the
following authority in its Charter:
The Council may create, combine, consolidate
and abolish; may assign functions to
; and may
organize as it sees fit the work of:
(1) Other offices and positions in addition to
[mayor, mayor pro tem, city manager, city
clerk, city treasurer, city attorney, chief of
police, tax collector
, fire chief, and
building inspector]; and
(2) Such departments, boards, commissions and
agencies as it deems appropriate.
Greensboro City Charter ch. IV, § 4.01(b) (emphasis added). This
Charter provision provides the City with the authority to designate
zoning compliance assessment responsibilities to its tax collector. Accordingly, the City possesses the authority to require its tax
collector to assess a privilege license applicant's zoning
compliance as part of the administration of the privilege license
tax. The City validly exercised this authority in Greensboro
Ordinance § 13-48.
Fantasy World contends that this consolidation of privilege
license tax administration and zoning administration is a violation
of State law. Specifically, Fantasy World argues that the denial
of a business privilege license is not a valid remedy for enforcing
local zoning ordinances because N.C.G.S. § 160A-175, which sets
forth the exclusive ordinance-enforcement remedies available to
cities, does not contain the authority to deny a privilege license.
We are unpersuaded by this argument.
N.C.G.S. § 160A-175(a) (2003)
provides [a] city shall have
power to impose fines and penalties for violation of its
ordinances, and may secure injunctions and abatement orders to
further insure compliance with its ordinances . . . . As an
initial matter, we note that the denial of a privilege license is,
at best, an indirect method of zoning ordinance enforcement and is,
therefore, to be distinguished from the remedies set forth in G.S.
§ 160A-175, which provide for direct enforcement of city regulatory
ordinances. Moreover, it is unnecessary to analyze the instant
case under G.S. § 160A-175 because we conclude that the City
possessed the authority to deny Fantasy World's privilege license
on the basis of zoning non-compliance pursuant to the power to
administer the privilege license tax. In administering the
privilege license tax, the City had the authority to requireconfirmation of Fantasy World's zoning compliance and the authority
to reject Fantasy World's privilege license application where
zoning compliance was found wanting.
This assignment of error is overruled.
 We address next Fantasy World's argument that N.C.G.S. §
160A-388(b), which empowers local zoning boards of adjustment to
hear zoning appeals, does not confer jurisdiction upon the
Greensboro Zoning Board of Adjustment to hear an appeal from the
denial of a business privilege license. We do not agree.
The North Carolina General Statutes confer the following
appellate authority on a city zoning board of adjustment:
The board of adjustment shall hear and decide
appeals from and review any order,
requirement, decision, or determination made
by an administrative official charged with the
enforcement of any ordinance adopted pursuant
to this Part [zoning]. . . . [T]he board
shall have all the powers of the officer from
whom the appeal is taken.
N.C.G.S. § 160A-388(b) (2003) (emphasis added). The Greensboro
City Charter authorizes the City to make the tax collector an
official charged with assessing zoning compliance. Greensboro City
Charter ch. IV, § 4.01(b). The City has elected to exercise this
authority by enacting an ordinance which provides that if the City
tax collector denies a privilege license on the basis of an alleged
zoning violation, the Zoning Board of Adjustment must hold a
hearing and make a final determination with respect to any zoning
violations. Greensboro Code of Ordinances § 13-48(b). Thus, the
Greensboro Zoning Board of adjustment had jurisdiction to hear an
appeal taken from the municipal tax collector's denial of FantasyWorld's privilege license based upon his assessment that the
business was in violation of local zoning laws.
This assignment of error is overruled.
 We next address Fantasy World's argument that Greensboro
is barred from asserting that the company is violating local zoning
ordinances by the doctrines of res judicata and collateral
estoppel. This contention lacks merit.
In asserting claim and issue preclusion, Fantasy World relies
on the superior court orders denying the City's motion to show
cause and denying the City's motion for a permanent injunction.
However, neither order amounts to a final judgment on the merits of
any issue or claim involved in the present suit, as is required for
res judicata or collateral estoppel to apply. See Thomas M.
McInnis & Assocs., Inc. v. Hall, 318 N.C. 421, 429, 349 S.E.2d 552,
557 (1986) (setting forth elements of each doctrine). The superior
court indicated that its order denying the City's motion to show
cause was not on the merits, and the order denying the City's
motion for a permanent injunction was based on a lack of
jurisdiction. This assignment of error is overruled.
 We next address Fantasy World's argument that the City
erroneously classified Fantasy World's business as a sexually
oriented business as the term is defined in Greensboro Code of
Ordinances § 30-2-2.7, set forth supra at 606-07, 592 S.E.2d at
208, because the business became a legally existing non-conforming
use prior to the enactment of the definition the City seeks toapply. The gravamen of this argument is that there is no competent
record evidence that the business had not come into compliance with
previously existing zoning requirements applicable to adult
businesses. See Greensboro Code of Ordinances § 30-4-11.2
(permitting continuation of legally existing non-conforming uses).
We do not agree.
At the hearing before the Board of Adjustment, a zoning
enforcement officer testified that he had inspected Xanadu in 1998
and on September 6, 2000; he described the materials found on the
premises on both occasions, which included mostly adult-oriented
materials and products, and stated that the premises was
essentially the same on both occasions. Moreover, a 1998 report
prepared by zoning officers indicated that, although each motion
picture viewing booth which was inspected purported to offer one
additional general release film than adult content film, some
of the listed general release films were not available for
viewing. Moreover, nothing in the record indicates that the City
ever determined that Fantasy World's present use of 4018 West
Wendover Avenue was in full compliance with past or current City
development ordinances applicable to sexually oriented businesses.
Thus, there is competent record evidence to support the
Board's findings, which in turn support the Board's conclusion that
the City's amended development ordinances are applicable to Fantasy
World. This assignment of error is overruled.
 We address next Fantasy World's argument there was
insufficient evidence presented to the Greensboro Zoning Board of
Adjustment to support its conclusion that Fantasy World's business
at 4018 West Wendover Avenue violated the City's development
ordinances. We disagree.
The function of the reviewing court is to determine whether
the findings of fact made by the Board [of Adjustment] are
supported by the evidence before the Board and whether the Board
made sufficient findings of fact. Shoney's v. Bd of Adjustment
119 N.C. App. 420, 421, 458 S.E.2d 510, 511 (1995) (citation and
quotation marks omitted).
When the specific issue raised on appeal to
this court is whether a Board's decision was
supported by competent, material and
substantial evidence, our Supreme Court has
further held that this court is to inspect all
of the competence evidence which comprises the
whole record so as to determine whether
there was indeed substantial evidence to
support the Board's decision. Substantial
evidence is that which a reasonable mind would
regard as sufficiently supporting a specific
Appalachian Outdoor Adver. Co., Inc. v. Town of Boone Bd. of
, 128 N.C. App. 137, 140, 493 S.E.2d 789, 792 (1997)
(internal citations omitted).
In the present case, the record upon which the Greensboro
Board of Adjustment based its decision contained a report prepared
by Zoning Enforcement Officers Barry Levine and Richard Parham
following a visit to Fantasy World's business on 18 October 2000.
That report contained the following information:
On entering, we observed a cubicle with
lingerie for sale on the left and the customer
service counter on the right. Once inside weobserved sexually oriented video tapes for
sale on the side, rear wall and on three
display racks in the middle of the room. We
also observed sexually oriented magazines on
the walls and stacked on the floor. We also
observed erotic devices and miscellaneous
marital aids on the back wall and on the right
wall near the customer service counter. A
rack of adult greeting cards was near the
right wall of the erotic devices.
The report also described the mini motion picture theater booths
and the titles of movies available for viewing in those booths.
According to the report, movies were available on two separate
channels: a red channel and a green channel. Each channel offered
both general release and sexually oriented film selections.
The report indicated that zoning officers viewed all of the
selections for the red and green channels, both the sexually
oriented and general release videos[, and] found all of the adult
oriented movies . . . to depict specified sexual activities and/or
anatomical areas. Officer Levine also testified about the
inspections, and the tax collector, John Rascoe, provided
information tending to show that the business was located within
one thousand two hundred feet of another sexually oriented
Thus, there is competent and sufficient evidence to support
the findings of fact made by the Board, which in turn support the
Boards's conclusion that Fantasy World, doing business as Xanadu,
was in violation of the City's zoning requirements. This
assignment of error is overruled.
 Finally, we address Fantasy World's constitutional
arguments. Fantast World contends that the City's denial of its
privilege license constituted an unconstitutional prior restraint
against free expression in violation of the First and Fourteenth
Amendments of the United States Constitution because: (1) the
City's licensing scheme vests unchecked discretion in the City tax
collector to deny a business privilege license, and (2) the
judicial review of a denial is not sufficiently prompt. We
Localities may permissibly make adult establishments subject
to zoning requirements:
[A] municipality may control the location of
theaters as well as the location of other
commercial establishments, either by confining
them to certain specified commercial zones or
by requiring that they be dispersed throughout
the city. The mere fact that the commercial
exploitation of material protected by the
First Amendment is subject to zoning and other
licensing requirements is not a sufficient
reason for invalidating these ordinances.
Young v. American Mini Theatres, Inc
., 427 U.S. 50, 62, 49 L. Ed.
2d 310 (1976). Zoning ordinances that do not ban adult
entertainment altogether but instead place only spacing limitations
on such businesses are properly analyzed as a form of time, place,
and manner regulation. Renton v. Playtime Theatres, Inc.
U.S. 41, 46, 89 L. Ed. 2d 29, 37 (1986). '[C]ontent-neutral'
time, place, and manner regulations are acceptable so long as they
are designed to serve a substantial governmental interest and do
not unreasonably limit alternative avenues of communication. Id.
at 47, 89 L. Ed. 2d at 37. A city's interest in attempting to
preserve the quality of its urban life meets the substantialgovernmental interest standard. Id.
at 50, 89 L. Ed. 2d at 39.
A city does not limit alternative avenues of communication by
dispersing or concentrating adult oriented business through valid
zoning requirements. Id.
at 52, 89 L. Ed. 2d at 41.
However, [l]icensing schemes directed at sexually oriented
businesses engaged in protected expressive activity pose special
problems because of the risks of censorship and suppression
associated with prior restraints on speech. Chesapeake B & M v.
, 58 F.3d 1005, 1010 (4th
Cir. 1995). A licensing
unbridled discretion in the hands of a government
official or agency constitutes a prior restraint and may result in
censorship. Lakewood v. Plain Dealer Pub. Co.
, 486 U.S. 750, 757,
100 L. Ed. 2d 771, 782 (1988). Unbridled discretion naturally
exists when a licensing scheme does not impose adequate standards
to guide the licensor's discretion. Chesapeake B & M
, 58 F.3d at
1009. There is a significant distinction between exercis[ing]
discretion by passing judgment on the content of any protected
speech and review[ing] the general qualifications of each license
applicant; the latter is a ministerial action that is not
presumptively invalid. FW/PBS, Inc. v. City of Dallas
, 493 U.S.
215, 229, 107 L. Ed. 2d 603, 621 (1990) (plurality opinion). In
addition, a licensing scheme must not only require a timely
decision by the licensing authority but also must assure a prompt
final judicial decision to immunize the deterrent effect of an
interim and possibly erroneous denial of a license. Freeman v.
, 380 U.S. 51, 58-59, 13 L. Ed. 2d 649, 654-55 (1965). In the present case, the City tax collector denied Fantasy
World's application for a business privilege license pursuant to
Greensboro Ordinance § 13-48, set forth supra
at 610, 592 S.E.2d at
210. We conclude that this ordinance does not create a prior
restraint on free expression, and that sufficient procedural
safeguards exist to satisfy the applicable constitutional
To the extent that Greensboro Ordinance § 13-48 involves
application of City zoning ordinances, it does not run afoul of
constitutional principles. The General Assembly has found that
sexually oriented businesses can and do cause adverse secondary
impacts on neighboring properties and has authorized
municipalities to enact location restrictions for such businesses.
N.C.G.S. §§ 160A-181.1(a), (c)(1) (2003). Greensboro has enacted
restrictions pursuant to this statute. Greensboro Code of
Ordinances § 30-2-2.7 (definitions), 30-2-2.73.5 (spacing
requirements). The zoning requirements set forth by the City's
zoning ordinances, and imposed upon the City tax collector by
Greensboro Ordinance § 13-48, easily comport with the
Constitutional requirements established in Renton
, 475 U.S. at 50,
52, 89 L. Ed. 2d at 38, 41.
To the extent that Greensboro Ordinance § 13-48 involves
administration of the privilege license tax, it neither places
unbridled discretion in tax collection officials, nor denies
appropriate judicial relief. The tax collector is authorized to
inquire into the zoning compliance of privilege license applicants
and is directed to deny the application if an applicant isoperating or seeks to operate in violation of local zoning
requirements. Greensboro Code of Ordinances § 13-48. Accordingly,
the City tax collector performs the ministerial function of
applying valid privilege license application processing guidelines
and zoning compliance guidelines. The vesting of such authority in
a government official is not presumptively invalid,
no constitutional infirmities
with the tax collector's application
of Greensboro Ordinance § 13-48.
With respect to the requirement for prompt judicial review,
the tax collector's zoning decision is immediately appealable to
the City Zoning Board of Adjustment, and the Board's decision may
be reviewed in superior court upon the filing of a petition for
N.C.G.S. § 160A-388(b),(e) (2003). Fantasy World
relies on authority from the United States Sixth Circuit Court of
Appeals holding that the possibility of a discretionary writ is
insufficient to ensure appropriate judicial review. See Deja Vu of
Nashville, Inc. v. Metro. Gov't of Nashville & Davidson County
F.3d 377, 401 (6th Cir. 2001), cert. denied
, 535 U.S. 1073, 152 L.
Ed. 2d 855 (2002). This case is not binding authority upon this
Court, and we decline to extend its reasoning to declare the
judicial relief provided in G.S. § 160A-388 to be constitutionally
insufficient. Rather, in the instant case, we are persuaded that
Fantasy World was afforded the possibility of sufficiently prompt
judicial review. This assignment of error is overruled.
Chief Judge MARTIN and Judge STEELMAN concur.
For a discussion of this issue, see Mom N Pops, Inc. v.
, 979 F.Supp. 372, 385 (W.D.N.C. 1997) (ruling that a
city's practice of referring all privilege license applicants to
the city zoning administrator did not convert the privilege
license into a regulatory scheme), aff'd
, 162 F.3d 1155 (4th Cir.
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