Appeal from the United States District Court for the Central District of California,. D.C. No. CV-88-7838-RG. Richard A. Gadbois, Jr., District Judge, Presiding. Original Opinion Reported at,
Before: Dorothy W. Nelson, Stephen Reinhardt, Circuit Judges and Marion J. Callister, District Judge.*fn* Opinion by Judge D.w. Nelson.
AMENDED OPINION AND ORDER
D.W. NELSON, Circuit Judge:
The City of Los Angeles ("City") appeals the district court's grant of a preliminary injunction prohibiting the City from enforcing its Adult Entertainment Business Zoning Ordinance, Los Angeles Municipal Code § 12.70, against the Appellees, owners of adult entertainment businesses ("Adult Businesses"). We affirm the order of the district court.
FACTUAL AND PROCEDURAL BACKGROUND
In 1977, the City Department of Planning conducted a study which found that concentrations of adult entertainment businesses were creating blight in the neighborhoods where the businesses were located. In response, the City enacted Municipal Code § 12.70 in 1978. Section 12.70 prohibits adult businesses from being established, substantially enlarged, or subject to transfer of ownership within 500 feet of churches, schools, parks, or within 1,000 feet of other adult businesses. The ordinance was enacted to prevent the "continued erosion of the character of the affected neighborhoods of the City" as described by the 1977 study.
Effective May 13, 1983, the City enacted Ordinance No. 157,538 which amended § 12.70B by adding the provision that each adult business was to be considered a separate business even if it operated in conjunction with a similar business at the same establishment. In addition, the ordinance amended § 12.70C to prohibit the maintenance of more than one adult business in the same building or structure. The ordinance, however, allowed multiple businesses established on or after September 1, 1978 to continue to operate until March 10, 1985, with an additional provision respecting the "grandfathering" of businesses established before September 1, 1978.
Effective January 13, 1984, the city council passed Ordinance No. 158,579, which forbade the establishment of any new adult business within 500 feet of any residential zone. Finally, Ordinance No. 161, 111, enacted in 1986, prohibited the continued operation after March 6, 1988 of adult businesses located within 500 feet of a residential zone. The 1986 ordinance also provided for the continued operation of such businesses whenever "a site consistent with 12.70C is not reasonably available elsewhere in the City for the establishment or relocation of the subject adult entertainment business." A business existing on March 6, 1986 could continue to operate until March 6, 1991 if the business could establish undue financial hardship based on investment or the existence of a written lease extending past March 6, 1988.
The Adult Businesses*fn1 filed a joint complaint and separate individual complaints challenging the constitutionality of zoning ordinance § 17.70. They also brought three separate motions requesting a preliminary injunction against the City's enforcement of the ordinance.*fn2
Without distinguishing among the three motions, the district court ruled from the bench on June 17, 1991 that plaintiffs had met the criteria for a preliminary injunction, and enjoined the City from enforcing the ordinance.
The City raises the preliminary issue of the Adult Businesses' standing to assert the First Amendment rights of the general public. We review standing questions de novo. Conti v. City of Fremont, 919 F.2d 1385, 1387 (9th Cir. 1990). A district court's grant or denial of a preliminary injunction will be reversed only where the district court either abused its discretion or based its decision on an erroneous legal standard. Religious Technology Center, Church of Scientology Int'l, Inc. v. Scott, 869 F.2d 1306, 1309 (9th Cir.) cert. denied, 485 U.S. 993 (1989). Under an abuse of discretion standard, this court cannot reverse the district court's grant of a preliminary injunction unless it has a "definite and firm conviction" that the district court committed a "clear error of judgment in the Conclusion it reached." Abatti v. Commissioner, 859 F.2d 115, 117 (9th Cir. 1988).
I. Adult Businesses' Standing
The City contends the Adult Businesses are without standing in this court since they cannot employ the First Amendment rights of the public as a ground for the issuance of the preliminary injunction. While the Adult Businesses argue in their first motion for a preliminary injunction that enforcement of the ordinance will deny the public access to the type of entertainment they sell, the crux of their argument is that the ordinance infringes upon their own First Amendment rights. They argue that § 12.70 suppresses their protected speech by failing to provide them with reasonable alternative relocation sites for their businesses. Because the Adult Businesses have standing to protect their personal First Amendment rights, we need not decide whether they possess standing to assert the First Amendment rights of the public to have access to the types of expression sold by these businesses.
II. The Preliminary Injunction
In support of their motions for a preliminary injunction, the Adult Businesses argue that the City has provided them with an insufficient number of possible relocation sites and that therefore enforcement of the ordinance would cause them hardship and irreparable injury. The Adult Businesses also argue that the ordinance raises serious questions of law. The City contends that all the evidence presented by the Adult Businesses regarding their threat of hardship went to the degree of economic harm they will face if the ordinance is enforced, and that the district court abused its discretion in considering this evidence since economic harm is not relevant to the issue of whether the Adult Businesses' First Amendment rights are threatened. The City also contends that the district court erred in finding that this case presented serious questions of law since the ordinance in question is constitutional on its face.*fn3
In the context of location-restrictive ordinances, this circuit has determined that a preliminary injunction should issue upon a clear showing of either: (1) probable success on the merits and irreparable injury; or (2) sufficiently serious questions going to the merits to make the case a fair ground for litigation and a balance of hardships tipping decidedly in favor of the party requesting relief. Adultworld Bookstore v. City of Fresno, 758 F.2d 1348, 1351 (9th Cir. 1985); Ebel v. City of Corona, 698 F.2d 390, 392 (9th Cir. 1983).
These are not two separate tests, but "merely extremes of a single continuum." Benda v. Grand Lodge of Int'l Assoc. of Machinists & Aerospace Workers, 584 F.2d 308, 315 (9th Cir. 1978), cert. dismissed, 441 U.S. 937 (1979). Thus, a moving party need not demonstrate that he risks irreparable injury, but he must at least show that he will suffer a degree of hardship that outweighs the hardship facing the opposing party if the injunction is not issued. Similarly, a moving party need not demonstrate that he will succeed on the merits, but must at least show that his cause presents serious questions of law worthy of litigation.
A. Economic Impact Under Renton
The question of purely economic injury is not relevant to the issue of whether a moving party faces hardship if a restrictive zoning ordinance is enforced. Lydo Enterprises, Inc. v. City of Las Vegas, 745 F.2d 1211, 1213 (9th Cir. 1984). Rather, a lower court may only consider whether enforcement of the ordinance is likely to impugn the moving party's First Amendment rights. But, "any loss of First Amendment freedoms, even ...