Kentucky – Most aspects of Kenton County’s 2004 strip club ordinance are constitutional, a divided 6th U.S. Circuit Court of Appeals panel ruled Wednesday.

In a 2-1 decision, the panel said Kenton County commissioners were within their rights to impose limits on when and how performers at sexually oriented businesses could mingle with customers after they leave the stage.

However, the full panel sent the case back to a lower court to consider whether license application fees that businesses, entertainers and managers must pay were excessive.

A group of business owners and employees challenged the Kenton County ordinance on a variety of constitutional grounds.

Among other things, the ordinance requires entertainers, for at least an hour after they have performed on stage, to stay at least five feet away from any area of the business occupied by customers.

The club owners challenged this provision on First Amendment free speech grounds, but Chief Judge Danny Boggs and Judge John M. Rogers held in the majority opinion that it was a legitimate effort to prevent prostitution.

Noting that dancers and customers would have ample opportunities for conversation from five feet apart or via cell phone or closed-circuit television, Boggs and Rogers wrote, “We simply cannot conclude that this provision, which regulates commingling only in a particular place and only for a limited period of time, substantially impairs the quantity and accessibility of protected speech.”

In a dissenting opinion, Judge Eric L. Clay said this part of the ordinance effectively prohibits all communications and that other aspects of it act as “an unconstitutional prior restraint on protected speech.”

Boggs and Rogers also concluded that county commissioners had the authority to enact regulations that applied to the city of Covington and were more stringent than municipal regulations already on the books. And they rejected claims the ordinance did not provide for timely judicial appeals.

The fee structure in the ordinance, however, did not pass immediate muster.

The ordinance requires sexually oriented businesses to pay a $3,000 application fee for a license, with $1,500 subject to refund if the application is denied. The fee for entertainers and managers is $155 annually, none of which is subject to refund.

The appeals court remanded this portion of the ordinance to the district court for reconsideration. The majority opinion cited prohibitions against charging certain classes of businesses discriminatory fees, and noted that in general fees charged by governments must have a direct relationship to the cost of services provided.

Clay, in his dissent, argued “there is already evidence that the county used exorbitant cost estimates to justify levying high fees on license applicants and no countervailing evidence on the record to suggest that the amount of the fees are justifiable.” Thus, he maintained, the licensing fee portion of the ordinance should have been held flatly unconstitutional.