       FLANIGAN'S ENTERPRISES, INC. OF GEORGIA, d.b.a. Mardi Gras, Plaintiff-Appellant,

                                                        v.
   FULTON COUNTY, GEORGIA, The Board of Commissioners of Fulton County, Georgia, et al.,
Defendants-Appellees.

   6420 Roswell Road, Inc., a Georgia Corporation, d.b.a. Flashers, Harry Freese, individually and as
Licensee for Flashers, et al., Plaintiffs-Appellants,

                                                        v.
  Fulton County, The Board of Commissioners of Fulton County, Georgia, et al., Defendants-Appellees.

             Ceeda Enterprises, Inc. d.b.a. Riley's Restaurant and Lounge, Plaintiff-Appellant,
                                                        v.

  Fulton County, Georgia, The Board of Commissioners of Fulton County, Georgia, et al., Defendants-
Appellees.

                                                  No. 00-11152.
                                        United States Court of Appeals,
                                                Eleventh Circuit.

                                                  Feb. 20, 2001.
Appeals from the United States District Court for the Northern District of Georgia. (Nos. 98-02441-CV-GET-
1, 98-02904-CV-GET), G. Ernest Tidwell, Judge.
Before DUBINA, FAY and COX, Circuit Judges.
        PER CURIAM:

        Plaintiffs, four adult entertainment businesses ("Plaintiffs") operating in unincorporated Fulton
County, Georgia appeal from the grant of summary judgment in favor of defendants Fulton County and its

Board of Commissioners. The district court held that a 1997 amendment to Section 18-76 of the Fulton
County Code ("Section 18-76" or "1997 amendment") which prohibited the sale and consumption of alcoholic

beverages in adult entertainment establishments was constitutional as a matter of law. The district court

found that the 1997 amendment operated as a content-neutral restriction that furthered the government's
interest in preventing negative secondary effects associated with adult entertainment businesses, and denied

Plaintiffs' claims based on due process, prior restraint, and contract impairment. On appeal, Plaintiffs contend

that the amendment to Section 18-76 fails to further the government's purported concern because local studies

show no evidence of negative secondary effects connected with Plaintiffs' clubs. Plaintiffs also contend that
Defendants' conduct in passing the 1997 amendment violated due process, that the amendment impairs their

contractual obligations, and that the district court erred in declining to reach the merits of their prior restraint
claim. We hold that the 1997 amendment fails to further Defendants' purported concern with negative

secondary effects, and accordingly REVERSE IN PART and AFFIRM IN PART the district court's grant of
summary judgment.

I.      Background Facts

        In considering whether to amend Section 18-76, the Fulton County Board of Commissioners

("Board") passed a resolution directing the Fulton County Police Department, the County Attorney, and the
Department of Planning and Economic Development (collectively "Fulton County staff") to conduct a study

on the secondary effects of alcohol consumption in adult entertainment establishments located in Fulton

County. See Fulton County, Ga., Resolution Relating to Regulation of Alcohol Consumption in Adult

Entertainment Establishments (Apr. 16, 1997). The Board also directed Fulton County staff to assemble
similar studies from foreign jurisdictions ("foreign studies"). The resolution stated that the Board had reason
to believe that consumption of alcoholic beverages in adult entertainment establishments contributed to

increased crime and decreased real property values. The resolution further stated the Board's intent "to enact,
if warranted by said studies, a carefully tailored regulation to minimize the negative secondary effects of the
serving and consumption of alcoholic beverages at adult entertainment establishments...."

        On June 13, 1997, the Fulton County Police Department completed a study concerning the number
of calls for police assistance and the number and types of crimes occurring in the vicinity of twelve drinking

establishments: six that featured adult entertainment and six that did not. See Study of Calls for Service to

Adult Entertainment Establishments Which Serve Alcoholic Beverages (June 13, 1997). The study concluded
that, for the time period January 1, 1995 through May 31, 1997, there was no statistical correlation showing
an increase in crime at adult entertainment establishments that served alcoholic beverages. Rather, the

statistics indicated greater instances of calls for service and reported crime at non-adult entertainment
establishments that served alcoholic beverages.

        In or about June 1997, the six Fulton County adult entertainment establishments ("the Clubs"), four

of which are owned by Plaintiffs, commissioned Land Development Analysts, Inc. ("LDA, Inc.") to conduct

a study of the Clubs' economic impact on their surrounding environs. Specifically, LDA, Inc. sought to
identify negative impacts, if any, on the business volumes, rental rates and property values of surrounding

properties.   The study revealed high occupancies and rental rates in existing buildings, expensive

improvements, business expansions, turn-away business volume and proposed development in the Clubs'
vicinities. See Economic Impact Study, Six Locations in Three Neighborhoods, Fulton County, Georgia

(June 1997). LDA, Inc. could not identify any detrimental impacts as caused by the Clubs.

        In response, the Board of Commissioners retained its own appraiser, Dabney & Associates
("Dabney"), to inspect the subject properties and to review the economic impact study prepared by LDA, Inc.

The Dabney report claimed several weaknesses with the aforementioned study, but determined that the

report's weaknesses did not invalidate it's conclusions.1 The Dabney report found that LDA, Inc. gathered
appropriate data and arrived at reasonable conclusions. Based on the market data provided by LDA, Inc.,

Dabney found that the Clubs had caused no diminution of property values or rents. See An Administrative

Review of An Economic Impact Study of Six Locations In Three Neighborhoods, Fulton County, Georgia

dated August 7, 1997. Dabney personally observed that none of the subject properties or those around them
showed a lack of maintenance.2 The Clubs bore restrained identification signs, and Dabney found it difficult
even to identify two of the Clubs as adult entertainment establishments. Thus, the Dabney report drew similar

to identical conclusions to that of LDA, Inc., i.e., that the Clubs had caused no quantifiable "blight" upon their
environs.

        The Board held two public meetings, on November 19, 1997, and on December 17, 1997, to consider
the amendment. At the first public meeting, the Board considered the following: (1) foreign studies collected
by Fulton County staff;3 (2) the LDA, Inc. study; (3) the Fulton County Police study; (4) and the Dabney



    1
     The Dabney report posited that: (1) LDA, Inc.'s use of broad neighborhoods may have eclipsed
adverse impacts in the Clubs' immediate areas; (2) the failure to use control neighborhoods precluded
evidence that increasing market values might have reached even higher levels without the presence of
adult entertainment establishments; and (3) the failure to define key underlying terms, specifically
"blight," resulted in undue focus on market conditions that may not directly relate to maintenance of
surrounding properties, see also, infra, n.2. The Dabney report also criticized LDA, Inc. for failing to
detail the results of services it claimed to have performed, such as to review demographic and economic
trends, to identify the highest and best use of properties, and to review existing and proposed zoning
changes. Because this data did not relate to blight, or a lack of maintenance in and around the Clubs, the
Dabney report stated that such omission did not invalidate the conclusions of LDA, Inc.
    2
     Noting that The Dictionary of Real Estate Appraisal defines "blight" as a failure to maintain the
quality of real estate, Dabney focused on maintenance as a key element contributing to blight. The
Dabney report criticized LDA, Inc. for neglecting to directly consider maintenance, but concluded that
LDA, Inc. presented information about the Clubs' surrounding areas that might serve as proxies for
"maintenance" both in an economic sense and general physical sense.
    3
     The foreign jurisdictions studies included: (1) City of Austin, Texas Report; (2) Analysis of Adult
Entertainment Businesses in Indianapolis, Indiana; (3) Analysis of the Relationship Between Adult
Entertainment Establishments, Crime, and Housing Values in Minneapolis; and (4) Study of the Effects
of the Concentration of Adult Entertainment Establishments in the City of Los Angeles.
report. The Board also received public comments and permitted counsel for Plaintiffs fifteen minutes each

to present their position regarding the proposed amendment and the relevant studies.
          On December 17, 1997, at the second public hearing, the Board met and approved the amendment

to Section 18-76. The 1997 amendment prohibits the serving, offering or consuming of any alcoholic

beverages on the premises of an adult entertainment licensee.4 The preamble to the ordinance provides the

Board's justification for the amendment:
          ... WHEREAS, in a public hearing held November 19, 1997, the Board of Commissioners heard
          testimony and received studies from its staff, the public, and from representatives of the adult
          entertainment industry concerning negative secondary effects connected with adult entertainment
          facilities where alcoholic beverages are consumed, and live nude, or partially nude, performances are
          presented;

          WHEREAS, based upon the experience of other urban counties and municipalities, which
          experiences the Board of Commissioners finds are relevant to the problems faced by Fulton County,
          Georgia, and which do not vary greatly among generally comparable communities within this
          country, the Board of Commissioners finds that public nudity, under certain circumstances,
          particularly circumstances related to the sale and consumption of alcoholic beverages in adult
          entertainment facilities offering live entertainment, begets criminal behavior and tends to create
          undesirable community conditions;
          WHEREAS, among the undesirable community conditions identified with live nude entertainment
          and alcohol are depression of property values in the surrounding neighborhood, increased
          expenditure for the allocation of law enforcement personnel to preserve law and order, increased
          burden on the judicial system as a consequence of the criminal behavior herein above described, and
          acceleration of community blight by the concentration of such establishments in particular areas;
          WHEREAS, the limitation of nude conduct in establishments licensed to sell alcohol for consumption
          on the premises is in the public welfare, and it is a matter of government interest and concern to
          prevent the occurrence of criminal behavior and undesirable community conditions normally
          associated with establishments which serve alcohol and also allow or encourage nudity;....
Ordinance Amending Fulton County, Ga., Code § 18-76 (Dec. 17, 1997).
II.       Procedural History


      4
      Section 18-76 "Rules for Operation" now states that:

                  Any person, firm partnership, or corporation licensed hereunder shall comply with the
                  following rules and regulations pertaining to the operation of the adult entertainment
                  establishment:

                          ....

                          (7) No licensee shall permit any alcoholic beverages to be served, offered, or
                          consumed on the premises.
                  Violations of these rules and regulations may result in revocation of the license.

          Fulton County, Ga., Code § 18-76 (1997) (effective Jan. 1, 1998, provided that adult
          entertainment facilities holding adult entertainment licenses on Dec. 17, 1997, shall not be subject
          until Dec. 31, 1998).
        On August 25, 1998, plaintiff Flanigan's Enterprises, Inc. of Georgia, d/b/a Mardi Gras ("Mardi

Gras") filed a civil action in the District Court for the Northern District of Georgia seeking declaratory and
injunctive relief and monetary damages. The civil action names Fulton County, a political subdivision of the

State of Georgia, and the Fulton County Board of Commissioners, individually and in their official capacities,

as defendants (collectively "Defendants"). On October 5, 1998, plaintiff CEEDA Enterprises, d/b/a Riley's
Restaurant and Lounge ("Riley's") and plaintiff 6420 Roswell Road, Inc. d/b/a Flashers, Harry Freese,

Fannies, Inc., and William H. Parks, Jr. ("Flashers and Fannies") filed suit against the same Defendants. The

complaints, filed pursuant to 42 U.S.C. § 1983, seek a declaration that Section 18-76, as amended, operates

as an impermissible prior restraint and violates the free speech clause of the First Amendment, the takings
clause of the Fifth Amendment, the equal protection clause, and both the substantive and procedural

guarantees of the due process clause of the Fourteenth Amendment. The complaints further seek a permanent

injunction prohibiting the enforcement of this provision against the Plaintiffs, and damages for condemnation,
intentional interference with business relations, and breach of contract.

        The district court, Hon. G. Ernest Tidwell, consolidated the three cases by agreement of the parties.

On February 4, 2000, the district court entered summary judgment in favor of the Defendants on all claims.5

Relying on Sammy's6, the district court determined that an ordinance prohibiting nude dancing in

establishments licensed to sell liquor constitutes a content-neutral law subject to intermediate scrutiny under

O'Brien.7 The district court concluded that Section 18-76 was constitutional as a matter of law because, like

the ordinance in Sammy's, Section 18-76 was amended to prevent negative secondary effects related to nude

dancing, and therefore, furthered a substantial government interest unrelated to free expression. The court
reasoned that the experience of other urban areas provided the requisite factual basis for the Board's stated

justification that nude dancing begets criminal behavior and tends to create undesirable community

conditions. Moreover, the district court rejected Plaintiffs' arguments that the Board, in the face of



    5
    In all three cases, the Plaintiffs filed separate briefs in response to Defendants' motion for summary
judgment. However, the district court addressed each argument as it related to the Plaintiffs as a group
because each plaintiff incorporated the briefs and arguments of the other plaintiffs. We employ the same
approach because Plaintiffs have incorporated each others' Briefs on appeal.
    6
    Sammy's of Mobile, Ltd. v. City of Mobile, 140 F.3d 993 (11th Cir.1998), cert. denied, 529 U.S.
1052, 120 S.Ct. 1553, 146 L.Ed.2d 459 (2000).
    7
     United States v. O'Brien, 391 U.S. 367, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968).
contradictory local studies, unreasonably relied on outdated and foreign studies that focused on the location
of adult entertainment businesses rather than the relationship between alcohol and live nude entertainment.

           With respect to the Plaintiffs' due process challenge, the district court found that the Defendants'

actions in amending Section 18-76 constituted legislative action because the amendment applies generally
to all adult entertainment establishments existing now or created in the future. However, even if the 1997

amendment could be characterized as adjudicative in nature, the Clubs did not have a vested right in the

renewal of their adult entertainment and liquor licenses because section 18-42 of Article II of the Fulton

County Code requires annual registration in accordance with Article II, and the Clubs did not have a vested
right in the law never changing.8 Moreover, the district court found that Plaintiffs were given sufficient due

process, i.e., notice of the proposed legislation, time to state their concerns and to submit their own studies
at the first public hearing.
           The district court did not address the merits of the Plaintiffs' claim that Section 18-76 operates as an

invalid prior restraint. The district court found that such a claim was not adequately set forth in the pleadings,
and therefore, was untimely raised for the first time in response to the Defendants' motion for summary
judgment. Finally, the district court determined that even if the amendment to Section 18-76 impaired the

Clubs' contractual leases, the amendment constituted a necessary exercise of the county's police power in
order to prevent the negative secondary effects related to the sale and consumption of alcohol in adult
entertainment establishments.

           On February 22, 1997, Plaintiffs filed a motion for reconsideration, and on March 3, 1997, the
Plaintiffs timely filed a Notice of Appeal. On March 27, 1997, the district court entered an order denying the
Plaintiffs' motion to reconsider the order granting summary judgment to the Defendants on all counts.

Plaintiffs thereafter proceeded with the present appeal.
III.       Discussion

           We review a district court's grant of summary judgment de novo, applying the same standards as the

district court. See Harris v. H&W Contracting Co., 102 F.3d 516, 518 (11th Cir.1996). We will affirm the

district court if the record demonstrates there is no genuine issue as to any material fact and the moving party

is entitled to judgment as a matter of law. See Fernandez v. Bankers Nat'l Life Ins. Co., 906 F.2d 559, 564


       8
     As the district court found that the Clubs did not have a vested right in the renewal of their licenses,
Plaintiffs' claim for just compensation pursuant to the Fifth and Fourteenth Amendments also failed as a
matter of law. Plaintiffs do not contest this finding on appeal.
(11th Cir.1990).

A.      Freedom of Expression
         The Supreme Court has recently reaffirmed that nude dancing of the type at issue here is expressive

conduct that falls within the outer ambit of the First Amendment's protection. City of Erie v. Pap's A.M., 529

U.S. 277, 120 S.Ct. 1382, 1391, 146 L.Ed.2d 265 (2000) (citing Barnes v. Glen Theatre, Inc., 501 U.S. 560,

565-566, 111 S.Ct. 2456, 115 L.Ed.2d 504 (1991) (plurality opinion)); see also Schad v. Mount Ephraim,

452 U.S. 61, 66, 101 S.Ct. 2176, 68 L.Ed.2d 671 (1981). Thus, municipal ordinances like the one at issue

that regulate nude dancing are subject to constitutional scrutiny.
                               1. Establishing the Proper Standard of Review

         To determine what level of scrutiny applies, we must decide "whether the State's regulation is related

to the suppression of expression." Pap's, 120 S.Ct. at 1391 (quoting Texas v. Johnson, 491 U.S. 397, 403,

109 S.Ct. 2533, 105 L.Ed.2d 342 (1989)). If the governmental purpose in enacting the regulation is unrelated

to the suppression of expression, then the regulation need only satisfy intermediate scrutiny under O'Brien.

Pap's, 120 S.Ct. at 1391 (citing cases). If the government interest is related to the content of the expression,

however, then the regulation falls outside the scope of the O'Brien test and must be subjected to strict

scrutiny. Id. Thus, the principal inquiry in determining content neutrality is whether the government has

adopted a regulation of speech because of disagreement with the message it conveys or if it is justified

without reference to the content of regulated speech. Ward v. Rock Against Racism, 491 U.S. 781, 791, 109

S.Ct. 2746, 2754, 105 L.Ed.2d 661 (1989).

         In Pap's, the Supreme Court held that a municipal ordinance banning all public nudity, as applied

to establishments that offered nude dancing, was content-neutral. Pap's, 529 U.S. 277, 120 S.Ct. 1382, 146

L.Ed.2d 265. The Court reasoned that the city of Erie's asserted interest in combating negative secondary

effects associated with adult entertainment establishments was unrelated to the suppression of the erotic

message conveyed by nude dancing. See id. As in Pap's, the preamble to Section 18-76 expressly states that

the 1997 amendment was intended to target the negative secondary effects associated with adult entertainment

establishments. Therefore, the Defendants' purpose in prohibiting nude dancing in establishments licensed
to sell liquor is not related to the suppression of any erotic message conveyed by nude dancing.

        Plaintiffs Fannies and Flashers argue that the amendment to Section 18-76 is distinguishable from

the ordinance at issue in Pap's because Fulton County is not attempting to ban all public nudity. See Pap's,
120 S.Ct. at 1391 (reasoning that the ordinance "does not target nudity that contains an erotic message;
rather, it bans all public nudity, regardless of whether that nudity is accompanied by expressive activity").

Fannies and Flashers contend that Section 18-76 is content-based because it only bans nude dancing in

establishments licensed to sell alcoholic beverages. Similarly, they claim that Section 18-76 treats live nude

dancing differently from non-live nude dancing and, therefore, is content-based because it favors one message

over another. If the combustible nature of nudity and alcohol were truly the problem Defendants sought to

correct, Fannies and Flashers assert that the Board would have enacted a general ban on nudity. See Pap's,

529 U.S. 277, 120 S.Ct. 1382, 146 L.Ed.2d 265; Barnes, 501 U.S. 560, 111 S.Ct. 2456, 115 L.Ed.2d 504.

        First, this circuit has specifically held that a city ordinance prohibiting nude dancing in establishments

licensed to sell liquor is content-neutral and therefore, subject to review under the O'Brien test. See Sammy's

of Mobile, Ltd., v. City of Mobile, 140 F.3d 993, 996 (11th Cir.1998), cert. denied,529 U.S. 1052, 120 S.Ct.

1553, 146 L.Ed.2d 459 (2000).9 We have subsequently reaffirmed this holding, guided by Pap's, reasoning

that regulations targeting undesirable secondary effects of adult entertainment establishments that serve

alcoholic beverages are unrelated to the suppression of the erotic message conveyed by nude dancing. Artistic

Entertainment, Inc. v. City of Warner Robins, 223 F.3d 1306, 1309 (11th Cir.2000) (explaining that

ordinance's express purpose was to reduce criminal activity and "other undesirable community conditions");

Wise Enterprises, Inc., v. Unified Government of Athens-Clarke County, 217 F.3d 1360, 1363-64 (11th

Cir.2000) (reproducing ordinance providing that combination of public nudity in combination with the sale
and consumption of alcoholic beverages "begets criminal behavior and tends to create undesirable community

conditions").

        Second, the Supreme Court has recognized that a regulation is not necessarily content-based simply

because on its face it distinguishes among types of speech based on their content. See Renton v. Playtime

Theatres, 475 U.S. 41, 46-48, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986). In Renton, the plaintiff argued that the

ordinance was content-based because it treated theaters that specialized in adult films differently from other

kinds of theaters. However, the Court applied intermediate scrutiny reasoning that the ordinance was aimed



    9
     The Clubs argue that the ordinance at bar is distinguishable from that in Sammy's because Fulton
County did not rely on the Twenty-first Amendment in amending the ordinance. However, the district
court correctly found that "[e]ntirely apart from the Twenty-first Amendment, the State has ample power
to prohibit the sale of alcoholic beverages in inappropriate locations." 44 Liquormart, Inc. v. Rhode
Island, 517 U.S. 484, 116 S.Ct. 1495, 134 L.Ed.2d 711 (1996). This power is located in the inherent
police power of every state to regulate to promote public decency. Id.
not at the content of the films shown at the adult motion picture theaters, but rather at the secondary effects

of such theaters on the surrounding community. Here, as in Renton, the Board's predominate concern, as

manifested in the preamble of Section 18-76, was the secondary effects of nude dancing combined with the

consumption of alcoholic beverages, not at the message conveyed by nude dancing. Accordingly, we find
that amended Section 18-76 is content-neutral and review the Fulton County ordinance pursuant to the test

set forth in O'Brien.

                                           2. Applying the O'Brien test

         Under O'Brien, an ordinance is valid if: (1) it serves a substantial interest within the power of the

government; (2) the ordinance furthers that interest; (3) the interest served is unrelated to the suppression

of free expression; and (4) there is no less restrictive alternative. See O'Brien, 391 U.S. at 377, 88 S.Ct. at

1679. Defendants assert that Section 18-76 was amended to prevent the occurrence of criminal behavior and

undesirable community conditions, specifically identified in the preamble as depression of property values,
increased crime, and acceleration of community blight. Such interests are substantial government interests

that satisfy the first part of the O'Brien test. See, e.g., Pap's (applying O'Brien test to city of Erie's prohibition

on public nudity and finding that stated interest in combating secondary effects related to nude dancing is
clearly within city's police powers to protect public health and welfare).

         Section 18-76 also satisfies the third and fourth prongs of the O'Brien test. See O'Brien, 391 U.S.

at 377, 88 S.Ct. at 1679. Both our court and the Supreme Court have expressly held that an ordinance
focusing on the secondary effects associated with the combination of nude dancing and alcohol consumption

is unrelated to the suppression of free expression. See Pap's, 120 S.Ct. at 1393 (stating that the government's

interest in combating harmful secondary effects is not related to the suppression of expression); accord Wise

Enterprises, Inc., 217 F.3d 1360, 1364.10 Moreover, such a restriction on First Amendment rights is no

greater than necessary to further the government's interest, as required under the fourth prong of the O'Brien

test. See Pap's, 120 S.Ct. at 1397 (concluding that, in order to comply with ordinance, requirement that

dancers wear pasties and G-strings leaves ample capacity to convey the dancer's erotic message); Wise

Enterprises, Inc., 217 F.3d at 1365 (reasoning that ordinance does not prohibit all nude dancing, but only in

those locations where the unwanted secondary effects arise).



    10
      Although the Plaintiffs contend that Section 18-76 fails to meet this factor, they present no evidence
that Fulton County passed the ordinance to hinder the communicative aspects of such conduct.
         The second prong of the O'Brien test, however, states that the regulation must further an important

government interest. See O'Brien, 391 U.S. at 376, 88 S.Ct. 1673. The avoidance of criminal activity,

protection of property values, and avoidance of community blight are undeniably important. See Pap's, 120

S.Ct. at 1395 (stating that asserted interest in combating secondary effects associated with nude dancing are
undeniable important). However, it is less clear whether Section 18-76 furthers the Defendants' stated interest

in preventing the occurrence of negative secondary effects associated with the types of businesses operated

by Plaintiffs.
         In order to meet their burden under this element, the Defendants must have "some factual basis for

the claim that [adult] entertainment in establishments serving alcoholic beverages results in increased criminal

activity" and other undesirable community conditions. Grand Faloon Tavern, Inc. v. Wicker, 670 F.2d 943

(11th Cir.1982) (upholding county ordinance prohibiting nude and semi-nude entertainment in establishments

licensed to sell liquor where city commissioners had evidence that substantial criminal activity took place in

topless bars). In terms of demonstrating that such secondary effects pose a threat, the city need not "conduct
new studies or produce evidence independent of that already generated by other cities ... so long as whatever

evidence the city relies upon is reasonably believed to be relevant to the problem that the city addresses."

Pap's, 120 S.Ct. at 1395 (quoting Renton, 475 U.S. 41, 51-52, 106 S.Ct. 925, 89 L.Ed.2d 29 (1986)). In

Barnes, for example, the Court determined that Indiana's public indecency statute reflected moral disapproval

of people appearing nude in public, and found evidence in a long line of public indecency laws, dating from

1831, that the statute furthered the government's interest in protecting order and morality. See Barnes, 501

U.S. 560, 567-68, 111 S.Ct. 2456, 2460-62. In Pap's, the Supreme Court held that Erie city council members

could reasonably rely on the experience of other cities, in addition to their own first-hand knowledge, as

evidence that the same kind of nude dancing was likely to produce the same secondary effects. See Pap's,

120 S.Ct. at 1395. Thus, we find no basis for Defendants' contention that, pursuant to Pap's and Barnes, we

may presume the evidence needed to meet the second prong of the O'Brien test.11
         Our own cases demonstrate that we require some reasonable justification for legislation which



    11
      For example, Defendants contend that the Supreme Court in Barnes upheld Indiana's ban on public
nudity without requiring any evidence of how the government's interest was furthered. In fact, the Court
found it difficult to discern what governmental interest the legislation served because Indiana does not
record legislative history. However, the Court found that the history of Indiana's public indecency statute,
dating from 1831, evinced that the statute furthered the government's interest in protecting societal order
and morality.
suppresses, albeit incidentally, protected expression.12 See Sammy's, 140 F.3d at 997 (relying upon the

experience of other cities, foreign studies, case law reciting findings, as well as the officials' own wisdom and

common sense); Wise Enterprises, Inc., 217 F.3d at 1364 (experience of other cities, foreign studies, and a

local police report documenting police visits to adult entertainment establishments). In this case, the Board
amended Section 18-76 of the adult entertainment ordinance because it was concerned that adult

entertainment facilities caused (a) depression of property values; (b) increase in crime and expenditures

related thereto; and (c) neighborhood blight. See Preamble to Ordinance Amending Section 18-76. Unlike

in Pap's and Sammy's, where the plaintiffs never challenged the cities' findings, the Fulton County Clubs

challenged and disproved the Board's findings. The evidence in the record relating to conditions in Fulton

County shows unequivocally that property values in neighborhoods adjoining the Clubs have increased during
the time the Clubs have been in existence, and that surrounding buildings show no signs of blight, or lack of
physical maintenance. Moreover, the Fulton County police study found greater reported crime connected

with establishments that served alcohol but did not feature adult entertainment. In other words, local studies
commissioned both by the Clubs and the Board found no evidence of the secondary effects with which the
Board was purportedly concerned. The question thus becomes, was it reasonable for Defendants to ignore

relevant local studies and rely instead upon remote foreign studies in determining whether adverse secondary
effects were attributable to the Fulton County Clubs?

         We do not think that Defendants had any reasonable justification for amending Section 18-76 when

the county's own studies negated the very interests it purportedly sought to prevent. See Krueger v. City of

Pensacola, 759 F.2d 851 (11th Cir.1985). In Krueger, we stated that where the right to free speech is at issue,

the government bears the burden of showing that the articulated concern has more than merely speculative

factual grounds, and that it was actually a motivating factor. See id. at 855. Thus, in that case, we held

unconstitutional a city ordinance which banned nudity in establishments that served alcoholic beverages
because the city failed to produce any evidence of a crime problem, the city's purported justification in

passing the ordinance. Id.; cf. Grand Faloon Tavern, 670 F.2d 943, 950 (report of police calls and

testimony of police officers concerning crime associated with nude entertainment provided necessary link

between stipulated purpose of the ordinance and the problems justifying it).             We recognize that a



    12
    Although we might disagree that nude dancing contains any expression protected by the First
Amendment, the test has been given us. We will not merely go through the motions of applying it.
governmental entity is not required to perform empirical studies. See Pap's, 120 S.Ct. at 1395. However,

having done so, the Board cannot ignore the results. Local studies, including those commissioned by the

county itself, revealed that the Clubs had less, up to half, the incidence of crime than establishments that did

not offer nude dancing, property values had increased in the Clubs' surrounding neighborhoods, and the
physical maintenance of surrounding buildings showed no quantifiable blight. Accordingly, we find that it

was unreasonable for Defendants to rely on remote, foreign studies concerning secondary effects when the

county's own current, empirical data conclusively demonstrated that such studies were not relevant to local

conditions.13
          The case might be different were the Clubs a recent addition to Fulton County neighborhoods. It is

undisputed, however, that Plaintiffs have continually operated these adult entertainment establishments for
nearly a decade.14 We realize that our decision today appears to result in constitutional fact finding, in which
the constitutionality of an ordinance will depend on local conditions. However, we have no choice; we are

bound by the decisions of the Supreme Court and the law of our circuit. To be sure, Defendants may respond

by enacting a ban on all public nudity; the Supreme Court has upheld that. See Pap's, 529 U.S. 277, 120

S.Ct. 1382, 146 L.Ed.2d 265; see also Barnes, 501 U.S. 560, 111 S.Ct. 2456, 115 L.Ed.2d 504. However,

Defendants may not ban nude dancing in establishments licensed to sell liquor without any factual basis to
support the claim that these establishments are connected with negative secondary effects.

          We reiterate that, to satisfy the O'Brien test, the county must demonstrate that it reasonably relied

upon evidence relevant to the problem that it addresses. See Pap's, 120 S.Ct. at 1395. We simply cannot find

it reasonable for a government entity to conduct studies on specific areas and then to reject the conclusions

thereof in favor of studies from different cities and different time periods. Accordingly, we hold that Section
18-76 is unconstitutional under the O'Brien test because the ordinance fails to further the professed

government interests.
B.        Due Process


     13
      Given our decision, we need not address the Plaintiffs' argument that the foreign studies relied upon
by Defendants do not examine the connection between drinking and nude dancing, and secondary effects.
Cf. Diva's, Inc. v. City of Bangor, 21 F.Supp.2d 60 (D.Me.1998) (holding unconstitutional ordinance
enacted in reliance on foreign studies which focused only on efficacy of land use and zoning schemes in
reducing crime).
     14
      In their Reply Brief to the Motion For Summary Judgment, Defendants concede that Mardi Gras
has continually operated an adult entertainment establishment in Fulton County since 1992, Flashers since
1991, Fannies since 1984, and Riley's since 1983.
         Plaintiffs Flashers and Fannies contend that Section 18-76, as amended, deprives the Clubs of a

vested property right in their alcoholic beverage and adult entertainment licenses in violation of due process

of law. U.S. Const. Amend. XIV, § 1. They assert that the Clubs have a vested right in these licenses based
on the fact that Defendants have renewed their licenses in the past, as well as their expectation of renewal due

to the wording of the licensing scheme. Defendants argue that the 1997 amendment effects all existing and
future adult entertainment establishments in Fulton County, and as such, constitutes legislative action

undertaken by the Board in the normal manner prescribed by law.15 Alternatively, Defendants argue that

Plaintiffs had nothing more than a unilateral expectation in the renewal of their licenses, and as such were
not exempt from a change in the law pursuant to a legitimate exercise of the city's police power to protect

public welfare and safety. Finally, Defendants assert that the Plaintiffs received due process.16

         Due process of law requires notice and an opportunity for some kind of hearing prior to the

deprivation of a significant property interest. Halverson v. Skagit County, 42 F.3d 1257, 1260 (9th Cir.1994).

Assuming, arguendo, that Section 18-76 operates as an adjudication targeted at the Clubs, and that the Clubs

have a vested property right in their adult entertainment and liquor licenses, we agree with the district court

that Plaintiffs were granted due process.17 Plaintiffs' claim of a lack of procedural due process fails as a



    15
      Plaintiffs argue that the ordinance constitutes adjudicative action because they occupy the only sites
for adult entertainment; that Fulton County exempted them, as a prior non-conforming use, from a 1992
zoning ordinance prohibiting adult entertainment in establishments licensed to sell alcoholic beverages.
The district court found that Section 18-76 applies to all adult entertainment establishments, whether
existing or future, and relied on the averment of the Deputy Director of Environment and Community
Development to the effect that numerous sites are available in Fulton County for other adult entertainment
establishments. The district court also found that Plaintiffs do not have a vested property interest in the
renewal of their license because, the Clubs were not exempt from the county's legitimate exercise of its
police powers in furtherance of a substantial government interest. Accord, Goldrush II v. City of
Marietta, 267 Ga. 683, 696, 482 S.E.2d 347 (1997) (rejecting plaintiff's state and federal constitutional
claims).
    16
       Although in their Brief Flashers and Fannies allege that the Defendants deprived the Clubs of their
right to substantive and procedural due process, they fail to elaborate or provide any citation of authority
in support of the former allegation. Therefore, we are left to conclude that Flashers and Fannies have
waived this argument, and address only the claim for procedural due process. See Fed. R.App. P.
28(a)(9); see also Continental Tech. Servs., Inc., v. Rockwell Int'l Corp., 927 F.2d 1198, 1199 (11th
Cir.1991).
    17
      Plaintiffs had notice of the Defendants' contemplated action at least as early as April 16, 1997, eight
months prior to the amendment of Section 18-76. The Clubs were represented on a specially formed
Adult Entertainment Committee, and had opportunity to discuss issues relating to the regulation at two
public meetings of this committee. Finally, the Board conducted two public hearings, and permitted
fifteen minutes to each Plaintiff's counsel, present at the first hearing, in order to present the Clubs'
concerns and the Clubs' studies.
matter of law.

C.        Prior Restraint
          Next, Flashers and Fannies argue that the district court erred in failing to consider their claim that

Section 18-76 is part of a licensing scheme that operates as an invalid prior restraint. See FW/PBS, Inc. v.

City of Dallas, 493 U.S. 215, 228, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990). In declining to address the merits,

the district court held that the Plaintiffs' challenge to the licensing scheme was a new claim raised for the first

time in response to the Defendants' motion for summary judgment. That response, filed more than fifteen

months after commencement of this suit, was unaccompanied by either a motion to amend the pleadings or
any reason justifying an amendment. Thus, we must decide whether the Plaintiffs' pleadings were sufficient

to give Defendants and the court notice that the entire licensing scheme, and not just Section 18-76 were

subject to challenge as a prior restraint. See Lyes v. City of Riviera Beach, 126 F.3d 1380, 1387 (11th

Cir.1997) (deciding whether complaint invoking Fourteenth Amendment gave notice of equal protection
claim where district court only analyzed due process claim).

          Plaintiffs' complaints, at first blush, expressly challenge the "Liquor Ordinance" or "Ordinance" as

a prior restraint. See Mardi Gras complaint in Civ. No. 1-98-CV2441, WW 34, 44; Plaintiffs Flashers' and

Fannies' complaint in Civ. No. 1-98-CV-2904, ¶ ¶ 33, 42; Plaintiff Riley's complaint in Civ. No. 1-98-CV-
2910, ¶ 8. However, a closer reading reveals that Plaintiffs specifically limited their constitutional challenge
to the 1997 amendment which restricted the sale and consumption of alcohol at adult entertainment
establishments, and the absence of negative secondary effects connected with the Clubs.18 By contrast, the
licensing scheme which Plaintiffs now attack is contained in separate sections of the Fulton County Code,

sections 18-111 and 18-112 Division 2. Chapter 18 Article III. No part of the licensing regulation was a part

of the 1997 amendment to Section 18-76 "Rules for Operation" Division 1. Chapter 18 Article III. We have
not even been able to locate sections 18-111 and 18-112 of the Fulton County Code in the record.

Accordingly, we find that the Plaintiffs failed to plead facts sufficient to notify Defendants or the court that
they challenged the licensing scheme as a whole. We affirm the district court's decision not to address the




     18
       For example, Mardi Gras' complaint prays for a preliminary injunction on the basis that "[t]he
ordinance prohibiting the sale or consumption of alcohol on the premises of adult entertainment facilities
(the 'Liquor Ordinance') is facially invalid in that it ... constitutes a prior restraint...." See Mardi Gras
Complaint, ¶ 34. In fact, each of the nine legal causes of action asserted by Mardi Gras relies specifically
on the 1997 amendment to Section 18-76.
merits of this claim.19

D.         Obligation of Contract

           Finally, Flashers and Fannies claim that Section 18-76 impairs the Clubs' right to contract in violation

of the Contracts Clause. See U.S. Const. art. I, § 10, cl. 1. Specifically, Flashers and Fannies argue that their

leases provide that the premises shall be used for a topless nudity bar, and require both clubs to maintain a

liquor license.20
           The United States Constitution provides that "no state shall ... pass any Law impairing the Obligation

of Contracts...." U.S. Const. Art. I, § cl. 1. In evaluating a Contracts Clause claim, the court must determine
whether the state law operates as a substantial impairment of a contractual relationship and if so, whether the

impairment is necessary to meet an important government interest. Allied Structural Steel Co. v. Spannaus,

438 U.S. 234, 98 S.Ct. 2716, 57 L.Ed.2d 727 (1978). However, "it is to be accepted as a commonplace that
the Contract Clause does not operate to obliterate the police power of the States.... [T]he police power [ ] is
an exercise of the sovereign right of the Government to protect the lives, health, morals, comfort and general

welfare of the people, and is paramount to any rights under contracts between individuals." Spannaus, 438

U.S. 234, 244, 98 S.Ct. 2716, 2722, 57 L.Ed.2d 727.
           We have already determined that the amendment to Section 18-76 constitutes a valid exercise of the

Defendants' police powers. See Pap's (combating secondary effects related to nude dancing is clearly within

city's police powers to protect public health and welfare). Thus, even if Section 18-76 impairs Plaintiffs'
contractual leases, we agree with the district court that the ordinance remains a valid exercise of the County's

police power to protect the health, safety, welfare and morals of its citizens.

IV.        Conclusion

           The district court granted summary judgment for Defendants on all grounds. We REVERSE the


      19
       In its Brief, Flashers and Fannies contend that the district court erred in severing the prior restraint
analysis from the question of the constitutionality of Section 18-76 because that section is part and parcel
of a licensing scheme which operates as a prior restraint. However, the authority they cite is inapposite.
See 10280 Northfield Road, LLC v. Village of Northfield, 173 F.3d 429 (6th Cir.1999). In that case, the
Village of Northfield adopted an ordinance that sought to regulate adult entertainment businesses by
enacting a zoning and licensing scheme. See id. The district court found that the licensing scheme
operated as an unconstitutional prior restraint, and attempted to salvage the ordinance by severing the
licensing scheme. See id. The Sixth Circuit held that the district court had impermissibly rewritten the
ordinance because the ordinance was designed to function through the issuance or rejection of conditional
permits. See id. These facts are not presented here.
      20
       The record does not contain evidence of lease provisions involving the other Plaintiffs.
grant of summary judgment on the First Amendment freedom of expression claim and AFFIRM the grant of

summary judgment on all other claims. We REMAND the case to the district court for further proceedings
consistent with this opinion.
