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The Village's economy is dependent on adult entertainment.

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As our opinion, Joelner v. Village of Washington Park, F. As of Junethe Village d eight adult cabarets in its surrounding 2. The present dispute originated in early when Joelner first applied for s to operate adult cabarets.

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At that time a Village ordinance limited cabaret s to four, all of which were already issued. In the Village passed Ordinancewhich increased the of available s to six. The Village then immediately granted the two newly available s. It granted one to the son of the Village's former police chief even though he, unlike Joelner, did not have an application pending on the Village Board's agenda, and gave the second to an individual who applied for a after Joelner.

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The Board then denied Joelner's application. Joelner sought a preliminary injunction to force the Village to grant him adult cabaret s, which the district court denied. We, after balancing the equities, affirmed the denial. See Joelner I, F. In reaching this conclusion, we observed that the record did not indicate that the Village relied on any studies or findings regarding the secondary effects associated with the adult entertainment industry when it enacted Shortly after that opinion issued, the Village repealed Ordinance and replaced it in April with Ordinancethe ordinance at issue in this appeal.

It lifts the numerical limit on s for adult entertainment venues. The final version of the ordinance was also amended to expand the permissible hours of operation after dark, mandating only that such establishments close in the morning between a. Additionally, in contrast to 's terse statement of purpose, contains both a separate preamble and findings.

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Some of these opinions refer to the harmful effects of combining alcohol with adult entertainment. But none claims that allowing alcohol sales to continue at the already-operating venues and banning it only from future clubs ameliorates the harm from combining alcohol with nude dancing. At a bench trial Joelner claimed that the purpose of the prospective alcohol ban in Ordinance is to favor the Village's political patrons-owners of currently d cabarets.

Joelner emphasized that he could not compete if his cabarets could not, like the others, serve alcohol. He further testified that despite the enactment ofall the adult cabarets in the Village continue to feature complete nudity, and at least one operates 24 hours. He also submitted into evidence adult entertainment and Washington park strip clubs s for two cabarets not yet in existence at the time of trial that covered back prior to Ordinance 's enactment. And finally, Joelner recounted that when Ordinance was enacted he promptly applied for a cabaretbut the mayor denied him the ostensibly because he had not appeared before the Board.

As Joelner explained, Ordinance contains no such requirement and instead provides that the Village clerk shall immediately issue a temporary upon receipt of a completed application.

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The Village mayor then briefly testified for the Village. He asserted that the Village exempted current holders from the alcohol ban because the Board was concerned about infringing upon their property rights. The mayor did not otherwise address Joelner's testimony. After considering the ordinance and the testimony, the district court struck down the alcohol ban in Ordinance as unconstitutional on its face.

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It also ruled that the denial of cabaret s to Joelner under was unconstitutional. On appeal the Village challenges the district court's factual finding that the alcohol ban was adopted to stifle competition with current holders. This factual finding, which we accept unless clearly erroneous, Entertainment Software Assoc. Blagojevich, F. It determined the applicable legal standard, which we review de novo.

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See id. City of Gary, F. First it must ask if an ordinance that bans alcohol at adult entertainment establishments 1 is passed pursuant to a legitimate governmental power, 2 does not completely prohibit adult entertainment, and 3 is aimed at combating the negative secondary effects caused by adult entertainment establishments. See Ben's Bar, F.

If so, then the regulation is constitutional if it survives intermediate scrutiny, meaning it serves a substantial governmental interest, it is narrowly tailored, and reasonable alternative avenues of communication remain available. See generally id. If, on the other hand, a regulation is not aimed at secondary effects it fails step threestrict scrutiny applies.

Steen, F. Because the level of scrutiny is at stake, we first address whether the district court's factual finding of anti-competitive purpose was clear error. Andy's Restaurant, F. Courts may consider, among other materials, the text of the ordinance, its preamble or express legislative findings associated with it, and studies and information of which legislators were clearly aware.

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See R. City of Rockford, F. Amerson, F. The district court did not err in finding that the Village enacted Ordinanceexempting existing operators from the alcohol ban, to protect those operators from competition with Joelner. Joelner testified without contradiction that he has been the sole applicant for a under the new ordinance. Without dispute he explained that it is impossible to sustain an adult cabaret in the Village's present environment consisting of other, alcohol-dispensing venues without also serving alcohol.

It was perfectly reasonable for the district court to infer that potential customers for Joelner-and the secondary effects associated with them-would just migrate to the establishments exempted from the alcohol ban rather than go away. Gilleo, U. The Village argues that a city should be permitted to experiment with gradual solutions to its problems.

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While this is true, see Young v. American Mini Theatres, U. The mayor admitted that virtually all the Village's income is still derived from adult cabarets. And several additional Washington park strip clubs of Ordinance belie the Village's purported desire to combat secondary effects from adult entertainment. For instance, the mayor specifically amended the ordinance to expand the permissible hours of operation for adult cabarets, by allowing them to stay open all night, and thereby seemingly increased the likelihood of crime, prostitution, and several of the other secondary effects identified in the ordinance.

Furthermore, the Village has neglected to enforce most of the other restrictions in the ordinance, such as the prohibition on complete nudity, against current holders. The backdated s, the expanded hours of operation, and the unenforced prohibition on complete nudity permitted the district court to conclude without clear error that the Village was not experimenting with a gradual solution to the secondary effects of erotic speech. To support its claim that it enacted the prospective alcohol ban to curb secondary effects, the Village relies, as it did at trial, solely on Ordinance 's preamble and findings.

The Village likens this case to Ben's Bar, Inc. Village of Somerset, F. The preamble there cited several findings made by other municipalities about the negative effects of the combination. We ruled that the preamble sufficiently demonstrated that the ordinance was passed to combat secondary effects. The Village concedes that its ordinance contains no citations to similar findings, but argues that the citation to Ben's Bar itself among the 19 cases cited in the ordinance is akin to citing directly to the studies themselves. But this case differs markedly from Ben's Bar.

First, in that case the opponent of the ordinance introduced no evidence of a counter motive, such as anti-competition. Second, none of the studies in Ben's Bar suggested that banning alcohol at only one of many nude dancing clubs diminishes their secondary effects. Because the purpose of the ban on alcohol consumption in newly d establishments was to prevent competition, strict scrutiny applies.

We therefore conclude that the alcohol ban and the licensing scheme as a whole are unconstitutional on their face.

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We add that even if the Village were indeed attempting to combat secondary effects with its alcohol ban, and intermediate scrutiny thus applied, the Ordinance could not survive. The Village again relies on Ben's Bar and argues that because we there determined that a ban on alcohol in both newly and currently d adult entertainment establishments passed muster under intermediate scrutiny, see Ben's Bar, F. But the Village's reasoning is flawed. The Supreme Court has repeatedly recognized that an underinclusive regulatory scheme is not narrowly tailored.

See Rubin v. Coors Brewing Co. Discovery Network, Inc. Finally, there remains the district court's rulings that it was unconstitutional to deny Joelner cabaret s and to award attorneys' fees to Joelner. The Village does not challenge the district court's ruling as to the denial of the s-which indeed appears arbitrary-so any such challenge is waived.

See Ajayi v. Aramark Bus. Chicago Housing Authority, F.