The justices heard oral arguments at St. Mary’s University School of Law for the 2007 legislation, which instituted a $5 fee for each person at a nude dancing establishment where alcohol is served.
But so far, a state district judge in Austin and the 3rd Court of Appeals have agreed with the Texas Entertainment Association — a lobbyist group for the strip clubs — that the tax is unconstitutional.
“A tax imposed on a small group of First Amendment speakers, particularly a group conveying a message that the taxing body might consider undesirable, carries a greater risk of suppressing speech than a zoning ordinance because the power to tax involves the power to destroy,” 3rd Court Justice Diane Henson ruled in June.
The state Attorney General’s Office and comptroller have disagreed. More than $16 million in already-collected fees are in limbo until the matter is decided. The Supreme Court gave no indication of when it will issue a final decision, but it could be months.
The Supreme Court travels to law schools to hear cases in front of students about twice a year, Chief Justice Wallace Jefferson told the crowded auditorium as the judges took seats at a mahogany bench beneath a university seal. Jefferson, a native of San Antonio, described Thursday’s appearance as a homecoming of sorts for himself and for Justice Paul Green, a 1977 graduate of the law school.
It was the first time the panel has held court at St. Mary’s since 2000.
The state has the right to ban nude dancing outright, as well as alcohol, Texas Solicitor General James Ho told the panel during his remarks. So it makes sense that Texas should be allowed to impose lesser restrictions in the form of a fee, he argued.
“It is undisputed … this fee is substantially discouraging businesses from combining live nude dancing with alcohol consumption,” he said, comparing the fee to a traffic ticket issued to discourage speeding.
He described alcohol and nude dancing as a “combustible combination.” Dancers still have the same freedom of speech as always, as long as the dancing takes place in an establishment where alcohol isn’t served, Ho said.
Austin-based attorney Craig Enoch, who represents the strip clubs, pointed out that courts long have held nude dancing to be a form of expression protected by the First Amendment.
If the state really believed that nude dancing and alcohol spur crime, lawmakers could have attempted to ban them outright, he argued. But allowing the practice to continue with a fee is hypocritical, he said.
The practice, he said, is less like issuing traffic tickets than like allowing people to yell “fire” in a crowded theater — for a fee.
“It is a fundamental difference between prohibiting yelling ‘fire’ in a crowded theater and paying a tax for the privilege,” he said.
Justices did not state their individual opinions on the issue, but some questions to the attorneys did provide hints about the direction in which some might be leaning.
Justice David Medina asked how a $5 fee could put someone’s First Amendment rights in jeopardy.
“I could see if it was $100, but it’s only $5,” he said.
The tax would add up to roughly $500,000 per year per taxed establishment, Enoch responded.
The fight over such legislation is not likely to end once the court’s decision is handed down, said state Rep. Ellen Cohen, D-Houston, who authored the bill and attended Thursday’s session with members of the Texas Association Against Sexual Assault and San Antonio’s Rape Crisis Center.
“If the court rules against us, there will be a blueprint that tells us what we need to do” with the next bill, said Victoria Camp, deputy director of the advocacy group. “I imagine that there will be work to be done either way.”