BUS 382 : Legal Foundations Of Business


You are corporate counsel to the New York Entertainment Association, a private organization representing the interests of the State’s topless clubs and adult entertainment industry. In response to the attached recent ruling of the Texas Supreme Court, upholding that State’s “pole tax” – a $5 per customer fee that the owners of strip clubs are required to levy on their customers – the New York Legislature has proposed similar legislation for New York State.

Please write a short memo (no more than three pages, double spaced) to brief the CEO of the New York State Entertainment Association on the constitutional issues and legal concerns relevant to New York strip clubs if such a law were to be passed in New York State. Specifically, please be sure to discuss the following points of law:

1.Briefly summarize what constitutional law issue was litigated in this case, how the Texas Supreme Court ultimately ruled on the case, and explain the court’s rationale. Please indicate if this decision can be appealed any further, and if so, in which court can the appeal be brought and the process for that.

2.Advise your CEO if (a) the Texas law is binding on strip clubs in New York State, and (b) whether or not the Texas Supreme Court’s decision is binding on New York State courts and WHY.

3.Finally, advise your CEO what the constitutional First Amendment issue is in this case, and what legal standard (rational basis, intermediate scrutiny, or strict scrutiny) the court will apply to determine the constitutionality of the tax.  Please make sure to clearly outline and define the constitutional issue and standards. Apply the appropriate standard to the facts presented to make a strong First Amendment argument against the tax.  Finally, if the Association had to litigate this issue, please outline what court(s) would hear the case and why.

This is legal analysis – please do not merely provide your CEO with your personal opinion of the tax, or restate what he can already read for himself/herself in the newspaper. S/he is paying you by the hour do identify the relevant legal standards and legal issues, and to apply them to the relevant facts to support a legal argument against the proposed tax. Stick with the First Amendment, this is NOT a due process or Equal Protection case.