author: PETERSON, Judge.

text:
    RAINFOREST CAFE, INC., Respondent, v. STATE OF WISCONSIN INVESTMENT BOARD, et al., Appellants.
    No. A03-813.
    Court of Appeals of Minnesota.
    April 13, 2004.

      Peter W. Carter, David Y. Trevor, Dorsey & Whitney, LLP, Minneapolis, MN, for respondent.
    Gregg M. Fishbein, Richard A. Lock-ridge, Lockridge Grindal Ñauen, PLLP, Minneapolis, MN, and Daniel L. Berger, Blair Nicholas, Hannah Greenwald, Bernstein Litowitz Berger & Grossman, LLP, New York City, for appellants.
    Considered and decided by LANSING, Presiding Judge; PETERSON, Judge; and HALBROOKS, Judge.
   OPINION

PETERSON, Judge.

After LSR Acquisition Corp. (LSR), a wholly owned subsidiary of Landry’s Seafood Restaurants, Inc. (Landry’s), acquired a majority of the shares of Rainforest Café, Inc., (Rainforest I), LSR and Rainforest I merged to form respondent Rainforest Café, Inc. (Rainforest II). Appellants, State of Wisconsin Investment Board (SWIB) et. al., owned shares of Rainforest I. Appellants dissented from the merger and asserted dissenters’ rights under Minn.Stat. § 302A.473, subd. 6 (2002), seeking payment for the fair value of their shares, and respondent initiated an appraisal proceeding under Minn.Stat. § 302A.473, subd. 7 (2002), seeking a determination of the fair value of Rainforest I shares before the merger. Following a trial, the district court determined that the fair value of each share was $3.25. On appeal, appellants argue that them shares are worth more than $3.25 per share and that the district court erred by relying upon only some of the evidence presented by the parties and by failing to consider and reconcile conflicting expert testimony. We affirm.

FACTS

Rainforest I owned, operated, and licensed three categories of large, high-volume, restaurant facilities in what is known as the “eatertainment” industry. The facilities reflected a rainforest theme and included mall units, which were located primarily in shopping malls and contained between 300 and 450 restaurant seats; icon units, which were located in high-traffic tourist areas and contained 400 to 600 restaurant seats; and international units, which were located outside the United States and paid Rainforest I licensing fees and royalties. Rainforest I became a publicly traded company in April 1995.

Between 1994 and 2000, Rainforest I opened approximately 30 units across the United States and licensed additional units internationally. The units typically opened to high business volume followed by a decline in same-store sales after one year due to a lack of repeat business. The company implemented incentive programs, promotions, menu changes, and advertising campaigns to reduce the decline in repeat business. These efforts continued through 1999 and 2000, but same-store sales declines continued. In its quarterly and annual public filings, the company reported same-store sales declines for seven consecutive quarters. Same-store sales declined 12.7% in the second quarter of 2000 compared to the second quarter of 1999 and 13.4% in the third quarter of 2000, compared to the third quarter of 1999. However, in spite of the declining same-store sales, overall revenues of the company increased from 1995 through 1999 and into 2000, due to new store openings.

During its expansion, the company entered into long-term leases that included a base rent, plus additional rent computed as a percentage of a restaurant’s sales. The leases had no provisions for early cancellation or termination by the company. By early 2000, Rainforest Ts long-term lease obligations totaled approximately $175 million, but the company continued to generate positive cash flow. The company implemented cost-control measures to improve financial performance, but its ability to open new stores was limited by restrictions placed on it by certain leases and by its ability to find high-traffic tourist locations. '

In 1999, Rainforest I’s CEO, Lyle Ber-man, began seeking a buyer for Rainforest I. Lakes Gaming, Inc. tendered an offer of $4.62 per share in December 1999. At that time, Berman was chairman of the board of directors for both Rainforest I and Lakes Gaming, and Rainforest I shares were trading at four dollars per share.

In February 2000, Landry’s offered to purchase Rainforest I for a combination of Landry’s stock and cash. Landry’s stock price at the time made the offer worth $5.23 per Rainforest I share. SWIB publicly opposed the Landry’s offer, and the publicity generated by SWIB’s opposition convinced Rainforest I management that they would not receive sufficient shareholder votes to approve the purchase. The Landry’s offer was terminated in April 2000. By that time, the offer’s value had fallen to a little over four dollars per share as a result of a decline in Landry’s stock price.

In the summer of 2000, Rainforest I closed one of its stores, and in July 2000, it took a $101.5 million asset-impairment and store-closing charge, which reflected the declining performance of its mall location stores and the exit costs for closing the one store. In the summer and fall of 2000, the company unsuccessfully attempted to renegotiate its leases. Rainforest I lost key members of its management team and a number of other employees, and management contemplated closing 20 additional stores. During the fall of 2000, the company contemplated a bankruptcy filing to terminate its leases for stores that management anticipated would soon become unprofitable. The company retained bankruptcy counsel, but did not disclose the possibility of bankruptcy to shareholders.

In September 2000, Landry’s proposed a two-step merger that LSR would commence with a cash tender offer to acquire 100%, but not less than a majority, of Rainforest I common shares for $3.25 per share. If LSR acquired a majority of Rainforest I common shares, Rainforest I shareholders would vote on a merger, and after approval of the merger, any Rainforest I shares not tendered to LSR, except shares of shareholders that exercised and perfected their right to dissent from the transaction, would be exchanged for $3.25 per share. On September 26, 2000, the Rainforest I board approved a resolution in favor of the Landry’s offer. Rainforest I stock was trading in the two dollars per share price range for several weeks before Landry’s second offer. After the offer was announced, the stock price jumped one dollar, but the price never rose above $3.25 per share.

SWIB publicly opposed the offer. In response, Rainforest I issued a press release inviting a better offer, but no other offer was made. Approximately 60% of Rainforest I shareholders accepted Landry’s tender offer and tendered their shares to Landry’s for $3.25 per share. On December 1, 2000, 80% of Rainforest I shareholders either agreed to the merger of LSR and Rainforest I or did not pursue their dissenters’ rights. Appellants did not vote their Rainforest I shares in favor of the Landry’s offer and asserted and perfected their statutory dissenters’ rights.

On April 27, 2001, respondent petitioned the district court under the Minnesota Business Corporation Act to determine the fair value of Rainforest I stock. During a trial to the court, appellants’ experts testified that the fail value was $6.10 per share and respondent’s experts testified that the fair value was three dollars per share.

Christopher Mercer, appellants’ expert, analyzed the value of Rainforest I stock using three different methods. First, Mercer determined that the net asset value on the valuation date was $3.81 per share (excluding Rainforest I’s excess assets of $22,130,000), but considered this value to be only a benchmark in determining the fair value of the shares and gave it zero weight. Second, Mercer used the guideline-company method to arrive at a share value. This method compares the subject company to similar publicly traded companies to arrive at valuation conclusions, typically by determining various multiples of the guideline company’s stock, and then applying an adjusted multiple to the subject company. Under Mercer’s guideline-company-method analysis, Rainforest I stock was valued between $4.80 per share and $4.91 per share, without including excess assets. Mercer assigned weights of 37.5% and 25%, respectively, to these values. Finally, Mercer valued the shares by applying the discounted-cash-flow (DCF) method, the most commonly used income valuation approach. Using Landry’s financial projections, Mercer valued the company at $5.23 per share and assigned a weight of 37.5 percent to this valuation. After applying the different weights to the different valuations, Mercer arrived at a final share value of $4.98 as of the valuation date. After taking into consideration Rainforest I’s excess assets, including cash and a federal income-tax receivable, Mercer calculated the value of each share to be $5.95. Finally, Mercer calculated a share value after including the value of severance payments incurred in the merger, as well as the tax benefits that accrued to Landry as a result of the merger, and concluded that the fair value of Rainforest I stock was $6.10 per share.

In an initial valuation conclusion rendered on December 27, 2000, approximately two years before his final report, Mercer opined that the market pricing of Rainforest I stock was “ ‘rational’ given declining fundamentals,” and that “[f]air value [was] likely in the range of the transaction price.” He also recognized that earnings for the third quarter of 2000 were “significantly augmented” by the lower depreciation charges following the asset-impairment charge taken by the company. Mercer’s initial valuation report also included a section on how to achieve a higher price than the $3.25 per share offering price. Mercer suggested that the company must prove the “reality” of the third quarter earnings, overcome the issue of same-store sales declines, and overcome the taint or questionable concept of themed restaurants.

Don Nicholson, respondent’s rebuttal expert, opined that Mercer’s final valuation report was inaccurate because Mercer (1) did not interview Rainforest I’s or Landry’s management; (2) failed to consider Rainforest I financial information for October and November 2000; (3) used guideline companies that bore little resemblance to Rainforest I; (4) failed to consider the public stock price of Rainforest I as an indicator of the market’s valuation; and (5) used financial projections prepared by Landry’s for its lenders and did not take into account changes Landry’s made based on later information. Nicholson opined that Mercer’s use of Landry’s projections was inappropriate because it assumed a company under Landry’s management and control with the availability of Landry’s resources-which were not available to Rainforest I.

Respondent’s expert, Donald Erickson, determined the fair value of Rainforest I shares using the DCF method and applying it to four different scenarios based on Rainforest I’s financial projections. Two of the scenarios assumed that Rainforest I reorganized under bankruptcy protection and two did not. The other variables were: (a) variations in the number of store closings; (b) variations in the outlook for Rainforest I’s Fisherman’s Wharf store; (c) variations in the outlook of Rainforest I’s foreign operations; and (d) variations in the discount rate.

Erickson considered using a market-based comparative approach but concluded that Rainforest I was unique, particularly with regard to the magnitude of same-store sales declines, such that comparing Rainforest I’s performance to guidelines companies would yield unreliable results. Erickson also rejected book value as an indication of fair value, in part because it does not take into consideration contingent liabilities (such as expenses related to future store-closing) that others in the marketplace consider when evaluating the company. Erickson testified that the book value as of the valuation date was in the five dollars per share range.

Richard May testified for appellants to rebut Erickson’s testimony. May testified that Erickson’s valuation was flawed because it projected future sales out 12 years rather than the standard five years; used an inappropriate discount rate for the level of risk associated with Rainforest I or the eatertainment industry as a whole; assumed an unreasonably low long-term growth rate; and erroneously assumed the closure of too many stores. By correcting each of Erickson’s alleged errors, May testified that the minimum fair value of Rainforest I shares as of the valuation date was between $4.69 and $5.06 per share. May testified that after applying the guideline-company method to Erickson’s own selected guideline companies, the fair value for Rainforest I shares was $7.23 per share. However, May also testified that the price of stock that is traded in volume in a free and active market by informed persons best reflects the consensus of the investing public. Also, both Mercer and May testified that the average control premium in a merger is approximately 40%, which is less than the 62% obtained by Rainforest I shareholders in the merger.

The district court concluded that the fair value of appellants’ shares of Rainforest I stock as of the valuation date was $3.25 per share. In arriving at this value, the district court determined that the experts’ conflicting testimony provided no aid in determining the fair value of the stock, finding that appellants’ experts were overly optimistic and respondent’s experts were overly pessimistic. The district court determined that the market-based and transactional evidence was a more reliable and relevant indicator of the stock’s value. The court also found that book value was not a reliable indicator of fair value.

Appellants made no posttrial motions and now appeal from the May 2003 judgment, arguing that the district court abused its discretion by (a) failing to resolve the differences between the experts’ opinions and rejecting all expert testimony introduced at trial; (b) rejecting book value as a measure of value that should set a floor for the value of the shares; (c) failing to consider comparable transactions offered by appellants’ expert; and (d) ultimately determining that the fair value of Rainforest I stock was $3.25 per share.

ISSUES

1. Did the district court abuse its discretion by rejecting expert testimony and relying instead upon market-based and transactional evidence to determine the fair value of the dissenters’ shares?

2. Did the district court abuse its discretion by finding that book value was not a reliable indicator of Rainforest I’s fair value?

3. Did the district court abuse its discretion by rejecting the analysis of appellants’ expert’s analysis as overly optimistic?

4. Did the district court err in concluding that the fair value of Rainforest I stock was $3.25 per share?

ANALYSIS

On appeal from a judgment where there has been no motion for a new trial, appellate review is limited to “whether the evidence sustains the findings of fact and whether such findings sustain the conclusions of law and the judgment.” Gruenhagen v. Larson, 310 Minn. 454, 458, 246 N.W.2d 565, 569 (1976). But, a motion for a new trial is not a prerequisite for appellate review of a substantive question of law that was previously considered and addressed by the district court. Alpha Real Estate Co. of Rochester v. Delta Dental Plan of Minn., 664 N.W.2d 303, 311 (Minn.2003).

“Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.” Minn. R. Civ. P. 52.01. “Findings of fact are clearly erroneous only if the reviewing court is left with the definite and firm conviction that a mistake has been made.” Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn.1999) (quotation omitted). If there is reasonable evidence to support the district court’s findings, we will not disturb them. Id. An appellate court views the record in the light most favorable to the district court’s judgment. Rogers v. Moore, 603 N.W.2d 650, 656 (Minn.1999). A district court’s conclusions of law are not binding on this court and are reviewed de novo. MCC Invs. v. Crystal Props., 451 N.W.2d 243, 246 (Minn.App.1990), review denied (Minn. Mar. 27,1990).

Upon a fundamental corporate change, such as a merger, Minnesota law allows minority shareholders to dissent from the corporate action. Minn.Stat. § 302A.471, subd. 1 (2002). Dissenting shareholders that comply with the statutory conditions for dissenting to the proposed action are entitled to receive the fair value of their shares. Minn.Stat. § 302A.473, subds. 3, 6, 7 (2002).

The court ... shall determine the fair value of the shares, taking into account any and all factors the court finds relevant, computed by any method or combination of methods that the court, in its discretion, sees fit to use, whether or not used by the corporation or by a dissenter.

Id. at subd. 7.

[F]air value ... means the pro rata share of the value of the corporation as a going concern. To determine fair value, the trial court may rely on proof of value by any technique that is generally accepted in the relevant financial community and should consider all relevant factors, but the value must be fair and equitable to all parties.

Advanced Communication Design, Inc. v. Follett, 615 N.W.2d 285, 290 (Minn.2000). “[Findings of valuation will not be disturbed if within the limits described by the evidence, even though they do not exactly adopt the testimony of any one witness.” Standard Constr. Co. v. Nat’l Tea Co., 240 Minn. 422, 428, 62 N.W.2d 201, 205 (1953) see Hertz v. Hertz, 304 Minn. 144, 145, 229 N.W.2d 42, 44 (1975) (stating “[ajssigning a specific value to an asset is a finding of fact”).

1. Appellants argue that the district court committed reversible error when it disregarded all of the expert testimony. Citing Thomas v. Thomas, 407 N.W.2d 124, 126 (Minn.App.1987), which states, “[w]hen conflicting opinions of expert witnesses have a reasonable basis in fact, the trier of fact must decide who is right,” appellants contend that the district court had a responsibility to resolve the conflicting experts’ analysis and that its failure to do so was prejudicial and an abuse of discretion. But appellants ignore the next sentence in Thomas, which states, “The trial court is not bound by the opinion of any witnesses concerning values.” Id. (citing Lehman v. Hansord Pontiac Co., 246 Minn. 1, 7, 74 N.W.2d 305, 310 (1955)). The weight and credibility of expert testimony is for the fact-finder to determine. Shymanski v. Nash, 312 Minn. 304, 308, 251 N.W.2d 854, 857 (1977). The “opinions of expert witnesses are only advisory and the [fact-finder] may weigh such evidence in the light of all the facts and opinions presented to it and draw its own conclusions.” Housing & Redevelopment Auth. v. First Ave. Realty Co., 270 Minn. 297, 306, 133 N.W.2d 645, 652 (1965). Furthermore, the dissenters’ rights statute expressly states that the court “shall determine the fair value of the shares, taking into account any and all factors the court finds relevant ... whether or not used by a corporation or by a dissenter.” Minn. Stat. § 302A.473, subd. 7.- The district court considered the experts’ opinions but determined that the opinions were not helpful because they were overly optimistic or overly pessimistic, which is specifically permitted by the statute.

Appellants argue that they were prejudiced by the court’s disregard of their experts’ testimony because, had the court adopted their experts’ testimony, the outcome would have been vastly different. See Jenson v. Touche Ross & Co., 335 N.W.2d 720, 725 (Minn.1983). (stating “before an error in the exclusion of evidence may be grounds for a new trial, it must appear that such .evidence might reasonably have changed the result of the trial if it had been admitted”). Appellants confuse the concept of prejudice as applied to appellate review of a trial court’s eviden-tiary rulings with a fact-finder’s determination of the weight and. credibility of expert testimony. The issue here is not the admission or exclusion of evidence; it is the weight that the fact-finder attributed to the evidence. The weight that the district court attributed to the experts’ testimony, which was admitted at trial, might reasonably have changed the result of the trial, but that does not mean that attributing no weight to the testimony was prejudicial error.

Appellants next assert that the district court arbitrarily rejected the rebuttal testimony of their expert, May. Appellants argue that by using the same valuation techniques as respondent’s expert, but with less pessimistic assumptions and projections, May addressed the district court’s concerns about respondent’s overly pessimistic analysis and, therefore, the court should have adopted May’s valuation.

The district court’s findings of fact and memorandum demonstrate that it did not arbitrarily reject May’s testimony. The court found that May successfully pointed out the weaknesses of Erickson’s valuation, which was the purpose of May’s rebuttal testimony. But the court also found that both of appellants’ experts were overly optimistic and that their reliance on positive third-quarter earnings was unfounded, in part because they failed to recognize that the up-tick in third-quarter earnings was due to the impairment charge taken during the second quarter of 2000 (resulting in lower depreciation expenses during the third quarter), and the boost from a temporary decrease in accrued bonus payments as a result of the departure of key employees who would eventually have to be replaced. The court also found that both of appellants’ experts assumed perpetual growth but presented no evidence to support that assumption, especially in light of the company’s continuing declines in same-store sales.

2. Appellants argue that the district court erred when it rejected book value as a floor value for determining the fair value of Rainforest I shares. Appellants acknowledge that book value is often an unreliable measure of a company’s fair value but assert that in this case, the value of the company should not be less than the book value. See Warner v. E.C. Warner Co., 226 Minn. 565, 576, 33 N.W.2d 721, 727 (1948) (stating book value is only minor element to be considered in arriving at true value of stock and that book value is entitled to little, if any, weight in determining true value of stock).

Appellants argue that when Rainforest I took a $101.5 million impairment charge against its assets in the second quarter of 2000, it acted to reflect the liquidation value of its assets. Consequently, appellants argue, the normal criticisms against using book value are not present, and the book value after the impairment charge was taken should function as a floor for fair value. Therefore, appellants conclude, the district court erred in reaching a fair value for the shares that was below book value.

Appellants are asking this court to reweigh the evidence. The role of the court of appeals is to correct errors, not to find facts. Sefkow v. Seflcow, 427 N.W.2d 203, 210 (Minn.1988). The district court found that book value was not a reliable indicator of fair value. Nicholson, Erickson, and May all testified that book value often bears little relationship to the price at which a company is bought or sold, primarily because book value is a measure derived from a company’s balance sheet, which may not fully reflect the market value of a company’s assets. Even Mercer, appellants’ expert, analyzed Rainforest I’s book value but gave it no weight. Also, there was evidence that at the time of the merger, Rainforest I stock never traded anywhere near book value, and caselaw from Minnesota and other jurisdictions overwhelmingly recognizes that book value is not a reliable indicator of fair value. Thomas, 407 N.W.2d at 126 (stating book value is often an erroneous figure and easily subject to manipulation); see also Beerly v. Dep’t of Treasury, 768 F.2d 942, 946 (7th Cir.1985) (stating book value is “virtually meaningless” index of share value). The district court’s rejection of book value as a floor value is not clearly erroneous.

3. Appellants argue that the district court erred by failing to consider the comparable-transaction and guideline-company methods proffered by Mercer. While appellants acknowledge that the district court acted within its discretion in finding that Mercer’s income approach (DCF method) for valuing the shares was overly optimistic due to its reliance on unwarranted projections of growth, appellants contend that the court’s criticism does not apply to Mercer’s guideline-company analysis because that methodology did not rely on projections. Therefore, appellants argue, the court’s rejection of Mercer’s guidelines methodology was an abuse of discretion.

Appellant’s argument disregards the court’s finding that the companies Mercer identified as guidelines .bore little resemblance to Rainforest I. Few, if any, of the companies were in the eatertainment segment of the restaurant industry, most or all projected future growth, and none had the type of declining same-store sales that Rainforest I had. Mercer conceded that Rainforest I was unique and that it was “fundamentally different from most of the guideline companies.” Contrary to appellants’ argument, the district court presented a reasonable basis for rejecting Mercer’s guideline-company analysis.

4. Finally, appellants argue that the district court erred in concluding that the fair value of appellants’ stock was $3.25 per share. Appellants contend that after rejecting the expert testimony, there was little evidence of fair value left, other than anecdotal evidence.

The district court found that the fact that the negotiations, tender offer, and merger occurred at arms length on the open market indicated that the $3.25 share price was fair and the product of independent market forces. The court also found that Rainforest I’s heavy trading volume on the NASDAQ stock exchange was indicative of fair value. The court noted that the premerger stock price of two dollars was a relevant indicator that fair value did not exceed $3.25 per share. The court also noted that Landry’s offered a 62% premium over the publicly traded price, which was greater than the 40% premium typically paid. Finally, the court found that the acceptance of Landry’s tender offer by 80% of the shareholders, including Rainforest I’s senior management, was a relevant indicator of fair value.

Citing cases from foreign jurisdictions, appellants argue that although market price can be a relevant consideration in the valuation context, market price accurately reflects fair value only when the market has reliable and current information. Therefore, appellants contend, because the market was not aware of Rainforest I’s significantly improved third-quarter results in 2000 when the stock was trading around two dollars per share (immediately before Landry’s offer), the trading price did not accurately reflect the fair value of the shares, and the district court’s reliance on the measure was misplaced.

But the district court found that the uptick in the third-quarter earnings was not the result of improvements in the company’s core business, but rather was the result of lower depreciation expenses associated with the impairment charge Rainforest I took in the second quarter, as well as the lower administrative costs associated with the departure of key employees who would have to be replaced. The record supports the district court’s finding, and press releases reported the departure of key employees and the impairment charge to the investing public before Landry’s offer. Moreover, the district court found that due to the seasonal nature of the restaurant business, the most relevant comparison compared one quarter with the same quarter in the prior year, not one quarter with the following quarter. Same-store sales declined by 13.4% between the third quarter of 1999 and the third quarter of 2000.

Appellants argue that the district court’s reliance on the 62% premium paid by Landry’s was erroneous because the market was not aware of the positive third-quarter 2000 performance results, which depressed the market price of the stock. Therefore, appellants contend, the fair value of the shares was higher than the two dollars per share market price, and the premium paid by Landry’s was likely less than the 40% market average. But appellants’ argument relies on their portrayal of the third-quarter-2000 performance as a significant improvement. As we have already determined above, the district court articulated its basis for rejecting appellants’ characterization of the third-quarter-2000 performance as a significant improvement.

Appellants also argue that the district court’s reliance on the market and transactional evidence eviscerates the appraisal statute. Appellants contend that there would be no need for the valuation statute if all that a court needed to do was determine whether the market price was close to the tender-offer price. Appellants mis-characterize the district court’s decision. The record demonstrates that the district court considered all of the evidence presented; it did not rely solely on the market price. Minnesota caselaw recognizes market price as a relevant factor in determining the value of a corporation. Spinnaker Software Corp. v. Nicholson, 495 N.W.2d 441, 444-45 (Minn.App.1993), review denied (Minn. Mar. 30, 1993).

Finally, appellants argue that relying on the number of shareholders who approved the transaction when determining fair value defeats the purpose of- the statute, which is to protect minority interests. See MT Props., Inc. v. CMC Real Estate Corp., 481 N.W.2d 383, 388 (Minn.App.1992) (recognizing legislative aim of statute is to protect minority dissenting shareholder). We agree. The fact that a substantial majority of Rainforest I shareholders voted to approve the merger is not a relevant factor in determining the fair value of the corporation because the essence of appellants’ claim is that the shareholders who approved the merger incorrectly determined the fair value of the shares.

But we conclude that the remaining factors considered by the district court provide a sufficient basis for its determination of fair value. Market price is a generally accepted “technique” employed by the financial community as a relevant measure of value when a stock is heavily traded. See Follett, 615 N.W.2d at 290 (stating court may rely on proof by any technique generally accepted by financial community in determining fair value); see also Beerly, 768 F.2d at 946 (stating market price of thinly-traded stock may not be reliable guide to current value); BNE Mass. Corp. v. Sims, 32 Mass.App.Ct. 190, 588 N.E.2d 14, 21 (1992) (stating when valuing corporation, courts should use purchase price where that price was negotiated in arms-length transaction). Given the evidence in this case, the district court’s reliance on the market price of Rainforest I shares is not clearly erroneous. The record supports the district court’s findings of fact, and those findings support its conclusion that the fair value of the dissenters’ shares is $3.25 per share.

DECISION

In determining the fair value of the dissenters’ shares, the district court did not err by rejecting the valuation opinions of expert witnesses and basing its determination of fair value on a valuation method that was not used by an expert witness. There is reasonable evidence to support the district court’s determination of fair value.

Affirmed.

      .According to generally accepted accounting principles, a corporation may recognize an asset-impairment charge when the book value of a long-lived asset exceeds its fair value and is not recoverable from future cash flows over its estimated life. Accounting for Impairment of Long Lived Assets, Statement of Financial Accounting Standards No. 121 (Financial Accounting Standards Bd. 2000).

      . SWIB's costs associated with acquiring its Rainforest I shares totaled approximately $4.85 per share.

      . The net asset value method adjusts the book value of a company's assets to their actual or estimated market value and subtracts its liabilities to arrive at a valuation.

      . The undisputed valuation date is November 30, 2000.

      . Mercer also used the guideline-company methodology based on Rainforest I’s pro for-ma operating results, but assigned zero weight to the $177,878,000 valuation.

      . The DCF method projects the future benefits (usually earnings, cash flow, or dividends) and discounts the projected income stream back to a present value. In essence, it is the value someone is willing to pay today to receive the anticipated cash flow in future years. The discount rate is generally based on the level of risk of the business and the opportunity cost of capital.

      . Mercer identified 19 guideline companies that included Applebee’s, California Pizza Kitchen, Bob Evans Farms Inc., BUCA Inc., Champps Entertainment, Inc., Chicago Pizza & Brewery, Inc., P.F. Chang's China Bistro, Ruby Tuesday, Inc., and Panera Bread Company.

      . During 2000, more than 33 million shares of Rainforest I stock were publicly traded.


source: Caselaw Access Project

author: HUDSON, Judge. G. BARRY ANDERSON, Judge

license: Public Domain

text:
    CITY OF ELKO, Respondent, v. Emad ABED, et al., Appellants, Albert LaFontaine, Defendant.
    No. A03-1050.
    Court of Appeals of Minnesota.
    April 13, 2004.

      James J. Thomson, Mary D. Tietjen, Kennedy & Graven, Chartered, Minneapolis, MN, for respondent.
    Randall D.B. Tigue, Randall Tigue Law Office, P.A., Minneapolis, MN, for appellants.
    Considered and decided by ANDERSON, Presiding Judge; STONEBURNER, Judge; and HUDSON, Judge.
   OPINION

HUDSON, Judge.

In 2001, the City of Elko City Council adopted Ordinance No. 92 establishing licensing requirements for sexually oriented businesses. In 2002, the City of Elko served and filed a summons and complaint seeking an injunction to enforce the ordinance against appellants, Sphinx Properties, L.L.C., and Circus Circus, L.L.C., who were operating an adult establishment that offered nude dancing. Both parties moved for summary judgment and the district court granted summary judgment to respondent City of Elko on all claims. On appeal, appellants challenge the constitutionality of the ordinance and argue that the ordinance is a licensing scheme that is a prior restraint on speech in violation of the First Amendment. Likewise, appellants argue that the disqualification and disclosure provisions, the license and investigation fees, the distance restrictions, and the prohibition against gratuities are all impermissible prior restraints on speech. We affirm.

FACTS

On November 19, 1999, the Elko City Council adopted Ordinance No. 79, imposing a temporary moratorium on new adult establishments in the city. The city council directed the city planner, Stephen Grittman, to review studies relating to the adverse effects of sexually oriented businesses. Grittman reviewed several studies relating to the impact of sexually oriented businesses on communities, including a report that contained information from studies conducted in Minneapolis, St. Paul, Phoenix, and Indianapolis. Copies of these studies were disseminated to both the planning commission and the city council. Grittman prepared a draft resolution and findings for the City of Elko planning commission and city council that outlined and summarized conclusions relating to the potential adverse secondary effects that sexually oriented businesses would have within the city.

Based on findings in the draft resolution, on November 21, 2000, the planning commission recommended that the city council establish zoning and license controls to minimize secondary effects of sexually oriented businesses and provide those businesses a reasonable opportunity to locate and operate in the city. On December 4, 2000, the city council accepted that recommendation and adopted Grittman’s draft resolution. Based on the findings in the resolution, on August 6, 2001, the city council adopted Ordinance No. 92, establishing licensing requirements for sexually oriented businesses.

Ordinance No. 92 prohibits the operation of a sexually oriented business within the city without first obtaining a sexually oriented business license. The ordinance sets forth the procedure for obtaining a license and also provides that individuals convicted of certain crimes are disqualified from licensure for a period of time. The ordinance authorizes the city council to set an annual license and investigation fee; the license fee was set at $5,000 and the investigation fee at $1,500. The ordinance also contains a distance requirement for dancers, and a requirement that no gratuity may be given to any semi-nude dancer or performer.

On December 21, 2001, appellant Sphinx Properties, L.L.C. (Sphinx), purchased a restaurant/bar in the city. Sphinx leased the property to appellant Circus Circus, L.L.C. (Circus Circus). Appellant Emad Abed (Abed) is the president and sole shareholder of both companies. Natalie Brisson (Brisson) is the vice president in charge of dance operations for Circus Circus. Brisson has been convicted of misdemeanor prostitution, thus the ordinance disqualifies her and Circus Circus from licensure for a period of time as long as she remains an officer of Circus Circus.

In September 2002, Sphinx and Circus Circus sued the city in federal district court alleging that the ordinance is unconstitutional. In October 2002, Albert La-Fontaine acquired an interest in the property and claimed it was sovereign tribal land exempt from local ordinances and regulations and began offering nude dancing at the property. On November 1, 2002, the Elko police issued citations to three female dancers for dancing nude in violation of the ordinance, and issued a citation to a manager for serving alcohol while nude dancing was occurring, in violation of a separate ordinance. On November 8, 2002, the federal district court denied the city’s motion for a temporary restraining order and suggested that any alleged violations of the ordinance should be heard in state court. On November 12, 2002, the city revoked Circus Circus’s liquor license for non-payment of license fees and delinquent property taxes. On November 14, 2002, special agents of the Minnesota Alcohol and Gambling Enforcement Division observed alcohol continuing to be served at the property.

On November 19, 2002, the city served and filed a complaint seeking an injunction to enforce Ordinance No. 92. On November 26, 2002, the district court issued a temporary injunction prohibiting appellants from, inter alia, operating a sexually oriented business without a license. At some point after the temporary injunction was issued, LaFontaine ceased to have an interest in the property.

On December 13, 2002, appellants filed an answer and counterclaim challenging the constitutionality of Ordinance No. 92. On February 25, 2003, appellants moved to dissolve the temporary injunction and sought an injunction prohibiting the city from enforcing the ordinance. The district court treated the motion and city’s response as cross-motions for summary judgment on the merits.

On June 3, 2003, the district court denied appellants’ motion for summary judgment and granted the city’s motion, thereby concluding that Ordinance No. 92 is constitutional. This appeal follows.

ISSUES

I. Did the district court err in holding that Ordinance No. 92 is a content-neutral time, place and manner regulation?

II. Did the district court err in holding that the provision providing for license disqualification based on prior criminal convictions of certain offenses is valid?

III. Did the district court err in holding that the disclosure requirements are valid?

IV. Did the district court err in holding that the license and investigation fees are valid?

V. Did the district court err in holding that the distance restrictions and prohibition of gratuities are valid?

ANALYSIS

I

Summary judgment is appropriate only where there are no genuine issues of material fact and a party is entitled to judgment as a matter of law. Minn. R. Civ. P. 56.03. On appeal from summary judgment, we examine two questions: “whether there are any genuine issues of material fact and whether the lower courts erred in their application of the law.” Cummings v. Koehnen, 568 N.W.2d 418, 420 (Minn.1997). The facts are undisputed; therefore, this court’s review is whether the district court erred in its application of the law. On appeal from a grant of summary judgment, we review questions of law de novo. Christensen v. Eggen, 577 N.W.2d 221, 224 (Minn.1998). “The constitutionality of an ordinance is a question of law, which this court reviews de novo.” State v. Botsford, 630 N.W.2d 11, 15 (Minn.App.2001), review denied (Minn. Sept. 11, 2001). The party opposing summary judgment “must do more than rest on mere averments.” DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn.1997).

Appellants first argue that the district court erred in analyzing the constitutionality of Ordinance No. 92 under the more lenient time, place, and manner standard, because the ordinance is a prior restraint on speech, and as such, it carries a heavy presumption against its constitutional validity. Appellants further contend that even if Ordinance No. 92 is a time, place and manner regulation, in City of Los Angeles v. Alameda Books, Inc., 535 U.S. 425, 122 S.Ct. 1728, 152 L.Ed.2d 670 (2002), the United States Supreme Court heightened the evidentiary burden required to sustain such ordinances under the so-called secondary effects theory. Appellants argue that they cast doubt on the evidence the city used to support the adoption of the ordinance, and under the heightened evi-dentiary burden articulated in Alameda Books, the burden shifted to the city to produce additional evidence to sustain the ordinance. Appellants claim that the city did not meet its burden. The city counters that nude dancing establishments are only entitled to minimal protection under the First Amendment, and that the ordinance complies with the requirements the Supreme Court has established for regulating adult uses.

It is well established that regulations enacted for the purpose of restraining speech on the basis of content presumptively violate the First Amendment. See Carey v. Brown, 447 U.S. 455, 462-63, and n. 7, 100 S.Ct. 2286, 2291, and n. 7, 65 L.Ed.2d 263 (1980). By contrast, a city may regulate a First Amendment-protected use if the ordinance is: (1) a content-neutral time, place, and manner regulation; (2) designed to serve a substantial governmental interest; and (3) which does not unreasonably limit alternative avenues of communication. City of Renton v. Playtime Theatres, Inc., 475 U.S. 41, 47, 106 S.Ct. 925, 928, 89 L.Ed.2d 29 (1986). Thus, the Renton test is less stringent than that for content-related restrictions, because content-neutral speech regulations are justified without reference to the content of the regulated speech.

But determining whether an ordinance is “content-based” or “content-neutral” is not always an easy task because certain ordinances do not fit neatly into either category. That is certainly the case with the City of Elko ordinance we are confronted with here. To be sure, the ordinance is enforced through a licensing scheme that prohibits certain expressive conduct (nude dancing), unless the establishment has obtained the appropriate license and satisfied various disclosure and disqualification provisions. As such, it is not a typical content-neutral zoning ordinance where, for example, a city has limited adult entertainment to a certain geographical area. Nevertheless, the ordinance does not ban nude dancing establishments altogether, and as the district court concluded, the ordinance is aimed not at the content of the “message” being conveyed by nude dancing, but rather at the secondary effects of nude dancing establishments on the surrounding community.

Appellants forcefully argue that nude dancing is entitled to the same First Amendment protection afforded to core First Amendment activities and speech, such as, the production of newspapers, books, or films. But the United States Supreme Court has articulated what we believe is a dispositive distinction between the degree of First Amendment protection afforded to expressive conduct, such as nude dancing, and the degree of First Amendment protection afforded to other forms of speech and expressive conduct. For example, the Supreme Court has held that adult films and books receive complete First Amendment protection. See Alameda Books, Inc., 535 U.S. 425, 122 S.Ct. 1728, 152 L.Ed.2d 670 (acknowledging a city ordinance regulating adult bookstores implicates First Amendment rights); Jacobellis v. Ohio, 378 U.S. 184, 187, 84 S.Ct. 1676, 1677, 12 L.Ed.2d 793 (1964) (“[mjotion pictures are within the ambit of constitutional guarantees of freedom of speech and of the press”)- However, the Supreme Court has consistently stated that while nude dancing is entitled to some First Amendment protection, “it falls only within the outer ambit of the First Amendment’s protection.” See City of Erie v. Pap’s A.M., 529 U.S. 277, 289, 120 S.Ct. 1382, 1391, 146 L.Ed.2d 265 (2000); Barnes v. Glen Theatre, Inc., 501 U.S. 560, 566, 111 S.Ct. 2456, 2460, 115 L.Ed.2d 504 (1991) (holding nude dancing is expressive conduct within the outer perimeters of the First Amendment, though only marginally so). Furthermore, the Supreme Court has noted that society’s interest in this type of expression is different than its interest in non-sexually explicit expression. See Young v. Am. Mini Theaters, Inc., 427 U.S. 50, 70, 96 S.Ct. 2440, 2452, 49 L.Ed.2d 310 (1976) (holding that it is manifest that society’s interest in protecting this type of expression — sexually explicit materials — is of a wholly different and lesser magnitude than the interest in untrammeled political debate). The First Amendment parameters are admittedly not precise, but it is clear that nude dancing receives some lesser degree of First Amendment protection than adult films and adult books, or traditional political speech. Having established that the First Amendment only minimally protects nude dancing, our analysis now turns to whether Ordinance No. 92 is a valid time, place, and manner regulation, designed to serve a substantial governmental interest.

A city may regulate a First Amendment-protected adult entertainment establishment if the ordinance satisfies a three-prong test: the ordinance must be (1) a content-neutral time, place, and manner regulation; (2) designed to serve a substantial governmental interest; and (3) which does not unreasonably limit alternative avenues of communication. Renton, 475 U.S. at 47, 106 S.Ct. at 928. We conclude that Ordinance No. 92 satisfies the three-prong test.

1. Content Neutral

The ordinance satisfies the first prong of Renton as it is content-neutral. The Court in Renton held that “content-neutral” regulations are those that “are justified without reference to the content of the regulated speech.” Renton, 475 U.S. at 48, 106 S.Ct. at 929 (emphasis in original) (quotations omitted). In Renton, the Court concluded that the stated purpose of the ordinance was to address the secondary effects of adult businesses and not to suppress unpopular views; therefore the Court held the ordinance was content-neutral. Id.

Here, the purpose of Ordinance No. 92 is also to minimize the secondary adverse effects of sexually oriented businesses. The city council considered the relationship between sexually oriented businesses and the potential adverse effects on the community prior to adopting the ordinance. The city relied on studies that described other cities’ experiences with adult businesses and their adverse secondary effects. In addition, the ordinance states on its face that it is to neither have the “purpose nor effect of imposing a limitation or restriction on the content of any communicative materials, including sexually oriented materials.” The ordinance also provides that “it is not the intent nor effect of this Ordinance to restrict or deny access by adults to sexually oriented materials protected by the First Amendment, or to deny access by the distributors and exhibitors of sexually oriented entertainment to their intended market.” We conclude that Ordinance No. 92 satisfies the first prong of the Renton test, as its purpose is to minimize the secondary adverse effects of sexually oriented businesses. Therefore, the district court correctly held that Ordinance No. 92 is a content-neutral time, place, and manner regulation.

2. Substantial Governmental Interest

The second prong of Renton requires that the ordinance be designed to serve a substantial governmental interest. The Supreme Court has recognized that cities have an interest in attempting to preserve the quality of urban life and that interest is one that must be accorded high respect. See Am. Mini Theaters, 427 U.S. at 71, 96 S.Ct. at 2453. Thus, the Court has held that combating the harmful secondary effects associated with nude dancing is a substantial governmental interest. Renton, 475 U.S. at 50, 106 S.Ct. at 930; Erie, 529 U.S. at 296, 120 S.Ct. at 1395. Furthermore, in demonstrating that 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.” Renton, 475 U.S. at 51-52, 106 S.Ct. at 931. But appellants argue that the Supreme Court’s recent decision in Alameda Books heightened the Renton evidentiary standard. We disagree.

The primary issue in Alameda Books was the appropriate standard for determining whether an ordinance serves a “substantial government interest” under Renton. Alameda Books, 535 U.S. at 433, 122 S.Ct. at 1733. In Alameda Books, the Supreme Court rejected the Ninth Circuit’s conclusion that a city must prove that the city’s theory — in that case whether the adult' bookstore would result in damaging secondary effects to the community- — -is the only theory that can plausibly explain the data the city relies on. Id. at 438-39, 122 S.Ct. at 1735. To the contrary, in Alameda Books, the Court stated:

[i]n Renton, we specifically refused to set such a high bar for municipalities that want to address merely the secondary effects of protected speech. We held that a municipality may rely on any evidence that is reasonably believed to be relevant for demonstrating a connection between speech and a substantial, independent government interest.

Id. at 438, 122 S.Ct. at 1736. Appellants, however, claim that the following language in Alameda Books heightened the Renton evidentiary standard:

[t]his is not to say that a municipality can get away with shoddy data or reasoning. The municipality’s evidence must fairly support the municipality’s rationale for its ordinance. If plaintiffs fail to cast direct doubt on this rationale, either by demonstrating that the munici-palitys evidence does not support its rationale or by furnishing evidence that disputes the municipalitys factual findings, the municipality meets the standard set forth in Renton. If plaintiffs succeed in casting doubt on a municipality’s rationale in either manner, the burden shifts back to the municipality to supplement the record with evidence renewing support for a theory that justifies its ordinance.

Alameda Books, 535 U.S. at 438-39, 122 S.Ct. at 1736.

Appellants claim that under the “new” standard in Alameda Books, the city must prove that the ordinance actually diminishes the secondary effects that the ordinance was designed to prevent. Appellants further claim that under Alameda Books, the city bears the burden of production to come forward with evidence to reestablish the validity of its initial conclusion when the city’s evidence is challenged either by evidence (1) showing the studies relied upon are invalid or unreliable, or (2) that reaches a conclusion contrary to the city’s studies. Appellant’s position is unavailing.

First, several courts have held that Alameda Books did not establish a “new” evidentiary standard, contrary to appellants’ contention. In finding an ordinance was valid because the challengers failed to “cast sufficient doubt,” the Eighth Circuit rejected the argument that Alameda Books changed the evidentiary standard. SOB, Inc. v. County of Benton, 317 F.3d 856, 864 (8th Cir.2003). The Eighth Circuit Court of Appeals noted

Justice O’Connor, writing for the four-justice plurality in [City of Erie v.] Pap’s[AM.], afforded substantial deference to legislative judgments regarding secondary effects.
Alameda Books was ... deferential in reviewing a zoning ordinance which had a broader impact on protected First Amendment interests. Justice Kennedy’s concurring opinion in Alameda Books was somewhat less deferential than the plurality to local legislative judgments as to the adverse secondary effects purportedly addressed by zoning regulations. But Justice Kennedy joined the plurality opinions in Barnes [v. Glen Theatre, Inc.] as well as [Erie ], and he did not even cite those cases in his Alameda Books concurrence, which means there is nothing to suggest that he has retreated from his votes in Barnes and [Erie]. In these circumstances, we conclude that the Court’s holding in [Erie ] is still controlling regarding the deference to be afforded local governments that decide to ban live nude dancing.

SOB, 317 F.3d at 863-64. Other courts have also held that Alameda Books did not create a new evidentiary burden and did not substantially change the second prong of the Renton test. See Giovani Carandola, Ltd. v. Bason, 303 F.3d 507, 516 (4th Cir.2002) (noting that a “city or state need carry a minimal burden to demonstrate its interest in regulation of such activity”); Baby Dolls Topless Saloons, Inc. v. City of Dallas, 295 F.3d 471, 481 (5th Cir.2002) (citing Alameda Books and noting that a city is not required to demonstrate with empirical data that its ordinance will successfully lower crime); Ben’s Bar, Inc. v. Village of Somerset, 316 F.3d 702, 721-22 (7th Cir.2003) (stating Justice Kennedy’s concurrence in Alameda Books “agreed with the plurality’s overall conclusion that a municipality’s initial burden of demonstrating a substantial government interest in regulating the adverse secondary effects associated with adult entertainment is slight”). We likewise conclude that Alameda Books did not establish a “new” evidentiary standard.

Were this court to adopt appellants’ reading of Alameda Books, whenever a prospective licensee casts any doubt on the municipality’s evidence, the burden would shift to the municipality to supplement the record with evidence renewing support for a theory that justifies the ordinance. Parties to these cases would be on a never-ending merry-go-round of burden shifting. Thus, after careful review of Alameda Books, we conclude that the party challenging an ordinance must cast “direct doubt” on the municipality’s rationale by showing the “municipality’s evidence does not support its rationale.” Alameda Books, 535 U.S. at 438-39, 122 S.Ct. at 1736 (emphasis added). To cast direct doubt, the challenger must present evidence that is directly contrary to the municipality’s evidence, not simply produce a general study refuting all secondary effects. This is not a new or heightened evidentiary standard as this interpretation is consistent with the holding in Renton, which established the proper evidentiary burden of the parties.

Here, the city relied on relevant studies on the adverse secondary effects of sexually oriented businesses when it adopted Ordinance No. 92. The city used studies that described other cities’ experiences as to adverse secondary effects of sexually oriented businesses, and reasonably believed that licensing regulations for sexually oriented businesses would serve to reduce potential secondary adverse effects. In addition, appellants did not produce evidence that cast direct doubt on the city’s studies. Appellants merely claim that the studies relied on by the City amount to nothing more than “junk social science.” But as the district court properly noted, it appears these same or similar studies were relied on and upheld in other cases, including Jakes, Ltd., Inc. v. City of Coates, 284 F.3d 884 (8th Cir.2002), Renton, and Alameda Books. In sum, appellants produced one article criticizing the research methods used by municipalities in secondary-effects studies and the prior testimony of a manager of a nude dancing club in an unrelated matter. As the district court aptly noted, the article submitted by appellants was submitted in SOB in that party’s unsuccessful attempt to overturn an ordinance. 317 F.3d at 863. General commentary criticizing adverse secondary effect studies is not enough to cast “direct doubt” on the city’s rationale for the ordinance.

Because Alameda Books did not change the Renton evidentiary standard for determining whether an ordinance serves a “substantial government interest,” and because Ordinance No. 92 meets the three-prong Renton test, we hold that Ordinance No. 92 is constitutional and accordingly affirm the decision of the district court.

II

Disqualification Provisions

Ordinance No. 92 authorizes the city to conduct background checks and to disqualify license applicants with certain criminal convictions and tax delinquencies. Appellants contend that such disqualification provisions are unlawful prior restraints in violation of the First Amendment. The city counters that disqualifications based on prior criminal convictions of certain crimes are valid, and notes that similar provisions have been upheld. The city further contends that the ordinance does not totally prohibit licen-sure based on prior convictions, but simply requires a waiting period before obtaining a license.

Section 5 of the ordinance provides, in relevant part, that licenses shall not be issued to individuals who have been convicted of certain enumerated sex crimes and where less than two years have elapsed since the date of conviction or release from confinement, if the conviction is a misdemeanor; and less than five years have elapsed since the date of conviction or release if the conviction is a felony; or if the individual has been convicted of multiple misdemeanors occurring within a 24-month period. Several courts have upheld disqualifications based on past criminal convictions. See DLS, Inc. v. City of Chattanooga, 107 F.3d 403, 414-15 (6th Cir.1997) (finding that the disqualification for a conviction of certain sexual offenses within the last five years is valid since the city officials’ discretion is limited by objective criteria); TK’s Video, Inc. v. Denton County, 24 F.3d 705, 709-10 (5th Cir.1994) (finding that disqualification for convictions for certain sexual offenses, and disclosure of such convictions, are valid since they are correlated with the side effects that can attend these businesses and the “ends and means are substantially related”).

Appellants argue, however, that the Minnesota Supreme Court invalidated such restrictions in Alexander v. City of St. Paul, 303 Minn. 201, 227 N.W.2d 370 (1975). In Alexander, the city council revoked a theater license after an employee was convicted of selling, distributing or exhibiting an obscene motion picture. Alexander, 303 Minn. at 203, 227 N.W.2d at 372. The Minnesota Supreme Court noted that expression by means of motion pictures is included within the First and Fourteenth Amendments. Id. The court also noted that “the standards for excluding persons from engaging in the licensed activity must bear a reasonable relationship to their qualifications to engage in that activity.” Id. In finding the ordinance unconstitutional, the court noted that because the city was licensing a motion picture theater, “it is licensing an activity protected by the First Amendment, and as a result the power of the city is more limited than when the city licenses activities which do not have First Amendment protection.” Id. at 227, 227 N.W.2d at 373-74. Of particular significance to our analysis here, the court also held that revoking a license for a past conviction related to obscenity denies the person the ability to exercise a constitutionally protected right because of a past abuse of that right. Id. at 206, 227 N.W.2d at 373.

But Alexander is distinguishable on several grounds. First, Alexander involved the licensure of motion picture theaters — a category of expression not subject to the limiting language used by the Supreme Court in analyzing nude dancing ordinances. See Jacobellis, 378 U.S. at 187, 84 S.Ct. at 1677 (motion pictures are within the ambit of constitutional guarantees of freedom of speech and of the press). The case law is clear that nude dancing receives a lesser degree of First Amendment protection than adult films. Barnes, 501 U.S. at 566, 111 S.Ct. at 2457. Secondly, Ordinance No. 92 does not deny a license for a past abuse of a constitutionally protected right, such as showing motion pictures. Rather, the city’s ordinance temporarily denies a person a license for a past conviction of certain enumerated sex-crimes, such as prostitution. In addition, the city’s ordinance sufficiently limits the decision-maker’s discretion because the ordinance contains objective criteria enumerating the disqualifying sex crimes and limiting the period of disqualification by the severity of the crime.

Because similar disqualification provisions have been upheld and the disqualification provisions are substantially related to the city’s significant governmental interest, we affirm.

Ill

Disclosure Provisions

Appellants also argue that the disclosure requirements in Ordinance No. 92 eonsti-tute a prior restraint on freedom of expression. The city counters that other courts have held that disclosure requirements in similar ordinances are valid.

Many other courts have upheld similar- disclosure requirements. See TK’s Video, 24 F.3d at 710 (upholding the disclosure requirement, including names, ages, and prior criminal histories); Ellwest Stereo Theater, Inc. v. Boner, 718 F.Supp. 1553, 1566-68 (M.D.Tenn.1989) (upholding disclosure requirement as to persons operating and managing the adult-oriented businesses, but finding the disclosure requirement as to their criminal convictions was overbroad); Broadway Books, Inc. v. Roberts, 642 F.Supp. 486, 493 (E.D.Tenn.1986) (upholding disclosure requirement, including criminal records). In order for the city to compel disclosure, “it is necessary that there be a substantial relationship between the information sought to be disclosed and a significant governmental interest to be furthered by such disclosure.” Ellwest Stereo Theater, 718 F.Supp. at 1567. The Fifth Circuit noted that requiring owners and employees to disclose information about their age, prior regulatory infractions, and sexual offenses, “substantially relates to the substantial government interest of curtailing pernicious side effects of adult businesses.” TK’s Video, 24 F.3d at 710.

The city has a “significant governmental interest” that is furthered by the disclosures required in the ordinance. The purpose of the ordinance is to “guard against the inception and transmission of disease” and to guard against the secondary effects of sexually oriented businesses. And, as the Fifth Circuit noted, disclosing information about owners’ and employees’ ages, prior regulatory infractions and sexually related criminal convictions substantially relates to the city’s interests in guarding against the secondary effects of sexually oriented businesses.

Because similar disclosure requirements have been upheld, and because the disclosure requirements are substantially related to the city’s significant governmental interest, we affirm.

IV

License Fee Provisions

Appellants also argue that the license fee (of $5,000) and the investigation fee (of $1,500) are unconstitutional prior restraints on First Amendment rights. Appellants acknowledge that the city may impose a fee, but, citing Murdock v. Pennsylvania, 319 U.S. 105, 63 S.Ct. 870, 87 L.Ed. 1292 (1943), contend that licensing fees on adult entertainment must be reasonably related to recouping the costs of administering the licensing program. Appellants also argue that following the Supreme Court’s decision in Alameda Books, the municipality bears the burden of proving the reasonableness of the fees. The city counters that the license fee in the ordinance is valid and notes that the Eighth Circuit has held that the prospective licensee has the burden of proving the license fee is unreasonable. The city also argues that appellants have produced no evidence showing the fee is unreasonable or content-based.

Distinguishing core First Amendment cases such as Murdock, which involved the right to distribute religious leaflets, the Eighth Circuit in Jake’s held that because nude dancing is only marginally protected by the First Amendment, adult entertainment license fees need not be reasonably related to recouping the costs of administering the licensing program. Jake’s, 284 F.3d at 891. In addition, the Jake’s court noted that the “prospective licensee has the burden of establishing that a license fee is unreasonable”; however, a “fee may be so large or so discriminatory as to demonstrate that it is not content-neutral.” Id. And, as noted earlier in this opinion, Alameda Books, which was decided approximately six weeks after Jake’s, did not change the evidentiary standard municipalities must meet to satisfy the “substantial governmental interest” test. By logical extension, nothing in Alameda Books shifts the burden to municipalities to establish the reasonableness of the license fee.

Nevertheless, appellants point to the Eleventh Circuit Court of Appeals, which has held that

when core First Amendment freedoms are made subject to a licensing scheme, only revenue-neutral fees may be imposed so that government is not charging for the privilege of exercising a constitutional right ... [and] it is the government’s burden to demonstrate that its licensing fee is reasonably related to recoupment of the costs of administering the licensing program.

Fly Fish, Inc. v. City of Cocoa Beach, 337 F.3d 1301, 1314 (11th Cir.2003) (citation omitted). The Eleventh Circuit also noted that at least one other circuit and several federal district courts have adopted the same analysis on licensing fees on adult entertainment businesses. Id. (citing Deja Vu of Nashville, Inc. v. Metro. Gov’t of Nashville, 274 F.3d 377, 395 (6th Cir.2001); Kentucky Rest. Concepts, Inc. v. City of Louisville, 209 F.Supp.2d 672, 691-692 (W.D.Ky.2002); AAK, Inc. v. City of Woonsocket, 830 F.Supp. 99, 105 (D.R.I.1993); Ellwest Stereo Theater, 718 F.Supp. at 1574; Bayside Enters., Inc. v. Carson, 450 F.Supp. 696, 704-705 (M.D.Fla.1978)). Appellants urge us to adopt the Eleventh Circuit’s analysis. We decline to do so.

Instead, we adopt the Eighth Circuit’s analysis regarding licensing fees for businesses that offer nude dancing because, as noted above, nude dancing receives a lesser degree of First Amendment protection. Thus, prospective licensees have the burden of proving that the fees are unreasonable. In adopting the Eighth Circuit’s analysis, we acknowledge, as did the Jake’s court, that an adult entertainment license fee may be “so large or so discriminatory as to demonstrate that it is not content neutral.” Jake’s, 284 F.3d at 891. But here, appellants have not met their burden to show that the fees are unreasonable. The district court and the city noted that the appellants produced no evidence showing the fee is unreasonable, other than arguing that the fees are unreasonable because they are substantially higher than license fees in other cases. Although we acknowledge that the fees here are high, we cannot say that they are so large or discriminatory as to demonstrate that they are not content neutral.

V

Distance Restrictions and Prohibition Against Gratuities

Finally, appellants challenge the provisions in Ordinance No. 92 prohibiting any dancer from receiving gratuities and requiring dancers to be no closer than six feet from any patron. Appellants argue that the distance requirements create so-called “floating buffer zones” and note that these buffer zones have been invalidated by the United States Supreme Court. Appellants also contend that the dancers should be allowed to accept gratuities since the Supreme Court (in other contexts) has invalidated such financial disincentives to engage in constitutionally protected speech. The city counters that the distance restrictions are nearly identical to restrictions that other courts have upheld, and contends that the First Amendment protects neither the desire to dance within a certain distance nor the opportunity to receive tips. Finally, the city argues that the ordinance has a fixed buffer zone, not a floating buffer zone as appellants argue.

Section 18 of the ordinance requires that performers maintain a six-foot distance from customers while performing on a platform raised two feet from the floor where the customers sit. Section 18 also limits the manner in which dancers may solicit or accept gratuities. Several circuits have upheld similar behavioral (distance and gratuity) restrictions on dancers as reasonable, content-neutral time, place, and manner restrictions. See Jake’s, 284 F.3d at 891-92 (six feet and no tips); Deja Vu of Nashville, 274 F.3d at 396-98 (three feet and finding there is no constitutional requirement that compensation come in the form of tips); Colacurcio v. City of Kent, 163 F.3d 545, 553 (9th Cir.1998) (ten feet), cert. denied, 529 U.S. 1053, 120 S.Ct. 1553, 146 L.Ed.2d 459 (2000); Kev, Inc. v. Kitsap County, 793 F.2d 1053, 1061-62 (9th Cir.1986) (ten feet and no tips).

Appellants argue, however, that similar distance restrictions have been held unconstitutional. In support of their position, appellants point us to Schenck v. Pro-Choice Network of Western New York, 519 U.S. 357, 117 S.Ct. 855, 137 L.Ed.2d 1 (1997), where the Supreme Court struck down a so-called “floating buffer zone” that required abortion protesters to remain 15 feet from the abortion clinic doorway and driveway entrances. The Supreme Court invalidated floating buffer zones in the abortion protest context because proximity was essential to the type of expression the protesters sought to protect. Id. at 377-78, 117 S.Ct. at 867. The protesters in Schenck attempted to persuade patients to reconsider their decision as they approached the entrance to the clinic. Id. It was difficult, if not impossible, to speak in a conversational manner with patients and simultaneously comply with the distance requirements. Id. The court concluded that the injunction lacked precision and burdened more speech than necessary. Id. at 380, 117 S.Ct. at 868. Appellants argue that, in a similar fashion, the entertainers will dance further away from patrons in order to assure they do not inadvertently violate the distance restrictions. The flaw in appellants’ argument is that Ordinance No. 92 is not a “floating buffer zone” as described in Schenck. Unlike the distance restriction in Schenck, the distance restriction in Ordinance No. 92 is well defined, and is confined to the “platform” where the performers may provide the entertainment. Furthermore, close proximity is not an essential element of nude dancing because the expressive content of such dancing does not depend on being at “a normal conversational distance,” as appellants imply. As the district court aptly noted, “[wjhatever constitutionally protected aspects there are in nude dancing would seem to be preserved from a distance of six feet as well as six inches.”

Because the distance restriction is well defined and sufficiently narrow, we affirm.

DECISION

The district court correctly concluded that Ordinance No. 92 is constitutional because nude dancing receives a lesser degree of First Amendment protection than adult films or books, and because the ordinance meets the three-prong Renton test. Accordingly, we affirm the district court’s grant of summary judgment to the City of Elko. In addition, we affirm the district court’s grant of summary judgment to the City of Elko with respect to the disqualification and disclosure provisions because they are substantially related to the city’s significant governmental interest. We also affirm the district court’s grant of summary judgment to the City of Elko with respect to the license and investigation fees because appellants did not meet their burden to show the fees are unreasonable, and because the fees are not so large as to demonstrate that they are not content neutral. Finally, we affirm the district court’s grant of summary judgment with respect to the distance restrictions and prohibition against gratuities because the distance restrictions are well defined and narrowly drawn and do not burden more “speech” than is necessary.

Affirmed.

G. BARRY ANDERSON, Judge

(concurring specially).

I agree with the majority regarding the disposition of this appeal but concur specially because I do not believe that the activity at issue here is protected by the First Amendment.

In U.S. v. O’Brien, four men burned their Selective Service registration certificates in violation of the Universal Military Training and Service Act to encourage “others to adopt [their] antiwar beliefs.” 391 U.S. 367, 369-70, 88 S.Ct. 1673, 1675, 20 L.Ed.2d 672 (1968). The men were prosecuted for this violation; their defense was that it was protected “symbolic speech” because they intended to convey an idea. Id. at 376, 88 S.Ct. at 1678. In rejecting this argument, the Court stated, “We cannot accept the view that an apparently limitless variety of conduct can be labeled ‘speech’ whenever the person engaging in the conduct intends thereby to express an idea.” Id. When analyzing restrictions on so-called symbolic speech, the Court enumerated a four-part test, all parts of which must be satisfied for the legislation to be constitutional: (1) the government making the law must have the constitutional authority to do so, (2) the law must serve “an important or substantial governmental interest,” (3) the interest must not be related to the suppression of free expression, and (4) the incidental restriction on expression must be no more than is necessary to achieve the governmental interest. Id. at 377, 88 S.Ct. at 1679.

Four years later, in California v. La-Rue, the Supreme Court stated that nude dancing is entitled to some constitutional protection, but observed that this form of “live entertainment” “partake[s] more of gross sexuality than of communication.” 409 U.S. 109, 118, 93 S.Ct. 390, 397, 34 L.Ed.2d 342 (1972). In Schad v. Borough of Mount Ephraim, the Court stated, “Entertainment, as well as political and ideological speech, is protected”; the Court continued that “an entertainment program” may not “be prohibited solely because it displays the nude human figure.” 452 U.S. 61, 65-66, 101 S.Ct. 2176, 2181, 68 L.Ed.2d 671 (1981).

The meaning of LaRue and Schad was clarified in Barnes v. Glen Theatre, Inc. where the Supreme Court noted, “[N]ude dancing ... is expressive conduct within the outer perimeters of the First Amendment.” 501 U.S. 560, 565-66, 111 S.Ct. 2456, 2460, 115 L.Ed.2d 504 (1991). Unfortunately, the Supreme Court has recently reiterated this position, noting that nude dancing is “expressive conduct” falling “within the outer ambit of the First Amendment’s protection.” City of Erie v. Pap’s A.M., 529 U.S. 277, 289, 120 S.Ct. 1382, 1391, 146 L.Ed.2d 265 (2000).

But the better position, and the position that does not necessitate the intellectual gymnastics created by an attempt to find what the “outer ambit” of the First Amendment means, is the position articulated by Justice Scalia in his Barnes concurrence where he correctly argued that statutes and ordinances prohibiting or restricting erotic dancing are “not subject to First Amendment scrutiny at all.” Barnes at 572, 111 S.Ct. at 2463 (Scalia, J., concurring). Justice Scalia noted that there is a long history in American law of prohibiting public nudity, and it is a recent development that such laws have been thought to have First Amendment implications. Id. at 572-73, 111 S.Ct. at 2464.

It is difficult, and ultimately a useless task, to attempt to define the “outer ambit” of the First Amendment that protects erotic dancing. The better approach is to recognize that erotic dancing is solely conduct and not entitled to First Amendment protection.

      . The draft resolution, Resolution No. 23, identified potential adverse secondary effects including: increased crime rates (especially sex-related crimes), depression of commercial and residential property values, and increased transiency.

      . U.S. Const. Amend. I provides: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press, or the right of the people peaceably to assemble, or to petition the Government for a redress of grievances.” The protections of the First Amendment are made applicable to the states by the Fourteenth Amendment. Stromberg v. California, 283 U.S. 359, 368, 51 S.Ct. 532, 535, 75 L.Ed. 1117 (1931).

      . The third prong of the Renton test is not at issue in this appeal.

      . Bryant Paul, et al., Government Regulation of "Adult” Businesses Through Zoning and Anti-Nudity Ordinances: Debunking the Legal Myth of Negative Secondary Effects, 6 Comm. L. & Pol. 355 (2001).

      . Similarly, many of the other cases cited by appellants also involved adult motion picture establishments or adult bookstores — businesses also not subjected to the nude dancing constitutional standard.

      . A prospective operator of a sexually oriented business is required to execute an application form which requires applicants to disclose: their name, and any name used in the prior five years, current business address, fingerprints or social security number, name and address of the proposed business, proof of age, and information on any other licenses to operate sexually oriented businesses and the status of such licenses.