New Albany, Indiana.- Ericka and Dustin McClung were shocked last month by the sign that appeared on the building under renovation three doors from their home on Main Street in New Albany.

It read: “Adult Retail Store Now Open.”

Ericka McClung said she tries to shelter her two young daughters from exposure to sexually explicit shows.

“I don’t even have cable,” she said.

Dustin McClung said he understands that the business, New Albany DVD, has constitutional rights to freedom of expression.

“But where do our rights come in?” his wife asked.

For the time being at least, the store has been shut down by an order from the city building commissioner. But the owners have filed suit in federal court, claiming that constitutional rights have been violated and seeking an order allowing it to operate.

Similar conflicts – pitting community anxiety about exposure to adult businesses and business owners’ First Amendment free-expression rights – are taking place across the country, from Louisville to Detroit, Abilene, Kan., to Los Angeles.

“This is the hot topic in planning and zoning law,” said Gary Edmonson, the Kenton County, Ky., prosecutor who has used the conservative obscenity standards in his Northern Kentucky community to keep out adult video stores. “It’s going on all over the country. It’s been going on for the last two or three years.”

He said some adult business owners have been emboldened by recent U.S. Supreme Court rulings that seem to strengthen their First Amendment rights.

Also, Edmonson said, “a lot of money is being made.”

Indiana University law professor J. Alexander Tanford said Indiana communities must be especially careful about the way they restrict adult businesses. He said the 7th U.S. Circuit Court of Appeals in Chicago, which has jurisdiction over the state, is considered especially strict in its protection of First Amendment rights.

ERIC KELLY, a nationally known planning and zoning consultant from Muncie who published a book last year about the regulation of adult businesses, said an extraordinary number of legal battles are now under way involving communities and adult businesses.

He said 10 disputes have reached federal courts of appeal in the last six months – which he described as an extraordinary number.

In some cases, Kelly said, the legal dispute is over conflicting interpretations of some of the nation’s most fundamental legal rights – the right to freedom of expression and the authority of communities to protect their citizens’ property rights and safety.

In other instances, he said, suits have been filed “where local governments have gotten into left field” by trying to restrict adult businesses in ways that obviously violate the owners’ constitutional rights.

It’s clear under several Supreme Court rulings, Kelly said, that adult businesses have a right to operate if they offer material that can be sold legally.

It’s legal if it isn’t obscene – and obscenity is determined by community standards, Edmonson said. He added that a jury trial ultimately is the way to determine if something is obscene.

On the communities’ side, Kelly said, are clear Supreme Court decisions allowing local governments to regulate businesses to protect the public or specify what kinds of signs can be used and how their buildings must be constructed, for example.

The Louisville Metro Council adopted its latest ordinance regulating adult entertainment Thursday night. It establishes a 1 a.m. closing time for adult businesses; stipulates that peep show booths must be in view of store employees; requires dancers to wear at least pasties and G-strings and to stay at least 6 feet from customers; and it prevents them from accepting tips.

In Detroit, where the city is trying to more effectively regulate its strip clubs, which were estimated to generate $337 million a year in sales, Kelly has been called in to advise on a stricter zoning ordinance.

The current ordinance says that new strip clubs generally must locate in an industrial or heavy commercial area and that they must obtain a special liquor license, which must be renewed annually.

In New Albany, the lawsuit filed in U.S. District Court by New Albany DVD says it completed remodeling the structure at 601 W. Main Street by Feb. 19, when it asked a city building inspector to make a final inspection and issue a required certificate of occupancy.

The inspector came to the store and said “he was advised by the New Albany planning and zoning office not to conduct the inspection,” the suit alleges.

Based on the city’s refusal to inspect, the suit says, the business opened that afternoon, in advance of the City Council’s approval that night of a six-month moratorium on the opening of sexually oriented businesses. The moratorium is intended to give the council time to write a new ordinance regulating adult businesses.

THE SUIT also alleges that New Albany DVD’s request to put up a sign was illegally rejected by the city, with a city employee saying he believed the store “would be selling porn.”

The store, which intended to sell adult videos, DVDs and novelties, was closed after city officials issued a stop-work order saying it had opened without its required permits. Its sign was taken down the following weekend.

“Based upon the actions of the city of New Albany,” the suit says, “the plaintiff has been unable to offer for sale materials which are protected by the First Amendment to the United States Constitution.”

It asks the court to order New Albany to stop interfering with the business and seeks a court order for the city to pay New Albany DVD’s legal fees.

Bart Betteau, a lawyer representing New Albany DVD, said a city cannot prevent a business from selling material just because city officials don’t like it.

“We all know that if this was a flower shop this would not be happening,” he said.

The city, Betteau said, “cannot have any sort of local ordinance that violates federal law.”

He said the moratorium doesn’t apply to his client, since the city illegally prevented his business from operating.

New Albany City Attorney Shane Gibson said he doesn’t believe the case presents a First Amendment issue.

The business simply didn’t obtain the permit it needs to operate from the city building department, Gibson said, and it didn’t obtain another permit it needs from the zoning office.

HE DECLINED to comment on the suit’s allegation that city officials instructed a building inspector not to conduct a final inspection. He said he hasn’t yet spoken to all the city employees involved.

Gibson said he believes the moratorium will prevent New Albany DVD and other adult businesses from opening until the city has a new ordinance.

“We’re committed to working with the City Council to get an ordinance that addresses the concerns of all the people we serve,” he said.

Brenda Hoover, who owns Ninny’s, a successful, family-style restaurant in its fourth year at 506 W. Main St., said she is following the dispute.

“I think the city is really trying to make some changes in the West End,” Hoover said, “and to have something like that come in will bring us down.”

New Albany DVD may sell materials that have a strong market, Hoover said, adding with a smile that she also has powerful literature in her restaurant.

Pointing to a stack of Bibles available for free on a stand near the restaurant’s entrance, she said the owner of New Albany DVD “has got a bigger fight on his hands than he knows.”

Meanwhile, Floyd County is working on an ordinance of its own.

Derrick Wilson, the lawyer for the county Plan Commission, said it will consider a moratorium on adult businesses in its jurisdiction at its March 15 meeting so it will have time to develop an ordinance regulating them.

The county currently has no such ordinance on its books, Wilson said.