A significant ruling potentially effecting online business has come from an unlikely source -- an Internet pornography site. VoyeurDorm runs a pornbusiness from a residential neighborhood in Tampa, Florida. The "dorm" is populated by young women, guests, and 150 live Web cameras. Members pay a monthly fee to view activities 24 hours a day, and for an additional fee can chat online with dorm residents.
In 1999 the city of Tampa tried to close the dorm, arguing that it was an adult business located in a residential neighborhood in violation of the city's zoning laws. The owners of VoyeurDorm filed suit in federal court to block the closure, but the district judge ruled in the city's favor late last year.
Last Friday, however, the Court of Appeals for the 11th Circuit reversed the District Court, holding that Tampa could not use its zoning laws to close the dorm. The Court found that "because the public does not, indeed cannot, physically attend" the dorm, the activity "does not fall within the purview of Tampa's zoning ordinance."
Essentially, the Court of Appeals found that the business exists on the Internet, but not physically within the city -- at least for purposes of the zoning ordinance.
"This approach to regulation could have significant effects on all kinds of Internet businesses," says Pete Lando, a lawyer with Hughes & Luce concentrating on Internet and Technology Law. "The Court's recognition that an Internet nexus could exempt a business from certain types of local regulation could have far-reaching effects for taxation, jurisdiction, choice of law and other legal matters."
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