Parts of Dallas Law on Adult Businesses Voided : Judiciary: The Supreme Court says the licensing ordinance does not give enough protection to free speech rights.

Taking a strong stand on behalf of free speech, no matter how unsavory it may seem, the Supreme Court on Tuesday struck down the key provisions of a novel Dallas ordinance intended to rid the city of adult bookstores and theaters.

In recent years, the court has given cities zoning powers to combat red-light districts where adult theaters, bookstores and nightclubs are concentrated. Cities were permitted to disperse these businesses, even send them to industrial areas--but not to shut them.

The sponsors of the 1986 Dallas ordinance wanted to go one step further. By requiring operators to obtain city licenses and to undergo regular inspections, officials hoped to rid themselves of these businesses, as well as the crime and urban blight often associated with them. If they succeeded, other city councils were ready to copy their effort.

The Supreme Court, however, invalidated the core provisions of the law on the grounds that it gave too much unfettered power to city officials and failed to adequately protect the free speech rights of owners of bookstores and theaters.

Although the ordinance was not struck down entirely, the ruling shows that the high court remains vigilant in shielding even the most unpopular forms of free speech.

“We’re breathing a sigh of relief,” said John H. Weston, a Beverly Hills lawyer who represented the adult businesses in the case. If Dallas had won, “we would have seen more of this censorship-by-licensure,” he said.

But a Washington lawyer who represents cities said the ruling was not a total loss. The court upheld the licensing requirement for owners of adult motels, nightclubs and other sexually oriented businesses that are not covered by the First Amendment.

Moreover, the key portion of the law was struck down only because it lacked procedural safeguards, said Benna Solomon, who filed a brief for the National League of Cities.

“I think it can be easily fixed,” she said.

Despite the court’s general move to the right on civil rights, crime and other issues, the First Amendment has proven to be an exception so far.

Not only was flag-burning upheld as a protected form of political protest last year, but also the justices rejected a government ban on dial-a-porn services for adults. In an earlier unanimous ruling, the court also said Indiana prosecutors could not close X-rated bookstores before their books were judged in court to be obscene.

On Tuesday, only the court’s three staunch conservatives--Chief Justice William H. Rehnquist and Justices Byron R. White and Antonin Scalia--said they would uphold the Dallas law. But they were outvoted when Justices Sandra Day O’Connor and Anthony M. Kennedy joined the four-member liberal wing led by Justice William J. Brennan Jr. in striking down the key provisions.

O’Connor, writing the main opinion, said the Dallas law had to fall because it did not require city officials to act quickly on an owner’s bid for a license, nor did it call for a quick court review if a license was denied. The danger, she said, is that bookstores and theaters would be shut unjustly.

“We therefore hold that the failure to provide these essential safeguards renders the ordinance’s licensing requirement unconstitutional,” O’Connor wrote in Paris Adult Bookstore vs. Dallas, 87-2012.

Meanwhile, in a rebuff to academia, the court ruled unanimously that a university, when charged with race or sex discrimination, must turn over confidential internal documents to government investigators.

Other businesses, including law and accounting firms, must divulge their internal evaluations of candidates for promotion in similar situations, and universities “do not enjoy a special privilege” that makes them exempt, Justice Harry A. Blackmun said for the court.

The case began in 1985 when Rosalie Tung was turned down for tenure at the University of Pennsylvania in Philadelphia. She complained to the Equal Employment Opportunity Commission that she was a victim of discrimination based on her race, sex and national origin. In response, EEOC lawyers subpoenaed the confidential tenure evaluations written by five male faculty members.

The university refused the request, fought and lost in the lower federal courts. In an appeal to the Supreme Court, the school said its right to academic freedom gave it a unique justification for keeping its internal deliberations secret. The American Assn. of University Professors and a lineup of the nation’s most prestigious universities joined in support of the institution.

But the justices flatly rejected their argument. Because of academic freedom, the government may not attempt “to control or direct the content” of what is taught at a university, but it may ferret out “invidious discrimination” against faculty members and other employees, Blackmun wrote in University of Pennsylvania vs. EEOC, 88-493.

In a third ruling, which amounted to a $300-million setback for the Internal Revenue Service, the court said utilities need not pay taxes on deposits collected from their customers. The IRS said these deposits should be considered income for the utilities, but the justices disagreed unanimously. (IRS vs. Indianapolis Power, 88-1319.)