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Raleigh is challenging a judge’s ruling that struck down a city ordinance intended to regulate nightlife.
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The city is arguing that the suit brought against it by bar owners may be rendered “moot” by new developments and that the judge erred in his ruling against the city.
The appeal comes as Raleigh struggles with how to regulate nightlife in the Glenwood South entertainment district specifically.
The ordinance required bars, taverns and nightclubs that sold alcohol and had live or recorded entertainment after 11 p.m to have a city permit.
The ordinance also “prohibited on the premises or in parking areas provided by the permittee for patrons of the Nightlife establishment; (a) use or possession of illegal controlled substances; (b) Violation of [state liquor laws] or any other alcohol-related offenses; and, (c) acts of violence.”
Violations resulted in fines, and four or more in a year resulted in a permit’s revocation.
The ordinance took effect in February 2024, and a judge struck it down in August 2025.
A group of bar and club owners sued the city in 2024, claiming the nightlife permits conflicted with state law.
Wake County Superior Court Judge Paul Holcombe III concurred in his ruling last year.
The state’s Alcoholic Beverage Control Commission grants businesses permits to sell alcohol between 7 a.m. and 2 a.m. Raleigh’s rules conflicted with the commission’s permits by potentially curtailing the consumption of alcohol on business premises’ during that time, Holcombe wrote.
Raleigh appealed the judge’s ruling in September 2025.
In an appeal brief submitted in late May, the city of Raleigh made several arguments against the judge’s decision, but first it outlined a more immediate problem.
While the lawsuit was originally filed by a group of 12, all but one dismissed their claims after the suit originally started.
The only one to remain in the suit was “Three 22 LLC” a company owned by Dan Lovenheim, who owns bars and other businesses in the city.
Three 22 LLC was a holding company for a single bar in Glenwood South, Pearl & Peril.
But now, the city said in the brief, Lovenheim no longer owns Pearl & Peril. The ABC Commission permits that he alleged the city’s permitting system conflicted with no longer exist, the city argued. Pearl & Peril has new state alcohol permits to reflect its new ownership.
That could render the whole lawsuit “moot,” according to the city’s brief. That would mean it can’t be brought back up in court because circumstances outside of court have resolved the issue.
The city argues that if the lawsuit is rendered moot and the city’s appeal is therefore dismissed, then Holcombe’s decision striking down its nightlife permit ordinance should also be vacated.
“Unless the trial court’s order is vacated along with the dismissal of this appeal, the trial court’s decision will remain as a permanent barrier to the City vis a vis all owners of nightlife establishments in the City,” the city’s legal brief says.
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Even if the case isn’t rendered moot and the city’s appeal isn’t dismissed because of that, the city argues that the judge “erred” in his ruling.
“State law also specifically empowers cities to ‘regulate places of amusement and entertainment,’ including ‘cocktail lounges, night clubs, beer halls, and similar establishments,’” the city argued.
The state’s ABC Commission, on the other hand, was created to specifically regulate the sale of alcohol.
“A plain reading of the Nightlife Permit Ordinance reveals that it imposes no control on the manufacture, sale, purchase, transportation, or possession of alcohol, nor does it establish any rules about the consumption of alcohol,” the city argued. Therefore the city’s rules never contradicted state law, according to the city.
If the judge’s ruling stands, the city said, then the city will never be able to regulate any place that serves alcohol “no matter what other activities, products, or services those establishments provide.”
The appeal also rebuts a claim that the nightlife permit ordinance violates free speech by targeting entertainment at specific kinds of businesses, saying it doesn’t restrict the content of any entertainment provided.
Lovenheim’s attorneys have asked the N.C. Court of Appeals for an extension allowing them to delay their response until Aug. 26, saying that counsel for both sides “have been working to schedule a mediation involving this and another matter which mediation was recently scheduled for October.”
His attorneys did not immediately respond to The News & Observer’s request for comment about this suit.
However, this is not the only suit Lovenheim is involved in with the city of Raleigh.
Raleigh has flipped back and forth between different ways of regulating noise levels from businesses in Glenwood South over the years.
The city used to measure decibel levels but moved to a “reasonable person” standard, which didn’t require measurements, because it was hard to accurately tell which businesses were causing noise, The N&O previously reported.
Lovenheim sued the city again in October 2024, alleging it was using the ordinance to unfairly target a club he owns called The Village.
“The judge in our case ruled that the reasonable person ordinance may have been unconstitutional,” wrote Abraham Rubert-Schewel, an attorney with Tin Fulton Walker & Owen, representing Lovenheim in that case.
The nightlife ordinance was also supposed to help the city regulate noise, in part by requiring the shunts to shut off sound and by taking away the nightlife permits if there was an excess of noise complaints.
But after Lovenheim’s suit on the noise ordinance, the city dropped the noise citations against him and changed its rules yet again.
At the beginning of the year, the city moved back to decibel-based enforcement, including special requirements for Glenwood South.
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