LOS ANGELES — Hold on to your ears, Mickey Mouse. A 10-year fight between Anaheim and the owner of a nude club off the Riverside (91) Freeway ended with the city paying $2 million to settle a lawsuit over damages for lost profits, an attorney said Tuesday.
The agreement between Bill Gammoh, owner of the Taboo Gentlemen’s Club, and Anaheim was reached in February, with the lump sum payment arriving last week, and the check from the city clearing yesterday, plaintiff’s attorney Scott Wellman said.
Wellman believes the settlement sets a precedent.
“This marks the first time in California that an adult business has been paid damages for lost profits as a result of a city depriving it of its First Amendment rights to freedom of expression,” Wellman said. “All Mr. Gammoh wants to do is run his small business quietly, lawfully and without the city of Anaheim improperly interfering in his operations.”
The club, originally proposed as Funtease Theater in 1994, ran into a number of zoning issues, Wellman said.
They included the city’s contention that the club would be within 400 feet of a parcel that could be developed into a home, and that he could not have a sex-oriented business within 100 feet of a freeway.
In September 1999, the Fourth District Court of Appeal reversed a lower court decision, ordering Anaheim to issue Gammoh operating permit.
The justices found the freeway requirement unconstitutional on its face, Wellman said, and Gammoh opened the club in December 2001.
The justices sent the civil right violation portion of the lawsuit back to the Superior Court for trial, said Deputy City Attorney Moses Johnson.
The city entered settlement negotiations when Superior Court Judge Andrew Banks ruled that a jury would weigh the issue of damages only, not liability. Experts for Gammoh had put his damages at about $6 million, the lawyers said.
The $2 million was fair, Johnson said, “considering the exposure of $6 million.”
Wellman said other adult businesses were operating in the city when Gammoh applied for his permit, but none had the high freeway visibility of his.
“I don’t think the City Council thought it was politically proficient to have a gentlemen’s club along a freeway in the same town as Disneyland and Mickey Mouse,” Wellman said. “They were willing to expend $2.5 million, to delay the business, that could have gone for city services.”
Johnson said that assessment is incorrect.
“Disney had nothing to do with this,” Johnson said, adding that Gammoh “didn’t meet the criteria” to open his business. The club serves no alcohol and has full nude dancing on a raised stage, Wellman said.
“Fully clothed” dancing occurs off stage between the customers and performers, he said.