San Luis Obispon- Porn store owner Steve Diamond’s Grover Beach shop recently started offering many new items: sparkling, silky evening gowns, newspapers and movies more suitable for the whole family.

That’s because three judges from the U.S. Ninth Circuit Court of Appeals ruled that he can’t operate Diamond Adult World as an adult business while the court considers his appeal.

Diamond appealed a federal judge’s ruling in mid-June that said the city’s law barring adult businesses downtown does not violate Diamond’s constitutional rights. The decision forbade Diamond from operating an adult bookstore at his current location.

Diamond had asked the appellate court to allow him to remain open while it considered his appeal. That request was denied 2-1 on Sept. 16.

Since then, Diamond has changed his shop’s name to Diamond Video World, pulled $53,000 of steamy merchandise from his shelves and instead stocked them with non-pornographic videos, magazines and a line of formal wear.

Don’t expect to find the latest releases. The videos are mostly older, VHS tapes. The magazine selection features older titles as well, such as Forbes and Time from 1995 and a copy of American Family Physician from 1984.

Diamond said Friday that he’s even changed the videos in his line of viewing booths, located at the rear of the store, from porn flicks to “normal” films.

The store still carries some pornographic material, but Diamond maintains that the stock amounts to only 25 percent of his total merchandise. The city recognizes adult businesses as those that devote more than 25 percent of their floor space or display area to pornographic material.

“The police still say it looks like an adult store,” Diamond said. “I’ve done everything I can.”

Grover Beach officers, he said, have been counting his adult-oriented merchandise to determine how much he’s selling.

Ed Richards, who has represented Grover Beach throughout its dispute with Diamond, said the city is wrapping up an investigation to determine whether Diamond is still operating a porn shop.

“There is currently a dispute,” Richards said. “The city contends he’s currently operating an adult store at that location, and Steve says no, he’s not.”

Richards anticipates the city to finish its investigation sometime next week. If the city concludes he’s operating as a porn store, in violation of city codes, it would alert the federal district court in Orange County. A judge there could then rule that Diamond must close his store until the appeals process is complete, which could take up to a year.

Diamond’s attorney, Roger Jon Diamond, said he was surprised by the appellate court’s decision.

“I couldn’t see the harm to the city,” he said, “if we waited a few more months to find out the result of the appeals.”

Steve Diamond, he said, is keeping track of how much money he might lose by not having a fully-stocked adult store. If Diamond wins the appeal, Roger Jon Diamond (who is no relation) said he will ask the court to require the city pay whatever monetary loss Diamond has incurred.