ARCADIA, California – A two-year-old legal battle between the city and a local strip club has ended in a settlement agreement, which will most likely result in the club being closed or sold off by April.
The federal court case, dating back to 2006, stems from the city’s decision to revoke Taboo Gentlemen’s Club’s business license for breaking the city’s adult business codes.
From 2004 to 2006, police say they conducted a series of inspections and undercover investigations at the club, and found repeated code violations, including simulated sexual acts and performances by unlicensed dancers.
The club’s owners, Bill Badi Gammoh and Chawkat Jajieh and 10 dancers sued in response, claiming city and police had obstructed business and violated their civil rights.
As part of the settlement, the city has agreed not to shut the club down until April 1, 2009. The club has remained open pending the result of litigation. Its owners plan to close or sell their stake by then.
“Based on the cost of continued litigation and the fact that the federal judge was very interested in seeing this resolved before trial, we felt we were giving up very little,” City Manager Don Penman said.
City officials also moved to make adult licenses more accessible to dancers. At Tuesday’s meeting, the City Council lowered the annual cost of such licenses from $250 to $150 and made available a temporary license to dancers coming in from out of town.
“Everyone seems to be happy, including our clients,” said attorney Scott Wellman, who represents Gammoh and Jajieh. “The city gets what they want, we get what we want – that’s usually a pretty fair settlement.”
Although stripteases and nude dancing are protected under the First Amendment of the Constitution, Arcadia has adopted strict regulations that have discouraged the more sexually explicit side of the industry.
The city’s adult business ordinance prohibits lap dances, sexual contact, private dance booths and direct tipping. It also requires licensed dancers to perform on an elevated stage.
Most of those rules were broken by Taboo, the city has claimed, and its undercover investigations found the club’s behavior did not improve, despite warnings over a period of two years.
“Officers observed `lap dances’ in private booths from partially clothed entertainers who made sexual contact with the officers by touching the officers or by rubbing themselves against the officers, simulating oral sex or sexual intercourse,” court documents stated.
The city used its ordinance to shut down another strip club, Golden Eyes, several years ago. Taboo remains the only strip club in Arcadia, Penman said.
A second court case related to the dispute had also been ongoing simultaneously, but was recently resolved at the state appeals court level. On Sept. 25, Judge Victoria Chavez upheld Arcadia’s right to revoke the club’s business license, rejecting an appeal filed by Taboo of an earlier Superior Court ruling.
City officials can now use that court-approved right in April, should the club try to stay open past then.
Penman credited the city’s up-to-date ordinance.
“When someone wants to go into these cities that have obsolete ordinances, the constituents complain, but the cities are caught reacting and trying to update them and end up paying a lot of money to these clubs because their ordinances are not up to date,” he said.
In 2004, Wellman’s firm sued the city of Anaheim on behalf of another Taboo club and received a $2 million settlement. In 2007, Taboo also received a $5.2 million settlement from the city of La Habra, including a $3 million offer to buy the property.
In 1999, Arcadia officials overturned – under the threat of a lawsuit – an 11-year-old ordinance that had prevented strip clubs within 750 feet of a residential area. The older ordinance had effectively eliminated any place in the city where such clubs could open.