jaguars sues dallas in federal court

8/9/2019 Jaguars Sues Dallas in Federal Court

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PLAINTIFFS ORIGINAL COMPLAINT Page 1

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

ROYAL35, L.L.C. and KEVIN '

RICHARDSON, 'Plaintiffs, '

'v. ' CIVIL ACTION NO.

'CITY OF DALLAS, TEXAS, and ' ____________________________

DAVID BROWN, solely in his '

official capacity as Chief of Police, ''

Defendants. '

PLAINTIFFSORIGINAL COMPLAINT

TO THE HONORABLE JUDGE OF SAID COURT:

Comes now the Plaintiffs, ROYAL35, L.L.C. (Royal) and KEVIN

RICHARDSON (Richardson) (collectively referred to as Plaintiffs), who bring this

action for declaratory relief, preliminary and permanent injunction and attorney=s fees

pursuant to 42 U.S.C. Sections 1983 and 1988(b) and for cause of action against the

Defendants would state the following:

I.

Jurisdiction and Venue

1. This Court has jurisdiction of this action pursuant to 28 U.S.C. Section 1331

because this is a civil action arising under the Constitution of the United States to-wit: the

First and Fourteenth Amendments to the United States Constitution. Additionally this

Court has jurisdiction pursuant to 28 U.S.C. Section 1343(a)(3) because this is an action to

Case 3:15-cv-00310-L Document 1 Filed 01/30/15 Page 1 of 15 PageID 1


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redress the deprivation of federal constitutional rights under Chapter 41A, Dallas City

Code, a municipal ordinance within the provisions of 42 U.S.C. Section 1983. The Court

may enter a declaratory judgment as provided in 28 U.S.C. Section 2201 and Rule 57,

Federal Rules of Civil Procedure.

2. Venue of this case lies in the Northern District of Texas pursuant to 28 U.S.C.

Section 1391(b) because this is a civil action not founded on diversity of citizenship and

this claim arose in and Defendants reside in this district.

II.

Parties

3. Plaintiff ROYAL35, L.L.C. is a Texas limited liability company with its

principal place of business in Dallas County, Texas. Plaintiff Kevin Richardson is its sole

member and manager. Royal35 with Kevin Richardson as Applicant applied for a license

to operate a sexually oriented business at 11327 Reeder Road in Dallas, Dallas County,

Texas on or about December 17, 2014.

4. Defendant City of Dallas is a home rule city located in Dallas, Dallas County,

Texas. Defendant may be served with process through service upon Rosa A. Rios, City

Secretary of the City of Dallas, 1500 Marilla Street, Room 5DS, City Hall, Dallas, Texas

75201. David Brown is an individual residing in Dallas, Dallas County, Texas. Mr. Brown

is sued solely in his official capacity as Chief of Police. He may be served with process at

his office at 1400 S. Lamar, Dallas, Texas 75215.



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III.

Facts Applicable to all Counts/Citys History

of Unconstitutional Enactments

5. On June 18, 1986, the City Council of the City of Dallas adopted Ordinance

No. 19196 regulating sexually oriented businesses (SOBs). The ordinance required the

chief of police to approve the issuance of a license within thirty (30) days, but further

provided that the license may not issue if the premises to be used for the sexually oriented

business had not been approved by the health department, fire department, and the building

official as being in compliance with applicable laws and ordinances. The ordinance did not

set a time limit within which the inspection/approvals must occur. Multiple SOBs sued the

City contending that the new ordinance acted as an impermissible prior restraint on

protected speech. InF.W./P.B.S., Inc. v. City of Dallas, 493 U.S. 215, 223 (1990), the

Supreme Court agreed, concluding that the Citys licensing scheme lacked adequate

procedural safeguards, as the Citys regulatory scheme allowed indefinite postponement of

the issuance of a license. The court struck down the ordinance as violative of the First

Amendment stating the core policy that the license for a First Amendment-protected

business must be issued within a reasonable period of time, because undue delay results in

the unconstitutional suppression of protected speechand that two (2) safeguards are

essential: the licensor must make the decision whether to issue the license within a

specified and reasonable time period during which thestatus quois maintained, and there

must be the possibility of prompt judicial review in the event that the license is erroneously



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denied. Id. At 288. The City amended its Ordinance to eliminate the unconstitutional

prior restraint.

6. On January 22, 1992, Defendant City amended Chapter 41A (the SOB

Ordinance). After various clubs filed suit, the United States District Court in Cause No. 3-

92-CV-1090-H styledMD II Entertainment, Inc. d/b/a The Fare West v. City of Dallas,

Texas and The Permit and License Appeal Board of the City of Dallas, Texas (Judge

Sanders presiding) struck down portions of the amendments.

7. In response, on October 13, 1993, the City of Dallas again amended Chapter

41A to purportedly address the infirmities found in 1992. Instead portions of the 1993

amendments were found to be unconstitutional as content-based restrictions on expression

by the United States District Court, Northern District of Texas, Dallas Division, in the case

styledMD II Entertainment, Inc. d/b/a The Fare West, Plaintiff v. City of Dallas, Texas,

Defendant, Civil Action No. 3:93-CV-2093-T (Judge Maloney presiding).

8. On March 8, 2000, the City passed Ordinance No. 24206 to amend Chapter

41A to add yet another basis for denial of a license: Section 41A-5(a)(9) whereby the Chief

of Police was authorized not to issue a license if an applicant has not obtained a certificate

of occupancy for the premises on which the applicant intends to do business as a sexually

oriented business or the sexually oriented business or its location would otherwise be in

violation of the Dallas Development Code or any of the applicable City ordinances or state

or federal law. As was the case inF.W./P.B.S., there was no provision in this ordinance



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wherein the City is required to make the decision whether to issue the license within a

specified and reasonable time period. On June 1, 2000, the Court inBaby Dolls, et al. v.

City of Dallas, Cause Number 3:97-CV-1331-R entered an Order preventing the City from

applying Ordinance No. 24206 to Plaintiffs/Intervenors.

9. In response, the City passed Ordinance No. 24440 on October 25, 2000.

Therein, the SOB Ordinance, as amended, provided that (such as in the instant case as

discussed hereinbelow) if a license is revoked, the licensee may not apply for a new license

for the same location for one full year (Section 41A-10(e)). The amendments further

expanded the definition of licensee so that even the holder of less than one percent (1%)

interest in a corporation whose sexually oriented business license had been revoked would

now be foreclosed from holding a sexually oriented business for a year from the revocation

even though he may never have been remotely involved in the management of the business.

InAdventure Plus, Inc., et al. v. City of Dallas, Cause No. 3:00-CV-2500-H in November,

2000 raised various constitutional infirmities in the 2000 Ordinance including the fact

that the new definition of licensee to include any ownership interest was an unjustified

effort to stifle the operation of sexually oriented businesses in the City by preventing certain

persons from holding a license without any substantial justification in violation of the First

Amendment and the principles enunciated in United States v. OBrien, 391 U.S. 367,

(1960).

10. In response, the City amended the SOB Ordinance on August 13, 2001



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wherein the definition of licensee was yet again changed. The not even one drop

ownership rule was eliminated, but was replaced by the a new provision wherein a licensee

would now include each individual who exercises substantial de factocontrol over a

sexually oriented business for which a license has been issued under this Chapter regardless

of whether the individuals name or signature appears on the license application. The

Adventure Plus litigation was still pending and had not been resolved when these

amendments were enacted. By this time, there were no less than a dozen cases pending

between the City and members of the SOB industry. Despite the fact that the industry had

generally been successful throughout its fifteen (15) year history of litigation with the City,

the SOB industry proposed various agreements which were ultimately accepted and which

have resulted in the adult cabarets relocating to industrial zoning districts in the northwest

quadrant of the City and the parties generally enjoying a state of peaceful co-existence.

Issues created by the Citys then most recent enactment such as the new definition of

licensee were reserved for the future (e.g., theAdventure Pluslitigation was resolved by an

Order of Continuance and Abatement dated March 24, 2004 wherein it was ordered that if

the City took any action relating to Section 41A-2(18) [the definition of licensee now

recodified as 41A-2(21)], the parties could file appropriate pleadings seeking relief

regarding such actions from that Court).

Causes of Action

11. JGC Dallas, L.L.C. d/b/a Jaguars (Jaguars) has held a City of Dallas SOB



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license to operate an adult cabaret at 11327 Reeder Road, Dallas, Texas since 2012. On

December 11, 2014, the City claimed there was a basis to revoke Jaguars license based

upon the allegation that either a licensee or an operator of Jaguars had knowingly allowed

the possession, use or sale of controlled substances on the premises. That revocation is

stayed in Jaguarspending appeal in state court litigation commenced by the City. Plaintiffs

herein are not parties to that litigation nor otherwise named in the revocation proceedings.

12. Becoming aware of the threatened revocation, ROYAL35 entered into a

contract with JGC Dallas to acquire its leasehold rights to the Reeder Road premises and to

purchase the assets of the business being operated by JGC Dallas known as Jaguars. The

purchase price is approximately $2.3 Million Dollars payable over the next twenty-four (24)

months to JGC-Dallas plus rent payments to the Landlord under the lease. Plaintiff Kevin

Richardson is a qualified and experienced operator having applied for and obtained licenses

from various governmental entities including a dance hall license from the City of Dallas.

The qualifications to obtain a dance hall license as contained in Chapter 14, Dallas City

Code are virtually identical to the qualifications to obtain a SOB license contained in

Chapter 41A. Plaintiff Richardson through his unrelated entity, Strategic Hype, L.L.C., as

recently as December, 2014 received a dance hall license from the City of Dallas and by

unanimous vote by the City Council obtained a renewal of the specific use permit required

to operate that business in downtown Dallas.

13. On December 17, 2014, Royal35 and Kevin Richardson as its sole member



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and manager made application for a sexually oriented business license for 11327 Reeder

Road. By response dated January 16, 2015, that application was denied by the City solely

on the basis that:

(a) the license held by JGC Dallas had been revoked;

(b) the licensee shall not apply for or be issued a sexually oriented

business license for the same location for which the license was revoked for one year after

the date the revocation becomes effective; and

(c) Kevin Richardson as a person who exercised substantial de factocontrol

over Jaguars . . . [was] a licensee under the previously issued and revoked license. The

City does not contend that Richardson is an Owner, Employee, Officer, Designated

Operator or Operator of JGC Dallas as those terms are defined in the Ordinance. Instead,

the City contends that in his individual capacity he has exercised substantial de factocontrol

not over the business for which he filed an application, but rather another business whose

license is being, but has not yet been, revoked since the alleged basis for the revocation of

the JGC license has not yet been subjected to judicial scrutiny.

14. The Citys attempt to deny Royal35/Richardson a license based upon alleged

past conduct of officers/employees of a different business/company is an unconstitutional

prior restraint on freedom of expression. It is long settled that Plaintiffsproposed adult

cabaret entertainment falls within the scope of expression protected by the First

Amendment. Various cases including the Supreme Court inF.W./P.B.S.have set forth the



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core policy that the license for a First Amendment protected businessmust be based upon

clear objective standards. The Citys prevention of Plaintiffsexercise of their current and

future First Amendment freedoms on the basis of alleged past instances of conduct is

certainly within the ambient of Universal Amusement Company, Inc. v. Vance, 587 F.2d

159 (5thCir. 1978), en banc, affirmed, 445 U.S. 308 (1980). Therein, the Fifth Circuit

noted that a prior restraint of expression comes before [the] Court with a heavy

presumption against its constitutional validityId. at 165 citingBantam Books v. Sullivan,

372 U.S. 58, 70 (1963).

15. Moreover, denial of the license is not justified under United States v. OBrien,

391 U.S. 367, 377 (1968). Content-neutral regulations burdening expressive activity such

as the provision at issue herein must be judged under a four-factor test of OBrien. The

OBrientest states that a content-neutral ordinance survives constitutional challenge despite

its adverse impact on the exercise of First Amendment rights only when:

(1) it is within the constitutional power of the government;

(2) it furthers an important or substantial governmental interest;

(3) the asserted governmental interest is unrelated to the suppression of

free expression; and

(4) the incidental restrictions on alleged First Amendment freedoms is no

greater than is essential to the furtherance of that interest. 397 U.S. at 377.

16. The third prong of OBrienis violated when the governmental interest is



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related to the suppression of free expression. 391 U.S. at 377. Section 41A-2(21)(E) as

read and used by the City in conjunction with Section 41A-10(e) is constitutionally suspect

because it does not relate to or further the governmental interests of assuring law-abiding

licensees: Richardson has been shown to be a law-abiding licensee, has been granted other

licenses by the City of Dallas and in fact, under the language of Section 41A-10(e) could

indeed obtain a sexually oriented license for his company Royal35 at any other location in

the City except this particular location.

17. The fourth prong of OBrienis likewise violated because the regulation in

question is not narrowly tailored to do only what is necessary to achieve a substantial

governmental interest. Denial of a business license based solely upon allegations of

employees of another business knowingly allowing criminal acts by a customer, rather than

being based on conduct or knowledge on the part of this applicant, Kevin Richardson, is a

greater restriction on free expression than is essential to furtherance of the governmental

interests because the alleged basis does not tend to show that Kevin Richardsons

management would be perilous, reckless or intolerable.

18. Subsection (E) of Chapter 41A-2(21) allows for subjective discretion by the

City to limit protected speech in violation of the First and Fourteenth Amendments of the

United States Constitution. Subparts (A) through (D) provide clear, objective standards.

Who is listed on the application? Who is an officer? Who is a 20% owner? On the other

hand, Subpart (E) Who exercises substantial de factocontrol? is defined only in the mind



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of the City. This new definition of licensee is an unjustified effort to stifle the operation

of sexually oriented businesses in the City by preventing certain persons from holding a

license without any substantial justification in violation of the First Amendment as

enunciated in OBrien.

19. Plaintiffs aver that this expansion of the definition of licensee taken together

with the expansive use of the revocation procedures are properly viewed as a mere pretext

to suppress and prohibit the expression Plaintiffs would feature. The denial of a new,

separate business license to Plaintiffs because of prior contacts with an entity whose license

is under threat of revocation causes the license requirement itself to be a prior restraint

designed to suppress the content and the expression violative of the First Amendment to the

United States Constitution. Plaintiffs would show that the Citys denial of a sexually

oriented business license is based upon a standard so arbitrary, capricious and unreasonable

as to deny substantive due process protections and constitute an unconstitutional prior

restraint.

20. There is absolutely no evidence or allegation that the Applicant, Plaintiff

Kevin Richardson, knowingly allowed prohibited criminal acts on the premises operated by

JGC Dallas, L.L.C. Under the City=s Ordinance (see Section 41A-5(8)(a)(i)(aa)), even a

drug conviction against the applicant could not be the basis for the denial of a license. In

other words, the City could not use the conduct alleged as the basis for the revocation of

JGCs license as the basis to deny the issuance of the license to Royal35. Instead in an



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effort to frustrate Plaintiffs=due process rights, the City revokes the existing license and

then even though the revocation is not yet effective, denies issuance of the new license

based on the interlocutory revocation which is based on the mere allegations of a

wrongdoing by entertainers/employees of the licensee.

21. The use of mere allegations by the City to deny a license has already been

found to not pass constitutional scrutiny. SeeDumas v. City of Dallas, 648 F.Supp. 106

(N.D. Tex., 1986) wherein Judge Buchmeyer struck down provisions of the SOB Ordinance

allowing the denial of a license to an applicant who was Aunder indictment or misdemeanor

information@. Therein the Court found that Aan indictment or information is not evidence of

an applicant=s guilt, but merely indicates . . . an ex parteprocedure navigated solely by a

prosecutor . . .@. Id. at 1074. The City is using mere allegations to revoke one license. The

City then uses the pending Arevocation@to deny Plaintiffs=application. Without a license,

Plaintiffs are unable to operate their business and thus, are effectively denied the right of a

hearing on the grounds for denial. Plaintiffs are being arbitrarily denied their license and

Plaintiffs are therefore denied procedural and substantive due process. Similar provisions

in the current SOB Ordinance have also been reviewed and overturned as unconstitutional.

In Cause No. 3:01-CV-0857-G styledMillennium Restaurant Group, Inc. d/b/a Cabaret

Royale, Steve W. Craft, Club Hospitality, Inc. d/b/a Lipstick and Nick Mehmeti, Plaintiffs v.

City of Dallas, Texas and Terrell Bolton, Chief of Police . Judge Fish, by Memorandum

Order entered February 21, 2002, found that the City=s attempt to revoke a sexually oriented



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business license even on the basis of criminal convictions was an unconstitutional prior

restraint of First Amendment rights if based solely on employee conduct citing Universal

Amusement Company, Inc. v. Vance, 587 F.Supp. 159 (5thCir. 1978) en banc, aff=d., 445

U.S. 308 (1980) and holding that the license revocation was not justified under the third and

fourth prongs of O=Brien, 391 U.S. 367, 377 (1968).

22. If the Defendants are allowed to proceed with the denial of Plaintiffs=license,

under Chapter 41A, Section 41A-2(21)(E) and/or 10(e) irreparable harm will result to

Plaintiffs should an injunction not issue. The threatened injury to Plaintiffs outweighs the

threatened harm to the Defendants. The granting of injunctive relief will not disserve the

public interests and there is a substantial likelihood that Plaintiffs will prevail on the merits.

A strong presumption of irreparable injury exists in threatened infringement on First

Amendment rights, including protected expression as featured by Plaintiffs = business.

Plaintiffs will also lose the customers and goodwill which they are purchasing which was

created over a number of years; a monetary loss which is difficult to calculate. Plaintiffs

request that a preliminary injunction be entered restraining the Defendants from denying the

Plaintiffs=sexually oriented business license until this Court adjudicates the constitutionality

of Chapter 41, Section 41A-2(21)(E) and 10(e). All conditions precedent to the filing of the

Complaint have been met, there are no pending administrative proceedings, and further

proceedings under the Ordinance would be futile.



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24. It was necessary for Plaintiffs to retain counsel to represent them in this

litigation. The Plaintiffs request the Court to render an award for reasonable and necessary

attorneys fees and costs pursuant to 42 U.S.C. Section 1988.

WHEREFORE PREMISES CONSIDERED, Plaintiffs pray that the Court grant

judgment:

(1) declaring Section 41A-2(21)(E) to be unconstitutional and violative of the

First Amendment;

(2) declaring Dallas City Code Sections 41A-10(e) and 41A-2(21)(E), as applied,

unconstitutional as a prior restraint violative of the First Amendment of the United States

Constitution in that they deny substantive due process and equal protection in violation of

the Fourteenth Amendment of the United States Constitution;

(3) declaring Sections 41A-2(21)(E) and 41A-10(e) unconstitutional both facially

and as applied to Plaintiffs pending SOB licenseapplication, and as a prior restraint in

violation of Plaintiffsrights guaranteed by the First and Fourteenth Amendments to the

United States Constitution;

(4) declaring that the definition of Licenseewithin Section 41A-2(21)(E)

unconstitutional in violation of the First Amendment to the United States Constitution both

facially and as applied as same is vague, overbroad and denies substantive due process;

(5) granting a preliminary and permanent injunction enjoining Defendants from

enforcement of Chapter 41A-2(21)(E) and Chapter 41A-10(e) against the Plaintiffs as a



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result of, or on the basis of, the Citys allegation that a licensee or operator of JGC Dallas,

L.L.C. knowingly allowed possession, use or sale of controlled substances on the premises

at 11327 Reeder Road;

(6) for a reasonable attorneys fee as allowed under 42 U.S.C. Section 1983 and

1988;

(7) costs of court; and

(8) such other and further relief that the Court may deem proper and just.

Respectfully submitted,

/s/ Roger Albright__________________

Roger Albright

(Bar No. 009 745 80)

Email: [email protected]

Law Offices of Roger Albright

3301 Elm Street

Dallas, Texas 75226

214.939.9222214.939.9229 (Telecopier)

COUNSEL FOR PLAINTIFFS

mailto:[email protected]:[email protected]:[email protected]

jaguars sues dallas in federal court

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