HOUSTON (CN) — A federal judge ruled Friday that Houston arbitrarily refused to let a strip club join a settlement authorizing topless lap dances, and blasted the city for pursuing a court order that forced the club to shut down.
Dobbins Chang LLC dba Fantasy Plaza is an all-nude strip club in North Houston that the city calls a crime haven.
In a state court nuisance lawsuit, Houston cited the arrests of Fantasy Plaza dancers on prostitution charges and the arrests of three club managers after undercover Houston police learned the club was employing a 16-year-old runaway.
The city won a temporary restraining order in the state lawsuit on Feb. 5, forcing Fantasy Plaza to close its doors because it was operating without a sexually oriented business permit.
But Fantasy Plaza filed a federal antitrust lawsuit on Feb. 1, the same day as the state temporary restraining order hearing that led to its closure, claiming the city is effectively taking bribes from 16 clubs that signed on to a 2013 settlement that puts competing clubs at a disadvantage.
The settlement exempts those clubs from having to get operating licenses from the city, and exempts their dancers from a no-touch rule, allowing them to perform topless lap dances.
In return, the clubs each make annual payments to the city of $50,000, and a small percentage of their liquor sales, into a human-trafficking abatement fund the city set up as part of the settlement.
Houston police say they it used the fund, into which the clubs collectively pay more than $1 million a year, to hire seven new officers for the vice unit, who are solely focused on human trafficking.
At a hearing Friday in the federal case, Fantasy Plaza’s attorney Albert Van Huff told U.S. District Judge Lynn Hughes that the city has twice denied the club’s request to join the settlement.
“Were you given any explanation?” Hughes asked.
“Only that the new administration did not want to allow additional clubs to enter the agreement, is what I heard from the city,” Van Huff said, citing the administration of Mayor Sylvester Turner, who took office in January 2016.
Houston city attorney Nirja Aiyer said Fantasy Plaza is different from the clubs that are part of the settlement, because dancers in the preferred clubs wear bikini bottoms and they all have alcohol permits, so they generate liquor sales to pay into the fund.
“They are regulated under the Texas Alcoholic Beverage Commission. Fantasy is an all-nude sexually oriented business,” she said. “They don’t wear anything and because of that they are ineligible for an alcohol permit. So it’s a BYOB. You bring your own alcohol and you can consume it.”
But Van Huff said that five more strip clubs have signed the settlement since it took effect in 2013, and not all of them sell liquor.
“Is that right?” Hughes asked Aiyer.
“At this point I’m not aware which one does not,” Aiyer said.
Hughes criticized the city for spending “more time discussing topless places than they do the budget” and asked why the city does not let Fantasy Plaza into the settlement deal.
Aiyer said that crime has been a problem at Fantasy Plaza. The city claimed in the state court case that there have been more than 30 arrests there in the past four years.
Hughes said he had read local media accounts of the state proceedings, but the number of arrests reported did not impress him.
“OK, no. This paper or whatever it was, it said there were over 30 crimes over four years, including prostitution. There was no specificity,” Hughes said.
He asked Van Huff what the crimes were “that were discussed so loudly” in news reports.
Van Huff said the city had cited Fantasy Plaza for operating without a permit, that some of its dancers had been arrested for dancing without a license and that three Fantasy Plaza managers were arrested because a 16-year-old had produced a fake identification to get a job dancing at the club.
“An undercover vice officer paid her for a lap dance in order to positively identify her and then charged three of the managers with violating the SOB [sexually oriented business] ordinance prohibition about employing a minor,” he said.
Van Huff said there was also a shooting in the club’s parking lot. “After the club was closed, three men were hanging out in the parking lot and smoking cigarettes, and one pulled out a pistol and shot the other one,” Van Huff said.
“Then there were several instances where undercover vice officers went in and engaged in fantasy talk with the dancers, and arrested the dancers for allegedly agreeing to sex for a fee,” he said.
Hughes turned to Aiyer. “So you are holding the parking lot shooting against the club?”
“The parking lot is part of the club. Yes, your honor,” she said.
“… But the city certainly doesn’t take responsibility for shootings on its property, does it? Road rage for one, parks,” Hughes said.
He asked Aiyer how many of the prostitution charges resulted in conviction.
“And of course, you convicted the prostitute, not the club,” he said.
Aiyer said she could not give him the number.
Fantasy Plaza’s criminal defense attorney Gregg Dasher stood up in the gallery and said that the only Fantasy Plaza dancer charged with prostitution was convicted because she could not afford to take the case to trial and pleaded guilty, and all the other prostitution charges were dismissed.
Van Huff told Hughes that the Harris County District Attorney’s Office had dismissed the employing-a-minor charges against two of the managers, and the same charge against a third manager was pending. “We expect that it will be dismissed soon,” he said.
Taking Fantasy Plaza’s attorneys on their word about the dearth of prosecutions, Hughes rebuked Aiyer: “You made your case to the state judge on things that were dismissed except for one prostitution charge, which was a guilty plea.”
Van Huff said he wanted Hughes to grant Fantasy Plaza a temporary restraining order requiring the city to treat Fantasy the same way as clubs that signed the 2013 settlement, under which they are not required to get operating permits.
Van Huff said he believes an injunction from Hughes would require the city to revise its temporary restraining order in state court, allowing Fantasy Plaza to reopen.
Hughes obliged him.
“This appears to be a concerted and arbitrary effort to kill Fantasy,” the judge said. “The city has a higher duty than to play games with people’s businesses, I don’t much care whether it’s an SOB, or a bank or a construction company.”
He issued a temporary restraining order after the hearing on Friday afternoon, ordering the city to treat Fantasy Plaza as if it were part of the 2013 settlement.
“Dobbins Chang [dba Fantasy Plaza] asked the city to join the agreement. Without a reason, the city declined, although it has allowed five new, similarly situated clubs to join. The city of Houston may not use the club’s and the dancers’ lack of licenses against Dobbins Chang LLC,” the order states.
“Dobbins Chang may operate Fantasy Plaza as though it is a member of the settlement agreement.”
Hughes said he is not messing with the state judge’s injunction, but he is ordering the city to explain the defects in its case to the state judge.
Fantasy Plaza owner Urooj Abdulla told Courthouse News after the hearing that Aiyer’s statement to Hughes that the city is not adding new clubs to the settlement is “bullshit.”
He said the city just added another Houston strip club to the deal, causing the city to apologize to the club after police officers arrested two of its dancers.
“They took two girls out of there. They took them downtown. Then they said, ‘Huh, we apologize. We didn’t know you were in Sweet 16. We apologize.’ And they let them go and then sent a letter of apology,” Abdulla said, calling the clubs that are part of the settlement “Sweet 16.”
“Whereas us, every two weeks they come and they are ruining my business. They are literally ruining my business. My business is halfway down because of them,” he said.