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.