Strip clubs sue over surcharge

Remember the strip club fee that passed the Lege this last spring? Well, a coalition of strip clubs in the state have now filed a lawsuit to block the law from being implemented.

The suit, filed Wednesday in Travis County, alleges that lawmakers violated club operators' constitutional right to free speech when they approved the surcharge last spring. Owners of topless bars have argued that the fee, designed to help victims of sexual assault, imposes a discriminatory tax on their businesses and unfairly links their patrons to rape.

And though officials from the Texas attorney general's office vowed to do whatever it takes to uphold the adult entertainment fee, government insiders acknowledged quietly that they may face an uphill battle.

A similar strip club fee endorsed by Gov. Rick Perry in 2004 - one that would've raised money for education - never made it into law after legislators voiced concerns that it was an inappropriate and unseemly stretch.

The bill's authors say they're not suggesting that people who go to strip clubs or adult-video stores walk out and commit sex crimes; they're simply seeking revenue for underfunded programs.

"Clearly we're disappointed by the lawsuit; we were really hoping this industry would see this as an opportunity to do something positive for the communities they're in," said Annette Burrhus-Clay, executive director of the Texas Association Against Sexual Assault. "We're going to fight it because we believe in the merits of our position."

The fee lawmakers passed this spring is expected to raise about $40 million each year, more than half of which would go toward sexual assault services. The rest would be used to provide health assistance to Texas' poorest residents.

But in the suit, filed against Texas Attorney General Greg Abbott and Comptroller Susan Combs, advocates for the adult entertainment industry argue the fee would amount to an unconstitutional tax on nude dancing, a form of expression protected by the First Amendment.

And they say the measure singles out strip clubs by not applying to all sexually oriented businesses. Nude modeling studios and adult video arcades aren't affected, they say.

"Exotic nude dancing is protected speech under the First Amendment," the lawsuit states. "It [the fee] singles out income derived from protected speech for a burden the state places on no other income."

I am not a lawyer, so as always, take the following with a grain of salt. The free-expression argument is interesting. I'm not sure if that would come down to whether the fee represents an undue burden - my layman's opinion is that it probably wouldn't - or if you just can't single out one particular form of expression for this kind of tax. The income argument seems specious to me - we're not taxing the dancers themselves, we're imposing a per-customer fee on the venues, which they can pay themselves, pass along to the customers, or some combination thereof. Now, a tax on lap dances, that I could see as singling out the dancers' incomes. This feels like a stretch to me. Finally, the issue with the fee not applying to other types of SOBs, well, I suppose if you can ban smoking in bars but leave an exception for cigar bars, then I'm not sure why you couldn't impose a fee on Treasures but not on the Adult Video Megaplex.

So, I'm a bit skeptical about the clubs' chances in this suit. I'm also a bit perplexed by the assertion that "government insiders" are worried.

But neither did state officials appear overly optimistic about their chances of fighting the legal challenge.

"Any time you get in a courtroom, there's a 50 percent chance you'll win, a 50 percent chance you'll lose," said Sen. Royce West, D-Dallas, an attorney. "If we didn't do it right this time, that will tell us what we've got to do to get it right next time."

That's not exactly an assessment of the merits of the suit, is it? And Sen. West isn't a defendant, so he's not really going to be fighting this challenge anyway. Sure, anything can happen in a courtroom, but saying so doesn't help evaluate the state's odds of winning. Vince thinks the state will have it tough, however, so maybe I need to rethink this.

On a side note, as I mentioned in that previous link, does anyone know if the recent victories by the city of Houston over its strip clubs will affect the revenue estimate for this fee? It's not relevant to the issue at hand, I'm just curious.

One last thing:

A lawyer for the plaintiffs - the Texas Entertainment Association, which represents more than half of the topless clubs in the state, and Karpod, Inc., which operates a club in Amarillo - declined to comment on the suit.

Amarillo has a strip club in it? I never would have guessed.

Posted by Charles Kuffner on December 07, 2007 to That's our Lege