It never ends

That’s what they say about parenthood — Happy Father’s Day.

Here’ an unpublished opinion issued last Friday by the Fifth Circuit Court of Appeals. A little background: In 1994, El Paso Entertainment (a strip club) sued the City of El Paso, challenging the validity of its zoning ordinances regulating Sexually Oriented Businesses. Before that issue could be resolved, the City and El Paso Entertainment entered into an agreed judgment in 1995, “precluding the City from enforcing any SOB ordinances against either Foxy’s Nightclub or Lamplighter Lounge for as long ‘as the businesses remain[ed] in operation at their current locations by their current owners and operators.’” You can see where this is going.

In 1996, after the 1995 agreed judgement of course, the sole shareholder of the corporations (Mark Diedrich) operating Foxy Nightclub and Lamplighter Lounge sold his interest to another person (Dean Reiber). So the corporations that own and operate the strip clubs did not change; the person owning the shares in those corporations changed.

The district court sided with the City and held that, under the terms of the zoning code, a change of ownership had occurred. The court of appeals, however, held that the phrase “owners and operators” as used in the agreed judgment was ambiguous. It ruled that “this matter is best resolved on remand by a full hearing to allow the parties to present extrinsic evidence and otherwise develop their positions.” New life for the clubs.

It never ends.

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