Houston topless clubs lose case, may respond to Supreme Court with pasties


HOUSTON — Eric Langan says he may respond to the U.S. Supreme Court with pasties.

HOUSTON — Eric Langan says he may respond to the U.S. Supreme Court with pasties.

Langan, 39, is the chief executive officer of Houston-based Rick’s Cabaret International Inc., owner of four strip clubs in the city. On March 17, he and other club owners lost an 11-year fight to overturn a city ordinance when the country’s highest court refused to hear their case.

The regulation, passed in 1997, bans topless dancing clubs and other adult businesses within 457 meters of daycare centers, schools and churches, double the previous distance. The idea is to force the clubs to move, if not shut down entirely. An easy fix for ordinance-violating breasts may foil the plan, Langan said.

“The City of Houston will win the battle and lose the war because they won’t be able to regulate us once we move to latex pasties,” said Langan, whose company is the largest publicly traded owner of strip clubs, with a market value of $176 million US. Pasties, not to be confused with the British meat pie, are used to cover nipples.

Rick’s shares fell 5.2 per cent the day the Supreme Court said it wouldn’t take up the ordinance. While they have since recovered, they are down about seven percent this year after almost quadrupling in 2007. The shares rose $1.67, or 7.2 per cent, to $25 yesterday in Nasdaq Stock Market composite trading.

The regulation may have unintended consequences, Langan said. “Any ice house can now compete with us just by throwing a girl on the bar in a bikini or pasties without being subject to any additional regulation,” he said, referring to neighborhood taverns. “I think we’re going to see a lot more clubs putting dancers on stage.”

Houston isn’t lacking in such spots. The ordinance targeted 126 businesses, including adult book stores and “modeling studios,” where scantily clad women pose for customers. Massage parlors were exempted.

The Texas city ranks third behind Las Vegas and New York City among adult entertainment markets, according to Angelina Spencer, executive director of the Association of Club Executives, an industry trade group in Naples, Florida. Houston was the birthplace of the upscale mega-club, a concept pioneered in the late 1980s and early 1990s by Langan and his competitors, she said.

Langan estimated the ordinance will affect 38 topless clubs employing about 6,000 people. One of the best known is The Men’s Club, which occupies a 26,000-square-foot building near the Galleria shopping district and mall, home of luxury retailers such as Neiman Marcus and Saks Fifth Avenue.

The club, owned by privately held Texas Richmond Corp., employs 400 people and drew 100,000 customers from Jan. 1, 2006, to Dec. 15, 2006, according to court records in a case involving the ordinance.

The Men’s Club restaurant specializes in steak and Maine lobster and its wine cellar won Wine Spectator’s 2006 Award of Excellence. Texas Richmond CEO David Fairchild didn’t respond to phone calls and e-mails seeking comment.

City investigators have been working undercover at topless clubs in anticipation that the ordinance would stand up, said Patrick Zummo, a private attorney who represented the city in its defense of the ordinance. Raids and shutdowns may be next, he said. Officials have slapped a sign on at least one Houston nightspot, Club Onyx near William P. Hobby Airport, telling patrons it’s in violation of a signage ordinance.

As for the idea that clubs can thwart the ordinance with pasties and bikini tops, “Nobody really knows whether a bikini bar is going to be successful financially in Houston,” Zummo said.

Unlike most city ordinances restricting adult entertainment, Houston’s measure doesn’t have a grandfather clause that lets existing businesses remain, said defense attorney John Weston, who represented the club owners. The businesses also must pay for their relocation, he said.

The Houston ordinance is odd, coming from the only major U.S. city with no zoning laws, said Weston, who filed the Supreme Court petition and says he has argued seven cases before the court, including two involving adult-entertainment regulations.

“Politics is a dirtier game than any lap dance I’ve ever witnessed,” said Spencer of the Association of Club Executives. “A bad precedent like this, which is so restrictive, opens up the doors for this to take place across the country.”


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