THECITYOFMIAMIBEACHTRIEDTOEXTORT$30,000FORALIQUORLICENSEFROMME

LeroyGriffith,ownerofClubMadonna,speakswithCBS4InvestigativeTeam

DOCUMENTS
REPORTOFMIAMIDADECOMMISSIONONETHICSANDPUBLICTRUST SECRETCITYCOMMISSIONSESSIONSTRANSCRIPT ALLEGEDLYLIBELOUSLETTERFROMCOMMISSIONERSWIFETOCOMMISSION

REPORT OF INVESTIGATION AND CLOSE-OUT MEMORANDUM

To: File From: Michael Murawski Advocate Re: City of Miami Beach/ Club Madonna Date: June 21, 2007 Cc: Robert Meyers, Executive Director Sylvia Batista, Investigator Manuel W. Diaz, Investigator ________________________________________________________________

Disposition: Undoubtedly some City of Miami Beach officials improperly intertwined City business with the personal lawsuit pending against Commissioner Grosss wife and may have improperly participated in Commission discussions when they stood to be enhanced by the action of the board1.However, it would be difficult to sustain an ethics complaint for the following reasons: 1) the officials acted with apparent full knowledge, advice and approval of the City Attorneys office and we have generally declined to file complaints in the past in such situations; and 2) there is some evidence to suggest that the individual suing the City initiated the linkage of the two separate lawsuits. It is also the intention of this memorandum to advise all municipal counsel to be aware of the possible implications of violating the Conflict of Interest and Code of Ethics ordinances should their cities be presented with a similar circumstance. Background and Investigation: 1) This investigation was undertaken after the matter was referred to the COE by Joe Centorino from the State Attorneys Office (SAO). 2) Leroy Griffith (Griffith) is the owner of Club Madonna located on Washington Avenue within the City of Miami Beach (the City). Club Madonna is an adult entertainment establishment that provides, among other things, exotic dancing and nude female entertainers. Concern was raised that City Commissioner Saul Gross and others may have exploited their official positions in violation of section 2-11.1 (g) of the Conflict of Interest and Code of Ethics Ordinance, by improperly interjecting the
Section 2-11.1 (d) of the Miami-Dade County Conflict of Interest and Code of Ethics ordinance states, impertinent part, that Any person included in the term defined in subsection (b)(1) who has any of the above relationships or who would or might, directly or indirectly, profit or be enhanced by the action of the Board of [City] Commissioners shall absent himself or herself from the commission meeting during the discussion of the subject item and shall not vote or participate in any way in said matter.
1

payment of a commissioners wifes attorneys fees into negotiations concerning a lawsuit against the City. 3) City ordinances 6-40 and 6-41 prohibit the sale of alcoholic beverages at an establishment that permits partial or total nudity. In approximately February 2004, Griffith, through his attorney, contacted the City and advised them that based on new case law it appeared that these ordinances were likely unconstitutional. Griffith was seeking to have the City amend their ordinance to allow for the service of alcohol in establishments with partial or total nudity, such as Club Madonna. 4) On March 17, 2004, the City Commission considered a resolution to amend ordinances 6-40 and 6-41. The motion failed by a vote of 4 to 3. Commissioners Cruz, Garcia and Steinberg supported amending the ordinance to allow the service of alcohol however, Commissioners Gross, Bower, Smith and Mayor Dermer voted against the amendment2. It should be noted that Mrs. Jane Gross, wife of Commissioner Saul Gross, appeared at this commission meeting and spoke out against the amendment. As early as February 2004, Mrs. Gross3 had started a campaign of e-mails and phone calls to express opposition to allowing alcohol to be served at Club Madonna. After the defeat of the resolution, Griffiths attorney met with City officials to discuss the issue. According to Griffith, the City Manager suggested that Griffith file a lawsuit against them in order to allow them to meet in executive session and discuss the ordinance. In August of 2004, Griffith filed a lawsuit against the City (the Federal lawsuit). 5) Meanwhile, in May 2004, Griffith, using a different attorney, filed a lawsuit alleging libel, slander and defamation against Mrs. Jane Gross for some of the comments she made at the March 17, 2004 City Commission meeting and for some of the e-mails she circulated. 4 6) Griffiths attorney in the libel case had sent a letter to both Mrs. Gross and Commissioner Gross in May of 2004 demanding a retraction of the allegedly libelous statements and announcing their intention to sue. As a result of that letter, the City retained outside counsel, Richard Ovelman (Ovelman), from the law firm Jorden Burt, to represent Commissioner Gross in the event the Commissioner was sued. 7) In December of 2005, the City Commission authorized a resolution to pay Jorden Burt $5,316.33 for their successful representation of Commissioner Saul Gross. The City deemed the representation of Commissioner Gross successful because Griffith only filed
2 3

Mayor Dermer and Commissioner Smith approved the resolution on its first reading on January 14, 2004. Ms. Gross owns property on Washington Avenue not far from where Club Madonna is located.

The City maintains that the lawsuit brought against Mrs. Gross was, in essence, a sort of Slapp suit. A Slapp suit, which stands for strategic litigation against public participation, is a device available for shutting down and intimidating members of the public who voice opposition to a proposed project. Typically what happens before this kind of suit is filed is that a developer or other applicant seeks governmental approval for a controversial issue. There is an ensuing rally and outcry by concerned citizens, in this case, Commissioner Grosss wife. In order to intimidate objectors, the applicant files a Slapp suit.

suit against Mrs. Gross. Former City Attorney Murray Dubbin (Dubbin) admitted that Jorden Burts representation of Mrs. Gross was an inevitable by-product of their representation of Commissioner Gross. Dubbin further acknowledged that some of the research Jorden Burt did regarding its representation of Commissioner Gross was also applicable to Mrs. Grosss defense. Jorden Burt expended a total of 19.8 hours on the representation of Commissioner Gross including about 11 hours on research. 8) Jorden Burt continued to represent Mrs. Gross. In approximately September 2004, after a hearing before Judge Ronald M. Friedman, Ovelman was successful in obtaining a dismissal, with prejudice, of the lawsuit against Mrs. Gross. Although the lawsuit was dismissed with prejudice, two issues remained concerning the Griffith v. Jane Gross lawsuit: (i) whether or not Griffith would protract the litigation by filing an appeal of Judge Friedmans decision and; (ii) whether Mrs. Gross would seek payment of her attorneys fees pursuant to Section 57-105 of the Florida Statutes. Thus, Griffiths Federal lawsuit was pending against the City while these two issues regarding the Griffith v. Jane Gross lawsuit remained unresolved. 9) On June 8, 2005, July 6, 2005 and July 27, 2005 the City held attorney-client sessions pursuant to section 286.011 (8) ,Florida Statutes, ostensibly to discuss the pending litigation against the City in Griffiths Federal lawsuit. Section 286.011(8), Florida Statutes, entitled Public meetings and records states, in pertinent part: Notwithstanding the provisions of subsection (1) any board or commission of any state agency or authority or any agency or authority of any county, municipal corporation, or political subdivision, and the chief administrative or executive officer of the governmental entity, may meet in private with the entitys attorney to discuss pending litigation to which the entity is presently a party before a court or administrative agency, provided that the following conditions are met: (b) The subject matter of the meeting shall be confined to settlement negotiations or strategy sessions related to litigation expenditures. (Emphasis added) 10) In an interview with COE investigators Dubbin advised that, to his knowledge, the City was not involved in the settlement negotiations between Griffith and Mrs. Gross. 11) Gary Held (Held), an Assistant City Attorney, provided COE investigators with information seemingly contradictory to Dubbins statement. Held advised COE investigators that he told Griffiths attorney that the Citys agreement to settle (the Federal suit) was contingent on Griffith dismissing the case against Mrs. Gross and paying her attorneys fees. Held advised that he is in possession of a memorandum wherein this position is expressed but would not produce it claiming attorney-client privilege. Furthermore, the current City Attorney, Jose Smith (Smith)5, corroborated

At the time the executive sessions were held Mr. Smith was a City Commissioner who participated in at least some of the sessions.

Helds statement telling COE investigators that yes, payment of Mrs. Grosss legal fees was a point of negotiation. 12) Held intimated that it was essentially Griffiths suggestion, expressed in a settlement offer sent to the City in May of 2005. The offer consisted of the following: in order to get the City to reconsider the ordinance amendment, Griffith would drop the Federal lawsuit against the City and drop his case against Mrs. Gross; however Mrs. Gross would be responsible for the payment of her own attorneys fees. It seems that Griffith initiated the linkage concept by tying in the idea of dropping his lawsuit against both Mrs. Gross and the City in order to try and negotiate the amendment to the ordinance which he was seeking. It seems though that Griffith made clear from the outset that paying Mrs. Grosss legal fees was not part of his offer. 13) Deputy City Attorney Jean Olin (Olin), advised that Dubbin asked her to research the issue of whether the City could pay the attorneys fees incurred by Mrs. Gross. Olin advised that she researched the issue extensively and concluded that there was no way the City could pay Mrs. Grosss legal fees. Her conclusion was based in part on the fact that Mrs. Gross was being sued in her capacity as a private citizen by Griffith, another private citizen. She concluded that there was no nexus or link to City business that would permit the City to pay Mrs. Grosss legal bills. 14) It is plausible to argue that since the Griffith v. Jane Gross lawsuit was deemed not to be City business, her lawsuit and the resolution of the payment of her legal fees should not have been discussed by the City Commission in executive session, exempting the public hearing requirement. 15) It is somewhat understandable; however, that the issue of Mrs. Grosss legal fees might have come up in the executive session since Griffith was offering to dismiss the Federal Lawsuit as part of a package deal he was attempting to strike with the City. The troubling aspect of this case is whether the City inappropriately attempted to wrest payment of Mrs. Grosss legal fees from Griffith by conditioning their payment on resolving the lawsuit between Griffith and the City. Since the City knew, through Ms. Olins research and opinion that the City could not simply outright pay Mrs. Grosss legal fees, it seems all most certain that the City raised the idea with Griffith. 16) There is little doubt that the issue of having Griffith pay Mrs. Grosss attorneys fees was discussed during at least some of the executive sessions in question. The City admits as much. In addition, former City Commissioner Louis Garcia (Garcia) advised COE investigators that he was present during two of the executive sessions and the payment of Mrs. Grosss legal expenses was discussed. Garcia confirmed that Held was used as a messenger to convey the Commissions proposal. 17) Although Slapp suits are nothing new, this case presents a unique situation because it involves a Slapp suit brought against a Commissioners wife. The uniqueness of the situation should have prompted the City Attorneys office to exercise a heightened degree of caution and be more prudent in their decision to permit their Commissioners to link the payment of legal fees to a City Commissioners wife as a condition of resolving a lawsuit against the City. Any discussion wherein the City would attempt to use its official leverage to secure payment of attorneys fees to a Commissioners wife, in her own

private lawsuit, should have raised significant red flags prompting the City Attorney to advise the Commission that, at best, such a discussion raised an appearance of impropriety; shielding that discussion behind the guise of an executive session Commission meeting, outside the publics eye, really only served to make matters look worse. Moreover, Mrs. Gross had a remedy available to collect her legal fees from Griffith. 18) The evidence suggests that the Commission realized that they did not want the issue of Mrs. Grosss legal fees to be a public issue. At the December 2005 City Commission meeting where Griffith attempted to get his ordinance amendment back on the Commissions agenda, Commissioner Cruz made mention of the pink elephant in the room that no one wanted to discuss. It is reasonable to believe that the pink elephant referred to was the payment of Mrs. Grosss legal fees. 19) Ultimately, Mrs. Gross and Griffith settled their lawsuit. In fact, the settlement agreement contained a general release; Griffith and Club Madonna released Commissioner and Mrs. Gross while Commissioner and Mrs. Gross granted a general release to Griffith and Club Madonna. The settlement agreement essentially made Mrs. Gross responsible for her own attorneys fees. Griffith signed the settlement agreement on June 9, 2005, one day after the City held its first executive session. Commissioner Gross signed the agreement on June 30, 2005. Thus, it is evident that Commissioner Gross knew that the settlement agreement called for his wife to be responsible for her own attorneys fees during the July 6, 2005 and July 27, 2005 executive sessions. 20) It is difficult to imagine that the City Commission would have negotiated so strenuously to recover attorneys fees had the litigant in the Slapp suit not been married to a City Commissioner. The appearance of impropriety created in this case is evident. It is no wonder the City refused to release even those limited portions of the executive sessions transcript wherein they admit payment of Mrs. Grosss legal fees was discussed. 21) The Advocate consulted with the SAO regarding the possible violation of Section 286.011(8) of the Florida Statutes. The SAO advised that since it appeared that the City Attorneys office allowed, if not invited, discussion of the Griffith v. Jane Gross lawsuit during the executive sessions, it would not pursue any action against any individual commissioner. 22) In conclusion, it appears very likely that Commissioner Gross, along with other City Commissioners, engaged in wholly inappropriate behavior by linking and conditioning the payment of Mrs. Grosss legal fees to the settlement negotiations between Griffith and the City. It would be no less inapt but is extremely doubtful, that the City would have attempted to secure payment of legal fees for any other citizen victim of a Slapp suit being sued by an individual who was also suing the City. The evidence suggests that the City Attorney allowed the City Commission to push their collegial bonds over the ethical line.

Miami Beach City Commission EXECUTIVE SESSION Wednesday, June 8, 2005 12:21 p.m. In attendance: Mayor David Dermer Matti Bower Simon Cruz Luis Garcia, Jr. Saul Gross Jose Smith Richard Steinberg City attorney Murray Dubbin City manager Jorge Gonzalez Deputy city attorney Don Papy First assistant city attorney Gary Held Senior assistant city attorney Roberto Datorre DUBBIN: The purpose of this meeting specifically is to advise the mayor and Commission of a proposed settlement of the issues that have been proposed by [Daniel] Aaronson, who is the attorney for the Griffith interest. Gary, do you want to explain the proposal? HELD: Well, as you all know, Leroy has been trying to get alcohol into his club. DERMER: When did that start?

iterations of this in the form of an ordinance pending before the City Commission, and I'm sorry Matti is not here, but Leroy, over the years, has been talking to some of you about this. At some point I think he came to understand that in order for the Commission to have a discussion out of the sunshine it was necessary for a lawsuit to be pending on this matter, so he filed a lawsuit on the ordinance. There are, obviously, other lawsuits pending related to the ordinance. I don't know if the ordinance involved, I mean the lawsuit DUBBIN: By the way, for the record HELD: Yes. DUBBIN: It's a pending case, a suit against Jane Gross by Griffith at this time, which I, frankly, consider part and parcel to the overall dispute and as an effort by Griffith to put pressure on the Commission or at least one commissioner to cave into his demands. I consider it part and parcel of this overall problem that that particular issue is not going to be discussed today. We will discuss that at some future point in time. GROSS: Can I say something for the record? DUBBIN: You can say something, but I wouldn't get involved in the Jane GROSS: Well, I'm not getting involved in the details, only procedurally where we are with it. DUBBIN: Yeah.

HELD: I'm sorry? DERMER: When did that start? HELD: At least when I joined the City, and I don't think I'm the cause of it though. STEINBERG: Happy birthday. GROSS: To getting him to drop it. HELD: Thank you very much. DUBBIN: In legal action. (Discussion off the record.) HELD: So, obviously, we been through a few GROSS: Right. But he lost on a motion to dismiss. He has requested a rehearing on the GROSS: That he has brought a lawsuit against my wife, originally named me, but he dropped me out of it. DUBBIN: When he dropped you out of it after a substantial amount of effort went into

motion to dismiss. This is about $120,000 in legal fees later, and he's made an offer to settle, which he is holding at the moment. I can't say pending the outcome of this meeting or not, just in terms of where his head is at and where that lawsuit is, procedurally, is in relation to where this lawsuit is against the City. DUBBIN: Okay. That's good. Now, Gary, why don't you just basically let me explain this to you in as few words as possible. He is proposing that, A, either abate or dismiss the pending litigation. The City would change its ordinance to allow nude dancing and alcohol for an experimental period of one year. During that period of one year, the City would, and I guess he would, keep track of any adverse secondary effects that that activity had on him, on the City. If at the end of year, or perhaps prior to that time, the City determined that there were adverse effects, then the City would do as it sees fit and repeal the law that repeal the amended law, in which case he would have the right to go back to court and pick up where he left off. That's about it. HELD: And there are different ways to deal with the one-year period. We could adopt an ordinance that sunsets it automatically or, as they are suggesting, they obviously want the Commission to take an affirmative act to require the removal of alcohol and it would only be alcohol in adult entertainment establishments. We wouldn't allow nudity in alcoholic beverage establishments, though there might be some issues. GONZALEZ: It keeps it closed. There are no other venues that would be allowed to operate. DUBBIN: That's part of the deal. STEINBERG: Can we give that to him or is it because the language he drafted in essence I don't think we can grant it HELD: Well, we wouldn't draft it that way, but I think the effect of the distance separation requirements, both by the State statute and ours, precluded the introduction of additional

STEINBERG: Without a waiver. If the City said yes, and some operator came in and the City Commission was of the mind of waiving it DUBBIN: That's one of the details. I've given you the philosophy of the DERMER: I just wanted to, if I can interject, and I understand, Gary, you are just basically conveying the settlement offer, but I've got to tell you and I know that, you know, obviously the suit, the Jane Gross suit, is a separate matter, but he is linking it to settle it as well, correct? HELD: Everything would be settled. DERMER: I'm speaking quite frankly. I really don't like the fact that somebody, through litigation, is going to try to use that as a wedge to intimidate, especially against the family member of a particular commissioner. I think it just really, as a precedent matter, is very, very, wrong. I just don't like it. And I don't know how you, the rest of the group, feels about it, and it's very hard, you know, to look proactively into the future. Let's say we do something like this. What kind of message are we sending? That you can go and, you know, hardballing against a particular family member of a commissioner to try and get a settlement? I mean, that would be the perception of this. No matter what the rights or wrongs or the merits of the issue, and I just don't like that. It just doesn't sit well with me, and I wanted to express it to you. CRUZ: That's basically what I was going to say. I have been a supporter of Leroy and I have been a supporter of this ordinance all along, but the minute you drag in a commissioner, and in this case, even worse, a commissioner's family, it just doesn't sit well, never mind the precedent that it sets. It's just not the way that we want to leave any of this, regardless. It just creates a very, very, bad taste in one's mouth. It doesn't fly. So, consequently, we find ourselves in a quandary, because you don't want to succumb to blackmail, and at the same time you want to put an end to this, and that's where I would like to get

some guidance. And I'm not saying put an end to it that we agree on it, but rather, one way or the other, because it's not fair to have somebody's family member involved in something like this. DUBBIN: May I make a suggestion? And, by the way, I want you to understand that the City Attorney's office is not bearish on this litigation. We feel that we are going to win. As a suggestion, though, what would you think of our returning to the attorney and saying, Look, we are not going to talk to you about anything else until you first dismiss that case and perhaps pay the attorney fees that are being incurred? DERMER: I think there is an element of good faith. I mean, if people want to negotiate, they've got to negotiate in good faith. Going and hardballing against a commissioner's family, that act, in itself, I think, constitutes bad faith. And to me, I mean, I just draw the line there when it comes to families and that sort of thing. We are in this process and, in many ways, we are fair game, and we know what we got into and everything else, and you subject yourself, but when it comes to family, it's a different story. CRUZ: We request that they drop the litigation and, at that point, we would, you know, start from square one, but unless it's unconditionally the lawsuit is dropped, then we don't even no use entertaining it. DUBBIN: Yes, sir. GARCIA: I am of the same feeling. I was one of the biggest proponents. To me, it didn't bother me. When it gets to the point that it deals with the family, it's like the old movie, you know, these are businesses with the family, so it just anything right now will be DUBBIN: Your suggestion is that you would like for the City Attorney to proceed? GARCIA: Again, at this point in time, he is trying to broadside, as far as I'm concerned, he is trying to broadside

CRUZ: He's got to drop it STEINBERG: Drop it and pay the attorney fees. I just don't see giving the message CRUZ: Drop it and pay, without a doubt, before we will discuss anything. DERMER: Is that the feeling, generally speaking? SMITH: Of course, I agree with what's been said, but I feel even uncomfortable sending him the message that we are even going to be speaking to him, because from everything that we've heard and I've listened to a lot of the Planning Board discussion on this and how we were trying to accommodate, how we were going to do this so that it wouldn't have an effect and impact in the surrounding area but when those school kids came in and the parents and the teachers and everything else, even though I was open-minded originally and thought maybe we could come up with an ordinance, I just don't see how, personally, I can support what he is asking for under any circumstances, whether he dismisses Saul, whether he pays attorney fees. I just don't see him I don't see myself agreeing to any alcohol and nudity at that location. STEINBERG: I had some of the same concerns on the day when the school kids came in, and I told him if it ever came up, I wouldn't support it for the hours he was asking for. And I thought from his standpoint he would be much better served having spoken to the school ahead of time and giving up the lunch, etc., so that he wasn't in operation while the school was open. And I think that would probably relieve the concerns that you had, but I certainly agree with you. I would not support it, no matter what happened with the litigation. HELD: He has told me that he would be willing to drop the lunch and start at, like, 6 p.m. STEINBERG: Right. He told me the same thing, but I told him I wouldn't

CRUZ: That's what I'm saying. DERMER: He's said a lot of things over the years, you know, to me, and I think the tactics that are used here are just so out of the realm and it will bring us, probably, to the next case that we are going to discuss, too tactics. I just don't see it you know, if this is a way to be effective, by attacking people, individually, and their families, to me, you know, I just don't. It stops there, and unless somebody knows that that's the message you are sending, then they are going to continue doing it and others will get the message in the legal community that that's the way you play around here. I think it's wrong. I just, you know, and then the fact that he files a lawsuit so we can sit in executive session. I mean, think about that, you know, to me I just look. I think this is somebody in a different sense of reality at this point. CRUZ: You want to move forward? DERMER: To tell you the truth, to sit in good faith in a settlement negotiation on any of this, at this point, you don't do this. You just don't behave like this. CRUZ: I wasn't looking at a settlement negotiation. I was looking at it you drop the lawsuit against Jane, pay the legal fees, and we will start reviewing it. We'll start from scratch. STEINBERG: We are not willing to negotiate until everything is done. DERMER: I mean, obviously he is coming more to the table with clean hands to start sitting and talking if he does take that remedy. CRUZ: We are not agreeing to settling anything. He has to let go of that and then we'll look at the merits of the case. We may turn it down again, but we would have cleared out one issue and gotten that out off the table. SMITH: I don't think he ought to get the message that if he does that that we are going to be favorably disposed. STEINBERG: Not until the litigation matter is dismissed with prejudice and the attorney fees are reimbursed. DUBBIN: Commissioner Smith mentioned to me that he would only be willing to look at it after the process runs its course, which means that they would come up with their plan, go to Planning Board, get the Planning Board recommendation, etc., etc., and going about their business, which, frankly, is the only legal way you could deal with this anyway. DERMER: It should be settled through a lawsuit in general. It should be done in a conditional use manner through proper concessions and monitoring, and everything else. DUBBIN: I'm getting the idea of where you want us to go. CRUZ: Do you want to explain it to me? DUBBIN: Let me explain it to you as I understand it. You are not willing to sit down and talk to him about anything until this suit against Jane is dropped, the litigation against the City is dropped, the attorney fees incurred by Jane and the litigation are paid, and, at that point, you would consider yourself back to square one whereby he could STEINBERG: Maybe I misunderstood. SMITH: Dismissing it without prejudice. HELD: Are we talking about the case against the City as well in federal court? DUBBIN: The case against the City I don't care one way or the other. DERMER: This is really not the forum to settle the case. That's the issue, too. This should go through the public process of the Planning Board and everything else.

HELD: I think it would. The question is, is the Commission willing to have the City Board consider an ordinance DUBBIN: I'm not sure they can stop it. DERMER: Any commissioner wants to bring an ordinance or anybody wants to do that, that's their prerogative and that should go through the governmental process. I mean, it may be comfortable for attorneys to sit down and settle things, and this and that. He didn't get his way through the political process and the public process, so he's going now through the legal process to try to get his way. You know, it's kind of like contract zoning. You know, the zoning settlement like we had with the Ritz-Carlton you don't get your way through the process, so you try to do a settlement and try and get extra FAR that way. I don't like that whole to me this is not the right place for this. And these tactics I think a clear message should be sent, and I will tell you what message should be sent. I find this extraordinarily insulting and wrong and, you know, I just think it is just terribly wrong, his behavior on this matter. I really don't see anything logical or right about it or it just it's the wrong forum for this issue. CRUZ: The issue is that I don't think it's right either that by us taking that direction we are also going to force, you know, Jane to continue to deal with a lawsuit and the costs associated with it. DERMER: I agree with you there. GROSS: Simon, Jane is not paying the legal fees. You could be sure of that. I mean, that's the reality. DERMER: It's not only the fees. It's the process, too. BOWER: You are paying it. GROSS: I'm paying it. BOWER: Jane and you are one. What's wrong with you?

CRUZ: You and your wife are the same thing, you know, and that's what I'm saying, you know. Regardless, I understand what you are saying, but we would be hanging out one of our own to dry. DERMER: But then what you are doing, basically, is you are saying, okay, and I like that result, but you are also telling him we would be settling this in the legal realm. CRUZ: I would tell him if you want to continue with your lawsuit against the City and everything else, do so, but you've got to drop this other thing altogether. Continue the lawsuit against the City. This person has nothing to do with it. STEINBERG: Right. Until you cut that off DERMER: The issue of the free expression, etc., etc. HELD: Secondary effects and whether there are sufficient secondary effects to justify that DERMER: And that had come prior to this. All right. Listen. I defer to you on that as far as making sure that look, I'm not here to I don't want to see the commissioner's wife be harassed like this. I think it's wrong, but I don't like the message it sends. I just think, you know STEINBERG: We are not sending we are saying we won't even talk to you. CRUZ: We are not even going to talk to you, but you've got to drop the other one. DERMER: That's fine. CRUZ: Then we will tell you STEINBERG: We are not even to discuss CRUZ: That's what, you know, it deals with your issue, but takes care. SMITH: They have to go back to the Planning Board and start from square one.

STEINBERG: I wouldn't get to how we would or wouldn't settle it. I think the message is, simply, the Commission is not willing to discuss settlement or anything else. Until you dismiss it and reimburse the legal fees, the Commission is not willing to discuss settlement. GROSS: I hear you. GARCIA: Mr. Mayor, I have a question. What is to prevent this guy to go over and, you know, drop the suit and then negotiate with us and then the negotiations fail, for him to reinstate the suit? STEINBERG: One of the things we said was with prejudice. SMITH: Which means once you withdraw, you can't refile it. DUBBIN: We know how to tell him. Show the time 1:45.

PAPY: The first session is regarding Club Madonna and Ell-Gee [Inc.]. And I will let Gary explain where we are in the settlement negotiations. HELD: Well, obviously, this is the lawsuit that Leroy Griffith has filed against the City to seek the right to sell alcohol at his adult entertainment establishment. And broadly applied, it would apply to all adult entertainment establishments in the city. We had an executive session at the June Commission meeting, and there it was discussed that before there would be any further discussion on the possible settlement of this lawsuit, that there would have to be an agreement by Leroy Griffith to dismiss his lawsuit against Jane Gross and to pay their out-of-pocket attorney fees. My understanding is that he has signed off on an agreement to dismiss that lawsuit with prejudice and have exchange of releases, but without any payment of attorney fees, which was essentially the agreement that had been in place before the executive session was held in June. STEINBERG: There was already an agreement to dismiss?

Miami Beach City Commission EXECUTIVE SESSION Wednesday, July 6, 2005 2:33 p.m. In attendance: Mayor David Dermer Matti Bower Simon Cruz Luis Garcia, Jr. Saul Gross Jose Smith Richard Steinberg City manager Jorge Gonzalez Deputy city attorney Don Papy First assistant city attorney Gary Held

HELD: It wasn't inked, but there was an oral discussion. GROSS: Well, the oral discussion had been going on and on for five months and had not been concluded. HELD: So that's essentially where we are. It's up to the Commission in its discretion to give us direction to further litigate or to engage in some form of settlement discussion. What Mr. Griffith and his attorneys proposed is that there be a one-year period in which to test whether having alcohol at Club Madonna had any adverse secondary effects. And if there were, then the right to sell alcohol would be eliminated. If there were not, then the right to sell alcohol would be continued. And that's basically what is before the Commission.

PAPY: So we're looking for advice right now as to how to proceed on this lawsuit. HELD: Right. We have filed a motion to dismiss the lawsuit, and it's pending. They responded, and my reply is due next week. PAPY: Richard? STEINBERG: I will move to continue with the litigation. I think the Commission was serious, as far as our direction last time. The fact that they dismissed it and then refused to reimburse for attorney fees, I think we should continue litigation. SMITH: I'll second that. CRUZ: They didn't reimburse the City?

discussions with them or simply to proceed to defend the case, which we are in the process of doing. The last executive session was a discussion about the plaintiff dismissing the case against Mr. Gross and reimbursing for attorney fees. And since that time, apparently, there has been a dismissal of that case, but without payment of attorney fees. GARCIA: Dismissal of your case? GROSS: Well, he signed a settlement agreement to dismiss the action with prejudice, which is what the court had decided, but he doesn't want to pay our legal fees. But he's willing to at least say, you won't incur anymore legal fees. You know, it's easy to laugh about it, but I'm out of pocket 30 grand. CRUZ: That's why we are rejecting it.

HELD: It wasn't the City. It was the commissioner. CRUZ: Are they going to reimburse you for attorney fees? GROSS: No. GONZALEZ: Did they comment at all? They just said no or did they argue why? HELD: I'm not sure I can adequately represent what it was that was expressed. There is no interest in paying any of the attorney fees for the other side. SMITH: Are you out of pocket anything? GROSS: Yes. I'm out of pocket 30 grand. DERMER: All right. There's a motion and second. There's no objection. GARCIA: I don't even know what we're voting on. PAPY: This is on the Club Madonna matter, and the issue was whether to continue settlement

GROSS: He's not going to keep suing so, you know, it still may be in my interest to sign that to get rid of it, and then, you know, continue on and see what happens with this process. GARCIA: Can you counter sue? GROSS: I could if I want to spend the money but, you know, that's quite expensive also. GARCIA: Well, I go with the majority here. STEINBERG: Do you have an objection to it? GROSS: What I'm saying is, I'm probably going to sign the settlement agreement just to foreclose him from continuing to sue us. And then, you know, if the Commission doesn't take the position that, you know, he's not going to get anywhere unless he pays the fee, that's fine. But that will be the Commission's position. I don't want to be in the position of linking the two. PAPY: In any event, our direction is clear to proceed on with the defense of that case. HELD: We'll probably be able to give a better

assessment of the cost of that litigation when we find out the results of the motion to dismiss. GROSS: I'm going to sign a settlement agreement with him that says if he won't sue me, we won't sue him. That settlement agreement says he's not responsible to me for attorney fees. But, you know, if the Commission wants to link it as a condition for even discussing it, that's between, you know, the Commission and Leroy. GONZALEZ: For Gary's benefit, should that be communicated that way or just STEINBERG: The Commission has stated its position that it's still consistent on the position that if the pre-existing conditions precedent are met to further negotiation, the City's willing to negotiate. Until that time, the City is not interested. PAPY: Okay. That concludes this attorney-client session. DUBBIN: This is the executive session to discuss proposed settlement offers in matters of Club Madonna and Ell-Gee, Inc. They are two cases presently pending. This had been discussed at the previous executive session on July 9 and the purpose of this session is to address directly the proposal that has been proffered by Leroy Griffith and Madonna's lawyers. And in lieu of this, in and of itself, at the time that you remember at the last meeting, the issue of pending litigation between Commissioner Gross and the same parties. It was discussed since that time. At that time that case had not been settled. Since that time, the case has been settled under terms that were agreed upon between the parties at that time. That should not be an issue before us today. I would like to ask Gary, who's been communicating with the attorney, Griffith, and the other corporations, to brief us. Fill us in on what your concept is on their point of view to settle the case, and I'd like you to just address that area. HELD: There's three things I would like to cover. First, to briefly describe the settlement offer. Second, to briefly describe the status of the case and issues in the case, and third are major concerns. So the settlement offer is to allow Madonna to serve alcohol for a one-year trial period that would be accomplished with the option of an ordinance that would actually permit adult entertainment establishments displaying total nudity to serve alcohol, and it would either be set within one year or have a one year validity. Upon the adoption of the ordinances, Madonna would dismiss its lawsuit. After the one-year period, the City would thus decide to extend for further periods or not, and because the lawsuit would be dismissed without prejudice, if the City decided not to extend, then Madonna would be able to renew its lawsuit. We have a motion to dismiss pending in this case. Basically, the case involves a challenge to the

Miami Beach City Commission EXECUTIVE SESSION Wednesday, July 27, 2005 2:30 p.m. In attendance: Mayor David Dermer Simon Cruz Luis Garcia, Jr. Saul Gross Jose Smith Richard Steinberg City attorney Murray Dubbin City manager Jorge Gonzalez Deputy city attorney Don Papy First assistant city attorney Gary Held Senior assistant city attorney Roberto Datorre

adoption of our ordinances in 1989 and 1990, prohibits alcohol being sold at establishments displaying total nudity. The lawsuit will test whether the City's basis or adoption of the ordinances 1989 and 1990 were reasonably based upon evidence that the ordinance would address the secondary effect of adult entertainment establishments. Basically, the case law allows for the City to rely on its own studies, set studies conducted by other cities and decisions in other cities, and the wisdom and knowledge of its elected officials, but plaintiffs challenging an ordinance have a right to cast direct doubt on the reasonable basis for belief that the ordinance will further a substantial governmental interest, and if they do cast direct doubt, then we have to convince the court that we did have a reasonable belief that the adoption of the ordinance that it would have secondary effects. The plaintiff is alleging that we have to establish actual facts, and we're having a dispute over what the case law actually says about that, but that's a side issue. DERMER: You're preparing for a motion to dismiss? HELD: We've already filed it and it's been fully briefed. DERMER: The issue of casting doubt that you give Madonna in this case that would be played out during some sort of a factual hearing, correct? It would not be in a motion to dismiss? HELD: Either a summary judgment or at trial. Basically, I was telling the court that the motion to dismiss there have been so many ordinances of this kind passed throughout the country and we relied on so many studies and other decisions that it's really beyond doubt that the City Commission reasonably believe at the time that it adopted the ordinance that it would address the secondary effects and that the plaintiffs shouldn't be allowed to force us to prove again, as so many other cities.

DERMER: You have confidence in that motion? HELD: I actually don't think the court will buy it. DERMER: So then that would take you to a factual hearing. HELD: It was a reasonable argument to make. DUBBIN: It's because courts tend not to grant motions to dismiss when they're DERMER: And you would proceed to a factual hearing then? HELD: Well, no. Then we would try to have it dismissed on summary judgment. First, there's a motion to dismiss where we accept the facts as pleaded in the complaint, and second is we can establish a set of facts through motion and I have a chance to rebut, and the court decides on a motion based upon what's submitted, whether there's a need to have a trial. DERMER: Are you going into the circumstances of the time that the ban at the time when it was instituted? HELD: It's two parts. The test is really at the time of the adoption, but plaintiff is going to try to show that both at that time and since then, even if we were able to prove at that time that there is no further legitimate governmental basis to maintain the ordinance. GROSS: This is the same ordinance that L.A. have and New York. They don't permit liquor and nudity together. HELD: I can't answer who has it, but it's around the country and no number of ordinances have been upheld. DERMER: Have any been struck? HELD: Yes. DERMER: What were the circumstances there?

HELD: They like to cite Flanagan's. I think it's a Georgia case, and in that case there was a number of establishments, let's say six, that were serving alcohol and nudity and the plaintiff did a study that showed that there was actually less crime and negative adverse effects from those establishments than there were from other alcohol establishments in the community. And on this basis the court concluded that there were not sufficient secondary effects from adult entertainment establishments to justify the ordinance. They were actually causing less of a problem to the community. GROSS: Would it be better if they were all adult entertainment? HELD: Yes, from the plaintiff's point of view. STEINBERG: Given that argument, if we were to grant within a year and after the year the Commission said this is what we want and we're back in court, will they then come and use evidence from the one year to show, Look, we did this for a year. There wasn't an increase, etc., basically trying to open us up to give them facts to support their position? HELD: There are three concerns. That was the second concern, that the one-year trial period might work against the City; that once they do a study they're already doing a study by the way, they're collecting evidence from a number of establishments in South Florida that serve alcohol and display nudity to show there's less crime at these establishments and property values around those establishments are rising just like everybody else's property values. So what they would show is they would make an extra effort during the oneyear period to make sure nothing happened at their clubs and be able to compare that to everything else that happens at the other clubs and show that they're a better establishment. STEINBERG: You look at the year before. You controlled your property better during that one year than you did the year before. Then you look at the two and say, Look, you've got the alcohol

and we had less calls for service, calls for services or we had no increase. HELD: The reality is they probably can show that for the last ten years on their property that they don't serve alcohol, so they don't have proof of that. What we could do is do a study, number one, of Leroy's establishment over in Miami and see what kind of history he's got there, and we would have to hire somebody to do our own study to rebut their studies. So the third point, really, is that adult entertainment litigation is expensive and it's probably going to cost us $200,000 for the City to try its case, and if the City loses, we would be responsible to pay a comparable amount of their expenses. STEINBERG: And if we prevail, do they have to reimburse us? PAPY: No. Cost, yes, but fees, no. GARCIA: How far apart or back were they when these were pled? PAPY: '89 and '90. GONZALEZ: And they talked about if the City loses the case, it doesn't just open up for Club Madonna, but for other potential new entries into the market which may not be beneficial. GARCIA: For anyone, you know. GONZALEZ: They may not want to win the case from a business perspective. SMITH: Because of your zoning, that would permit it, so even if the doors open and anybody can come in, theoretically, there's only like two or three places in the whole city where they could go. HELD: I brought maps out. If he relies on the state ordinance that establishes 25 feet distance separation in schools substantially, it covers most of the city but there are two areas that are

permitted. The city distance separation of 300 from schools and places of worship and residential district and some other establishments also renews most of the city, but under federal law we are required to have places available. SMITH: Are they challenging that? HELD: No, they are not. GROSS: You look at the one on the left. I see the red. That's the places. SMITH: That's Collins Avenue. HELD: Where there's red and no circle, then it would be permitted. STEINBERG: You would need red on both, wouldn't you? HELD: But here, there's circles where it would not be permitted, where it shows the distance from other establishments. DERMER: My personal feeling is I don't just like the fact that we're negotiating an ordinance that's passage through a settlement, and I see it somewhat analogous to the zoning through settlement also. DUBBIN: We're not contracting the passing of an ordinance. We're agreeing on temporary contracting to pass it over. All we're agreeing to do is move ahead to allow consideration by the Commission of the issue and to act in good faith to give them a fair hearing on the issue. DERMER: But the Commission can consider an ordinance. Some commissioner brings it forward, or administration brings it forward, like any other ordinance. I understand you're saying we're allowing for consideration, like, you know, like that consideration has what it's going to emanate from this room and go down into the chambers and suddenly an ordinance is there that will be passed in Leroy's mind. DUBBIN: I don't think Leroy has the slightest

idea. DERMER: As far as Madonna's position on this, it has to emanate from some sort of a sponsor, and if someone wants to sponsor it, then we see which way it goes. SMITH: I think it's really premature for us to be considering any kind of a settlement without knowing what those secondary effects are in terms of prostitution, child labor, whatever, you know, crimes associated with an adult entertainment establishment that has alcohol and nudity. Without knowing those facts, how can we possibly consider any kind of settlement and to say we'll give them a one-year trial that's just setting us up, and I just don't buy that. So what are the secondary consequences that we know of, or do we know of any? HELD: Well, I can't tell you the ordinance says, I can tell you what SMITH: Because that was in the 1980s. What do we rely on to say the reason we don't want this is because A, B and C? HELD: Well, it's crime and property values. SMITH: Do we have data to support that? HELD: We have not done a study yet. SMITH: Police reports, incidents of prostitution, whatever drugs, cocaine, heroin. GONZALEZ: Don't we have a public hearing on this? School children, the school and things like that? SMITH: The school doesn't really play a role in this. Nobody wants to have a school across the street from an adult entertainment establishment, but that's not the test. The test is because of these establishments, are we increasing the amount of other crimes associated with it? You know, Mafia and drugs and prostitution and things of that nature.

DUBBIN: Let me give you a temporary answer. That shouldn't be our concern. We have an ordinance that is legal and valid and presumptively a proper ordinance. The ordinance happened to have been passed 12 years ago. HELD: '89 and '90. It's two ordinances. DUBBIN: But it's still the law. I don't think we've ever since that time been a burden on you to prove a secondary effect. SMITH: But the challenge is being made now by this lawsuit. DUBBIN: Well, they've got to challenge the validity of the City's action in 1989, and then, assuming that they can cast a doubt on the validity of this action, a burden of some kind shifts to the City to defend itself. SMITH: But I thought I heard Gary say that they can challenge what happened in '89 or they can challenge today's environment. DUBBIN: Certainly, they can do that, but I think there's a different theory of attack. It's not the answer is yes, they can, but we have not been put to the burden of defending it. Perhaps we ought to consider conducting a study on secondary effects. GROSS: I thought that you testified at the time that we were considering his amendment that there was no constitutional right to have alcohol in a nude establishment. HELD: That is correct, and I still believe that, and that's a quote from one of the cases. GROSS: This is different. HELD: Right, he's saying that GROSS: But didn't you say you didn't have a constitutional right? Assuming you said there's no constitutional right. HELD: The case that I was relying on at the time was Sammy's v. City of Mobile, and apparently

the case law in the 11th Circuit has been evolving on this issue, giving more mobility to those establishments to challenge the ordinances and cast the doubt that we are discussing. There was just a case cited in June by the 11th Circuit that seems to swing the other way and pay more attention to the City's ability to rely on other studies and the wisdom of its elected officials and not have to be challenged, but it still has a phrase in there; they're still allowed to pass direct doubt and it's really clear to me at the moment and maybe very clear to his attorney what he needs to do in order to establish that. So I can't flat out answer your question, but clearly I do not think that there's a constitutional right to have alcohol at an adult entertainment establishment. DERMER: I don't think there's anybody here that's willing to settle under those terms. CRUZ: I want to clarify a couple of things because I think I want to put a couple of things on the table. I spoke to Murray and requested that we have this meeting and I requested to have the meeting because I received a phone call from Leroy Griffith a gazillion phone calls. I have been out of town for two weeks. When I got back on Monday morning, he called, basically saying he had an issue that his attorney wanted to take to the State Attorney's Office and that it was imperative that he speak to me. So I went and met with Leroy and, in essence, we had conveyed to him through our attorneys after our last executive session that one of the basis of even considering anything was that he pay for attorney fees in the Gross settlement that he pay. Basically, he came back saying that his attorney felt that that was extortion and that it was tantamount that he could take that to the State Attorney. I basically called Murray and said, Murray, this is the situation, and I think the last thing any one of us now wants is to continue to muddy the waters because he was adamant that he was not going to pay that, particularly after Gary passed on the order. So I felt it was prudent so we do

not continue to create more of a convoluted situation that we hold a discussion, and that that was put on the table because if it's left with the impression that it's a quid pro quo, that can be a problematic situation, and I do not want personally for there to be a quid pro quo, that we would even contemplate something if he were to pay X. DERMER: Frankly, the way it was phrased as my recollection was it was not a quid pro quo. It was that we saw just the opposite. We said we don't even want to sit with you, period. That is something you clear out. That's a family matter and it's something that you did. I viewed as a bad faith negotiation and if anything's being extorted, it's going to be Leroy's attitude toward us, and our attorney will go to the State Attorney, too. CRUZ: I agree, but it's something that we need to clear up, and that this body had in no way made any quid pro quo. DERMER: Just be careful talking to the guy when litigation is going on. He'll wrap anything around your neck. CRUZ: He was fully apprised of our discussions here in this executive session, so that's another story. GROSS: What do you mean? CRUZ: Somebody spoke to him. STEINBERG: He called me and I told him I can't discuss anything. CRUZ: And he called me and I told him that Gary would talk to him. GONZALEZ: I talked to him and reiterated that. CRUZ: Just so that you know, and I want to make sure that we're all on the same page and the same understanding because we do not need to continue to muddy the waters. Now, if the druthers of this Commission is we have a lawsuit pending we want to continue, let it continue to

ride. Then that's it. DERMER: Keep in mind, this guy sued us, you know. It's not like we sued him. He sued us. CRUZ: We just need to convey coherently. I did tell Leroy I was very simple and I told him, Leroy, I have been your biggest advocate on the Commission, but the minute you turn around and start suing the City and individual members of our Commission, how can I possibly stand up for you? Because you have now undermined us totally, so there is no way that any one of us would be able to go up there without alienating a colleague on the bench. DERMER: Also, if he, you know, in retrospect and this is outside of the realm of this complaint and everything else but if he had gone a certain route in the way he proceeded, by going to the Planning Board, maybe making certain concessions, saying, Listen, we're not going to have the same front that we had before. We're not going to have the limo parked outside. If he had a whole list of things and got the Planning Board recommendation and then came to the Commission with that, it could have been a different ballgame. GARCIA: Come on, Mr. Mayor. Be real. DERMER: I'm being real. But there is absolutely all concessions are viewed on one side, whether it be political or legal. Leroy's attitude, from what I have seen in his actions, have been it's my way or the highway and I'm going to get it done the way I want, and that's the end. Rather, there's no give and take here whatsoever, and there's just, if you don't do it my way, I'm going to sue you, and I just don't know how dumping buckets of vinegar on people really helps his cause, and it's kind of amazing to me. CRUZ: That was made perfectly clear to him by me. Obviously, it becomes very difficult to advocate his position, at least from my standpoint. It would be very tough for me to go and stand up after he sued the City and sued one of my colleagues. So, from that perspective, we are

where we are, but what I did want to leave clear on the table is that we need to communicate to him that there was no quid pro quo and that if he understood it as such, that that's off the table. HELD: I spoke to his attorney this week and they understand. GROSS: Does he have an action pending against Jorge Gomez? SMITH: That case is still pending against the City, but not against Jorge. DUBBIN: Let me ask a question. Is anybody interested in adopting a procedure that would provide Leroy with a one-year experimental period? SMITH: I'm not. GARCIA: I didn't think it was an issue when I came to the Board, if anything. I don't have a problem with him selling alcohol. I thought he sold alcohol all along. Also, when they passed this ordinance back in 1989, we wouldn't allow people. It's different times. We wouldn't allow people to go topless, but now we do, on the beach, but now we do, but I got no problems with the nudity. HELD: I just want to make sure that I have all the facts. Not that I disagree with your recommendations at all. First, how we're dealing with the alcohol issue is stamping people's hands and telling them to go next door to get drinks and come back, and they can come back inside. CRUZ: There's a bar next door. HELD: There's a bar, Fuddruckers. There's probably one within a block or two. DERMER: So I guess it's an economic boon to them. It's certainly helping them. HELD: The other thing to clarify is, he was advised that in order to allow alcohol, he was precluded at least one or both of the last meetings,

he was advised to sue the City. STEINBERG: I had mentioned that to the manager because there was two things that troubled me when I had conversations with them. What troubled me as well was that he was under the impression that the results of the first executive session was merely dismiss your case. CRUZ: And then we'll talk, but as long as you're suing Gross, we won't even discuss it. So what he seems to think, it was okay. And now they want attorney fees, too, and the perception at the first executive session was exactly the same as the second executive session. So I don't know if there was miscommunication or what, because what he said to me is, Look, you told me to settle. I settled. What's the problem? And you know, I said, You got to talk to Gary and the manager about that. I'm not going to get into what was actually said or not said in the executive session. And then the other thing was, The only reason I'm suing the City DERMER: Still, he's bringing all this stuff to us. He's created it. STEINBERG: The only reason I'm suing the City is the City said to him [Griffith] to sue, that we could discuss it in the executive session. CRUZ: He said that Matti and Jorge recommended to him that he sue the City so it can be taken up in executive session. GONZALEZ: I recommended that he offer a settlement and the settlement come to the executive session. I thought he had already sued. So the suit was already in place. CRUZ: He had a suit against Nancy and Jorge. SMITH: So the suit against Nancy was based on something else. GONZALEZ: I don't recall telling him to sue us. HELD: Maybe Matti suggested that that's a way

that the Commission could discuss it. DERMER: Probably wasn't well, I'm not going to comment. DUBBIN: Goes back to the question that is before us, has nothing to do with anything except are we willing to consider as a settlement, which is a temporary settlement, to allow them the opportunity to make a stage for experimental purposes for a period of one year? STEINBERG: My view of it, in general, I'm not opposed to them having alcohol there. I don't think it's necessary for them to do it during school hours, and that would be addressing some of the concerns that the schools have by controlling their hours of operation, and conversations I've had indicate that would be something he would be able to live with. But I don't think that it's something that we would be citing here. I think that's something that needs to go through for him to sue us to try to get out of the public realm and have us make a decision behind closed doors to hope that we have the courage to do something in this room that he wouldn't have to do this doesn't make sense. I wouldn't want to hand over that. I'd want to keep it in the open, and if you want to make a discussion, if we consider the ordinance, then we do. HELD: He can't amend Chapter 6. He can amend the land development. He can apply to amend the land regulation development. I think if you want the Planning Board to consider it, someone has to refer it to them. GARCIA: Again, to me, it's not a problem.

voted against it. CRUZ: They went all over the place. GARCIA: Going to the Planning Board doesn't do anything. It is what it is. Whatever, you know. DERMER: So then, as it stands now, this settlement's not happening, obviously, so you're proceeding with the courts through the process, and that's it. GONZALEZ: Let's make it clear. DERMER: That this settlement was offered and that the settlement was rejected. DUBBIN: Let GROSS: Murray's trying to make a statement, guys. DUBBIN: Whether we communicate to Leroy's attorneys that this proposal that they made is not acceptable to the City Commission. They'll say, Well, what is acceptable? and this is not by your instructions, but my opinion is he drops his stupid lawsuit and starts moving to try and do what he wants to get done in a civilized way, in accordance with our rules. He will be treated with the same respect of any other citizens. I didn't say go to the Planning Board. GONZALEZ: What Gary is saying, unless one of the seven commissioners brings a new time forward, he's not going to get a hearing. Is that right? HELD: (nods head)

GROSS: Overwhelming. GARCIA: Right now it wasn't overwhelming. It was 4-3, and you were the deciding vote. When it came to us, it was 4-3. SMITH: You sent it to the Planning Board six times and they couldn't make up their minds. GROSS: They did make up their minds. They DUBBIN: Well, first of all, he hasn't lobbied anybody that I know of for a hearing. STEINBERG: I think he's asked before. CRUZ: I think he asked a million times and I said I did all I could. A decision was made and I'm not bringing anything back up because how many times do I need to get smacked into a wall?

So I said, Look, I'm not doing this anymore. I did what I did. Unless the votes change up there, why do I want to bring it up and relive the situation? I mean, I don't want to do that. DUBBIN: And you're not going to know whether the votes are changed. CRUZ: Right, but do I want to bring it? No, I don't want to go through that. DUBBIN: Well, if I were him I would discuss all these suits. I would try to go on about my business. I would communicate with one of you or more of you and say, Look, give me another shot and [let me] try to convince one of you to refer it, order us [the City Attorney's Office] to draft an ordinance. GONZALEZ: But he's not you, which means he's not going to proceed in that manner. So his only resource is to pursue the litigation. GROSS: I think you should certainly communicate that we in no way asked him to bring any litigation against the City, and if he thinks that we did, then he should correct that. CRUZ: That's what he said. GONZALEZ: I recommended settlement. He brought the lawsuit already, but the settlement was I want to be clear that because I had a conversation with him where he brought his litigation and presented to me and I said, Fine, but it seems to me like if I win, you lose economically which is what you did earlier, which opens the door and he doesn't want that and I said, The only way you get a conversation is if you offer a settlement of some kind. Tell him that if he writes a check, he's precluded from getting a GARCIA: The Board is going to, you know, are you going to change your mind? DERMER: I always keep an open mind to everything until I see what's before you.

GARCIA: You're not going to change your mind? Right now it's a 4-3. I'm sorry. You know, correct me if I'm wrong. I don't want to do anything that's outside of the DUBBIN: First of all, they didn't answer you, so it's not outside. DERMER: And I said I keep an open mind on everything. DUBBIN: You got to understand that a proposal that he made that came before you was a very strict, very specific proposal. Specifically approved lap dances, specifically approved other things. There's factual changes that can be made on any new proposal that might make it more acceptable in the minds of a reasonable legislator for approval. GARCIA: I got a senior citizens discount, so I can go there. DERMER: On that note, anything further, or is that about it? GONZALEZ: Make sure you're very clear on what is going to be communicated. Everybody tell him to stop calling everybody else, just for the record. CRUZ: I am not taking anymore phone calls. It's on your shoulders now. Communicate it because it can lead to no good. GONZALEZ: So what do you want him to say? GROSS: Tell him, number one, if he thinks anyone asked him to bring a lawsuit against the City, we want to correct that impression and we did not ask him to, we don't want him to, and we want him to drop this lawsuit. That's number one. DERMER: I think the only thing that you should say, it's up into the hands of the lawyers, but I would say just one thing. I'd say, Your settlement offer was conveyed and rejected. That's it. Don't even address anything else. That's the end. If they want to sue or go to the State Attorney the

settlement offer was conveyed and rejected. That's it. SMITH: We hear these extortion threats all the time in litigation. There isn't a lawsuit that doesn't sound like extortion, so I'm not worried

about that. If that's what he wants to do, let him have a good time. DERMER: Good luck everybody.