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Last week the efforts to open a strip club in Downtown Milwaukee hit another roadblock when the Common Council's Regulation and Licensing Committee turned down yet another application to open a Silk Exotic strip club.
Silk had plans to open on the top floor of a four-floor building at the corner of Mason and Milwaukee Streets. The vote against the club was 3-2 with Ald. Nik Kovac, Tony Zielinski and Robert Puente voting against and Ald. Ashanti Hamilton and Mark Borkowski voting in favor.
Silk is involved in a couple of lawsuits against the city over the failure to get a license and those lawsuits came up during the hearing.
Borkowski asked Assistant City Attorney Adam Stephens how "much the city was on the hook for" in these two lawsuits. In February a federal grand jury handed Silk a victory in the first lawsuit and Stephens referenced that suit, which is on appeal in the 7th Circuit Court of Appeals. The second lawsuit has been assigned to Judge Lynn Adelman, who presided over the first trial.
Stephens minimized the damages and said, as any lawyer trying a case would say to his client, that he was confident that the awards in the first case would be overturned and that he was confident the city would win the second lawsuit. That may be wishful thinking. Judge Terence Evans, a former chief judge in the Eastern District in Wisconsin and a member of the 7th Circuit Court of Appeals, told me once that the appeals court was reluctant to overturn any jury verdict unless there was some "egregious" error in a trial.
In its appeal the city has not alleged any trial error. It is instead challenging a pretrial ruling made by Adelman. Silk’s attorney claims the city’s argument is not only wrong on the law but that it has been waived by the city’s failure to object during the trial.
However, a look at the facts of the cases indicates that the potential liability for the city is a significant amount of money.
In the first case the jury awarded $435,500 and the attorney’s fees for that action, which spanned five years, for a total of $920,996.57. The attorney fees are backed up by documentation filed with the court for every minute the attorneys and staff spent on the case. In addition, the attorneys reduced their fees by $40,000.
The potential liabilities in the second case are estimated at $653,250 for damages (if awarded at the same rate as the first trial) and attorney fees of at least $350,000 for a total of $1,003,250.
In addition there is a liability of an estimated $85,000 in attorney fees for the appeal of the first case.
That all adds up to a liability for the city of $2,009,246.50.
That estimate is most likely a low figure because Silk was also denied licenses in three other attempts, each of which would most likely be the subject of additional lawsuits which could result in additional awards of over $2 million total.
The total liability could well end up being between $4 and $5 million.
Some of those figures are estimates, but they are based on the awards in the first case in which the jury voted overwhelmingly against the city.
It’s hard to imagine an alderman seeking reelection next year having to defend against a challenger who mounts a campaign complaining about the incumbent’s waste of taxpayer dollars in this case.
Milwaukee is a city gripped by poverty and spending a couple of million dollars to fight a license application for a perfectly legal business might seem like irresponsible fiscal oversight.
Reports are that both sides are negotiating to try and find a settlement of sorts before the city is deluged with lawsuits and Silk is forced to continue its endless applications for a license at different spots Downtown.
The Common Council meets on Tuesday and it is expected that there will be an effort to grant the license in spite of the committee recommendation. That action could pave the way for a settlement which could save significant money for the city.
With a history in Milwaukee stretching back decades, Dave tries to bring a unique perspective to his writing, whether it's sports, politics, theater or any other issue.
He's seen Milwaukee grow, suffer pangs of growth, strive for success and has been involved in many efforts to both shape and re-shape the city. He's a happy man, now that he's quit playing golf, and enjoys music, his children and grandchildren and the myriad of sports in this state. He loves great food and hates bullies and people who think they are smarter than everyone else.
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