SANDY SPRINGS, Ga.—Fresh from its attorney's arguments Monday before the Georgia Supreme Court regarding the long-running lawsuit filed by the Maxim Cabaret adult nightclub, Sandy Springs has now doubled down by amending its existing lawsuit against state Senate Bill 426 to attempt to force the state to turn over to the city more than $600,000 in alcohol excise taxes and licensing fees which the city claims were collected illegally.
The lawsuit against the Senate bill has to do with the state's attempts to expand access to the internet by building broadband equipment at various locations within Sandy Springs, but the city is claiming that such construction would be "unsightly" and would "undo the work [the city] has done to improve its streetscapes." However, according to a report in the Marietta Daily Journal, Sandy Springs City Attorney Dan Lee will also be arguing that the state had no right to tax Sandy Springs' adult clubs because it had no right, at least since the city put its adult entertainment ordinances into effect in 2006, to issue liquor licenses to those clubs because the clubs had not previously been issued a "local license."
"We will be amending the state lawsuit to enforce the alcohol adult entertainment ordinance that had been stayed in Fulton Superior Court Friday, to include [both sets of fees]," Lee said.
Sandy Springs' adult ordinances have been in contention since they were first passed, with at least three adult clubs suing to overturn them, and besides the Maxim case which was heard in Georgia Supreme Court on Monday, cases involving clubs owned by Flanigan's Enterprises and Fantastic Visuals, both represented by First Amendment attorney Cary S. Wiggins, are headed for the U.S. Supreme Court.
In other Georgia club news, attorneys for a consortium of adult clubs argued Tuesday before Fulton County Superior Court Judge Constance C. Russell that a new state tax on adult entertainment businesses, which was approved by Georgia voters in 2016, should be voided. The tax calls for a levy of $5,000 per club or one percent of the club's gross revenue to be collected and used to "finance the Safe Harbor for Sexually Exploited Children Fund and a commission that oversees the fund, which is designed to provide care and social programs for victims," according to an article in the Atlanta Journal-Constitution.
The tax supposedly targets businesses that contribute to child sex trafficking, but as attorney Gary Freed, representing the Georgia Association of Club Executives, has pointed out, adult nightclubs are blameless in that regard, since no one under the age of 18 is allowed to work in the clubs, and no one under 21 may be present in the club audiences—and that most sex trafficking, including child sex trafficking, occurs through internet ads and contacts.
"There is absolutely no nexus between adult entertainment clubs and child sex trafficking," Freed told the court. "These clubs are trained to fight sex trafficking—to fight, particularly, minor sex trafficking. They’re the vanguards. There’s fingers being pointed at the wrong entity.
"Governments have been known to tax things they don’t like," he added, noting that originally, the Safe Harbor fund was supposed to be funded by levies on sex traffickers themselves, and that it was an afterthought to include adult clubs as a funding source.
The government's argument in favor of the tax essentially admits that the clubs themselves don't engage in sex trafficking but that they "attract illegal activity."
"You have these venues," argued Senior Assistant Attorney General Alex F. Sponseller. "Patrons go in there. They’re solicited for sex. They say, ‘Hey, we have these underage girls nearby, when you come out we’ll go to this hotel.’ Studies show the connection."
Sponseller did not identify any of these so-called studies.
The clubs are scheduled to make their first payments under the tax by April 30, but Judge Russell stated that she would rule by June 11 on whether the lawsuit against the tax could proceed.
