Storerotica Seminars Address Intellectual Property, Theft...and the War on Sex

LAS VEGAS – Storerotica, the new convention in town, started off with a bang today as seven attorneys and adult industry movers and shakers gave attendees the full lowdown on the fight in Ohio to defeat SB 16, the so-called "Community Defense Act."

The opening speaker for the panel titled "Preparing for War When Government Attacks" was Angelina Spencer, attorney, former club owner and now executive director of the Association of Club Executives (ACE), who gave a short history of SB 16: How similar legislation has been shopped to lawmakers for more than six years before finally being put before the legislature via an "initiative petition" drive, all through the efforts of the founder of the Cincinnati-based Citizens for Community Values (CCV), Phil Burress – and his financiers, of which more later.

Spencer was followed by Denny Larr, a former journalist and now the lobbyist for, among other clients, the Buckeye Association of Club Executives (BACE). Larr talked about her fight to keep SB 16 from being considered by the Ohio legislature, and how members of the Senate Judiciary Committee were all set to allow the bill to die in committee ... until they were pressured by the Senate president to pass it. Larr's efforts were then concentrated on rousing public sentiment against the bill –efforts that were aided by anti-SB 16 editorials in most of the major newspapers, as well as a demonstration of the new "six-foot rule" by the newly-formed Dancers for Democracy, who each wore homemade "hula hoops" with six-foot radii to show how far apart dancers would have to stay from each other and from customers.

Attorney J. Michael Murray then took the microphone, noting that "Liberty bashers are ... better organized than ever," and that part of the reason for the success of petitions like CCV's was the fact that, "for seven long years, we've seen the federal courts populated by Bush appointees" – particularly the Sixth Circuit court of appeals, where any litigation involving SB 16 would be heard on its way to the (similarly Bush stacked) Supreme Court.

Murray has had some recent wins, however, and he told the audience of about 200 about how he managed to get a summary judgment against a Lion's Den store in Abilene, Kansas reversed and remanded, in which the Tenth Circuit, relying in part on the work of sociologist Dr. Dan Linz, ruled that the plaintiff, Dickinson County, had failed to prove that the store had caused any adverse secondary effects on the community. Murray had a similar win in the Fifth Circuit, where that court again overturned a summary judgment against an adult cabaret and remanded the case to the trial court.

But not all of adult's recent decisions have been favorable, such as the Eleventh Circuit reversing a club's win against Daytona, Florida's oppressive zoning law, with Murray commenting that one lesson to be learned is that in the modern era, litigation should be considered a last resort, used only after a "political solution" has failed.

Murray then talked about the Ohio situation, noting that the adult businesses' main difficulty will be making sure it has signatures of 3% of the voters in all of 44 targeted counties before the September 2 deadline. But he said that while he understood CCV's mission to be to "create a theocracy," he said, "The only option that isn't acceptable is defeat."

Liakos spoke next, giving a history of CCV's founding, including its connection to censorship advocate (and convicted conman) Charles Keating, and how Burress is actually a "front man" for ultra-conservative millionaire financiers Carl Lindner and Dick Farmer, both of who have donated extensively to Republican politicians in Ohio.

Brandon Samuels of the Sunshine Entertainment Association and of Florida ACE gave a PowerPoint demonstration of the necessity for organizing the adult community and drawing new lines of communication to be able to get vital messages out quickly; in other words, an Emergency Response Network.

Attorney John Weston batted clean-up for the panel, noting that while "the opposition is getting better and better," and that "it's hard not to be pessimistic," the adult industry still has three important tactics at its disposal: Recall, initiative and referendum, of which he considered the last to be the most powerful ... and the tactic is available in about half of the United States. He noted that it had been used four years ago to overturn an onerous L.A. county dance club ordinance, as well as similar ordinances more recently in Scottsdale, Arizona and Seattle, Washington.

The next panel, "Getting Your Legal 'Docs' In A Row," dealt with intellectual property, with Detroit-based attorney Dave Draper and his Atlanta-based confrere Chris Berney handling the issues.

Berney concentrated on the documents necessary to form and run a business, including articles of incorporation – he didn’t recommend either partnerships or even sole proprietorships – and stressed the necessity of consulting with an attorney, a CPA and an insurance agents in setting up any adult business.

Most important, he said, was the operating agreement, which sets out who controls the corporation, as well as the transferability of power should one owner die or wish to sell his stake in the company.

Lease documents are also important, and Berney stressed the need to read each one carefully, noting that the "use" provision should accurately describe the products and services provided by the owner, so as to stave off possible "default events." He also spoke of the utility of non-compete clauses in employee contracts, and the need to make sure that all proprietary images and words are trademarked, noting that "every franchise I've ever seen has involved several trademarks."

Draper's talk dealt with sexual harassment claims, to which adult businesses are particularly susceptible. He advised adult business owners to take such claims seriously, to make sure there is someone – though preferably a male and a female – designated to handle such claims within the company, and that rules regarding that and other employee benefits and responsibilities be set out in an employee handbook.

Draper also talked about insurance coverage; that clubs should make sure that their general liability policies included insurance against intentional acts committed by employees – such as when a bouncer may get too rough with a customer. Both attorneys concluded by warning that business owners need to read the contracts they enter into.

Another worthwhile seminar involved the prevention of theft, and was run by former San Diego police detective Robert Smith, who now runs the Hospitality & Security Alliance, a theft prevention and training company.

Among the tidbits Smith dropped during his talk were that 75% of employees have stolen from their employer; that even honest employees won't report fellow employees' thievery, and that employees are 15 times more likely to steal from the business than shoplifters.

Smith discussed some of the reasons why employees steal – the fact that it's a cash business; that they're not properly supervised, that sometimes employees are in crisis situations such as having gambling debts or drug habits ... but the most common reason was simply "because it's easy."

Preventing employee theft should involve thoroughly interviewing potential employees before they're hired and performing background checks ... but nothing beats having plenty of video cameras – preferably digital, with 20 to 30 days' worth of image storage, located at good vantage points around the business.

Smith also discussed shoplifting and robbery, noting that more than 80% are pre-planned, not spontaneous, and that most are committed by repeat offenders. Ways to avoid problems with those areas include, again, extensive use of cameras, and professionally training both security guards and hosts so that they can know what suspicious activities to watch for ... and it doesn't hurt to be friendly to the local police, who can help greatly with the prosecution of any criminals who are caught.

"Be prepared for theft," Smith concluded, and showed some video images of just how easy it is for businesses to be ripped off.