UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF NEW YORK

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF NEW YORK : 69 PEARL INCORPORATED., d/b/a : LEGENDS ON PEARL, : COMPLAINT OMID REZA TEIMOURI, and : JOHN DeJOHN, : : Plaintiffs, : : v. : Civil Action No. : THE CITY OF ALBANY and : NALA R. WOODARD, : : JURY TRIAL DEMANDED Defendants. : : INTRODUCTION The present civil action is brought to address the wanton abuse of municipal power being exercised by the Albany City Clerk and the City of Albany in the issuance and revocation of Cabaret licenses. Nearly all bars and restaurants in the City of Albany have such a license, which is required by the City for bars and restaurants that also provide for amplified musical entertainment. The City of Albany allows for the issuance and maintenance of such a license only if, in the judgment of the Albany City Clerk, the establishment in question does not have a negative impact on the surrounding area. Once the Albany City Clerk determines, in his sole discretion and in the absence of any direction from the Albany City Code, that an establishment is having a negative impact, the City Clerk then becomes prosecutor, judge, jury and executioner: the City Clerk issues the permits, decides when to seek their revocation, and then conducts a public hearing, more appropriately described as a Kangaroo Court, where the City Clerk then decides to verify his own decision. The unconstitutionality of this regimen is 1

obvious. Detailing that the operation of a business not have a negative impact on the surrounding area is the epitome of an unconstitutionally vague government regulation, where the interpretation of the regulation is left to the caprice of the official interpreting it, versus providing concrete standards for the guidance of one s conduct. Allowing a municipal official to judge his own decisions, versus having a neutral, disinterested hearing officer conduct a legitimate hearing, is the antithesis of procedural due process. Plaintiff 69 Pearl Incorporated, which operates the Legends on Pearl Sports Bar, is presently facing loss of their Cabaret license, and loss of the ability to play amplified music or other form(s) of entertainment at its establishment. The loss of this cabaret license is effectively the death knell for this business, as it would be for any sports bar that provides the amplified broadcast of sporting events. This important business license is being revoked by the Albany City Clerk based on conditions that are vague and incomprehensible, and left to his sole discretion. This business license is also in the process of being revoked in the absence of any appropriate due process protections. With this as a background, Plaintiff 69 Pearl Incorporated, and its shareholders, Omid Teimouri and John DeJohn, hereby complain before this Court as follows: JURISDICTION 1. This Court has jurisdiction over this action under the provisions of 28 USC 1331, 1341, & 1343 because it is filed to obtain compensatory damages, punitive damages and injunctive relief for the deprivation, under color of state law, of the rights of citizens of the United States secured by the Constitution and federal law pursuant to 42 USC 1983. This Court also has jurisdiction over this action under the provisions of 28 U.S.C. 2201, as it is filed to obtain declaratory relief relative to the constitutionality of the policies of a local government. 2

2. Venue is proper under 28 USC 1391 (e)(2) because the events giving rise to Plaintiffs claims occurred in this judicial district. PARTIES 3. Plaintiff 69 Pearl Incorporated is a corporation duly incorporated under New York Law, with its principal place of business being 84 North Pearl Street, Albany, New York. Plaintiff 69 Pearl Incorporated does business under the name Legends on Pearl, which is located at 84 North Pearl Street, Albany, New York. 4. Plaintiff Omid Teimouri is a citizen of the United States, and is currently the coowner of 69 Pearl Incorporated. Plaintiff Teimouri is a resident of Albany County. 5. Plaintiff John DeJohn is a citizen of the United States, and is currently the coowner of 69 Pearl Incorporated. Plaintiff DeJohn is a resident of Albany County. 6. Defendant City of Albany is a municipal corporation duly incorporated under the laws of the State of New York, with its principal place of business being Albany City Hall, 24 Eagle Street, Albany, New York. 7. Defendant Nala Woodard is the duly appointed City Clerk of the City of Albany, with his principal place of business being Albany City Hall, 24 Eagle Street, Room 202, Albany, New York. Defendant Woodard is named in this action in his individual capacity. FACTS 8. Plaintiff 69 Pearl Incorporated owns and operates a sports bar and nightclub called Legends on Pearl, which is located at 84 North Pearl Street in Albany, New York. Legends on Pearl operates primarily as a sports bar, and also functions as a nightclub later in the evening on its days of operation. Legends on Pearl routinely amplifies sporting events for its patrons, including popular events such as the NBA Finals and NFL playoffs. 3

9. Legends on Pearl is a thriving business that routinely holds events appealing to African-American patrons as part of its nightclub operation. Legends on Pearl also routinely plays amplified music for its patrons, and hires DJ s to provide musical entertainment in its establishment. Events featuring DJs constitute a significant portion of the revenues for Legends on Pearl. 10. Pursuant to the Albany City Code, Legends on Pearl obtained a Cabaret License from the City of Albany to allow the club to play musical entertainment for its customers. This license is required for any establishment: in which any musical entertainment, singing, dancing or other form of entertainment is permitted in connection with a catering establishment, tavern or restaurant business except eating or drinking places which provide incidental musical entertainment performed by fewer than three people with no amplification, or through a central audio system, including the use of a jukebox. Albany City Code, 111-65 (emphasis added). 11. In short, to the extent that one can understand such a vague definition, a Cabaret License is required for any bar or restaurant that plays amplified music for its patrons, or, more precisely stated, for nearly every bar in Albany. It is also required for the operation of a sports bar, which, given the broad definition provided above, likely represents another form of entertainment utilizing amplification. The City Code expressly includes entertainment utilizing a disk jockey or DJ under its definition of entertainment. The language regarding a disk jockey is provided despite the fact that the disk jockeys employed by Legends on Pearl and other bars play pre-recorded music over a central audio system, which, under the express language of the statute, should not fall under the Cabaret License requirement. A copy of the City Code as it relates to Cabaret Licenses is attached hereto as Exhibit A. 4

12. Legends on Pearl has a Cabaret License from the City of Albany issued in 2013 and that was later renewed. This license requires that the establishment must not have a negative impact on the surrounding area. 13. In August 2014, allegedly because a history of police calls, recorded incidents, written complaints, and phone calls from residents and business owners alike, none of which were provided to the Plaintiffs despite their request for this information, the Albany City Clerk notified the owners of Legends on Pearl of [his] intent to suspend [their] Cabaret License pursuant to the City Code 111-76 [because] your establishment must not have a negative impact on the surrounding area. Other than being briefly mentioned in the City Code, the phrase negative impact on the surrounding area is not defined in the City Code. A copy of the City Clerk s suspension letter is attached hereto as Exhibit B. 14. Conditioning the license of a bar or nightclub on not creating a negative impact on the surrounding area presents a condition that is impermissibly vague and capable of many different interpretations by persons of reasonable intelligence. Many individuals, especially those of the Muslim faith, do not approve of drinking alcohol under any circumstances, especially while listening to music. Many individuals, especially some members of the Christian faith, do not believe that people should sing or dance, except to glorify God. Many individuals do not like sports, and do not like the fact that people congregate to watch sporting events. Many individuals, regrettably, do not like businesses that cater to African-Americans, and feel that African-Americans should not congregate near their homes or businesses. The preceding examples, all of which represent perfectly legal conduct, could present a negative impact to the surrounding community depending on the sensitivities of the individuals in the surrounding 5

community, or, more precisely, the sensitivities of the municipal official making the decision to revoke a business license. 15. Although none of this information has been provided to them, the Plaintiffs believe that the complaints in question regarding their business stem from two neighboring businesses, the owners of a neighboring lounge, Blue 82, and the owners of a new apartment building that adjoins one wall of Legends on Pearl. The landlord of Blue 82 has previously been involved in litigation with Plaintiff John DeJohn over other business dealings. In fact, this individual spoke against Legends on Pearl during the public hearing. Upon information and belief, the owners of Blue 82 also do not care for Legends African-American clientele, and believe that such clientele disturbs their efforts to run a lounge. The owners of the adjoining apartment building are currently in litigation with the owners of Legends on Pearl, claiming that noise from the establishment disturbs their tenants despite the Plaintiffs extensive efforts to soundproof the shared wall. Both sets of owners, and the landlord of Blue 82, have an obvious monetary and personal stake in making complaints to the City of Albany about Legends on Pearl, and an obvious monetary and personal stake in seeing the establishment closed down. The Plaintiffs further maintain, upon information and belief, that the owners of these businesses are actively conspiring with Albany City officials to detrimentally affect, and ultimately close down, Legends on Pearl, including as it relates to their Cabaret and Café Licenses. 16. It is repugnant that a business s licensure, and profits, can be adversely affected by a condition on their licensure that is both incompressible and arguably absurd. It is also repugnant that the City Code provision allowing for this is also incomprehensible, in that what it requires or permits is unclear given the provision s garbled and contradictory wording. That is 6

precisely what the Albany City Clerk proposes in this instance; a proposition that is patently unconstitutional. 17. Additionally, the Albany City Clerk is, under the express terms of the Albany City Code, Prosecutor, Judge, Jury and Executioner regarding the suspension or revocation of Cabaret Licenses. Specifically, the City Clerk decides what licenses to issue, under what terms they may be suspended or revoked, and then serves at the hearing officer considering his own decision to suspend or revoke the license. There is no provision in the Albany City Code for the appointment of a neutral hearing officer. Furthermore, the appellate rights of licensees are limited to an appeal to the Albany City Zoning Board of Appeals, the membership of whom is exclusively appointed by the Albany Mayor. 18. In this instance, City Clerk Woodard has already pre-judged the suspension of the Cabaret License of Legends on Pearl, detailing his intent to suspend your Cabaret License in his letter to the owners of the establishment. On September 23, 2014, City Clerk Woodard held a public hearing, and served as the hearing officer, to confirm his own determination in the absence of any appropriate due process protections. 19. This public hearing, which occurred yesterday, can be fairly described as a Kangaroo Court. Prior to the hearing, both the Plaintiffs and legal counsel demanded that the City Clerk provide documentation of the history of police calls, recorded incidents, written complaints, and phone calls from residents and business owners alike. The City Clerk refused to provide such information before the hearing, and stated, through a member of the Albany City Corporation Counsel s office, that the owners of the establishment knew of the complaints against them and had chosen not to inform their counsel. In short, the City of Albany, through one of its attorneys, acknowledged that the Plaintiffs participation in this 7

hearing was more akin to Franz Kafka s The Trial, where one is left to guess as to the nature of their offenses and defend against the unknown, rather than participating in a proceeding that even attempts to comport to Federal law. The City Clerk acknowledged during this hearing that repeated requests had been made for this information before the hearing, and that they were repeatedly denied pending an as yet unanswered FOIL request. The City Clerk was informed of the requirements to disclose such information prior to a hearing under the Due Process Clause, and that a failure to provide specifics regarding the complaints against Legends on Pearl precluded the Plaintiffs from being able to prepare for the hearing, and appropriately address the complaints, in an effort to preserve their Cabaret License. 20. The hearing also did not have any of the safeguards required to meet the requirements of due process. In addition to not being provided with fair notice and not having a neutral, objective hearing officer, there was no other process applied. Other than the statements of attorneys for the two businesses in question, and other individuals, there was no proof presented at the hearing. There also was no ability for the Plaintiffs to confront witnesses, or cross-examine the individuals that spoke. No documentation regarding the history of police calls, recorded incidents, written complaints, and phone calls from residents and business owners alike was put forward during the hearing. 21. Upon information and belief, the City of Albany and Defendant Woodard have previously, and repeatedly, been sued for similar instances of unconstitutional conduct, including trying to utilize vague regulations and city code provisions to penalize business owners. Whatever the wisdom, vel non, of making efforts to intimidate legitimate businesses in the City of Albany, the continuing effort by the City of Albany and City Clerk Woodard to enforce an 8

unconstitutional statute to the detriment of hardworking business owners is reprehensible, and indicative of a willful, deliberative intention to violate constitutional rights. 22. This pattern of unconstitutional conduct is further demonstrated by the revocation of the Plaintiffs Café License. Such a license is required to set up outdoor dining tables at a restaurant or bar. In August 2014, the City of Albany and City Clerk Woodard revoked the Café License issued to Legends on Pearl based on unspecified complaints, undoubtedly from the individuals referenced in paragraph 14 of this Complaint. The City Clerk failed to provide the Plaintiffs with any notice or opportunity to be heard regarding the revocation of this license. Instead, Clerk Woodard acted unilaterally, and arbitrarily, in revoking this important business license, again in direct contravention to the Due Process Clause of the United States Constitution. 23. Upon information and belief, the City of Albany and Defendant Woodard have also selectively enforced the City Code governing Cabaret Licenses to discriminate against businesses based on impermissible reasons, and have willfully treated Legends on Pearl differently than others similarly situated for those same reasons. 24. At all times relevant herein, the Defendants were acting under color of law, that is, under color of the Constitution, statutes, laws, charters, ordinances, rules, regulations, customs, and usages of the State of New York and the City of Albany. 25. The Defendants either knew or should have known that their actions violated clearly established law protecting the Constitutional and statutory rights of the Decedent. 9

CAUSES OF ACTION AS AND FOR A FIRST CAUSE OF ACTION AGAINST ALL DEFENDANTS Violation of Constitutional Rights Under Color of State Law -- Violation of Right to Substantive and Procedural Due Process of Law -- 26. Plaintiff incorporates by reference and realleges each and every allegation stated in paragraphs 1 through 25. 27. The Fourteen Amendment to the United States Constitution guarantees that due process of law be provided to all citizens who risk the loss of a liberty interest or a property interests because of the actions of a local government. Business licenses, such as the Cabaret License at question here, are clearly a protected property interest under the United States Constitution. 28. The Due Process Clause of the Fourteenth Amendment provides a number of guarantees as it relates to the revocation of a business license. First, the conditions of such a license must be clear and capable of being understood by a person of ordinary intelligence. Second, a party for whom a license revocation will be sought must be provided with adequate notice of their alleged transgressions to ensure them a full and fair opportunity to defend their licensure. Third, a party for whom license revocation will be sought has a right to a neutral, objective and fair tribunal to consider the facts allegedly supporting the loss of their licensure, and further has a right to confront witnesses and other evidence at such a hearing. In this instance, all three of these protections are being violated by the City of Albany. 29. The effort by the City of Albany and Defendant Woodard to condition Legends on Pearl s Cabaret License on not having a negative impact on the surrounding area is the quintessence of an unconstitutional government regulation, as that condition is both vague and 10

capable of a multitude of different, conflicting interpretations. The enforcement of this vague language violates the Plaintiffs constitutional rights. 30. The City of Albany and Defendant Woodard are further violating the Plaintiffs due process rights by not providing them with appropriate notice regarding the allegations that support a revocation of their Cabaret License. The City of Albany has provided the Plaintiffs with no specific allegations supporting the loss of the Cabaret License, and rejected the Plaintiffs request for more information prior to conducting a public hearing about their licensure. 31. The City of Albany and Defendant Woodard are also violating the Plaintiffs constitutional rights to due process by not providing a neutral hearing officer to determine the truth of the allegations against Legends on Pearl. Instead, the Defendants are allowing Defendant Woodard, who has already prejudged the issues in this case, to conduct a hearing to confirm his own judgments. Such a regulatory regime is clearly unconstitutional. 32. The hearing conducted by the City of Albany also does not comport to the requirements of procedural due process, and violates the Plaintiffs constitutional rights. The Hearing Officer/Prosecutor, City Clerk Woodard, put forward no evidence to support the revocation of the Cabaret License for Legends on Pearl, including providing the documentation that supports his predetermined decision. The Plaintiffs were not accorded the ability to crossexamine anyone who spoke at the hearing, or otherwise intelligently contest the vague allegations raised against Legends on Pearl. 33. City Clerk Woodard is acting in his capacity as the Albany City Clerk and as a policymaker for the City of Albany, and is therefore acting under the color of state law. City 11

Clerk Woodard and the City of Albany s actions and inactions also represent a violation of 42 U.S.C. 1983. 34. As a direct and proximate result of the unconstitutional acts described above, the Plaintiffs have been irreparably injured. AS AND FOR A SECOND CAUSE OF ACTION AGAINST ALL DEFENDANTS Violation of Constitutional Rights Under Color of State Law -- Violation of Right to Substantive and Procedural Due Process of Law -- 35. Plaintiff incorporates by reference and realleges each and every allegation stated in paragraphs 1 through 34. 36. The Fourteen Amendment to the United States Constitution guarantees that due process of law be provided to all citizens who risk the loss of a liberty interest or a property interests because of the actions of a local government. Business licenses, such as the Café License at question here, are clearly a protected property interest under the United States Constitutional. The Due Process Clause of the Fourteenth Amendment provides a number of guarantees as it relates to the revocation of a business license including being provided with adequate notice of any alleged transgressions to ensure a full and fair opportunity to defend one s licensure. 37. In August 2014, the City of Albany and City Clerk Woodard revoked the Café License issued to Legends on Pearl based on unspecified complaints, undoubtedly from the individuals referenced in paragraph 14 of this Complaint. The City Clerk failed to provide the Plaintiffs with any notice or opportunity to be heard regarding the revocation of this license. Instead, Clerk Woodard acted unilaterally, and arbitrarily, in revoking this important business 12

license, again in direct contravention to the Due Process Clause of the United States Constitution. 38. City Clerk Woodard is acting in his capacity as the Albany City Clerk and as a policymaker for the City of Albany, and is therefore acting under the color of state law. City Clerk Woodard and the City of Albany s actions and inactions also represent a violation of 42 U.S.C. 1983. 39. As a direct and proximate result of the unconstitutional acts described above, the Plaintiffs have been irreparably injured. AS AND FOR A THIRD CAUSE OF ACTION AGAINST ALL DEFENDANTS Violation of Constitutional Rights Under Color of State Law -- The Right to Freedom of Speech -- 40. Plaintiff incorporates by reference and realleges each and every allegation stated in paragraphs 1 through 39. 41. The First Amendment to the United States guarantees citizens the rights of freedom of speech, assembly and expression. Artistic expression, including those involving the playing of music, are expressly protected under the First Amendment, as is the right of assembly to listen to music. Businesses, in turn, have a First Amendment right to allow artistic expression on their premises. Governmental restrictions that requires a party to obtain permission, through a licensing scheme or otherwise, before engaging in protected expression are presumed to be constitutionally invalid if they give public officials the power to deny use of a form of speech in advance of its expression. This is especially true where government officials do not apply narrow and objective standards that limit their discretion, but rather apply vague standards that allow them to exercise unbridled discretion. 13

42. Here, the Albany City Code provisions regarding Cabaret Licenses represent an impermissible burden on free speech, and should be struck down on their face. In the alternative, these provisions are unconstitutionally vague, and have the potential of discouraging citizens, including Legends on Pearl, from exercising their right to free speech. Specifically, the City Code requires that businesses employing DJs have a Cabaret License, at the same time that it allows for the playing of prerecorded music on a centralized sound system. Many Disk Jockeys play Compact Disks or records on a sound system. One cannot determine, by reviewing the City Code, whether or not the Cabaret License is required to play music in such a fashion, and whether criminal or civil jeopardy can attach from this conduct. This contradictory language is the hallmark of an unconstitutionally vague restriction on free speech. 43. The City Code also details, without definition, that businesses holding a Cabaret License cannot have a negative impact on the surrounding community. This provision is also an unconstitutional restriction on free speech, as detailed elsewhere in this complaint, given that it is unconstitutionally vague and overbroad. 44. City Clerk Woodard is acting in his capacity as the Albany City Clerk and as a policymaker for the City of Albany, and is therefore acting under the color of state law. City Clerk Woodard and the City of Albany s actions and inactions also represent a violation of 42 U.S.C. 1983. 45. As a direct and proximate result of the unconstitutional acts described above, the Plaintiffs have been irreparably injured. 14

AS AND FOR A FOURTH CAUSE OF ACTION AGAINST ALL DEFENDANTS Violation of Constitutional Rights Under Color of State Law -- The Right to Equal Protection-- 46. Plaintiff incorporates by reference and realleges each and every allegation stated in paragraphs 1 through 45. 47. The Fourteen Amendment to the United States Constitution guarantees citizens the right to be treated equally under the law. A violation of Equal Protection arises where, as compared to others that are similarly situated, a person is subjected to selective enforcement of governmental authority based on impermissible considerations, such as the intent to punish an individual for the exercise of their constitutional rights. Businesses have a constitutional right, and, in fact, a legal obligation, to allow African American clientele to patronize their establishments. 48. Legends on Pearl is being treated differently than other businesses in the City of Albany for impermissible reasons, including, but not limited to, the racial background of its clientele. This impermissible treatment can be seen from the City of Albany s arbitrary and selective enforcement of its Cabaret and Café License regulations, and the unconstitutional manner in which those licenses have been impacted. Many businesses in Albany have outdoor eating facilities, including the two bars neighboring Legends on Pearl. Many businesses in Albany play amplified music. None, however, have been treated like Legends on Pearl, in that none have been selectively and arbitrarily prosecuted for violating the City s Cabaret and Café licensing regulations. Such action by the Defendants here is patently unconstitutional. 49. City Clerk Woodard is acting in his capacity as the Albany City Clerk and as a policymaker for the City of Albany, and is therefore acting under the color of state law. City 15

Clerk Woodard and the City of Albany s actions and inactions also represent a violation of 42 U.S.C. 1983. 50. As a direct and proximate result of the unconstitutional acts described above, the Plaintiffs have been irreparably injured. AS AND FOR A FIFTH CAUSE OF ACTION -- Demand for Declaratory Judgment -- 51. Plaintiff incorporates by reference and realleges each and every allegation stated in paragraphs 1 through 50. 52. The policies, customs, and practices of the Defendant are clearly unconstitutional and violate the Plaintiffs Due Process, First Amendment and Equal Protection Rights. 53. Plaintiff requests that this Court issue a declaratory judgment and declare that the policies and procedures of the Defendant to be unconstitutional and in violation of the United States Constitution. AS AND FOR A SIXTH CAUSE OF ACTION AGAINST ALL DEFENDANTS -- Demand for Preliminary and Permanent Injunction 54. Plaintiff incorporates by reference and realleges each and every allegation stated in paragraphs 1 through 53. 55. The policies, customs and practices of the Defendants are clearly unconstitutional and violate citizens Due Process, Free Speech and Equal Protection Rights, as previously detailed in this complaint. 16

56. The continuing pattern of constitutional violations will cause immediate and irreparable harm to the Plaintiffs, including their loss of an important business license, an adequate remedy for which does not exist at law. 57. The Plaintiffs face an immediate threat to their livelihood as Defendant Clerk Woodard intends to render a decision on the suspension of their license within the next 29 days. 58. Wherefore, the Plaintiffs request that the unconstitutional conduct in question here be prohibited by this Court. DEMAND FOR PUNITIVE DAMAGES 38. The actions of Defendant Nala R. Woodard are extreme and outrageous, and shock the conscience of a reasonable person. They also demonstrate a deliberate and conscious decision to violate important Constitutional rights. Consequently, an award of punitive damages is appropriate to punish the individual Defendant for his cruel and uncivilized conduct. Plaintiff does not seek an award of punitive damages against the Defendant City of Albany. DEMAND FOR TRIAL BY JURY 39. The Plaintiff hereby demands a trial by jury. 17

PRAYER FOR RELIEF WHEREFORE, Plaintiffs 69 Pearl Incorporated., d/b/a Legends on Pearl, Omid Reza Teimouri, and John Dejohn, request that this Honorable Court grant her the following relief: A. A judgment against all Defendants for compensatory damages in an amount to be determined by a properly charged jury; B. A judgment against Defendant Nala R. Woodard for punitive damages in an amount to be determined by a properly charged jury; C. A declaratory judgment against the Defendants declaring the Defendants policies, practices, and customs to be unconstitutional. D. A preliminary and permanent injunction enjoining the Defendant from continuing to enforce its unconstitutional policies, customs, and practices. E. A monetary award for attorneys fees and the costs of this action, pursuant to 42 U.S.C. 1988; F. Any other relief that this Court finds to be just, proper and equitable. Respectfully Submitted By: /s Elmer Robert Keach, III Dated: September 24, 2014 Elmer Robert Keach, III, Esquire Maria K. Dyson, Esquire LAW OFFICES OF ELMER ROBERT KEACH, III, PC One Pine West Plaza, Suite 109 Albany, NY 12205 Telephone: 518.434.1718 Telecopier: 518.770.1558 Electronic Mail: bobkeach@keachlawfirm.com 18

ATTORNEYS FOR PLAINTIFF 69 PEARL INCORPORATED., D/B/A LEGENDS ON PEARL, OMID REZA TEIMOURI, AND JOHN DEJOHN 19

EXHIBIT A

EXHIBIT B