"The police chief had numerous alternatives in dealing with [Galardi]. The option of non-renewal was by far the most serious. Unquestionably, this will put appellant out of business. However, here the evidence of serious wrongdoing is compelling and the actions engaged in by Galardi are inconsistent with holding such a permit."
After the ruling, Galardi's attorney, Roger Jon Diamond, said he would lodge an appeal of the decision with the Superior Court, as permitted under the code.
Then, on June 2, Suzanne Coe, Jack Galardi's attorney, filed an application with the city on behalf of Red Eyed Jack's Sports Bar, Inc., a Nevada corporation, for an adult-entertainment permit to operate Cheetahs.
According to articles of incorporation submitted with Coe's application, Red Eyed Jack's had been formed on June 2, 2002. Its first board of directors consisted of just one individual: 75-year-old Jack E. Galardi. In her June 2005 adult-entertainment application, Coe listed herself as president, vice president, secretary, and treasurer of the corporation.
The application form says that "each owner, corporate officer or partner is deemed an applicant and each must provide" detailed information regarding their address and background. Coe listed herself as both owner and corporate officer. No other owners were named.
On June 30, 2005, the San Diego Police Department turned down her bid to run Cheetahs.
"This letter is to inform you that your application is being denied," wrote police code compliance supervisor Cinty Sergott. Sergott went on to maintain that the lease for Cheetahs cited by Coe in her application "is not valid."
In her letter, Sergott cited a technicality, claiming that "a representative of the property owners, Mr. and Mrs. Philip R. Taylor, has advised the lease cannot be transferred without their authorization; thus making the transfer improper."
In a letter dated July 14, Coe fired back, refuting the city's allegation that the club's lease was not valid and alleging that San Diego regulators had unfairly tried to harass her. "I had to fly in to San Diego to apply for my license twice. The first time, after the licensing official disappeared for a very long period in the back area, I was informed, right before the office was to close for the day, that my entire packet could not be accepted because my bill of sale was not notarized (which is NOT a requirement, in fact a bill of sale is not even required under your Code).
"I was told that I could not Federal Express it in the next day or do anything except come back personally and submit it. When I arrived the second time, I met further resistance and had to become a bit abrasive to have these accepted.
"I know of no provision that allows the City of San Diego to make legal determinations regarding commercial leases and rights of commercial lessees in conjunction with its consideration of licensing adult speech."
Coe went on to argue that, in any case, the lease between Red Eyed Jack's and the Taylor couple was valid: "Since October 9, 1989 (the date of the death of the originally named lessee, who was an original partner) the named assignee of the lease has been Jack Galardi, who is a shareholder of my corporation." Coe appealed the ruling, and like Michael Galardi's earlier appeal, it began making its way through the city.
On August 8, 2005, Coe wrote to the city staffer in charge of scheduling appeal hearings to confirm that her appeal was being processed. "I received a message today whereby you called my office and relayed that the police department was agreeable to allowing Cheetahs to continue under the 'status quo' until further proceedings." She sent a copy of the letter to Michael Galardi. Meanwhile, Cheetahs continued to operate under Michael Galardi's old license.
Then, on January 27 of this year, with Coe's appeal pending, the city and Coe reached a settlement agreement. Under its terms, Michael Galardi agreed to end his appeal of the revocation of his license to operate Cheetahs. Coe agreed to drop her appeal of the police department's denial of her application to operate the club; the police in turn withdrew their denial letter and agreed to grant her a permit to run the strip club. Coe insists that her plan to buy out Jack Galardi's remaining interest means that Galardi family ownership of the club has come to an end.
And what about the six-foot rule? If it is "reasonably" administered by police, Coe says she can live with it. If not, or if it is cited unfairly to harass the girls in their work, there is always the possibility of a federal lawsuit.