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Adult Retailer Sues Police Chief In North Carolina
By: Mark Kernes
Posted: 4/29/2008

NEW BERN, N.C. – At approximately 1:15 p.m. today, retailer Greg Sakas and his corporation, Carolina Fantasy Products, Inc. (CFP), filed suit in North Carolina Superior Court against the City of New Bern, where his store, Pure Bliss, is located, as well as city police chief Frank Palombo and two of his detectives, charging that the defendants conspired, under color of law, to deprive Sakas of his right to conduct lawful business in the state, as well as to violate his First Amendment rights under the U.S. Constitution. The suit also seeks an injunction to prevent the city from illegally raiding his store once again, with Sakas having suffered two illegal raids since the spring of 2007.

"We’ve been back and forth on this, and there was no chance for us to try to work this thing out," Sakas explained. "If it had been up to me, I would have done by last December, but we kept putting it off, until finally, we were going to file it last Wednesday. When their attorney, the city attorney, Scott Davis, heard that this was going to be filed, he asked for a week or two to try to resolve this with the city. We gave them 72 hours. Tuesday came, and there was no call. I told my attorney Glen Barfield to go and find out what was going on. He called. Apparently, they were hoping that the city insurance company that handles their liability insurance would be able to intervene and see about resolving this. They said that at this point, they were not willing to settle on any money, so that put that dead in the water, and Scott Davis said if we would give him some additional time, that he’d take it to the city again; that maybe they would sit down now, knowing that this is imminent, maybe try to work something out if it was in any way possible, but I told my attorney to tell him to take it and cram it up his ass."

The dispute has been going on since Chief of Police Palombo pulled a surprise raid on Pure Bliss on January 29, 2007 – a particular surprise since approximately three years earlier, Sakas had approached the city’s planning department, explained what he intended to sell at a location he intended to purchase on Martin Luther King Boulevard in New Bern – mainstream DVDs, novelties and lingerie, as well as some adult DVDs and novelties – and had received an opinion in writing from city attorney Michael Scott Davis that Sakas’ inventory would not rise to the level of an "adult establishment" as defined by local ordinance. Two years later, when Sakas moved his operation, now named Pure Bliss, to another location, he received the same assurances after city officials had performed a physical inspection of the new premises as well.

Indeed, North Carolina’s General Statute 14-202.10 defines an "adult book store" as a book store that "receives a majority of its gross income during any calendar month from the sale or rental of publications … which are distinguished or characterized by their emphasis on matter depicting, describing, or relating to specified sexual activities or specified anatomical areas." The "publications" could include anything from printed matter to videotapes and DVDs or other imaging media. The statute also defines an "adult establishment" as "an adult book store, adult motion picture theatre, adult mini-motion picture theatre, adult live entertainment business, or massage business." The statute also contains a definition of "sexually oriented devices," which could be anything from blow-up dolls or plastic pussies to dildos and vibrators, but not condoms or other contraceptives.

What’s noteworthy about those definitions is that the "sexually oriented devices" play no part in the definition of an adult book store, or any other "adult establishment," and that sales of such items therefore would not count toward whether the store "receives a majority of its gross income during any calendar month from the sale or rental of publications." [Emphasis added] And while another statute, G.S. 14-202.11, prohibits adult establishments from selling sexually oriented devices, Sakas had been assured by the city that his stores were not "adult establishments" under the statute, so he was free to sell such devices there.

But despite the laws and the assurances of the city attorney, New Bern City Detective Carlos Richard Hughes, Jr. applied for a search warrant for Pure Bliss’s premises in late January, 2007, with Hughes claiming that he had probable cause to believe that Pure Bliss was selling sexually oriented devices in an adult establishment. The alleged probable cause was based in part on a citizen complaint about the business, and in part on Hughes having spoken to an employee of the business who, when asked whether the business made most of its money from adult DVD sales, replied, "Yes, from the DVD’s and the sex toys" – that last phrase being crucial.

"A reasonably well trained officer in Detective Hughes’ position would have known that his Affidavit failed to establish probable cause and that he should not have applied for the First Search Warrant," the Sakas lawsuit charges.

In any case, the raid was carried out in an astonishingly unconstitutional manner.

"They took boxes of merchandise that were still boxed up, were not even in inventory yet; had just gotten to the store, and confiscated them," Sakas detailed. "Every movie, every magazine except for the tattoo magazines, were taken out of there. The books were taken out of there. The ironic thing is, when they were taking everything out, they were even taking general movies out of there when they were taking everything else. They didn’t even look. They took everything out of there both times. They took every movie, and the novelties, the more expensive novelties."

One problem with the police raid is that at no point even to today has any charge of obscenity been leveled at Sakas or the store. The only charges that have been filed are under General Statute 14-202.12, which defines violation of Sec. 14-202-11 as a Class III misdemeanor, rising to a Class II for subsequent violations. Therefore, every book, magazine and DVD seized during the raid must be considered to be protected speech under the First Amendment … and seizure of same by the police a violation of Sakas’ First Amendment rights. The seizure also violated several North Carolina statutes, in that none of the items were contraband; none were stolen or embezzled, nor had they been used in the commission of a crime … nor were any of them specified or described in the search warrant, as they would have been required to be.

Police also seized all of Sakas’ business and financial records – record which showed that the sale of the adult publications brought in less than 50 percent of Pure Bliss’s gross income.

I’m an accountant by trade, and guess what?" Sakas asked rhetorically. "I’ve got everything broken down in the system between novelties, videos – general videos and regular, general novelties and regular novelties and lingerie, so you’ve got four categories, and in my financial statements, it’s broken down that way and cost is broken down by those four line items, so they didn’t even check the books to see if we were [an adult establishment] or not by the financial statements, and they still haven’t done it. They don’t have a forensic accountant on staff to even go in there and check to see if it is or isn’t. Then they came and raided me a second time without even checking the first time."

That second raid took place – ironically, in Sakas’ mind – on September 11, 2007, even though Sakas, through his attorney, had received assurances from city attorney Davis that the store still was not an "adult establishment" under the law, and that if he restocked and continued to do business as usual, he would not have to fear another raid.

"The second time, Scott Davis and Glen Barfield and the chief of police said they ironed out an agreement," Sakas said, "and nothing was going to – that they would not continue to harass me or anything until the first legal issue was worked out; that we could operate as we were, and that was an agreement, verbal agreement between the two parties that they would not come in and do anything. So what did they do? On September 11th, they reraided the place and rearrested me!"

The second search warrant, applied for and received by Det. Marcus Kirk, sought seizure of roughly the same items as had the first search warrant, with the addition of an item identified as "toxic substances ‘rush’."

"In attempting to set forth probable cause to believe the business was violating N.C.G.S 90-113.12 which prohibits the sale of any substance ‘which will induce a condition of intoxication through inhalation’, Detective Kirk alleged that an undercover officer ‘told the employee that the rush she had purchased on September 7, 2007 had been used to become intoxicated and that she wanted to get more. The male employee indicated that he also used the rush to become intoxicated and sold the undercover officer another bottle’," the complaint alleges. "However Detective Kirk knew or should have known that those allegations were false in that neither the undercover officer nor the employee described the effect of ‘using’ the ‘rush’ was to ‘induce a condition of intoxication’. Moreover the Affidavit fails to allege that either the undercover officer or the employee claimed to have inhaled the product, nor did Detective Kirk describe any basis or foundation for his allegation that the bottles of ‘Head Cleaner’ were or are a ‘common marketing ploy to sell toxic vapors for inhaling.’"

"The reference to ‘rush’ and the alleged violation of N.C.G.S. 90-113.12 was pretext for again seizing constitutionally protected publications," the complaint concludes. And once again, the police disregarded Sakas’ requests to return the seized materials.

They took all my financial records again," he details. "They took the fax machine. They took the DVR. They even took all of the different catalogs from companies like Topco, all the companies like Caballero. They took out every bulletin – the whole filing cabinet was just completely – all the files that were taken out, and we never have gotten them back."

"They left my store unlocked the second time; they wouldn’t even give us the key to allow us to lock the store!" Sakas exclaimed. "They said they would call us to come back and lock it up, but they didn’t even do that. They left my store unlocked without even the alarm on all night long."

Sakas suspects that both raids were the result of collusion between Palombo and the local branch of Pat Robertson’s Christian Coalition of America, since until two months ago, Coalition members were regular picketers outside Sakas’ stores.

"I tried to give them 10% discounts," Sakas chuckled, "but they said they had a 100% discount with the Lord by not coming in there, which makes sense."

According to Sakas, Palombo is expected to retire soon, and has higher political aspirations – and what better way to curry favor with religious extremists than to have a couple of "porn busts" on his record?

"Upon information and belief, Chief Palombo has authorized periodic surveillance of CFP by uniformed police officers in marked cruisers in an attempt to intimidate customers of CFP and prevent their patronage of the store," the complaint charges.

"In the last month, they’ve quit doing that," Sakas updated, "but they still ride by, and they used to follow my car in and out of town. That’s police harassment any way you look at it."

"Since January of last year till now, we’ve lost $120,000 on the bottom line on this store," he added. "Between all of the problems that I’ve had, I’ve lost over $200,000."

Through his complaint, Sakas is seeking a determination from the court that both of the search warrants executed on Pure Bliss were "issued without probable cause" and "improperly and illegally authorized the wholesale seizure of constitutionally protected materials resulting in the suppression of constitutionally protected expression." He’s also seeking an injunction against future raids, and a declaration that the defendants "imposed an unconstitutional prior and final restraint upon Plaintiffs’ freedom to engage in constitutionally protected speech."

Perhaps most serious for the defendants, however, are the allegations made under 42 U.S.C. Sec. 1983, which charge that the defendants, "under color of state law, sought, obtained and executed general search warrants issued without probable cause in a manner that intentionally and maliciously imposes unlawful restrictions on Plaintiffs’ expressive freedoms"; that they have "subjected plaintiffs to intentional and malicious harassment in the guise of police surveillance that has resulted in damage to plaintiffs’ reputation and loss of income"; that they falsely imprisoned Sakas, and converted his goods and property for their own uses – all serious federal offenses.

But although a hearing on the charges stemming from the first search warrant were originally scheduled for April of last year, the state has sought continued postponements of hearings, with the date of the next one scheduled for May 27.

"At one point – and they didn’t want this to be known – but no judge in the district wanted to hear it," Sakas charged. "These judges have to stand for election, and none of them wants to piss off the religious folk by dropping the charges."

Sakas wanted to thank some of the companies who’ve contributed either money or product to help him fight this battle; E&A Publications, Adam & Eve and Williams Trading Company – "They’re probably the three biggest ones." In all, he’s received about $25,000.

"All the money goes directly into a special legal fund, so it’s not intermingled with any of my other funds," Sakas noted. "I would think that some of the novelty companies would have come to my aid, but they haven’t."

But what this whole mess has mostly done is make Sakas fighting mad.

"Finally I said, the first of the year, ‘Screw it; if they want to try to close me down, let’s go for it’," Sakas explained. "I just went in and put everything back like it was and dared them to do anything now. And I think several other cities are just waiting to see what happens here before they try to mess with me."

"I told my attorney to tell Scott Davis, ‘Tell them they’ve got a goddamn gut-busting war on their hands now’," he continued. "Maybe we can get it so that no one in this city, nor in any city in North Carolina, will have this kind of abuse happen again. It’s not about me and it’s not about just this one store. A lot of people better realize that if they get away with this, do you think this is where it’ll end in North Carolina? Somebody needs to stand up and say enough is enough. I’m not gonna have them walk over me when it’s not right."

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