Another case about entertainment ads

By Joe Schoenmann

Sunday, Nov. 23, 2008 | 2 a.m.

The Clark County Commission last week approved payment of almost $250,000 to attorneys for the American Civil Liberties Union of Nevada and companies that employ handbillers. The settlement ended a legal fight that began 11 years ago.

The payment stemmed from a First Amendment case over a county code provision that banned handbillers on the Las Vegas Strip and near the Las Vegas Convention Center.

But here’s the kicker.

Without another settlement soon, more court expenses are expected to pile up for the county in an offshoot First Amendment case that is winding its way through federal court.

What’s this similar case about?

Seven companies are suing Clark County because last year the county raised the annual fees for newsracks on and near the Strip to $100 each.

The fee had been $25 a year, and the hike affected about 2,700 racks. So the increase would bring in about $202,500 more each year to a local government so cash-strapped that it is cutting medical services at the county hospital.

Many of the newsracks house advertisements for “outcall services” — the same businesses often advertised by handbillers on the Strip. Outcall businesses send dancers who are independent contractors to hotel rooms or homes to perform. They are legal, but police allege they are fronts for prostitution.

Rich Soranno, who once owned but has since sold all his stock in S.O.C., an outcall business involved in the handbill fight, has fought the prostitution perception for a long time.

“My belief and practice has always been that the business could be held liable if it is acting irresponsibly,” he said.

Joel Schwarz, an attorney on the newsrack case with local attorney Dominic Gentile, said the lawsuit is based on the argument that the county “placing an undue burden on the First Amendment rights of newsrack holders, trying to make them pay 100 percent of the costs of enforcing the newsrack ordinance.”

That ordinance prohibits the tampering with or removal of legally placed newsracks or the placement of newsracks that aren’t permitted.

“The county is saying, ‘We’re doing you a favor. We’re cleaning up the competition, so you should be willing to pay a premium,’ ” Schwarz added.

He added that newsrack companies are willing to negotiate. They just believe a 400 percent increase is too much.

What does the county say?

Deputy District Attorney Mike Foley said the county has to meet two tests when considering fees: It can’t charge a fee so high that it infringes on a publisher’s right to publish, and it can charge a fee that only covers maintenance costs. The county doesn’t think $100 a year is too much, Foley said. He added that the county has calculated the annual cost to maintain newsracks in that area at $120 each.

Are newsrack owners paying the higher fee until the court case is resolved?

No. In December, a judge approved a temporary restraining order prevented collection of the higher amount; then in February, a preliminary injunction went into effect. For now, the fee remains at $25 a year. There is a possibility, Foley said, that if the county wins the case, it will be able to retroactively charge the rack owners the higher fee.

If it loses, however, the legal fees could be substantial. From late December 2007 through Oct. 30, 54 legal documents, most of which require attorney attention, have become part of the case file.

Does that mean this is destined for a trial?

Not necessarily. A representative of Wild West Advertising, one of the plaintiffs, said rack owners would agree to between two and three times the current fee.

And Foley said county staff members plan to make a recommendation to the Clark County Commission in December that might ask the commissioners to consider a lower fee. If the two sides agree on a figure, the settlement of the case would include the plaintiffs’ dropping the lawsuit.