Man sues over brothel deal

A Texas businessman claims Nye County officials violated his civil rights in 2007 when they used a residency requirement to stop him from taking over the Chicken Ranch brothel near Pahrump.

Bruce Kahn, who lives in the Dallas area, was in the process of purchasing the Chicken Ranch when officials denied his application for a license to operate the bordello.

According to a Nye County ordinance, a license application must include evidence that the applicant has lived in the state for at least six months. Attorney Clyde DeWitt, who represents Kahn, said his client told Nye County officials he would move to Las Vegas after he obtained his license.

"That wasn't apparently a satisfactory response," said the lawyer, who practices in both Las Vegas and Santa Monica, Calif.

Gary Peck, executive director of the American Civil Liberties Union of Nevada, said denying a license application based on the applicant's place of residence clearly violates the Constitution.

"It would be like requiring local casino owners to move to another state if they wanted to open a casino in that state," Peck said. "You simply can't attach that type of requirement to licensing decisions."

The ACLU has no involvement in the federal lawsuit filed in early March by Kahn's company, TCR Holdings, against Nye County and the Nye County Licensing Board. Members of the board include all the Nye County commissioners and the Nye County sheriff.

Sheriff Tony DeMeo referred the Review-Journal to Chief Deputy District Attorney Ron Kent for comment, but attempts to reach Kent on Friday were unsuccessful. Commissioner Andrew "Butch" Borasky, chairman of the licensing board, declined to comment.

According to the lawsuit, Kahn began negotiating to buy the Chicken Ranch in September 2006 from its owner, Western Best Ltd. Once the sale appeared feasible, Kahn created TCR Holdings, a limited liability company based in Carson City, "for the sole purpose of acquiring" the brothel.

An agreement was reached, according to the lawsuit, and TCR Holdings deposited $150,000 earnest money into an escrow account.

"Under the agreement, escrow could not be closed until TCR obtained a license from the board to operate a brothel," the lawsuit states.

After a June 19, 2007, hearing, the licensing board denied TCR's application.

"Notwithstanding Kahn's commitment to relocate to Nevada upon approval of his license application, the application was denied because Kahn was not a resident of Nevada," the lawsuit states.

According to the complaint, the application also was denied because of Kahn's failure to provide certain information, "none of which had been requested by the board prior to the hearing and none of which was expressly required by any provision" of the Nye County Code.

"At the hearing, Kahn requested time to produce the newly requested documents, but the Board refused that request, notwithstanding the fact that it had the authority to grant it," the lawsuit alleges.

According to the complaint, escrow expired on June 30, 2007, and Kahn forfeited his earnest money in accordance with the terms of the escrow agreement. The lawsuit also claims Kahn spent at least $80,000 in his effort to obtain the brothel license.

"Western has been attempting to sell the Chicken Ranch since the transaction described fell out of escrow but is unable to do so because it is clear to any potential buyer that the Board will not issue a license to any applicant, which can be accomplished by the same tactic that the Board used to deny Kahn a license," the complaint alleges.

According to the lawsuit, the Nevada residency requirement has no "rational basis."

"For example, the Chicken Ranch in Pahrump is just under 75 miles from Baker, California, but well over 400 miles from Reno, Nevada," the document states. "Baker, California, then, is far more accessible to Pahrump than Reno, Nevada."

The complaint seeks a declaration that Nye County's residency requirement violates the due process clause of the Constitution, as well as a clause that prohibits states from enforcing laws that "abridge the privileges and immunities of citizens of the United States."

It also seeks an injunction that would prohibit Nye County from enforcing the residency requirement.

DeWitt, who primarily represents clients from the adult entertainment industry, said Kahn owns no other brothels.

"The bottom line is: As far as he or I can see, he is qualified to get a license, and that's all he's after, along with some money," the lawyer said.

Contact reporter Carri Geer Thevenot at cgeer@reviewjournal.com or 702-380-8135.