NEW BERN, N.C. — Greg Sakas was elated. After all, he was holding a check from the city's insurance company for $175,000 in exchange for dropping his lawsuit over their illegal bust of his store, Pure Bliss, two years ago for alleged zoning violations. However, District Court Judge Peter Mack ruled that since novelties are not considered "adult merchandise" in North Carolina, that Sakas' store did not fit the definition of an "adult business."
"We've got it signed, sealed and delivered from their hands to ours," he told AVN in an exclusive interview. "They have paid us for everything up until the last of the attorney fees, so when everything is said and done, we did not get any damages, which I waived; individuals who were arrested [clerk Michael Squires] can still go after the city, but that would be on their shoulders, not mine; but the company and me personally have signed off that this is it. But the $175,000 takes care of all of our fees, all of our losses up until what we have right now, roughly maybe about $10,000 that we'll have out of pocket by the time everything is said and done. That's not too bad."
Indeed, on Thursday, Sakas signed off on a four-page document styled "Settlement Agreement And Release" which discharges "any and all claims, actions, cause and causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, variances, trespasses, damages, judgments, executions, medical/hospital expenses, demands, costs, loss of services, loss of earnings and earning potential, loss of consortium, expenses, attorneys' fees, compensation and all consequential damages, damages for emotional distress, or punitive damages, on account of or in any way growing out of any and all known and unknown property damage, injuries, pain and suffering, psychological and/or mental distress, or residuals thereof, and death, including but not limited to any claims/damages resulting or arising out of or in connection with those incidents which are the subject of that certain action presently pending in United States District Court for the Eastern District of North Carolina, Eastern Division, bearing Case No. 4:08-cv-63."
That's the lawsuit Sakas filed against the city for depriving him of his right to conduct lawful business in the state, as well as to violate his First Amendment rights to sell his sexually-oriented merchandise in his general retail store, as long as it accounted for less than half of the store's stock and less than half of its gross sales, as required by the city's zoning ordinance.
"We won," Sakas declared. "Not only did we win for us, but we won for everyone in the state, because on the preponderance test, if you do it like we were doing, they cannot get you on the preponderance, and as long as you stay below 50% of revenue, the revenue being from your adult media, meaning your periodicals and your DVDs, movies, whatever have to stay below 50% of your total sales in the store. But the novelties do not count."
"As far as the preponderance, we've got that taken care of," he continued. "We have one more movie of a general nature than adult, and one more magazine of a general nature, which cannot show anatomical parts whatever - you can have nothing but tattoo books and that would be fine. We have over 5,000 comic books in that store, and we've got over 3,000 general movies, DVDs. A lot of them are the same titles, but it doesn't matter. What the agreement states is, they will agree that 'preponderance' means that you have to have more than half, in both stock and sales."
According to Sakas, there are still some final details to be worked out between the city and Sakas' attorneys, Glenn Barfield and Paul Cambria associates Barry Covert and Mike Diehl, but the city will have severe restrictions placed on it regarding how they can interact with his business.
"This is what we're drafting now," Sakas said, "and we're going to get a final approval, but it's just a matter of drafting it: We've got a verbal agreement with the city that for them to come back in to do inspections or anything, they have to inform us of what the problem is, come back in - and not undercover; they will not be able to come in undercover - and they will have to directly be involved with probably me down there at the time, or either instructing the manager who is on duty, and that will be my call to allow them to come in there, but the final problematic incident, if there is any, will be dealt with between attorneys. And as far as once a year or quarterly, I have no problem giving them financial statements showing that we are below the preponderance, below the level as far as the sales figures. And that will be only if needed, so it's not like they're going to be coming in all the time. So really, they've been handcuffed by their insurance carrier."
But not all of Sakas' problems have gone away with the settlement. Just last Sunday, a "mass force" of Christian Coalition members, apparently having heard of the terms of the settlement from the city's assistant chief of police, who is a member of the group, picketed Pure Bliss in an effort to turn away business.
"It's been a hard two years, a lot of sleepless nights," Sakas recounted. "Not that I didn't think we were going to win, but we're a small company; anyone with one or two stores would have had to fold, and what I'm saying is, I did it for us - don't get me wrong - but I also did it for everybody in the industry in North Carolina too. The only regret I've got is, I fought a battle and I had no one coming to my aid, hardly, in the state. The few people that did, I appreciate it, and the vendors that were at my side, I will not forget them and I will not back down from them, regardless, because they were here for me."
Sakas wanted to give a shout-out to his supporters, who kicked either monetary contributions or product, including Adam & Eve's Phil Harvey; Williams Trading Company; E&A Magazines; CFC Media; retailer Elegant Moments; Dreamgirls; Gentlemen's Video; Caballero Home Video; Pink Erotica; and Heatwave Entertainment.
"We got about $30,000 worth of contributions all told, and we even got some individuals including the owners of the companies," Sakas detailed. "We got about $25,000 in outside product. If it hadn't been for that, we would have lost it. Over all, we came out with less than a $10,000 loss."
"I don't think anybody, when we started this fight, thought we'd win," Sakas summarized, "but I kept saying from the very start that I wasn't going to back down and I was going to win it, and on my terms. I don't want to be arrogant, but I knew we had them because of what they did."
"This is, I think, a major win for North Carolina adult stores; I think it's a major victory for the industry which is being pounded left and right."