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Grover Beach yet to decide to pursue Diamond Video World appeal after Ninth Circuit Decision

Grover Beach, California- Grover Beach city officials had not decided Tuesday whether they would appeal a federal court ruling that allows Steve Diamond [pictured] to keep his downtown adult-oriented store open.

City Attorney Martin Koczanowicz said he was disappointed with the 2-1 decision by a panel in the Ninth Circuit Court of Appeals in San Francisco, which ruled that Diamond Video World was grandfathered in before a local ordinance banning such stores downtown took effect.

Koczanowicz planned to meet with city leaders to decide whether to appeal the case. It could be reheard by a larger panel of appeals court judges or the Supreme Court.

“We believe that he did not legally establish himself and that the trial court decision was correct,” Koczanowicz said, referring to a June 2005 decision by Judge Cormac Carney of the U.S. District Court in Orange County.

Carney had ruled that the Grover Beach zoning ordinance barring adult businesses downtown did not violate Diamond’s constitutional rights.

“The zoning ordinance provided that these types of establishments are not permitted,” Koczanowicz added. “We are obligated to correct that decision if we can.”

Grover Beach officials have wanted the store out of its West Grand Avenue location since it opened in December 2003.

The City Council approved the zoning ordinance—which allows adult businesses only in the coastal industrial zone, along Highway 1 on Grover Beach’s western edge — on Feb. 2, 2004.

More than two months later, the California Coastal Commission approved the ordinance.

Tuesday’s appeals court decision ruled that the city zoning ordinance took effect when it was approved by the Coastal Commission on April 15, 2004, after a local moratorium on adult stores expired a month earlier, said Diamond’s lawyer, Roger Jon Diamond. He is not related to Steve Diamond.

That same day, Steve Diamond sued in federal court to challenge the ordinance.He argued that it does not give him enough options and time for relocation and does not guarantee he will be issued all required permits for another site.

Steve Diamond said Tuesday he was happy with the ruling. If the city appeals it, he will continue fighting the case, he said.

“It’s a situation where the city was proven wrong and we’re able to operate,” Steve Diamond said. “I was very happy about it. I always believed in it. I think right prevails.”

The Grover Beach resident reduced the amount of adult-oriented merchandise at the store, formerly called Diamond Adult World, after the Ninth Circuit Court of Appeals ruled in September 2005 that he could not run the store as an adult business during his appeal.

Mayor Steve Lieberman said he had not yet examined all of the city’s options and could not comment on whether the city was going to appeal the case.

“Obviously we’re disappointed with the ruling,” Lieberman said. “It’s not that I object to adult-oriented businesses — just not in our downtown core, and that was the essence of our policy that was challenged.”

Steve Diamond said his business has not caused any problems in the community during the nearly four years it has been open.

“It has nothing to do with children; it has nothing to do with prostitution,” he said. “It’s all politics and perception. If they had problems with us…we’d be closed by now.”

The California Joint Powers Insurance Authority is covering Grover Beach’s litigation expenses, Koczanowicz said. The city is one of nearly 120 members of the insurance pool.

Steve Diamond planned to ask the city to pay for his attorney’s fees.

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