Miami Beach- [Miami Beach USA] I’ve always thought that Miami Beach City Commissioner Saul Gross was one of the better representatives this community has placed in power. His deliberations at Commission meetings exhibit a certain level-headedness that are often beneficial to finding solutions to the city’s problems. Frankly, I was hoping he would become the next Mayor after David Dermer left.

Leroy Griffith is the owner of several strip clubs in the area including Club Madonna on Washington Avenue, and during his recent bid to reverse a city ordinance which prohibits alcohol sales where nudity is present, there was a dust-up involving Griffith, Commissioner Gross’s wife (who opposed the ordinance change), and lawyers from the City Attorneys office. At the heart of the matter is the question: Did Miami Beach officials attempt to require payment of attorney’s fees in a case that involved the wife of a City Commissioner as a condition of further action on a matter before the Commission?

General chronology…

Griffith files a bid to change Miami Beach’s ordinance prohibiting alcohol sales where nudity is present. (Strip clubs)

Jane Gross (wife of Commissioner Gross) who owns property close to one of Griffith’s strip clubs vigorously opposes Griffith’s bid.

According to Griffith, in the course of opposing the ordinance change, Jane Gross made statements that Griffith was a “tax cheat” and “caused prostitution.”

Griffith files a libel suit against Jane Gross.

According to Griffith, the City states that in order to get his ordinance appeal heard before the Commission, Griffith must agree to drop the suit against Jane Gross.

Griffith drops the suit, but then, according to Griffith, he is told he must also pay attorney fees for Jane Gross (a private citizen) of approximately $30,000 or his appeal still will not be heard.

Without further comment, here is the report from the Miami-Dade Ethics Commission investigation so you can make up your own mind as to what went on…

REPORT OF INVESTIGATION AND CLOSE-OUT MEMORANDUM

From: Michael Murawski Advocate

Re: City of Miami Beach/ Club Madonna

Date: June 21, 2007

Cc: Robert Meyers, Executive Director
Sylvia Batista, Investigator
Manuel W. Diaz, Investigator

Disposition:
Undoubtedly some City of Miami Beach officials improperly intertwined City business with the personal lawsuit pending against Commissioner Gross’s wife and may have improperly “participated” in Commission discussions when they stood to be enhanced by the action of the board/1/. However, it would be difficult to sustain an ethics complaint for the following reasons:

1) the officials acted with apparent full knowledge, advice and approval of the City Attorneys office and we have generally declined to file complaints in the past in such situations; and

2) there is some evidence to suggest that the individual suing the City initiated the linkage of the two separate lawsuits. It is also the intention of this memorandum to advise all municipal counsel to be aware of the possible implications of violating the Conflict of Interest and Code of Ethics ordinances should their cities be presented with a similar circumstance.

Background and Investigation:

(1) This investigation was undertaken after the matter was referred to the COE by Joe Centorino from the State Attorney’s Office (SAO).

(2) Leroy Griffith (Griffith) is the owner of Club Madonna located on Washington Avenue within the City of Miami Beach (the City). Club Madonna is an adult entertainment establishment that provides, among other things, exotic dancing and nude female entertainers. Concern was raised that City Commissioner Saul Gross and others may have exploited their official positions in violation of section 2-11.1 (g) of the Conflict of Interest and Code of Ethics Ordinance. by improperly interjecting the payment of a commissioner’s wife’s attorney’s fees into negotiations concerning a lawsuit against the City.

(3) City ordinances 6-40 and 6-41 prohibit the sale of alcoholic beverages at an establishment that permits partial or total nudity. In approximately February 2004. Griffith, through his attorney. contacted the City and advised them that based on new case law it appeared that these ordinances were likely unconstitutional. Griffith was seeking to have the City amend their ordinance_ to allow for the service of alcohol in establishment with partial or total nudity, such as Club Madonna.

(4) On March 17, 2004. the City Commission considered a resolution to amend ordinances 6-40 and 6-41. The motion failed by a vote of 4 to 3. Commissioners Cruz, Garcia and Steinberg supported amending the ordinance to allow the service of alcohol however, Commissioners Gross, Bower. Smith and Mayor Dermer voted against the amendment/2/. It should be noted that Mrs. Jane Gross, wife of Commissioner Saul Gross. appeared at this commission meeting and spoke out against the amendment. As early as February 2004, Mrs. Gross/3/ had started a campaign of e-mails and phone calls to express opposition to allowing alcohol to be served at Club Madonna.

After the defeat of the resolution. Griffith’s attorney met with City officials to discuss the issue. According to Griffith, the City Manager suggested that Griffith file a lawsuit against them in order to allow them to meet in executive session and discuss the ordinance. In August of 2004, Griffith tiled a lawsuit against the City (the Federal lawsuit).

(5) Meanwhile, in May 2004, Griffith. using a different attorney, filed a lawsuit alleging libel, slander and defamation against Mrs. Jane Gross for some of the comments she made at the March 17, 2004 City Commission meeting and for some of the e-mails she circulated/4/.

(6) Griftith’s attorney in the libel case had sent a letter to both Mrs. Gross and Commissioner Gross in May of 2004 demanding a retraction of the allegedly libelous statements and announcing their intention to sue. As a result of that letter, the City retained outside counsel. Richard Ovelman (Ovelman), from the law firm Jorden Burt, to represent Commissioner Gross in the event the Commissioner was sued.

(7) In December of 2005. the City Commission authorized a resolution to pay Jorden Burt S5.316.33 for their successful representation of Commissioner Saul Gross. The City deemed the representation of Commissioner Gross successful because Griffith only filed suit against Mrs. Gross. Former City Attorney Murray Dubbin (Dubbin) admitted that Jorden Burt’s representation of Mrs. Gross was an inevitable by-product of their representation of Commissioner Gross. Dubbin further acknowledged that some of the research Jorden Burt did regarding its’ representation of Commissioner Gross was also applicable to Mrs. Gross’s defense. Jorden Burt expended a total of 19.8 hours on the representation of Commissioner Gross including about 11 hours on research.

(8) Jorden Burt continued to represent Mrs. Gross. In approximately September 2004. after a hearing before Judge Ronald M. Friedman. Ovelman was successful in obtaining a dismissal, with prejudice, of the lawsuit against Mrs. Gross. Although the lawsuit was dismissed with prejudice, two issues remained concerning the Griffith v. Jane Gross lawsuit: (i) whether or not Griffith would protract the litigation by tiling an appeal of Judge Friedman’s decision and; (ii) whether Mrs. Gross would seek payment of her attorney’s fees pursuant to Section 57-105 of the Florida Statutes. Thus, Griffith’s Federal lawsuit was pending against the City while these two issues regarding the Griffith v. Jane Gross lawsuit remained unresolved.

(9) On June 8. 2005. July 6, 2005 and July 27, 2005 the City held attorney-client sessions pursuant to section 286.011 (8) ,Florida Statutes, ostensibly to discuss the pending litigation against the City in Griffith’s Federal lawsuit. Section 286.011(8), Florida Statutes, entitled –Public meetings and records” states, in pertinent part:

“Notwithstanding the provisions of subsection (1) any board or commission of any state agency or authority or any agency or authority of any county, municipal corporation, or political subdivision, and the chief administrative or executive officer of the governmental entity. may meet in private with the entity’s attorney to discuss pending litigation to which the entity is presently a party before a court or administrative agency, provided that the following conditions are met:

(b) The subject matter of the meeting shall be confined to settlement negotiations or strategy sessions related to litigation expenditures.” (Emphasis added)

(10) In an interview with COE investigators Dubbin advised that. to his knowledge, the City was not involved in the settlement negotiations between Griffith and Mrs. Gross.

(11) Gary Held (Held), an Assistant City Attorney, provided CUE investigators with information seemingly contradictory to Dubbin’s statement. Held advised COE investigators that he told Griffith’s attorney that the City’s agreement to settle (the Federal suit) was contingent on Griffith dismissing the case against Mrs. Gross and paying her attorney’s fees. Held advised that he is in possession of a memorandum wherein this position is expressed but would not produce it claiming attorney-client privilege. Furthermore, the current City Attorney, Jose Smith (Smith)/5/, corroborated Held’s statement telling COE investigators that “yes, payment of Mrs. Gross’s legal fees was a point of negotiation.”

(12) Held intimated that it was essentially Griffith’s suggestion, expressed in a settlement offer sent to the City in May of 2005. The offer consisted of the following: in order to get the City to reconsider the ordinance amendment, Griffith would drop the Federal lawsuit against the City and drop his case against Mrs. Gross; however Mrs. Gross would be responsible for the payment of her own attorney’s fees. It teems that Griffith initiated the “linkage” concept by tying in the idea of dropping his lawsuit against both Mrs. Gross and the City in order to try and negotiate the amendment to the ordinance which he was seeking.. ft seems though that Griffith made clear from the outset that paying Mrs. Gross’s legal fees was not part of his offer.

(13) Deputy City Attorney Jean Olin (Olin). advised that Dubbin asked her to research the issue of whether the City could pay the attorney’s fees incurred by Mrs. Gross. Olin advised that she researched the issue extensively and concluded that there was “no way” the City could pay Mrs. Gross’s legal fees. Her conclusion was based in part on the fact that Mrs. Gross was being sued in her capacity as a private citizen by Griffith, another private citizen. She concluded that there was no “nexus” or link to City business that would permit the City to pay Mrs. Gross’s legal bills.

(14) It is plausible to argue that since the Griffith v. Jane Gross lawsuit was deemed not to be City business, her lawsuit and the resolution of the payment of her legal fees should not have been discussed by the City Commission in executive session, exempting the public hearing, requirement.

(15) It is somewhat understandable; however. that the issue of Mrs. Gross’s legal fees might have conic up in the executive session since Griffith was offering to dismiss the Federal Lawsuit as part of a “package deal” he was attempting to strike with the City. The troubling aspect of this case is whether the City inappropriately attempted to wrest payment of Mrs. Gross’s legal fees from Griffith by conditioning their payment on resolving. the lawsuit between Griffith and the City. Since the City knew. through Ms. Olin’s research and opinion that the City could not simply outright pay Mrs. Gross’s legal fees, it seems almost certain that the City raised the idea with Griffith.

(16) There is little doubt that the issue of having Griffith pay Mrs. Gross’s attorney’s fees was discussed during at least sonic of the executive sessions in question. The City admits as much. In addition, former City Commissioner Louis Garcia (Garcia) advised COE investigators that he was present during. two of the executive sessions and the payment of Mrs. Gross’s legal expenses was discussed. Garcia confirmed that Held was used as a messenger to convey the Commission’s proposal.

17) Although “Slapp suits” are nothing new. this case presents a unique situation because it involves a “Slapp suit- brought against a Commissioner’s wife. The uniqueness of the situation should have prompted the City Attorney’s office to exercise a heightened degree of caution and be more prudent in their decision to permit their Commissioners to link the payment of legal fees to a City Commissioner’s wife as a condition of resolving a lawsuit against the City. Any discussion wherein the City would attempt to use its’ official leverage to secure payment of attorneys fees to a Commissioner’s wife, in her own private lawsuit, should have raised significant red flags prompting. the City Attorney to advise the Commission that, at best, such a discussion raised an appearance of impropriety; shielding that discussion behind the guise of an executive session Commission meeting, outside the public’s eye, really only served to make matters look worse. Moreover. Mrs. Gross had a remedy available to collect her legal fees from Griffith.

(18) The evidence suggests that the Commission realized that they did not want the issue of Mrs. Gross’s legal fees to be a public issue. At the December 2005 City Commission meeting where Griffith attempted to get his ordinance amendment back on the Commissions agenda. Commissioner Cruz made mention of the “pink elephant- in the room that no one wanted to discuss. It is reasonable to believe that the “pink elephant” referred to was the payment of Mrs. Gross’s legal fees.

(19) Ultimately, Mrs. Gross and Griffith settled their lawsuit. In fact, the settlement agreement contained a general release; Griffith and Club Madonna released Commissioner and Mrs. Gross while Commissioner and Mrs. Gross granted a general release to Griffith and Club Madonna. The settlement agreement essentially made Mrs. Gross responsible for her own attorney’s fees. Griffith signed the settlement agreement on June 9. 2005, one day after the City held its’ first executive session. Commissioner Gross signed the agreement on June 30, 2005. Thus, it is evident that Commissioner Gross knew that the settlement agreement called for his wife to be responsible for her own attorney’s fees during the July 6, 2005 and July 27, 2005 executive sessions.

(20) It is difficult to imagine that the City Commission would have negotiated so strenuously to recover attorney’s fees had the litigant in the “Slapp suit” not been married to a City Commissioner. The appearance of impropriety created in this case is evident. It is no wonder the City refused to release even those limited portions of the executive sessions transcript wherein they admit payment of Mrs. Gross’s legal fees was discussed.

(21) The Advocate consulted with the SAO regarding the possible violation of Section 286.01 1(8) of the Florida Statutes. The SAO advised that since it appeared that the City Attorney’s office allowed, if not invited, discussion of the Griffith v. Jane Gross lawsuit during the executive sessions. it would not pursue any action against any individual commissioner.

(22) In conclusion, it appears very likely that Commissioner Gross, along with other City Commissioners, engaged in wholly inappropriate behavior by linking and conditioning the payment of Mrs. Gross’s legal fees to the settlement negotiations between Griffith and the City. It would be no less inapt but is extremely doubtful, that the City would have attempted to secure payment of legal fees for any other citizen victim of a Slapp suit being sued by an individual who was also suing the City. The evidence suggests that the City Attorney allowed the City Commission to push their collegial bonds over the ethical line.

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/1/ Section 2-11.1 (d) of the Miami-Dade County Conflict of Interest and Code of Ethics ordinance states. impertinent part. that “Any person included in the term defined in subsection (b)(1) who has any of the above relationships or who would or might, directly or indirectly, profit or be enhanced by the action of the Board of [City] Commissioners shall absent himself or herself from the commission meeting during the discussion of the subject item and shall not vote or participate in any way in said matter.”

/2/ Mayor Dermer and Commissioner Smith approved the resolution on its’ first reading on January 14, 2004.

/3/ Ms. Gross owns property on Washington Avenue not far from where Club Madonna is located.

/4/ The City maintains that the lawsuit brought against Mrs. Gross was, in essence, a sort of “Slapp suit’. A “Slapp suit”, which stands for “strategic litigation against public participation”, is a device available for shutting down and intimidating members of the public who voice opposition to a proposed project. Typically what happens before this kind of suit is filed is that a developer or other applicant seeks governmental approval for a controversial issue. There is an ensuing rally and outcry by concerned citizens. in this case, Commissioner Gross’s wife. In order to intimidate objectors. the applicant files a “Slapp suit”.

/5/ At the time the executive sessions were held Mr. Smith was a City Commissioner who participated in at least some of the sessions.