Brothel lawsuit dropped

A federal lawsuit seeking to stop the opening of a Storey County brothel was thrown out of court after the judge ruled he didn't have jurisdiction to hear it.

U.S. District Judge Howard McKibben said he did not have jurisdiction in the lawsuit filed against Storey County and its commissioners by Kal Kan Foods and Roybridge Investments over the approval of Wild Horse Canyon Ranch and Spa.

Commissioner Bob Kershaw sees no other challenges to the brothel and is hoping for a new spirit of cooperation in northern Storey County.

"I think this decision proves that we did nothing wrong," he said. "We didn't violate any laws and our goal now is to move forward, with development of Tahoe-Reno Industrial Center and the community."

The companies filed a complaint in U.S. District Court on Jan. 16, claiming the defendants violated their public trust in approving a third party's license application to operate a brothel near their businesses.

They asked the court to void the license for the brothel, about a mile from the Tahoe-Reno Industrial Center.

But because the damages claimed against the county could not exceed $50,000 under Nevada law, McKibben ruled the suit fell under the $75,000 minimum requirement to be heard in federal court.

Kal Kan Foods and Roybridge tried to argue that because each plaintiff could recover $50,000, the suit should fall under federal jurisdiction.

They also argued that under Nevada law, if an action by a government is capricious, arbitrary or in excess of authority, then there is no cap and the suit can be for actual damages.

However, in his May 30 ruling McKibben agreed with Storey County that the businesses cannot combine the damages to exceed the limit.

He also agreed with the Nevada Supreme Court that only someone who is party to a permit can claim unlimited damages from governmental action.

Since neither Kal Kan nor Roybridge were part of the permit process for the brothel, their damages are limited.

"Due to the statutory cap, it is a legal certainty that the amount in controversy cannot exceed $50,000," McKibben wrote.

Roybridge Investments is the parent company of Royal Sierra Extrusions Inc., located in northern Storey County's Tahoe-Reno Industrial Center.

Slated to open its doors for the first time at 2 p.m. Friday, Wild Horse Canyon Ranch and Spa will operate under the auspices of owner/operator Lance Gilman until the licensing of his partner, Susan Austin, is complete.

"We're still conducting background checks," Sheriff Pat Whitten said. "But I'm not anticipating any problems."

In addition to a license to operate brothel, the owners need four licenses, including a general license to sell souvenirs, a boarding license, for overnight lodging, and a liquor license.

"There are a few, last-minute details concerning what type of liquor will be served," said Whitten. "They hope to serve limited alcoholic beverages, offering them under restricted circumstances, but they must still run that through the State Health Department to see if that's acceptable."