Legal Question in Business Law in California

Re: Business Monopoly

The answer depends on the reasons why your porposed club wouldn't be allowed. It's possible that the city's zoning regulations won't allow such a club where you want to put it.

If you haven't decided on a location, it's possible that the regulations won't permit a fifth club. Adult clubs are often required to be in commercial districts and at least a certain distance from the nearest school, house of worship, etc. They can also be kept a certain distance from other adult clubs. There may be no sites in Modesto which satisfy all of these requirements.

Whether you can find a way to have the club you want within the rules imposed by the Dept. of Alcoholic Beverage Control (ABC) is not a simple question. You will probably need to hire counsel to advise you.

Re: Business Monopoly

Official acts of cities in matters such as granting or denying permits are classified as either ministerial or discretionary. An example of a ministerial act is issuing someone a dog license. If the papers are filled out properly and the fee paid, the clerk's function involves no discretion and he or she must issue the license.

An example of a discretionary action would be deciding whether to annex territory to the city, or whether the city should sue one of its vendors. Acts of this sort are not things that anyone has a right to expect will be done on demand, every single time.

Issuing a building permit or a business license can be either ministerial or discretionary. When a building permit meets all the code requirments, or when a proposed use is clearly permitted by the zoning, in most cases the permit or license office does not have discretion to refuse the permit or license, and a failure to do so can be addressed by appeal higher up the command chain or if appeal fails or there is no appeal process in place, a court can be asked to issue a writ of mandate ordering the public official to do his or her duty.

If, on the other hand, the permit or license requires a decision, or a use permit, a variance, or something of that ilk, a failure to issue the permit or license is much more difficult to attack. The rejected applicant must establish an abuse of discretion or the like, and courts are often rather deferential to the right of city officials to exercise discretion as the official, not the judge, sees fit.

However, if there is no rational explanation and no clear purpose served by denying an application, the court might agree with the applicant and at least order the city department to give the applicant a full and fair hearing.

This is a somewhat specialized area of law; it is really administrative law rather than business law, and I do not claim to be an expert, but if and when you do go shopping for a lawyer, look for one who doesn't flinch when you say "administrative mandamus" and has some experience in fighting City Hall.