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Dick and Jane's Super Spot is located at 1141 Deadwood Ave. in Rapid City.

A lawsuit filed by an adult store owner against the city could soon end in a settlement after the Rapid City Council directed staff to resolve the case at their meeting Monday night.

In October 2017, David Eliason, owner of Dick and Jane’s Naughty Spot adult store in Sturgis, filed a civil lawsuit in federal court against the city claiming that his constitutional rights to free speech, free expression and due process were violated when the council denied him a conditional use permit to open a store at 1141 Deadwood Ave., Suite 7.

The denial came just weeks after the permit was approved by the Planning Commission, a decision that was then appealed to the council by the owners of neighboring Karate for Kids Academy.

Bachelorette items, lingerie, post-mastectomy items, shoes, lotions, oils, lubricants, adult-themed novelties, sex aids, and DVDs and magazines with sexual themes are among the products sold at the store.

The owners and customers of Karate for Kids attended a September 2017 council meeting to argue the operation was an educational facility. A city ordinance prevents sexually-oriented businesses from operating within 1,000 feet of educational facilities. Karate for Kids was located at 1161 Deadwood Ave. but has since relocated to 5595 Mount Rushmore Road.

Eliason is seeking to recover attorney fees, as well as financial losses he incurred due to the delay in opening Dick and Jane’s Super Spot at the Deadwood Avenue location. A January 2018 federal court ruling by Judge Jeffrey Viken overturned the council’s decision, allowing Eliason to open the store. Eliason also is seeking compensation for emotional distress that he says caused a heart attack.

“We’re just looking forward to working with the city to bring this case to resolution,” Eliason said Tuesday, adding that he’d like to see it resolved “as quickly as possible.”

The city declined to comment on the potential settlement agreement but did confirm that seeking a resolution to the lawsuit was the direction provided by the council at the Jan. 7 meeting.

“The council provided input and direction to staff on actions to pursue in an effort to resolve this case during executive session,” read a statement from city attorney Joel Landeen.

The city has spent $53,820 on the lawsuit. If the cost reaches $75,000, the city’s insurance carrier would cover the rest, including any money tied to the settlement, city spokesman Darrell Shoemaker said Wednesday.

Eliason had to engage in a similar legal fight in 2013 to open the Sturgis store.

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City Reporter

City reporter for the Rapid City Journal.