Dream Nite Club owners file $3 million lawsuit against City of Ann Arbor

The lawsuit was filed Tuesday in federal court and claims the club has suffered "irreparable harm," losing customers and "hundreds of thousands of dollars" in revenue as a result of being targeted by the city.

The lawsuit says the club's owners are of Indian descent and were born in Trinidad and their patrons are largely African-American, Asian and Latino. City officials are subjecting Dream to heightened scrutiny because it's the only minority establishment in the downtown area, the lawsuit claims.

City Attorney Stephen Postema could not be reached for comment Wednesday afternoon.

The city has a lawsuit pending against the club's owners that was filed last spring. That suit claims police have received more than 200 calls at the business since September 2007, responding to liquor violations, disorderly conduct cases and assaults. In separate incidents last May, three people were stabbed in the club and a fighting broke out inside and outside that resulted in a man being shot in a neighboring parking lot. The business on South Fourth Avenue was formerly known as Studio 4.

The suit filed Tuesday against the city claims that Dream should not be held responsible for that shooting because it occurred in a parking lot that's used by the U.S. Postal Service and overseen by federal authorities. According to the lawsuit, the city brought an action against Dream with the state Liquor Control Commission for that shooting.

The lawsuit says the city "has focused extraordinary police attention on the club" and patrol cars often are parked in front. Former employees have been asked to be confidential informants and "wear wires and tape recording devices" to go inside the club and "look for signs of drug deals and prostitution," the lawsuit says.

The lawsuit claims the city is on a "fishing expedition" seeking to bolster its case against Dream.