‘Put this chapter behind us’: Miami agrees to pay $12.5M to settle Ball & Chain lawsuit

The Miami City Commission on Thursday agreed to pay $12.5 million to settle a lawsuit accusing the city of carrying out a “vendetta” against a group of Little Havana businesses, marking a partial resolution in a years-long legal entanglement between local nightclub owners and Commissioner Joe Carollo.

The lawsuit was filed three years ago in federal court by The Mad Room LLC, the company that owns the Ball & Chain nightclub, as well as Taquerias El Mexicano. It accused the city of harassing the businesses by carrying out code enforcement raids and “weaponizing” various departments in the city “to concoct a set of violations targeted at” businesses specifically owned by Ball & Chain’s Bill Fuller, who supported Carollo’s opponent in the city’s 2017 election. No other businesses on Calle Ocho were targeted by the alleged scheme, according to the complaint.

“The City’s vendetta against Plaintiffs runs from top to bottom — its elected officials, lawyers, professional staff, and every single department within its administrative function,” the complaint alleged.

It went on to say that the city deliberately created a “multi-pronged policy intended to unfold in stages and build relentlessly towards its eventual goal of destroying Plaintiffs’ business and arrogating their property rights.”

In a separate but related lawsuit, Carollo last year was found personally liable for violating the free speech rights of Fuller and Little Havana businessman Martin Pinilla, who also supported Carollo’s opponent in 2017. Last June, a jury awarded Fuller and Pinilla $63.5 million after finding that Carollo tried to destroy the men’s reputations and pushed city cops and code enforcement officers to target their properties.

Carollo has appealed the judgment. Meanwhile, the plaintiffs have struggled to collect on it, with Carollo reporting a negative $64 million net worth and a judge ruling this summer that his Coconut Grove home can be protected from seizure to satisfy the judgment.

The City Commission voted 4-1 to approve the $12.5 million settlement in the Mad Room case, with Carollo being the only “no” vote.

Carollo said that, in his opinion, “none of our employees in the city did anything wrong.”

“On the contrary,” he continued, “the history of these individuals was the history of violations, violations, violations, violations, not respecting our residents.”

Commissioner Miguel Angel Gabela said he would vote for the settlement because “we want to put this chapter behind us” and not burden taxpayers with what could be years of further litigation.

By agreeing to the settlement, the city does not admit to any liability.

In a statement issued Thursday, the city said that if the plaintiffs had prevailed in a trial, they would have been entitled to attorneys’ fees, “which could have far exceeded the settlement amount.”

“While the City firmly believes it has done nothing wrong,” the statement continued, “settling at this stage is a sound financial decision.”

Commissioner Damian Pardo suggested that, going forward, the city could consider spelling out disciplinary actions for elected officials implicated in similar lawsuits, such as a formal censure or removal from office.

The plaintiffs had initially claimed $27.9 million in damages from the alleged harassment campaign. In response to the City Commission’s approval of the settlement, their attorneys Maria Fehretdinov and Jason S. Koslowe wrote in a statement that “good governance and fair play are vital to our City.”

“We are hopeful the settlement advances those values. Plaintiffs look forward to putting this matter behind them and growing their businesses,” they added.

According to the city’s statement, the city’s insurer QBE Specialty Insurance Company will pay $4 million of the settlement, with the city bearing responsibility for about $8.2 million. Pardo’s office previously told the Herald that the remaining $300,000 involves liens against the businesses that came about as a result of code violations that would be erased under the settlement.

In May, QBE sued the city , saying it should not be held responsible for over $10 million in legal fees for Carollo’s defense in various lawsuits dating back to 2018, citing allegations that Carollo engaged in “deliberate, willful conduct that was intended to deprive plaintiffs of their property and harm plaintiffs’ reputations to punish and retaliate.” That lawsuit remains pending.