Bulletin Displays v. Regency Outdoor Advertising
| Decision Date | 06 June 2006 |
| Docket Number | No. SACV 05-1083CJC(ANX).,SACV 05-1083CJC(ANX). |
| Court | U.S. District Court — Central District of California |
| Parties | BULLETIN DISPLAYS, LLC v. REGENCY OUTDOOR ADVERTISING, INC. et al. |
Laurence Jackson, Holly O. Whatley, Christa & Jackson, Los Angeles, CA, for Bulletin Displays, LLC, Plaintiff.
Michael L. Tidus, Donald E. Leonhardt, Jackson, DeMarco, Tidus & Peckenpaugh, Irvine, Jeffrey A. Tidus, David P. Crochetiere, Baute & Tidus LLP, Los Angeles, CA, for Regency Outdoor Advertising, Inc., West Hollywood Properties, LLC, Brian Kennedy and Drake Kennedy, Defendants.
PROCEEDINGS: (IN CHAMBERS) ORDER DENYING DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 425.16 (filed 3/9/06)
Plaintiff Bulletin Displays, LLC ("Bulletin") asserts federal RICO and antitrust claims, and state law antitrust, unfair competition and tort claims, against Defendant Regency Outdoor Advertising, Inc. ("Regency") and other Defendants, based on Defendants' alleged payment of bribes to the Mayor of Lynwood, California. Regency has filed a motion to dismiss Bulletin's Complaint pursuant to California's anti-SLAPP statute, California Code of Civil Procedure Section 425.16. Because the only conduct alleged in the Complaint that is protected under the anti-SLAPP statute is merely incidental to other alleged conduct that is not protected, Regency's motion is DENIED.
Regency and Bulletin are competing billboard advertising companies. Bulletin filed its Complaint in this action against Regency and various other parties on November 4, 2005, alleging that the Defendants had engaged in a scheme to bribe public officials to influence the awarding of billboard permits and contracts in the City of Lynwood, California ("the City") between 1998 and 2001. According to the Complaint, Regency and its consulting agency, a lobbying organization called Ken Spiker and Associates ("KSA"), made cash payments to the City's Mayor, Paul Richards, and Allied Governmental Services ("AGS"), a corrupt organization associated with Richards. In exchange for Regency's payments, Bulletin alleges, Mayor Richards ensured that Regency would obtain billboard contracts with the City and prevented Bulletin from obtaining necessary permits and contracts needed to operate there. Bulletin also alleges that agents of KSA approached Bulletin on several occasions and threatened it with financial harm in an attempt to induce Bulletin to join the corrupt conspiracy.
The Complaint's specific allegations are as follows. In order to build billboards along the 105 freeway that runs through the City of Lynwood, a company must obtain two types of permits: a permit from California Department of Transportation ("Caltrans") ("Caltrans permit"), and a permit from the City ("City permit"). (Complaint, ¶¶ 13, 22.) Only one company may own any given Caltrans permit at a given time. (Id., ¶ 22.)
In 1996, Caltrans issued thirteen permits to Bulletin permitting Bulletin to place thirteen billboards on private land next to the 105 freeway in Los Angeles County. (Complaint, ¶ 13.) Nine of the Caltrans permits were for locations within the City. (Id.) Bulletin also secured all necessary leasehold rights, easements, and other rights from the landowners of the City property containing the proposed billboard sites. (Id., ¶ 15.) Between approximately 2000 and the present, Bulletin has held the only available Caltrans permits for billboard sites next to the 105 freeway in the City. (Id., ¶ 22.) However, Bulletin was unable to obtain the necessary City permits, because the City refused to grant them to Bulletin until February 2005. (Id., ¶ 17.) Consequently, Bulletin remained unable to use its Caltrans permits to build billboards along the 105 freeway in the City.
Between 1998 and the present, an entity named Allied Governmental Services or Allied Government Services ("AGS"), and several individuals associated with AGS, had an agreement with Mayor Richards. (Id., ¶ 20.) Under the agreement, AGS would make cash payments to Mayor Richards, who in return would issue or refuse to issue outdoor advertising permits. (Id.) The individuals who paid Mr. Richards on AGS' behalf were Paula Harris, Julio Naulls, and their relatives. (Id.) Mr. Naulls was an officer and principal of AGS. (Id., ¶ 21.)
On March 13, 2000, Mr. Naulls told Mark Kudler, an officer and principal of Bulletin, that he (Mr. Naulls) could assure Bulletin that Lynwood would issue it the necessary building permits if Mr. Kudler paid him $25,000 in cash. (Id., ¶ 21.) In making the statement, Mr. Naulls was acting as an agent of AGS. (Id.) All or a significant portion of the requested $25,000, if paid by Bulletin, was to be paid to Mayor Richards pursuant to his agreement with AGS, in exchange for Mayor Richards causing the City to approve Bulletin's proposed billboards. (Id.)
In or about November 2000, Mr. Richards entered into an agreement on behalf of the City with AGS. (Id., ¶ 24.) Under the agreement, the City would pay AGS approximately 20 percent of any payments made to the City by any billboard advertising company. (Id., ¶ 24.) The funds paid to AGS were ultimately to be paid to Mayor Richards, Ms. Harris, and Mr. Naulls. (Id.) The money paid to Mayor Richards was in exchange for his agreement to use his position as a City Council member and Mayor to cause the City to issue billboard permits. (Id.)
Also in November 2000, and after the City had entered its agreement with AGS Mr. Kudler was contacted by Ken Spiker, a principal of KSA. (Id., ¶ 23.) Mr. Spiker told Mr. Kudler that he had spoken to members and representatives of the Lynwood City Council, and that Bulletin could obtain the necessary City permits if Bulletin was prepared to pay "Paul Richards' price" of three million dollars to the City. (Id.) Included in that price, Mr. Spiker stated, "would be any amounts payable to Mr. Spiker or to [KSA]." (Id.) Mr. Spiker further stated that he and other Defendants had threatened to bankrupt a local city by use of litigation, that he had caused the city to cave in to his demands, and that he and his "colleagues" had told the city that they had more money than they did. (Id., ¶ 23.) He then stated that he, the City, and other Defendants would harm Bulletin if it did not agree to pay Paul Richards' price. (Id.) That threat of litigation and other steps caused Bulletin to fear that it would suffer material economic losses. (Id.) Between September 2000 and February 2001, Mr. Spiker had other conversations with Mr. Kudler in which he told Mr. Kudler that the City would grant Bulletin the needed City permits if Bulletin made the requested payments. (Id., ¶ 26.)
Some time after March 2000, KSA and the City entered into a joint venture whereby KSA or its agents would operate billboards in or next to the City. (Id., ¶ 28.) The City was to share in the profits from the joint venture in exchange for preventing Bulletin from building within the City and annexing and rezoning land as needed to accommodate the joint venture's billboards. (Id.) The joint venture agreement also provided that Mayor Richards would receive payment through the City's agreement with AGS, in exchange for his agreement to use his office to cause the City to approve billboards. (Id.) On or about February 1, 2001, KSA sent a letter to the City setting forth the terms of the joint venture agreement. (Id., ¶ 28.) In performing the joint venture agreement, the City amended its ordinances to permit any billboard to be built that was approved by the City, but refused to approve any requests by Bulletin to build within the City. (Id., ¶ 30.)
In June 2001, the City and AGS signed a contract providing that AGS would receive 20 percent of any amounts of money thereafter payable by billboard companies to the City, and that AGS would provide no material services or other benefit to the City in exchange for the payment. (Id., ¶ 27.) AGS and Mayor Richards further agreed that Mayor Richards would receive a portion of those payments in exchange for causing the City to approve billboard permits. (Id.) Thus, at least a portion of the money paid to AGS actually was paid to Mayor Richards. (Id.)
At an August 21, 2001 hearing, Mayor Richards introduced an amendment to the City ordinances to allow billboards in the public rights of way and on other terms, even in violation of applicable environmental laws, provided that the City Council approved of the particular billboard. (Id., ¶ 31.) This amendment was introduced and adopted by the City, in furtherance of the joint venture, on September 18, 2001. (Id.)
On November 6, 2001, the City approved three agreements between it and Regency. ("the Regency Agreements")(Id., 33.) The first provided that the City would lease Regency certain potential billboard sites located in areas zoned for commercial and industrial use. (Id.) The second provided that the City would use its best efforts to re-zone six potential sites that were not currently zoned for billboards. (Id.) The third provided that the City would use its best efforts to acquire three sites located within the City but owned by Caltrans and rezone them as necessary and then lease them to Regency. (Id.) In exchange, Regency was obligated to pay the City 84.8 million over the life of the Regency Agreements. (Id.) Although the ostensible purpose of the Regency Agreements was for Regency to build and operate 12 billboards along the 105 freeway in the City on Cityowned sites, Regency could not possibly do so because it did not have the necessary Caltrans permits. (Id. ¶ 34) The real purpose of the Regency Agreements was to harm Bulletin. (Id. ¶ 34.) Also on November 6, elections were held in which two City Council members lost their seats. (Id.) On November 13, 2001, the City's Planning Commission passed measures to "spot zone" certain areas to facilitate the November 6 Regency...
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