Supreme Court confirms Guardian legal victory

The Bay Guardian won a decisive and final legal victory Nov. 23 in our lawsuit against SF Weekly and its chain parent when the California Supreme Court let stand a verdict now worth more than $22 million.

The ruling ends the Weekly’s appeals, which have stretched for more than two years, and confirms a landmark Aug. 11 ruling by the California Court of Appeal that protects small businesses in the state against predatory chains.

The Bay Guardian sued the Weekly and the New Times chain, now known as Village Voice Media, in 2004, charging that the Weekly had systematically sold ads below cost in an effort to harm the local, independent competitor. By taking advantage of the resources of a large company, the Weekly was able to stay in business despite losing money every year, and was using below-cost pricing as a way to take ads away from the Guardian.

“We have before us the case of an ongoing, comprehensive, below-cost pricing scheme,” the Appeals Court concluded. That sort of behavior is specifically barred by California’s Unfair Practices Act, which was designed to protect small business from big chains.

SF Weekly and VVM tried to argue in their appeals that the state law should be consistent with federal antitrust law, which sets a much higher standard for proving predatory pricing. But the Appeals Court and the Supreme Court disagreed. California, the ruling now says, has every right to provide greater protections for small business than the federal government does.

VVM is still trying to avoid paying the judgment, and the Guardian has been aggressively pursuing collection efforts.

The Guardian’s stellar legal team includes trial lawyers Ralph Alldredge, Rich Hill, and Craig Moody, appellate specialist Joseph Hearst, and collection expert Jay Adkisson.

The lawyers who represented VVM in its unsuccessful trial efforts were H. Sinclair Kerr Jr., Ivo Labar and James Wagstaffe of Kerr & Wagstaffe. The appellate lawers were Paul Fogel, Raymond Cardozo, and Dennis Peter Maio of Reed, Smith. VVM was also represented by Don Bennett Moon.