
Shit! Mike Lacey flees the courtroom after losing a huge verdict
Photo by Charles Russo
Click here for full lawsuit coverage.
A San Francisco jury this afternoon found the San Francisco Weekly and its corporate parent guilty of illegal predatory pricing and awarded us $6.39 million.
Under state law, part of that verdict is subject to treble damages, bringing the total award to $15.6 million.
The battle isn’t over; Rod Kerr, attorney for the Weekly, told me immediately afterward that the 16-paper chain intends to appeal.
But the verdict sends a clear signal to small businesses, independent newspapers and the alternative press that a locally owned publication has the right to a level playing field and that a chain can’t intentionally cut prices and sell below cost to injure a smaller competitor.
The trial had been underway for more than five weeks. The Guardian charged the Weekly with violating the state’s Unfair Practices Act, a Progressive-era law that bars a company from selling a product below cost for the purpose of destroying competition.
Evidence produced in the trial showed clearly that the Weekly had been selling ads below cost. In fact, the paper had lost money every year since the New Times chain, now known as Village Voice Media, bought it in 1995. Those losses totalled $25 million over the 12 years.
The Guardian produced extensive evidence that the Weekly and VVM were trying to injury the local competitor, including three witnesses who testified that they heard Mike Lacey, one of the two principals of New Times, vow to put the Guardian out of business.
The evidence produced also showed numerous internal emails discussing the Weekly’s battle plans to take ads away from the Guardian.
The Weekly’s lawyers ultimately admitted to below-cost sales, but said they had no intent to harm a competitor. However, members of the jury interviewed after the case believed otherwise.
Kerstin Sjoquist, a local business owner and graduate student, said in an interview that “it felt overly predatory on the part of the Weekly” and that “the predatory intent trickled down from the top.”
Juror Dan Babin said he found the testimony of the Guardian’s co-owners “very, very trustworthy. I found them very honest in their approach.”
A juror who didn’t want to be identified by name said there was little disagreement among the panel members over the question of intent.
By all accounts, the jurors carefully weighed all the evidence in the case, deliberating for more than three days and going through what one juror described as “unraveling an onion.”
In the end, there was unanimous agreement that the Weekly had sold below cost, and 11 of the 12 jurors agreed that the paper had intended to harm competition.
The jury ruled that New Times/VVM and the East Bay Express, which until recently was owned by VVM, were equally culpable in aiding the predatory sales.
The Express is now an independent paper, and VVM is liable for any damages assessed against that publication.
The jury foreperson handed the verdict to the court bailiff at 12:30 pm, and the clerk read the results to a packed and silent courtoom. As the various parts of the verdict were read, and it became obvious that the Weekly and VVM were liable for significant damages, Lacey could be heard mumbling “shit” over and over again.
Lacey would not comment outside the courtroom and didn’t return our phone calls. But Kerr, in a brief interview, said he was “disappointed” with the jury decision. “We don’t believe the evidence supported the verdict,” he said, and vowed to file an appeal.
The Guardian will now ask Judge Marla Miller to issue an injunction barring the Weekly from continued below-cost sales.
VVM posted a lengthy statement on the web almost immediately after the verdict was announced, arguing that the Unfair Practices Act is flawed. The chain promised to seek to challenge the validity of that law on appeal.
The process of appealing a case such as this can take years. But in the meantime, a San Francisco jury has sent a powerful message: Local businesses and local independent media matter – and big chains that try to use their deep pockets to squeeze the locals can be held to account.
(The Guardian was represented in this case by three fantastic lawyers, Ralph Alldredge, Richard Hill, and E. Craig Moody. Thanks, guys. You did good.)
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Comments (44)
YES!!!!!!!
You go SFBG!!!!
Posted by Maurice in AZ | March 5, 2008 01:59 PM
This is great news! But what is the likelihood that you will see even one cent of that money? Also, was the verdict unanimous?
Posted by expatriate | March 5, 2008 02:07 PM
There were many parts to the verdict; some were unanimous, others were 11-1. There was one small aspect of the damage claim that was 9-3.
The law requires 9 of 12 to agree on a verdict.
It will be a while before we see any money; they have already vowed an appeal.
Posted by Tim Redmond | March 5, 2008 02:35 PM
yee haw. turns new times over to a collection agency!!!
Posted by a former employee | March 5, 2008 03:18 PM
I'd like to clarify one fact related to the lawsuit. The East Bay Express per se was not a party to the lawsuit. Rather, your lawsuit named "East Bay Express Publishing LP," a holding company controlled by New Times/Village Voice Media, as a party to the suit. The current owners of the Express, who purchased the paper from VVM last May, have no relationship with that company.
Posted by Stephen Buel | March 5, 2008 03:40 PM
I'd like to clarify one fact related to the lawsuit. The East Bay Express per se was not a party to the lawsuit. Rather, the Guardian named "East Bay Express Publishing LP," a holding company controlled by New Times/Village Voice Media, as a party to the suit. The current owners of the Express, who purchased the paper from VVM last May, have no relationship with that company.
Posted by Stephen Buel | March 5, 2008 03:41 PM
I think that is a picture of Mike Lacey GOING DOWN!
Posted by Kimo Crossman | March 5, 2008 03:43 PM
Wow. What a bunch of sore losers the New Times people are. A jury of normally competent folks found for the Bay Guardian, and now, according to Loser Lacey, the law is unfair, the jury is on the “pity” pot, and Brugmann is a communist! Next we will be seeing Lacey & Larkin waving a snitch list of Islamic terrorists working at the rival paper, whose ad rates they undercut, according to a JURY.
Here is a picture of the Ghost of New Times leaving the courtroom: http://www.fulcrumgallery.com/Edvard-Munch/The-Scream_28190.htm
Posted by Peter Byrne | March 5, 2008 04:08 PM
more coverage
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003720773
http://penpressclub.org/2008/03/guardian-wins-15-million-in-sf-weekly
Posted by Kimo Crossman | March 5, 2008 08:59 PM
Steve Buell is correct -- the East Bay Express is now locally owned, and the current owners and the current entity were not a party to the suit. Sorry about any confusion.
Posted by tim redmond | March 5, 2008 09:00 PM
congrats to the guardian's lawyers. i'd think even tim would be surprised at the verdict and the damages awarded. but you guys are wise enough not to spend the money yet, right? your nemesis won't let you off easy and the appeals process, based on recent UPA rulings and federal law, isn't in your favor. but for tonight, party like you just won 15.6 million, ka-ching!
Posted by student | March 5, 2008 09:11 PM
Fantastic news. This made my night.
Posted by Laura | March 5, 2008 10:01 PM
Congratulations!!!!!!!!
Posted by Susie | March 6, 2008 06:57 AM
What a complete pooch-screw. Sad.
Posted by Kristin | March 6, 2008 07:12 AM
Big Bruce can't compete in the marketplace so he is now forced to try to use the state to steal from his main competitor. Every business tries to undersell it's competitors and properly so. There
is no right to remain in business and there are no
rights of local yokels to maintain a privileged
position against newcomers. If we applied the BG's
tactics here we'd still be living in the horse and
buggy era. The fact is that the BG is trying to maintain a local monopoly here and has used any and
all tactics from union-busting to the heavy hand of the state to do so. Your statist politics have been
totally discredited as readers are turned off by your maniacal crusades and predictable identity politics.
Even many left readers realize the utter corruption involved in the BG's backing of such ilk as Tom Lantos, John Russo, Quentin Kopp, ad nauseum, over
the years. You are going to lose on the appeal and
this bad law will be erased from the books.
Be a man, Bruce, stop running to the state to erase
your competition and try putting out a paper worth reading.
Posted by Michael Hardesty | March 6, 2008 07:52 AM
Did anybody really expect Mike Lacey and his band of predatory brigands at Village Voice Media to be good sports about getting an adverse verdict? Their public statements are nothing more than face-saving gestures at being found out as ruthless monopolistic slimeballs.
Triple congratulations to Bruce and Tim and the Bay Guardian crew for fighting this long but very important fight for independent media. I hoist a virtual glass of your favorite alcoholic beverage to toast your long and hard-fought victory.
Posted by Peter Wong | March 6, 2008 08:31 AM
"Independent" media ? What nonsense. This is the logic of Black Oak Books in Berkeley- we are supposed to buy from them because they are locally owned and pay for their overpriced books instead of
getting a much better deal from Amazon. Nuts to that ! I should go buy from the local corner merchant at exorbitant prices rather than go to Trader Joe's or Safeway ? The BG has an utterly predictable line that is NOT "independent" of the PC nonsense around here.
They have a right to their views as do those of us
who dissent from same. I wouldn't give money to KPFA
or advertise in the Berkeley Daily Planet precisely
because I don't (mostly) agree with their take on things. Why should the BG be any different ?
The BG even supported Jim Jones long after many of
the facts came out about his unsavory operation.
Given the BG's attitude on the Second Amendment, why
should the rest of us get exercised about the First ? Many of you limo lib "little people" shop
at Whole Foods. Spare us your BS bout "monopolists."
I am not a fan of the centrist Clintonian politics of the SF Weekly but Lacey HAS done a great job in
Phoenix in repeatedly exposing that totalitarian
Sheriff and at far greater risk to himself than anything Big Bruce has undertaken here.
Posted by Michael Hardesty | March 6, 2008 09:04 AM
Local First
http://www.sfgov.org/site/sbc_page.asp?id=33119
WHY LOCAL FIRST?
1. Significantly more money re-circulates in San Francisco when purchases are made at locally owned, rather than nationally owned, businesses: More money is kept in the community because locally owned businesses purchase from other local businesses, service providers and farms. Purchasing local helps grow other businesses as well as the city tax base.
2. Most new jobs are provided by local businesses: Small local businesses are the largest employer nationally, and in San Francisco provide the most new jobs to residents.
3. Our one-of-a-kind businesses are an integral part of our distinctive character: The unique character of San Francisco is what brought us here and will keep us here. Our tourism businesses also benefit. ?When people go on vacation they generally seek out destinations that offer them the sense of being someplace, not just anyplace.? - Richard Moe, President, National Historic Preservation Trust
4. Local business owners invest in community: Local businesses are owned by people who live in this community, are less likely to leave, and are more invested in the community's future.
5. Customer service is better: Local businesses often hire people with more specific product expertise for better customer service.
6. Competition and diversity leads to more choices: A marketplace of tens of thousands of small businesses is the best way to ensure innovation and low prices over the long-term. A multitude of small businesses, each selecting products based not on a national sales plan but on their own interests and the needs of their local customers, guarantees a much broader range of product choices.
7. Reduced environmental impact: Locally owned businesses can make more local purchases requiring less transportation and generally set up shop in town or city centers as opposed to developing on the fringe. This generally means contributing less to sprawl, congestion, habitat loss and pollution.
8. Public benefits far outweigh public costs: Local businesses in town centers require comparatively little infrastructure investment and make more efficient use of public services as compared to nationally owned stores entering the community.
9. Encourages investment in San Francisco: A growing body of economic research shows that in an increasingly homogenized world, entrepreneurs and skilled workers are more likely to invest and settle in communities that preserve their one-of-a-kind businesses and distinctive character.
10. Non-profits receive greater support: Non-profit organizations receive an average 350% greater support from local business owners than they do from non-locally owned businesses.
Posted by Kimo Crossman | March 6, 2008 09:47 AM
Please ! This is blatant government propaganda put out by self-serving bureaucrats. Small businesses
generally pay less and charge more. The suburban
sprawl is the result of federal programs offering home ownership to people who would not be credit-worthy. The planning & zoning and anti-car attitudes
& regulations make it prohibitive for large businesses to locate or expand in central areas.
Show us the actual research stats that prove assertions one and two above. 90% of all new businesses fail. There is no evidence that local
owners are more successful than others and frankly
this is a parochial attitude you'd expect to find in small town bigots.
Posted by Michael Hardesty | March 6, 2008 10:00 AM
Out of curiosity, is the Michael Hardesty who contributes commments to this site the same person who is known as a Holocaust revisionist?
since you're bringing up all kinds of off-the-subject screeds as presumed proof that the guardian should lose its suit, it's fair to ask.
Posted by uhhhh | March 6, 2008 10:23 AM
KICK AAAAATTTTHHHHH.
Posted by Cartman | March 6, 2008 11:12 AM
If you ask me, this is a big victory for San Francisco as well as for the SFBG. You guys caught 'em pantsless. I laughed, and I laughed, and then I laughed some more. The SF Weekly's blog is where the really funniest comments though. It's not just from the agony of the defeated snarkers, but from those writing in, who are having a good laugh at New Times' court-proven crookedness. They're going to be bleating about how San Francisco Communists did this to them for decades!
And hey, if anyone's going on about the ancient history of how Jim Jones fooled the Guardian--he fooled a lot of people--how about recalling the SF Weekly's snarling about the commie peacenik bastards who wouldn't get behind our surgical strike into Iraq?
Posted by temerity | March 6, 2008 12:14 PM
Good going Guardian! You are a great paper coverings a lot of stories the mainstream press choose to ignore . Stick it SF Weekly!
Loren
Posted by loren | March 6, 2008 01:36 PM
One of many reasons that sfweekly lost the bay guardian lawsuit (aside from being guilty as charged) is that the corporate council for new times is Steve Suskin, whose specialty is representing folks who get arrested for driving under the influence of this and that substance. Check out his legal resume and his email address.
http://www.suskinlaw.com/jsp2170221.jsp
Posted by Peter Byrne | March 6, 2008 04:02 PM
I see the BG supporters are reduced to ad hominems
to make their case. We all know that this attempted
holdup will be tossed out on appeal. Byrne's comments are an irrelevant nonsequitur as usual.
The whole premise of the lawsuit is wrong both morally and economically. My comments are right on
target as they relate to the philosophical assumptions on which the BG's "reasoning" is based.
Past SF Weekly views on the war are as irrelevant
as their attorney's previous clients.
The left losers are forced to try to deny the message by attacking the messenger. It won't wash.
Posted by Michael Hardesty | March 6, 2008 04:19 PM
It's just a question, not an attack, Michael.
Be a man and answer the question.
Especially since you consider yourself worthy to judge the law and the lawsuit, economically AND morally.
Out of curiosity, is the Michael Hardesty who contributes commments to this site the same person who is known as a Holocaust revisionist?
Posted by uhhhh | March 6, 2008 04:35 PM
"I see the BG supporters are reduced to ad hominems
to make their case. " says Hardesty.
Actually, Lacey was the one who was fat-baiting Brugmann in print.
Say, Michael, what do you think about the Holocaust? Did it happen, or was it all just a big misunderstanding on the Allies' part?
Posted by temerity | March 7, 2008 03:07 AM
Who cares ? It has nothing to do with the discussion. Everything I wrote about Brugmann
was related to the terrible rag he puts out
as a reflection of his collectivist-statist
philosophy. I never went back and attacked him
on his beliefs in other unrelated areas.
Whatever Lacey wrote it is not relevant to my
comments.
So when one of the Guardian folks under a pseudonym
attacks me on something utterly irrelevant to the
issue, it is a classic ad hominem attack, don't
deal with the message you can't refute, attack the
messenger.
Do you "people" think I'd really fall for that ?
Didn't think it possible for my opinion of the
BG to go lower.
Posted by Michael Hardesty | March 7, 2008 09:43 AM
ok, that sounds like a 'yes.'
which is kinda ironic from a guy who pontificates about 'collectivist-statist philosophy.'
and by the way, michael, i'm not a 'Guardian folk.' nice attacking of the messenger there, too. haha.
Posted by uhhhh | March 7, 2008 11:46 AM
Which is it, Mike L: "We didn't break the law" or "We broke the law but it was a bad law and Bruce is a bad boy for asking us to abide by it"?
Congrats to the Guardian crew!
Posted by Craig McLaughlin | March 7, 2008 01:06 PM
What's ironic, Mister Redmond ? And
what does any of this have to do with
my comments on the Guardian ?
In your case there was no message and
hence no messenger to attack.
You Guardian boobs use the "nazi" label
exactly like your moron counterparts on
the neocon right use "Communist" and
"terrorist."
Bad cess to both of you.
Craig, your less than an imbecile.
The law was and is stupid and will be
thrown out on appeal.
Posted by Michael Hardesty | March 7, 2008 05:19 PM
ok, let's add up michael's fantasies.
i'll start.
- he thinks i'm a 'Guardian folk' and calls me 'Mr. Redmond.'
- he thinks that his opinion on the law somehow removes the responsibility of others to abide by that law.
- he thinks that the guardian's philosophy is turning off readers, but after more than a decade they still have more circulation (i.e., readers) than the weekly. hmm.
- and oh yeah, he thinks that the holocaust didn't happen.
this is fun.
feel free to add more!
Posted by uhhhh | March 7, 2008 05:40 PM
This comment has been removed by the Web Editor
Posted by Michael Hardesty | March 7, 2008 06:17 PM
michael,
between your puerile namecalling and denials of the holocaust, i think the questions about your credibility are pretty much settled.
thanks.
Posted by uhhhh | March 8, 2008 12:16 AM
It's about time a local, community newspaper strikes back at big media villains. Too bad Media News and Hearst haven't slipped up yet in their ways so they too could be taught a lesson -- if not just a slap to their invincible mugs -- figuratively, of course, hahh.
Posted by Daniel Yaryan | March 8, 2008 12:34 AM
Michael Hardesty, although we appreciate you voicing your opinion on the outcome of the trial, this is an inappropriate forum for some of the topics you're raising, and I've deleted your last comment. Vent all you want, but stick to the trial. And no "censoring" bs from you, either. You know the rules. Carry out your personal agenda on your own site. ---Web Editor
Posted by Marke B. | March 8, 2008 08:03 AM
Marke, I NEVER brought up the subject, I was responding to personal attacks by some of YOUR
people, if we can call them that and I decided
to respond in the interests of closure.
For you to delete my coimments while leaving in place the comments of the person who STARTED this
whole matter is an act of intellectual cowardice.
Unbelievable ! I don't need your lecture on staying
on topic as I was not the one who started straying
off topic. It's obvious that you people can't compete in the marketplace or ideas or any marketplace for that matter.
If you choose to talk to yourselves, hey, go ahead !
Posted by Michael Hardesty | March 8, 2008 09:27 AM
I put an "i" in comments in line five above in error.
And Marke, YES, this is censorship BECAUSE you never
enforced your rules against "uhhhh" (what an intelligent moniker)when he/she/it STARTED the violation of same.
And "uhhhh" ot Tim or Bruce or whoever you are, you
might take a logic course. One's views on other issues do not refute the views expressed on the topic at hand.
I repeat, you people at the BG are total intellectual cowards. You permit character
assassination or attempts thereof, and then
CENSOR the response of the victim of same.
Posted by Michael Hardesty | March 8, 2008 09:39 AM
No, "uhhhhhhh," it is OFF topic and has nothing to do with the topic under discussion. It is called the
ad hominem fallacy, you try to discredit an argument
by smearing the person who made the argument.
I'm more than happy to discuss the topic that you brought up in the appropriate forum. So if the BG censors my response to your (failed) attempt at
character assassination, they need to go back and
delete ALL of your comments as off topic.
If they would do so, I would have no complaint
and would in fact commend them for consistency in
their own rules.
Again, dude, you need to take a basic logic course.
Every argument has to be judged on its specific merits, not on unrelated topics.
Your nonlogic that because I have a different view on an UNRELATED historical event discredits my comments on the legal issue here totally fails.
Posted by Michael Hardesty | March 8, 2008 10:14 AM
Funny thing just happened, I responded to the nonlogic of "uhhhhh" above and my comment gets
posted above his at an hour earlier than I responded !
Again, I call on Marke B. to immediately delete
all the personal attacks by "uhhhh" that are off-topic.
Posted by Michael Hardesty | March 8, 2008 10:19 AM
michael,
asking you if you, in fact, hold opinions that have been attributed to you is hardly a 'personal attack' or 'character assassination.' it's more like truth in advertising.
the rest of your sputtering speaks for itself.
Posted by uhhhh | March 8, 2008 11:13 AM
Wish the jurors would have known that the B.G. won a lawsuit for $500,000 vs. the The S.F. Chronicle. It would have been a totally different outcome.
Posted by J. C. | March 8, 2008 07:45 PM
That lawsuit was another extortion by Big Bruce.
Go to the SF Weekly website for details. Also take
a look in the comments section of the Chron a week
or so ago, it was a Saturday. 90% or more of the
comments were hostile to the BG.
I'm now going to join the great majority around here
who don't read the BG. After seeing their dirty tricks here on the blog this is the final straw.
Posted by Michael Hardesty | March 9, 2008 12:08 AM
this has become a really humorous thread. is it a strange, but accurate reflection of the guardian's most devoted readership? back on topic: ironically, me thinks the guardian may end up neutering California's UPA if they lose on appeal. as the other blog points out, UPA verdicts haven't held up in state courts recently, and the Supreme Court has no love for them either. of course, we won't know this until the case is heard in, oh, 2012. by then, no newspapers anyhow.
Posted by student | March 9, 2008 02:15 PM