Supreme Court rejects SF Weekly appeal

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The California Supreme Court let stand Nov. 23rd a landmark ruling protecting small business from predatory chains, denying without comment an attempt by SF Weekly and its chain parent to get the high court to hear the case.

The decision brings to an end more than two years of appeals by the Weekly and Village Voice Media and effectively concludes the legal case.

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. You can read that ruling here (pdf)

The Appeals Court noted that shortly after New Times bought SF Weekly in 1995, New Times Executive Editor Mike Lacey announced that he would use the chain's deep pockets to assault the Guardian. "The essence of Lacey's message was that he wanted to 'put the Guardian out of business,'"he ruling states. "The sales representatives were made aware that advertising could be 'sold below cost' if needed 'in order to make a sale' and the resources of New Times would cover the loses, even over a term of many years."

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.

There are 20 other states that have laws similar the the California Unfair Practices Act.

The ruling is a victory not just for the Bay Guardian but for small business across the state. The appellate courts have made it clear that predatory pricing is a violation of law -- and the ruling can now be used by any independent merchant fighting big chains. As Ralph Alldredge, one of our laywers, noted after the Appeals Court ruling: "Think of what that means for big-box retailers, which have used below-cost selling on some products to attract customers away from small, independently owned grocery, hardware, drug, and department stores."

 

 

 

 

Comments

I hope that you throw any idea of settlement into the trash can and hold those bastards' feet to the fire for the full $20+ million. It may take a while, but you can probably end up owning them.

Posted by Guest on Nov. 23, 2010 @ 5:13 pm

great. now maybe you can pay real journalists again, instead of relying on interns.

Posted by Guest on Nov. 23, 2010 @ 6:22 pm

This is a great victory in many ways, specifically protecting smaller businesses.

The SFBG provides valuable information that other comical publications such as the Chronicle and SF Weekly refuse to run.

The D10 coverage was a prime example.

Well done.

Posted by Guest on Nov. 23, 2010 @ 8:02 pm

YES!!!!!!!!!!!!!!!!!

Please collect every penny.

Posted by Guest on Nov. 23, 2010 @ 10:48 pm

Thanks for the D10 coverage, who woulda thunk you could win with 2000 1st choice votes?

Will Bruce be having crab cakes at Just for You to celebrate? :)

Posted by D10 on Nov. 24, 2010 @ 12:11 am

Undercutting the competition is the essence of capitalism. More power to SF Weekly.

By the way, I hope they abandon California and don't pay the Guardian a cent. Everyone has noticed that the Guardian has been reduced from 100+ pages to a very thin paper indeed. Hopefully they will fold soon and spare us their endless whining about the "poor" and "the homeless". Most of us couldn't care less.

Posted by Guest on Nov. 24, 2010 @ 8:59 am

I'm almost tempted to let your telling comment speak for itself, with its fascist belief that the strong are justified in destroying the weak and obvious hatred of the poor. But let me just say that if your view of capitalism was correct, why would the people (remember the people, which our political and economic systems are supposed to be of, by, and for) support such a predatory and unsustainable system? Capitalism as an economic model is supposed to be about fair competition, guided by rules and judges, not simply the law of the jungle. Yours is a truly scary worldview, one that unfortunately is becoming all to common among the uneducated and misinformed teabaggers and their ilk. Luckily, at least for now, there are still rules to the capitalist game, rules that SF Weekly has wantonly broken and now must pay for.

Posted by steven on Nov. 24, 2010 @ 10:12 am

"Undercutting the competition is the essence of capitalism. More power to SF Weekly. "

Not even the lawyers who conned SFWeekly into fighting this all the way to the Supreme Court actually believe that.

Posted by Guest on Nov. 24, 2010 @ 11:48 am

I am not sure why this is any different from any store undercutting the competition.
Disappointing. Atleast the weekly provides a counterpoint from the left machine politics so heavily overexposed in SF

Posted by Guest on Nov. 24, 2010 @ 10:58 am

People who don't understand should take time to learn.

Posted by Guest on Nov. 24, 2010 @ 12:03 pm

Let the banks liquidate them and sell off their companies off one-by-one, and then maybe those companies can be purchased by people who actually give a rat's ass about their local communities. The Village Voice papers completely lack the spirit of the Village Voice of old, and in many ways are just glorified Shoppers that just happen to have restaurant reviews too.

Posted by Nuke Em in BK on Nov. 24, 2010 @ 9:44 pm

All the posturing and sanctimonious BS spouted by the SFBG and its lawyers etc. doesn't change the fact that your paper blows. Regardless of what SF Weekly did or didn't do, their content is far superior to yours. In the end you walked away with some cash but your journalism is shoddy, and that's all that really matters.

Posted by Guest on Nov. 25, 2010 @ 11:17 pm

@11/25 11:17pm guest: SFWeekly is like Microsoft of "indie" newspapers and thus had the money to hire "better" journalists, photogs and editors...

kinda hard for SFBG to match that with the resources of ONE actually independent paper which was materially harmed by lost ad revenue STOLEN by SFWeekly.

I bet all the pro-sfweekly prick comments here are posted by SFW staffers or VVM droids. lame...

reap what you sow.

Posted by Ken on Nov. 26, 2010 @ 1:01 am

All the posturing and
All the posturing and sanctimonious BS spouted by the SFBG and its lawyers etc. doesn't change the fact that your paper blows. Regardless of what SF Weekly did or didn't do, their content is far superior to yours. In the end you walked away with some cash but your journalism is shoddy, and that's all that really matters. >>

No cash has been awarded to the Guardian.

Therefore, your "journalism" is far shoddier than anyone else's.

And if the Guardian "blows", why are you perusing its website?

Jesus, you idiots really are something.

Posted by Vermicelli on Nov. 26, 2010 @ 12:41 pm