San Francisco News Blog

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Fifteen months after Bay Guardian publisher Bruce Brugmann received a staggering $16 million judgment in his predatory pricing lawsuit against SF Weekly and its parent company, it's time he and his paper were brought back to earth, Weekly attorneys argue in an appeal filed this week with the California Court of Appeal.

The appeal follows a six-week trial at which the trial court ignored federal legal precedents as well as precedents established in other states.

The jury responded with a judgment that handed the Guardian millions in "lost profits" despite the fact that Brugmann's paper couldn't find a single advertiser to testify on its behalf -- and in one case attempted to cite a dead man as a "lost customer."

"With this appeal, judicial error, attorney contrivance, expert witness puffery, juror confusion, and statutory imprecision are now cast in the edifying light of reason and clarity," says Michael Lacey, executive editor of SF Weekly's owner, Village Voice Media, formerly known as New Times.

In particular, the Weekly appeal notes that the Guardian's case rests on a precarious claim: the assertion that California stands opposed to both the U.S. Supreme Court and other state courts on a critical element of antitrust law.

Tim Redmond

Editor's note: From the moment SF Weekly published its first issue as a New Times publication in 1995, Bruce Brugmann, Tim Redmond, and their employees at the Bay Guardian made clear their intention to run us out of town. Brugmann famously said that San Francisco would be our Afghanistan. When all else failed, they sued SF Weekly in 2004 for sales below cost. The nearly $16 million verdict is on appeal.

On Good Friday, April 10, Redmond sent us the following announcement making clear his intent to up the ante. We offer you his words in their entirety, and our response.

Dear Mike:
 
I'm working on a story updating the status of our lawsuit. The inferences our lawyers have drawn from the various communications they've received from your legal team post-trial are that:
 
1. You do not intent [sic] to post an appeal bond, and
 
2. You believe that the Bank of Montreal and other members of a banking consortium have a prior security claim on all of your assets and
 
3. With the cooperation of your lenders, you have sufficient asset-protection to render New Times/Village Voice Media in effect judgment proof.
 
I am told by sources that at some point after we filed our lawsuit, you and Larkin transferred a significant amount of money out of the company and into your personal assets. The figure I've heard from sources is around $15 million.
 
Do you consider any of the above statements inaccurate? If so, please clear things up for me. If not, would you care to comment on the ethics of a going concern, a newspaper chain publishing 16 papers every week, using asset transfer and protection schemes and significant transfers of assets out of the company to avoid the payment of a legitimate debt?
 
Have you informed all your other creditors -- say, the printers you use and your landlords, vendors and suppliers -- that they will be unable to collect any money you owe them should you choose not to pay because your companies will hold themselves out as judgment proof (because they have no liquid assets that aren't subject to a Bank of Montreal lein [sic])?
 
Thanks, I look forward to hearing from you by Monday afternoon for publication in next week's paper.

Here's my response:

In final hearing, judge mulls Weekly arguments against anti-competitive Guardian verdict.

By Andy Van De Voorde

The final trial-court hearing in the Bay Guardian’s below-cost pricing lawsuit against the SF Weekly took place Tuesday at San Francisco Superior Court, capping the opening chapter of a bitter judicial battle that has already dragged on for more than three and a half years.

Although Superior Court Judge Marla J. Miller has offered preliminary rulings at previous hearings, she remained mute Tuesday on the question of how she would decide the Weekly’s motion for a new trial and its request that she overturn a jury verdict that awarded the Guardian $6.4 million in damages.

Tuesday’s hearing was punctuated with routines familiar to anyone who sat through the six-week trial: Guardian attorney Ralph C. Alldredge’s cell phone going off while he was making an argument; his colleague Richard P. Hill turning in his chair to glower at the gallery; and a perpetually overwhelmed court reporter complaining that attorneys for both sides were talking too fast.

Newspaper asks court to reverse Guardian verdict

By Andy Van De Voorde

Hoping to derail a runaway case that could have sweeping repercussions for the newspaper industry in California, SF Weekly has asked a judge to overturn the verdict in the Bay Guardian’s below-cost sales lawsuit.

Barring such a ruling, the Weekly asked Superior Court Judge Marla J. Miller to order a new trial.

The motions filed earlier this week argue that the Guardian received a huge money verdict despite not having offered any actual evidence of an illegal below-cost pricing conspiracy. They also make the case that, if allowed to stand, the unprecedented $15.9 million verdict violates the Weekly’s First Amendment and due process rights. Further, the Weekly argues that the trial was riddled with legal error that unfairly shifted the burden of proof onto the defense and allowed the Guardian to make grossly exaggerated damage claims.

Court grants Brugmann ten-year halo of protection

By Andy Van De Voorde

As expected, the judge in the Bay Guardian’s predatory pricing lawsuit against SF Weekly and its parent company has issued an injunction designed to protect the Guardian against any “injury” from its longtime rival.

In a decision handed down on May 19, Superior Court Judge Marla J. Miller ordered the Weekly not to sell any advertising below cost unless it is ready to go to court and prove that its pricing decisions weren’t intended to harm the Guardian.

First Amendment arguments get short shrift from judge in Guardian v. Weekly lawsuit

By Andy Van De Voorde

Apparently unsatisfied with a $15.6 million jury verdict in its predatory pricing lawsuit against SF Weekly, the Bay Guardian Friday asked a judge to give it even more.

During a post-trial hearing, Guardian attorney Ralph C. Alldredge told Superior Court Judge Marla J. Miller that his client wanted the entire $6.4 million verdict trebled rather than only the portion of the damages incurred within one year of the filing of the complaint.

The effect would have been to turn a $15.6 million verdict into a $19.2 million verdict.

As expected, Guardian boss wallows in his trial-court victory.

By Andy Van De Voorde

The dust has barely settled at Superior Court following the jury verdict last week in the Bay Guardian’s predatory pricing lawsuit against the Weekly.

But already Guardian boss Bruce Brugmann is doing what The Snitch expected him to do: Loudly encouraging others to use his successful (for now) shakedown effort as a model for other businesses to employ against their competitors.

Brugmann must be angling for a bronze statue down at the courthouse — or in Red Square.

In a story published Tuesday in the Boston Phoenix, Brugmann tells Phoenix media writer Adam Reilly precisely how he wants to see his $15.6 million verdict against the Weekly and its parent company New Times (now Village Voice Media) interpreted.

“Everyone can use our suit as a model and template for any big chain that’s coming in and trying to predatory-price them,” said Brugmann.

Golly.

Creating a “model and a template” for a flood of anticompetitive litigation that will inevitably lead to fewer newspapers and higher prices for the mom ‘n’ pop business owners who buy most of the ads in alternative weeklies.

Such a legacy to leave for a self-professed defender of the little guy.

Guardian hits jackpot—but don’t count the money yet, Bruce.

By Andy Van De Voorde

The Bay Guardian hit the lawsuit lottery for the second time in its history Wednesday, winning a $15.6 million judgment against SF Weekly and its parent company, New Times (now Village Voice Media) and it’s former sister paper the East Bay Express. The jury awarded the Guardian $1.79 million for damages from Oct. 2001 to Oct. 2003, and $4.6 million for damages from Oct. of 2003 to present, but that second amount could be trebled.

Village Voice Media vows that Guardian publisher Bruce Brugmann will have a difficult time cashing his ticket.

The verdict came despite the fact that the Guardian produced no direct evidence of a predatory pricing conspiracy aimed at harming the Guardian and called not a single advertiser to the stand to testify on its behalf.

The Snitch packs his things and leaves the courthouse.

By Andy Van De Voorde

It was a packed house Wednesday at Superior Court when the jury announced its verdict in the Bay Guardian’s predatory-pricing lawsuit against the Weekly.

The Snitch had been lurking around the courthouse for the past four days when word came down from an informant there would be a jury verdict at noon.

That was actually delayed slightly when the court reporter, whose inability to keep up with witnesses as they testified had become legendary, decided she needed a break after working on another trial during the morning.

As a result, there were 15 minutes during which the owners of both the Weekly and the Guardian waited together in the courtroom, sitting in the gallery.

The minutes passed painfully as the second hand on the courtroom clock plodded its way around the orb.

As time slowly dragged on, increasing numbers of Guardian employees and hangers-on filed in.

The Snitch had anticipated more of the snickering and chortling that he had heard so much of during the trial.

Instead, Bruce Brugmann, Tim Redmond, Guardian co-publisher Jean Dibble, and controller Sandy Lange, among assorted other hangers-on, watched quietly as the jury foreman handed them their early Christmas gift: damages in the amount of more than $15 million.

According to evidence presented at trial, that figure is far more than the Guardian has earned throughout its history.

The panel voted 11 to 1 that the Weekly, its former sister paper the East Bay Express, and their parent company, New Times (now Village Voice Media) intended to injure the Guardian and had done so.

When The Snitch heard the verdict, he was disappointed but not surprised.

Today's verdict in Bruce Brugmann's suit was an expensive lesson in laws, lawyers, and lawsuits, and how one man's obsession manipulated the system.

Like Ralph Nader, Bruce Brugmann is out of touch with reality. Feigning obliviousness to the Internet, the dot-com bust, 9/11, the Bush economy — and the $330 million lost by the San Francisco Chronicle to these very factors — Brugmann insisted in court that only SF Weekly threatened his wallet.

Jurors agreed and hit Village Voice Media with more than $15.6 million in damages. Brugmann thus earned in court more than he ever earned in 40 years of publishing.