State high court rejects anti-SLAPP motions by city seeking NFL franchise

The state Supreme Court denied anti-SLAPP motions by the city of Carson stemming from its unsuccessful attempt to lure a National Football League franchise.

The unanimous ruling Monday by Justice Mariano-Florentino Cuéllar found there was no evidence the city was acting in direct connection to "an issue of public interest" when the mayor and city council undertook actions that led to breach of contract and fraud claims. Rand Resources LLC et al. v. City of Carson et al., 2019 DJDAR 971 (Cal. Sup. Ct., filed July 8, 2016).

"We're pleased the court agreed with us as to the majority of our claims," said Kevin H. Scott, a partner with Huang Ybarra Gelberg & May LLP in Los Angeles who represented the plaintiff in oral argument. "We look forward to the case proceeding against the city."

The closely-watched case should help clarify limits to the concept of public interest under California's anti-SLAPP law. The statute is designed to discourage lawsuits meant to suppress free speech. The state Legislature amended the law in 1997 to ensure that goal by instructing courts to "construe broadly" the public interest concept.

Cuéllar found the case really came down to the more mundane contract disputes over who represented the city in negotiations.

"Since there is no evidence or persuasive argument that the identity of the city's agents was a matter of public interest in this case, defendants' conduct does not qualify as protected activity," Cuéllar wrote.

A broad interpretation of the law, Cuéllar added, does not "swallow a person's every contact with government, nor does it absorb every commercial dispute that happens to touch on the public interest."

In 2012, the city entered into a two-year contract with Richard Rand and his company, Rand Resources, to act as the city's exclusive agent in negotiating with the NFL.

As Cuéllar noted, the agreement between Rand and the city "did not begin under the most auspicious circumstances." An earlier mayor tried "to extort a bribe from Rand," leading to a separate, successful lawsuit against the city.

Rand later contended the city violated the deal by allowing another developer, Leonard Bloom, to act on the city's behalf. Well before the initial two-year contract ended, Rand said, the city had already begun to mislead him and "hide their activities" involving Bloom's company, U.S. Capital LLC.

The new effort allegedly used promotional materials developed by Rand and involved the creation of "a new entity with the same exact name as Mr. Rand's company," according to the ruling.

Rand filed a six-count complaint in Los Angeles County Superior Court against the city, Mayor James Dear and Bloom. That court threw out five of these claims based on an anti-SLAPP claim filed by the city but was reversed by a unanimous panel of the 2nd District Court of Appeal.

Cuéllar mostly affirmed the June 2016 ruling by the Justice Elwood G. Lui. But he differed with the appellate court on two claims relating to Bloom, finding he was acting in connection to a public interest and was not a party to underlying misconduct by city officials.

Bloom's attorney, John V. Tamborelli, said he was pleased with the "narrow" approach the court took.

"They segregated out the city of Carson as it related to what they were doing, unbeknownst to us," said the principal with Tamborelli Law Group in Woodland Hills.

While the case will still need to go back to the 2nd District, Tamborelli added, "If they follow this ruling, my client should be out of this case."

But Scott said Bloom's team still needs to survive a "two-prong analysis," adding Rand plans to attack the strength of his public interest claims in the appellate court.

Attorneys for the city did not return a call seeking comment.