Litigation

Battle of the Free Newspaper Titans -- Multi-Million Dollar Judgment Under California's Unfair Trade Practices Act

By Bruce Nye

California's Unfair Trade Practices  Act, Business & Professions Code sections 17000 and following, makes it unlawful to engage in the "production, manufacture, distribution or sale" (section 17040) of an article or product with the intent to destroy competition.  Section 17043 makes it unlawful for a person in business to sell a product at less than cost or to give away an article or product, for the purpose of injuring competitors or destroying competition.  Section 17044 makes loss leaders (defined in section 17030) illegal.

This brings us to The San Francisco Bay Guardian and the SF Express.  Almost every  major city has one or more of these  progressive, free, tabloid  weeklies.  The most venerable one in San Francisco is the Bay Guardian, founded in 1966 with the  stated plan to "Print the news and raise hell."  In its early years, the BG and its founder, Bruce Brugman engaged in a lengthy, and ultimately unsuccessful, anti-trust action against San Francisco's two more traditional dailies, the Chronicle and the Examiner.

Enter the SF Weekly, an upstart, hip tabloid owned by Village Voice Media.  According to the Bay Guardian, the Weekly tried to muscle its way into the market, and muscle BG out, with predatory, loss-leader advertising policies.  In March, a San Francisco jury agreed, awarding BG $6.3 million in damages.

Now, the trial judge has trebled the damages under section 17082 (or at least trebled most of them -- I haven't quite figured out how the math worked) and issued an injunction preventing the Weekly from doing this any more (required by section 17078).  Story here in The Chronicle.

Full post as published by CalBizLit on May 21, 2008 (boomark / email).