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Supreme Court denies appeal against San Diego Convention Center

On Jan. 12, the United States Supreme Court denied a petition submitted by United National Maintenance (UNM) seeking further review of the Aug. 15, 2014 ruling by the Ninth Circuit Court of Appeal in favor of the San Diego Convention Center Corporation (SDCCC), a public benefit corporation created by the City of San Diego to exclusively manage and operate the 2.6 million sf waterfront facility.

The denial means that UNM’s antitrust claims are now settled and there is no longer any exposure for triple damages, attorney’s fees or punitive damages. The only remaining claim is for intentional interference of contract, which only provides for single compensatory damages. Unless an earlier status conference is requested, the case will be returned to Judge Anthony J. Battaglia in the trial court for further proceedings on March 13, 2015.

UNM, a vendor of tradeshow cleaning services, initially sued SDCCC in November 2007 on claims for intentionally interfering with contractual relationships, antitrust violations and interference with prospective economic advantage. This lawsuit was filed after SDCCC adopted a policy in July 2007 mandating that it would be the exclusive provider of cleaning services staffing within its facility.

In the lower court on May 4, 2011, the jury returned a unanimous verdict on UNM’s intentional interference with contractual relations claim, awarding UNM damages of $668,905. However, the jury did not reach a verdict on UNM’s remaining claims. SDCCC filed a motion for a new trial on UNM’s intentional interference with contractual relations claim and a renewed motion for judgment as a matter of law on UNM’s other claims. The district court held that SDCCC was entitled to a new trial as the district court had previously erred in not giving a legal interpretation of UNM’s contracts. The district court held that UNM had failed to present sufficient evidence on the specific elements of its antitrust claims and finally they dismissed UNM’s claims for interference with prospective economic advantage and punitive damages as well as UNM’s motion for injunctive relief. After which UNM appealed, bringing the matter to the Ninth Circuit Court.

In the Aug. 15, 2014 ruling, the Ninth Circuit Court of Appeals amended its opinion to state that SDCCC is a public entity and denied UNM’s petition for rehearing. The Ninth Circuit cited that SDCCC operates as an “instrument” of San Diego based on the facts that SDCCC’s board members are appointed by the City of San Diego, SDCCC’s assets revert to San Diego and the fact that “SDCCC must publicly account for its operations.” SDCCC “is an extension of the municipality of San Diego and thus does not require active supervision by the state in order to retain its immunity from antitrust liability.”

Judge Andrew D. Hurwitz concurred, stating that, in addition to state action immunity, SDCCC would win anyway on the antitrust claims because “no jury could reasonably find that SDCCC engaged either in monopolization or an attempt to monopolize by mandating that its own employees clean its building.”


See related article
San Diego Convention Center Corp. wins court appeal from vendor


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