COURT REINSTATES CARUSO SUIT MALL BUILDER ALLEGES THREATS BY COMPETITOR.

Byline: Alex Dobuzinskis Staff Writer

GLENDALE - Shopping mall developer Rick Caruso has won a state appellate court decision reinstating his $40 million lawsuit against the Glendale Galleria's owner.

The appellate court decision clears the way for a trial on antitrust and unfair business practices allegations against Galleria owner General Growth Properties, which opposes Caruso's plan for a competing Glendale shopping center.

In his lawsuit, Caruso accuses General Growth of soliciting his agreement not to compete for tenants. The suit also accuses General Growth, which owns 170 malls nationwide, of threatening store chains with delaying or denying them leases at other malls if they lease at Caruso's proposed Americana at Brand center.

``This is a tactic that has become commonplace in the mall business,'' said Rick Moses, senior vice president and chief development officer for Caruso Affiliated. ``The big mall owners across the country have done this (on) many occasions to try to stop competing projects.''

The 3-0 decision, by the state's 2nd District Court of Appeal in Los Angeles, was issued Thursday. It reinstated Caruso's allegations that General Growth violated the state's antitrust law, and upheld his complaint of unfair competition and tortious interference.

The Glendale Galleria adjoins the proposed site for Caruso's $264 million Americana at Brand, formerly called the Town Center.

General Growth spokesman Arthur Sohikian said the appeals court decision is a preliminary ruling on procedural issues and does not validate Caruso's allegations.

``We respectfully disagree with the court's opinion that the suit that Mr. Caruso filed was merely a 'business dispute,''' Sohikian said. ``We continue to believe that Mr. Caruso's lawsuit against General Growth Properties was a way to silence their voice in the governmental approval process for the Town Center project in Glendale.''

Caruso's antitrust claim was dismissed at the trial court level, where the judge concluded he had failed to demonstrate the formation of a conspiracy by General Growth. The court also found that Caruso's lawsuit arose from General Growth's protected right of free speech to publicly oppose the project.

But the appeals court found Caruso's main claim is ``not that General Growth opposed the proposed plan at public hearings, but that it made private solicitations and threats designed to limit competition for tenants and disrupt potential lease agreements.''

Glendale City Councilman Dave Weaver, who supported the Americana at Brand project, welcomed the court ruling.

``Everything has been an anti-Caruso campaign by General Growth and they deserve just what they get and they're going to get it,'' Weaver said.

Caruso filed the lawsuit in February 2004. No date has been set for trial, but it is expected to proceed soon, Moses said.

Glendale Galleria has filed its own lawsuit challenging the city's favorable environment impact report for Caruso's project. A judge tentatively affirmed the EIR report in January, but General Growth's appeal is expected to be heard later this year by the Court of Appeal.

Alex Dobuzinskis, [phone]

alex.dobuzinskis(at)dailynews.com