Caruso Prevails: Appellate Court Reinstates Antitrust Claim and Upholds Anticompetitive Complaint against General Growth.

LOS ANGELES -- The California Court of Appeals has ruled that real estate owner and developer Rick Caruso's $40 million antitrust and anticompetitive lawsuit against General Growth Properties (NYSE:GGP) should proceed to trial. The court rejected General Growth's appeal and, in a further setback for the company, reinstated the antitrust component of the lawsuit that was set aside in a July 2004 ruling in Los Angeles Superior Court.

"We won on all counts and we are anxious for this case to move forward. General Growth has been using intimidation and unfair business tactics to limit competition. It's time to shine a spotlight on these disturbing practices," said Caruso. "This lawsuit has national attention as it has the potential to be a landmark, precedent setting case for the retail industry."

General Growth has been systematically attempting to sidetrack Caruso's Americana at Brand retail, housing and entertainment development in Glendale, Calif. that is set to be built across the street from its Glendale Galleria regional mall. General Growth launched its opposition to Caruso's project after it acquired the Galleria in late 2002. With strong community support, the city approved the Caruso project in April 2004. General Growth immediately financed a referendum forcing a city-wide election on the project. Voters approved the project in the September 14, 2004 election.

The Caruso lawsuit claims that during this period General Growth intimidated tenants that were exploring leasing at the Americana at Brand, interfered with Caruso's business and employed unfair business practices by attempting to force a partnership to divide prospective tenants.

"General Growth appears to believe that it doesn't have to play by the rules. I believe we should respect each other's businesses, adhere to basic principals of fairness and embrace healthy competition," added Caruso. "There is room in the market for everyone. Great new retail projects are good for neighboring businesses and for the community. In the case of my company, Caruso Affiliated, market studies prove that our centers bring new customers not just to our property but to the entire district."

The ruling came in the California Court of Appeals, second appellate district in Los Angeles. The panel included Justice Vaino Spencer and Justice Miriam Vogel with Justice Frances Rothschild writing the opinion.

"With this ruling the Caruso lawsuit returns to Los Angeles Superior Court where a trial date will be set," said Irell & Manella's Henry Shields, Caruso's attorney in the matter.

The Americana at Brand is a $264.2 million mixed-use project set on 15.5 acres that includes a two-acre park surrounded by a pedestrian promenade, fountains and outdoor seating and gathering places. It will feature 475,000 square feet for retail, dining and entertainment uses with 338 residential units.

Caruso is known for creating open-air community and regional centers that serve as local gathering places. Its style has become a recognized brand within the retail industry, which has become dominated by lifestyle shopping formats. A recognized leader in this trend, Caruso Affiliated's growth is approximately two times that of the largest publicly traded REITs and sales per square foot at Caruso properties are 40 percent higher than the industry average.

The success of Caruso's stylish and elegant outdoor environments where people can gather, shop and be entertained has challenged the traditional "mall" concept and set a new standard in the industry. The average length of stay of a guest on a Caruso property runs as much as three times that of a conventional shopping center, and the conversion rate to sale consistently averages 90 percent or higher. These key factors evidence an enhanced shopping experience that explains how tenants at Caruso properties consistently demonstrate dramatic same store sales increases, which in some cases reflect nearly double their performance in other local centers.