City Solutions Collects Unfair Competition Award From Clear Channel Subsidiary; Payment Follows 9th Circuit Court Reinstatement of $9 Million Fraud Verdict.

LOS ANGELES -- A Clear Channel Communications subsidiary finally made payment on a $9.8 million verdict dating back to 2002 when a jury found Eller Media Company, now known as Clear Channel Outdoor Inc., liable for fraud and unfair competition. The payment was made after the 9th Circuit Court of Appeals reinstated a $9 million fraud verdict and affirmed an $800,000 unfair competition award. Eller had reneged on an agreement to work with Santa Barbara-based City Solutions Inc. (CSI) on a joint bid to the City of San Francisco to provide 1,000 modular news racks in return for a 20-year exclusive advertising contract.

"Eller Media double-crossed CSI at the last minute in order to win the contract without any regard for simple business ethics," says Nick Brestoff of Moskowitz, Brestoff, Winston & Blinderman in Century City, CA, CSI's attorney. "My client is pleased that the 9th Circuit agreed with the original jury verdict. And they are even happier that Clear Channel has, with the exception of interest, made full payment on the verdict."

In late April of this year, the 9th Circuit Court of Appeals reinstated the jury's unanimous conclusion that Eller backed out of the deal and then utilized proprietary information it had gained from CSI to offer a competing bid with a new Clear Channel subsidiary, Adshel, just 12 days before the deadline to submit bids. The Eller/Adshel duo then won a very close bidding war against CSI and was awarded the 20-year contract. In essence, the maneuver enabled Eller to cut CSI out of its 50/50 deal with Eller so that Clear Channel could reap 100% of the profits.

In 2002 a jury awarded CSI $9.8 million in damages, but Eller subsequently filed a motion asking Judge William Alsup to overturn both the fraud and the unfair competition verdicts and to grant a new trial. Judge Alsup denied Eller's requests for a new trial and upheld the award for unfair competition. However, he set aside the $9 million award for fraud. CSI appealed this ruling to the 9th Circuit Court of Appeals which reversed and reinstated the $9 million verdict. However, there is still the issue of how much interest Clear Channel will be forced to pay. The 9th Circuit will rule on this issue in the weeks to come.

City Solutions Inc. is a privately held company based in Santa Barbara, CA and Lake Worth, FL, which specializes in large-scale modular news racks. The company has contracts and news racks in Florida, Indianapolis Indiana and Columbus, Ohio.

Moskowitz, Brestoff, Winston & Blinderman is a law firm based in Los Angeles specializing in high-stakes environmental, employment, and business tort litigation; and in public interest cases based on the Ralph M. Brown Open Meetings Act and the California Public Records Act.