'Depositions on everybody' 'Depositions on everybody' (September 02, 2005)

Nationwide, litigants seeing similar tactics in battles with Clear Channel

By Jon Wiener

The audit released by the city Monday charging that Clear Channel failed to adhere to terms of its lease at Shoreline Amphitheatre is one of a handful of similar battles underway elsewhere in the U.S. The media giant has locked horns with other public agencies or rival promoters around the country in seemingly no-holds-barred legal battles.

The tactics are illustrated by the experience of former Mountain View City Council member Rosemary Stasek, who was tracked down and served with a deposition less than 12 hours after she had returned from Afghanistan. The reason: A comment Stasek had made in December 2004 about the company "robbing the city blind" appeared in the Voice in April, when the former city council member was termed out of office and living in Kabul.

To date, the company has announced plans to depose more than three dozen people in the Shoreline dispute. The list includes city council members past and present, former city employees -- including a former cashier at City Hall -- as well as anybody who has spoken to the press about the case.

"They're noticing depositions on everybody," said city attorney Michael Martello, "people that barely remember the amphitheater."

For those who've taken on the company in court, it's a familiar refrain. Thousands of miles from Mountain View, outside St. Petersburg, Fla., Clear Channel lawyers have deposed more than 20 people in a battle over another amphitheater the company operates. Clear Channel has even deposed the lead attorneys for the public agency that is suing them, in an apparent attempt to turn them into witnesses and disqualify them from the case.

In Chicago, Denver, Austin, Atlanta and elsewhere around the country, the Texas media giant has done battle with local agencies, rival promoters and disgruntled concertgoers, many of whom fashion themselves as would-be Davids willing to take on the country's largest radio station owner and concert promoter, a Goliath that lists $20 billion in assets. Summer of defeat

After the Voice article was published in April, company lawyers sent the city a half-dozen public records requests, including one that demanded supporting documentation for Stasek's comment. Earlier this week, the company got a delayed but still emphatic response: A city audit released Monday said the company owed the city more than $3.6 million in back rent and penalties under conditions of its lease agreement.

The audit represents yet another chink in the company's armor following a summer full of legal defeats -- at a time when the company's concert business continues to disappoint and radio profits are falling.

In the Florida case, a judge rejected the company's claim to sovereign immunity, a legal privilege reserved for public agencies. Hundreds of people had complained about noise levels at Ford Amphitheater near St. Petersburg, and the Hillsborough County environmental planning commission discovered that the venue -- which was built by the company -- did not match the building plans the company had submitted.

Clear Channel lawyers argued that the company was a state service because the amphitheater is located on land owned by the Florida State Fair Authority. Had Clear Channel prevailed, it would have indicated that any private company doing business on public land could be considered a government service. (Company spokespersons did not respond to several requests for comment for this story.)

"They just challenge everything," said an attorney representing the Hillsborough County commission, which has already spent more than half a million dollars trying the case. The parties have been in confidential mediation sessions since the ruling, but could be back in court if they can't reach an agreement by late October.

In March, a Chicago jury awarded a total of $90 million in damages to a rival promoter who said Clear Channel prevented him from hosting a Supercross motorcycle racing series by threatening to freeze out venues that signed deals with the company, called Jam Sports. A mountain of internal Clear Channel e-mails used as evidence in the case documented the company's plan to squeeze the competition.

"This is great," wrote Ken Hudgens, Clear Channel's vice president of marketing, in one such e-mail. "We need to be scaring people -- not the other way around."

In another e-mail, the executive in charge of the entertainment division endorsed a strategy of "kill, crush and destroy." He later admitted recommending that disc jockeys at the company's radio station criticize competitor Jam Sports on the air.

It is tactics like these that have the U.S. Department of Justice investigating the company's business practices, according to Jeff Singer, the lawyer who represented Jam Sports in the case.

"Clear Channel would do anything -- and I mean anything -- to assure that it would continue to generate profits promoting its live entertainment," said Singer.

A judge recently overturned part of the verdict and ordered a new trial on damages in the case. Clear Channel's own filings with the Securities and Exchange Commission says the company "is vigorously seeking to overturn or nullify the adverse verdict and damage award." The same filing alludes to "certain other legal proceedings."

Singer said he is not worried and plans to re-file. As he told reporters after the verdict in March, "If you have enough courage and strength in America, with our civil justice system, even David has a chance against Goliath." Legal counsel canned

The David and Goliath metaphor is one that Mountain View officials like to use to describe their dispute with the company. Recent events could offer them hope that, just like in myth, David could wind up winning.

Since the Jam Sports verdict, Clear Channel has announced plans to spin off its entertainment division, which it purchased in 2000 for $4.6 billion. Stock analysts, most of whom have rated shares of the company as "sell," say the division is worth far less today. Meanwhile, the company's general counsel and executive in charge of its entertainment division have been sent packing.

Rob Vining, who faced a legal challenge from Clear Channel over his Web site www.clearchannelsucks.net, said the company's main legal strategy appears to be scare tactics.

"They try to push people around with their name," Vining said in an e-mail from Austin, Texas, "then wilt away when they know that a large publicized case is in front of them and they won't look like the good guys."

Vining settled with the company in March after scorning its original offer. "It was less than a few beers at a local bar," he said. The final agreement prevented Vining from using the site to provide commercial services, so he held on to the name and dedicated the site solely to antagonizing the company.

Martello, too, is shaping up to be quite a thorn in Clear Channel's side. In his role as chief city spokesperson in the Shoreline lawsuit, he has drawn the company's ire by responding sarcastically to their public records requests and his willingness to comment on what he calls "their mob-like approach to what they do."

The company has tried several times to find out how much money Mountain View has budgeted for the case, and how much it has already spent. The city has refused.

"They want to know how we can withstand the onslaught," he said.

As the case inches towards trial, that question is sure to be on plenty of people's minds.
E-mail Jon Wiener at jwiener@mv-voice.com

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