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Legal tangle is 'war' with media firm

Clear Channel owns the Ford Amphitheatre which sits on land owned by the Florida State Fair Authority, a codefendant in a noise lawsuit.

By TOM ZUCCO
Published July 4, 2005

Mike Martello had squared off against huge corporations in the past and figured he knew what to expect.

Then he crossed paths with media behemoth Clear Channel Communications.

Martello is the city attorney for Mountain View, Calif., a town of 73,000 about 10 miles north of San Jose in the heart of Silicon Valley. It is home to Internet icon Google, and just next door to it, the city-owned Shoreline Amphitheatre.

Clear Channel operates the amphitheater and has sued to stop the city from making annual audits of the amphitheater's finances. The city thinks Clear Channel may owe it millions and has countersued. In the meantime, the legal battle has turned ugly and expensive.

"This is fighting for the sake of fighting, trying to run up the legal bills," Martello said last week. "But they picked the wrong city. We're not poor, and we're going after a public accounting."

Twenty-three hundred miles awa y in Hillsborough County, another local government is squaring off in court against Clear Channel over issues surrounding an amphitheater. That battle is also contentious and costly.

Each side has rung up nearly $200,000 in legal bills, and no matter who prevails, lawyers say, taxpayers could wind up footing the bill.

The Ford Amphitheatre is at the center of three lawsuits pitting Clear Channel and the Florida State Fair Authority against the Hillsborough County Environmental Protection Commission and residents who live near the facility. At issue is the amount of noise the 20,000-seat amphitheater generates. Clear Channel built and operates the $23-million amphitheater, which sits on Fair Authority land off Interstate 4.

The EPC, which oversees the county's environmental regulations, says unapproved changes to the amphitheater's design help explain why hundreds of noise complaints have been lodged by residents since the facility opened in July 2004.

The lawsuits began in December, and as they drag through the courts, the EPC has found itself swamped by a series of motions, depositions and other legal maneuvering by the opposition. Among the examples:

--The EPC has deposed two people: amphitheater general manager Ed Morrell and amphitheater architect John Ahrens. Clear Channel has deposed about 20 EPC employees, including executive director Richard Garrity, who answered questions for nearly seven hours. Clear Channel has asked to depose Hillsborough County commissioners - who sit as the EPC - as well as the EPC's lead attorneys in the case.

--Clear Channel made a public records request for all e-mails the EPC sent to anyone relating to the amphitheater or the Fair Authority. It took an EPC paralegal more than 40 hours to sift through 10,000 e-mails.

--When the EPC asked Clear Channel for sound measurements from the amphitheater, Clear Channel submitted one page of scribbled notes.

--Clear Channel filed a motion to disqualify the EPC's lead trial attorney, Mark Bentley, the night before a hearing in the case.

"Even if we win, we're going to have to fight to pay back the county taxpayers for legal bills," said EPC general counsel Rick Tschantz. "We don't have a guarantee our legal fees will be reimbursed."

The EPC's legal bills, Tschantz said, have reached more than $200,000. "And we could still be at this two years down the road."

Giles Ellis, the Fair Authority's controller, said he couldn't say precisely how much the Authority has spent in legal bills. "But we're in the six figures," he said.

Figures released by the Schiff Law Group, general counsel for the Fair Authority, show attorneys' fees close to $150,000, plus about $35,000 in fees for the firm that previously represented the agency in the lawsuits.

The Fair Authority, which is a codefendant along with Clear Channel, also gets some of its funding from tax dollars, presenting what Tschantz called a double-whammy.

"Either way," Tschantz said, "the taxpayer loses."

Concerns about excessive concert noise are not new to Clear Channel-operated venues. The Sound Advice Amphitheatre in West Palm Beach, the Germain Amphitheater in Columbus, Ohio, the White River Amphitheatre near Auburn, Wash., and Chastain Park Amphitheatre in Atlanta have all had to deal with noise issues in recent years.

Agreements were reached in most of the cases. But at least one amphitheater - not owned or operated by Clear Channel - was forced to close because of noise problems.

The Pacific Amphitheatre at the Orange County, (Calif.), Fairgrounds was shut down for several years as a result of a noise lawsuit brought by residents. The amphitheater recently reopened, but only for fair events.

"This (amphitheater noise) is not a new problem," said Gary Bongiovanni, editor in chief of Pollstar, a trade magazine that tracks the concert industry. "It's why amphitheaters are usually built out on the fringe of a city."

That amphitheaters remain open and with a full slate of concerts is vital, Bongiovanni said, especially to Clear Channel.

"The vast majority of amphitheaters - about 40 - are controlled by Clear Channel," Bongiovanni said. "It's impossible to do an amphitheater tour without them."

But last summer's outdoor season was a disaster.

"We don't really know why," Bongiovanni said. "The most visible symptom was the huge price discounting at every amphitheater in the country, including the Ford Amphitheatre."

Still, Clear Channel is a formidable business.

Since it acquired SFX, the nation's largest live entertainment company, for $4.4-billion in 2000, Clear Channel has solidified its standing as the biggest player in the music industry.

Founded in 1972, the company controls roughly 1,200 radio stations, including eight in the Tampa Bay area. It also owns about 776,000 outdoor advertising displays, operates more than 100 venues in the United States, and had $9.4-billion in revenues last year.

But its rise to power has come with a price.

In March, a federal jury in Chicago found that Clear Channel illegally used its entertainment industry clout to block rival promoter JamSports from promoting motorcycle races. The jury rejected antitrust allegations against Clear Channel, but ordered the company to pay JamSports $17-million in missed profits and $73-million in punitive damages.

Much of JamSports' case involved the introduction into evidence of internal Clear Channel e-mails that recommended the company mount an aggressive campaign against JamSports, including suggesting that disc jockeys at two Clear Channel stations made negative comments about the rival promoter.

"Punitive damages are awarded when a jury believes that the litigant has engaged in willful or malicious conduct, bordering on criminal," JamSports attorney Jeffrey Singer told reporters after the verdict. "If you have enough courage and strength in America, with our civil justice system, even David has a chance against Goliath."

And since July 2003, the Justice Department has been looking into whether Clear Channel violated antitrust laws in one of its radio markets, according to a filing with the Securities and Exchange Commission. The department also is investigating whether Clear Channel violated laws by limiting airplay of artists who don't use its concert services.

Clear Channel officials declined requests to be interviewed by the Times, which has a marketing partnership with the Ford Amphitheatre.

But company founder Lowry May s told Fortune magazine in 2003, "We're not in the business of providing news and information. We're not in the business of providing well-researched music."

Ironically, the EPC argues, the noise issue at the Ford Amphitheatre could have been resolved early on and with relatively little expense.

But that point has passed.

The lawsuits have been very disruptive to the EPC, Tschantz said. "We have to monitor every concert now and sometimes have people there all day. And this is something taxpayers are picking up.

"But if you're going up against Clear Channel, you've got to be in for the long haul," Tschantz added. "It's just war, really."

Something Martello says he knows all too well.

In California, Clear Channel has asked to see every public complaint made against the Shoreline Amphitheatre over a five-year period, and has deposed city employees who made comments to local newspapers.

Clear Channel officials say they're merely trying to properly defend themselves.

Martello sees it differently.

"They are trying to bury us," he said of Clear Channel. "They even deposed cashiers, people who don't even know who runs the amphitheater.

"I've litigated with Merrill Lynch and AT&T, and they could have buried us. But they sat down and talked to us.

"That's not happening here."

[Last modified July 4, 2005, 01:41:02]