Politico reported last week that the World Cup was supposed to be a moment of unalloyed triumph for the city of Inglewood and the owner of SoFi Stadium, its signature sports venue. But the estranged partners have been embroiled in a long-simmering legal dispute, and now the city has emerged with a victory in court.
Insider reached out to California based attorney Richard Hamlin of Hamlin|Cody for his thoughts on the update of the litigation between the parties.
There are two separate Petitioners. Hollywood Park, the sprawling mixed-use property that includes the $5 billion-plus stadium — host to eight of the tournament’s soccer matches — filed one lawsuit. The owners of the Forum, an Inglewood landmark and arena, and the owners of the Intuit Dome, home to the Los Angeles Clippers NBA basketball team, filed another lawsuit. Both sought the same thing.
The Petitioners and the City of Inglewood signed various Development Agreements in 2009, 2012 and 2015. These agreements gave the Petitioners exclusive billboard rights in parts of the City. In 2015 and in 2020, the City leased portions of the public right-of-way, including sidewalks and street medians, to WOW Media. The lease restricted competing billboards within 2,000 to 2,500 feet of the WOW locations, which included locations bordering the Petitioners’ projects.
The Petitioners asked the judge to order the City to revoke permits issued to WOW Media that conflicted with their own out-of-home rights. They argued the leases to WOW violated the City’s ordinances and were otherwise illegal. The judge found the leases were legal and refused to revoke WOW’s permits. That was a clear, but far from complete victory for the City.
The Petitioners also sued the City for damages based on its alleged breaches of their Development Agreements. The judge who refused to invalidate the WOW leases did not rule on the damage claims. He considers only “writs and receivers,” which are a specialized type of case. He does not hear breach of contract claims. Instead, he stayed the breach of contract claims pending assignment to a judge who does hear general civil cases.
The City will still need to defend the Petitioners’ damages claims. We did not read the complaint, which runs to 435 pages including exhibits, but we have seen estimates of claims for several hundreds of millions of dollars in damages. WOW Media has argued in its answer that the Petitioners’ Development Agreements are themselves void “because they violate state law, municipal ordinances, and/or public policy.”
Any appeal will address issues such as compliance with the HBA, the California OAA, and local ordinances. There will be an issue concerning the legality of the proposed WOW sign locations. WOW has apparently obtained one or more patents for its “intellectual property” involving the use of kiosks on public sidewalks and street medians. An appeal will also test the concept of a “Transportation Information Network.” (We drafted an ordinance for a “Municipal Communications Network” in 2014.)
Finally, there is a third lawsuit pending in another branch of the Los Angeles Superior Court claiming the same damages. Stay tuned for developments.
The lesson for out-of-home operators is to be very careful in their contracts with local governments. Make sure you know the requirements for a valid contract with the city. Make sure the city’s promises are stated simply and clearly. Make sure those promises are enforceable. Contracts with cities can be very profitable. At the same time, city governments can change with the next election. The next mayor, city council, or city manager may not agree with their predecessors. Some cities may change their views on the enforceability of their promises if a better deal comes along.
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