Statement Regarding United National Maintenance v. San Diego Convention Center Corporation Ruling

Published on : Friday, August 22, 2014

San-Diego-Convention-Center-300x97On Friday, August 15, the Ninth Circuit Court of Appeals issued its ruling on United National Maintenance (UNM) v. The San Diego Convention Center Corporation (SDCCC) in favor of SDCCC.

 

UNM, a vendor of trade show cleaning services, initially sued SDCCC in November of 2007 on claims for intentionally interfering with contractual relationships, antitrust violations and interference with prospective economic advantage. This lawsuit was filed after SDCCC adopted a policy in July of 2007 mandating that they would be the exclusive provider of cleaning services staffing within their facility.

 

In the lower court on May 4, 2011, the jury returned a unanimous verdict on UNM’s intentional interference with contractual relations claim. The jury awarded UNM damages of $668,905. The jury did not reach a verdict on UNM’s remaining claims. SDCCC filed a motion for new trial on UNM’s intentional interference with contractual relations claim and a renewed motion for judgment as a matter of law on UNM’s other claims.

 

 

The district court held that SDCCC was entitled to a new trial as the district court had previously erred in not giving a legal interpretation of UNM’s contracts. The district court held that UNM had failed to present sufficient evidence on the specific elements of its antitrust claims and finally they dismissed UNM’s claims for interference with prospective economic advantage and punitive damages as well as UNM’s motion for injunctive relief. After which UNM appealed, bringing the matter to the Ninth Circuit Court.
 
In their ruling, the Ninth Circuit Court of Appeals amended its opinion to state that SDCCC is a public entity and denied UNM’s petition for rehearing. The Ninth Circuit cited that SDCCC operates as an “instrument” of San Diego based on the facts that SDCCC’s board members are appointed by the City of San Diego, SDCCC’s assets revert to San Diego and the fact that “SDCCC must publicly account for its operations.” SDCCC “is an extension of the municipality of San Diego and thus does not require active supervision by the state in order to retain its immunity from antitrust liability.”

 

Judge Andrew D. Hurwitz concurred, stating that in addition to state action immunity, SDCCC would win anyway on the antitrust claims because “no jury could reasonably find that SDCCC engaged either in monopolization or an attempt to monopolize by mandating that its own employees clean its building.”

 

“This is a win for San Diego, but more importantly a landmark win for the facility management industry as it will allow venues to operate and manage their buildings as they see fit,” said Carol Wallace, President & CEO of the San Diego Convention Center Corporation.

 

At this point UNM may (1) file a petition with the US Supreme Court requesting a review of the Ninth Circuit decision; (2) put on a new trial in the District Court that would be limited to the issue of interference with contract; or (3) dismiss the case.

 

The San Diego Convention Center Corporation is a public benefit corporation created by the City of San Diego to exclusively manage and operate the 2.6 million sf waterfront facility. Now celebrating nearly 25 years of success, the San Diego Convention Center has generated $22.9 billion in regional economic impact, $430.3 million in tax revenues and supports 12,500 jobs countywide.

 

Source:- San Diego Convention Center

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