Judge Scolds Local Satellite Operator Seeking Dismissal
LAW
by Amanda Bronstad
DirecTV has taken another step in its effort to have a $300 million lawsuit filed last fall by several of its independent dealers dismissed.
In a March 8 preliminary injunction hearing, L.A. Superior Court Judge Victoria Chaney declined to order the company to halt mailing letters to 12,000 independent satellite dealers asking them to sign amended contracts as part of a change in accounting practices in DirecTV’s sales relationships.
In October, a dealer filed suit on behalf of 30,000 DirecTV dealers, claiming DirecTV was slowly weeding them out by changing its accounting methods. Specifically, the dealers have had to pay charges to DirecTV if a customer temporarily or permanently stops satellite services. Meanwhile, DirecTV is behind in its monthly residual payments to the dealers, the suit said.
Chaney took the opportunity to offer DirecTV several suggestions on improving its business practices. She recommended that DirecTV extend the deadline to return the amended contract letters and criticized DirecTV’s poor communications with its dealers.
“The problems that you have encountered in this preliminary injunction hearing could have been avoided, and a lot of money and time could have been avoided, had a clear mission statement been placed into the letter,” Chaney said.
The company plans to ask Chaney to dismiss the lawsuit at a planned March 26 hearing.
Distant Leader
An L.A. partner of Seattle-based Davis Wright Tremaine LLP has been named managing partner after 12 years with the firm.
Richard Ellingsen, a partner in the health care practice of Davis Wright, replaced Bradley Diggs, who has been firmwide managing partner since 1994. Ellingsen joined Davis Wright after his L.A. health law boutique, Ellingsen Christensen & Steinberg, merged with the Seattle firm in 1990. Ellingsen brought with him several health care clients, including Huntington Memorial Hospital and Torrance Memorial Medical Center.
More McDonald’s Fallout
Simon Marketing Inc., crumbling as a result of the loss of McDonald’s Corp. as a client, has sued the company that managed the distribution of finances associated with its client contracts.
Simon Marketing, the Los Angeles-based subsidiary of Simon Worldwide Inc., sued Perseco Systems Services LP of Downers Grove, Ill. for breach of contract earlier this month. The suit also named marketing firms Creata Promotion Inc. and The Marketing Store Worldwide Inc., which worked with Simon Marketing in its contract for game pieces with McDonald’s.
The action is the latest in a series of suits following the discovery that a Simon employee swindled winning McDonald’s game pieces worth $20 million in prizes.
McDonald’s sued and dropped its contract with Simon Marketing after the revelation. Simon Marketing in turn sued McDonald’s to recover costs.
Simon Marketing officials declined to comment about the most recent suit.
Staff reporter Amanda Bronstad can be reached at (323) 549-5225 ext. 225, or at
[email protected].
