FRESNO, Calif., March 5, 2014 /PRNewswire/ -- The largest Yellow Pages company in the country was sued today by its principal independent competitor in Northern California. A lawsuit filed by the Fresno based company AGI Publishing, Inc. that publishes the Valley Yellow Pages directories in cities and counties from Bakersfield to the Oregon border alleges violations of the California Unfair Practices Act (UPA) and seeks both an injunction and damages.
Defendants include AT&T, Inc., and Cerberus. In 2012, those two companies established a new limited liability company called YP Holdings, LLC to own and operate the largest Yellow Pages business in the world. Before 2012, that business had been owned by AT&T, Inc, which until the 1980s, monopolized the telephone business in the United States, and remains one of the 25 largest companies in the world. Cerberus is a private investment company that uses billions of dollars in capital obtained from some of the wealthiest individuals and companies in the world to invest in ventures where it ultimately expects to earn high rates of return for those investors.
The lawsuit filed today in Fresno Superior Court alleges that defendants have engaged in three different practices prohibited by the California Unfair Practices Act in order to harm and weaken the plaintiff as their principal competitor in the Yellow Pages business throughout northern California. Those practices include: 1. using "loss leader" sales involving advertising space in Yellow Pages directories as well as the online counterparts for those directories; 2. offering selected advertisers "secret discounts" substantially below the prices shown in published "rate cards." which purport to show the prices defendants charge all advertisers; and 3. pricing a substantial portion of the advertising space in their Yellow Pages directories below cost where defendants believe they can take business away from Valley Yellow Pages with those prices. The complaint also alleges that defendants have required customers to agree that they will keep these practices secret, particularly from competitors like Valley Yellow Pages.
The Unfair Practices Act was adopted during the 1930s in response to abuses by large national businesses that had prospered during the Great Depression and were engaging in anticompetitive and fraudulent behavior designed to extend their market power at the expense of smaller local businesses that were weakened by the depression. "It is not surprising that the recent Great Recession has spawned the same kinds of anticompetitive behavior by dominant companies who have continued to grow in size and power despite the economic hardships faced by individuals and small businesses. Through those practices, giant companies see an opportunity to preserve and extend their market power at the expense of small independent businesses that have borne the brunt of negative economic conditions during the recent recession" says Ralph Alldredge, the lead attorney representing Valley Yellow Pages. "Injunctions under the Unfair Practices Act guarantee a level playing field for all competitors large and small, and damage awards under the UPA can compensate both competitors and consumers for the harm they have suffered as a result of any violation."
Alldredge was the lead trial attorney for the Bay Guardian newspaper in a recent Unfair Practices Act case involving alternative newspapers in San Francisco, which resulted in an injunction and a judgment for more than $20 million following a 2008 jury trial in San Francisco Superior Court. He also represents the owners of the San Francisco Examiner in a case pending in San Francisco Superior Court that alleges violations of the UPA by the Hearst corporation as owner of the San Francisco Chronicle.
The Fresno law firm of Dowling Aaron is co-counsel for Valley Yellow Pages. Donald Fischbach is the principal trial lawyer from that firm who will be working on the case.
Defendants are represented by James Gilliland and Maureen Sheehy of the San Francisco law firm of Kilpatrick Townsend & Stockton LLP.
Contact information: Ralph Alldredge can be reached at (510) 375-7200. He will also receive voice mail or text messages through that number. Email communications can be sent to email@example.com.
A copy of the lawsuit is attached.
SOURCE Valley Yellow Pages