Steptoe & Johnson LLP: Federal Lawsuit Charges Carpenters, Laborers Unions with Violating Anti-Trust Laws and RICO
LOS ANGELES--(BUSINESS WIRE)--Jan 10, 2019--A Los Angeles real estate development company today filed a complaint in federal district court in Los Angeles, charging the Carpenters and Laborers Unions with unlawfully attempting to use California’s signature environmental law to block the construction of a residential and retail project in Panorama City.
The complaint, filed by The Icon Company, alleges an illegal scheme by the Unions to manipulate the California Environmental Quality Act to block the project (and other projects) unless Icon ceded to the Unions’ demands to use union labor to build it.
In addition to two union locals, the complaint names multiple union officials, charging them with violating the nation’s anti-trust laws as well as the Racketeering Influenced and Corruption Organizations Act.
“This practice of exploiting environmental laws against developers in order to bolster union coffers by controlling the supply of construction labor in the market has been going on for far too long,” said Karl Tilleman, a partner at Steptoe & Johnson LLP, which filed the complaint on behalf of Icon. “It’s time someone stood up to these illegal bullying tactics of the unions, which are damaging the community and economy in far-reaching ways.”
Indeed, the complaint alleges that this practice has a dramatic effect on artificially restricting the supply of desperately-needed housing in Southern California, especially in lower-income communities, as developers in higher-income areas can better absorb the Union’s higher construction labor costs by charging higher rents.
In 2016, Icon bought a 9-acre property in Panorama City that is the site of a former Montgomery Ward store that closed in 2001. The company announced plans to construct 623 apartments, 60,000 square feet of office and retail space and a public park at an estimated cost of $150 million.
“The Icon Panorama is an exciting opportunity to redevelop a blighted site into a vibrant mixed-use community in a high-density area that will include much needed contemporary housing, destination retail and a public park,” said Icon co-founder Billy Ruvelson.
The project, at 14665 Roscoe Boulevard, will complement the future Metro line along Van Nuys Boulevard and become a catalyst for future development in an area that has seen very little investment and redevelopment in decades, Ruvelson said.
Under the guise of alleging CEQA-based claims, the Unions tried at every step throughout the city’s planning process to delay the project, which in fact was compliant with environmental laws, according to the complaint. Meanwhile, the project received overwhelming support from the surrounding community and was approved – at every stage of the planning process – by the City of Los Angeles.
When the Planning Commission approved the project on April 26, 2018, Commission President David Ambroz chided the Unions that their “appeal was specious at best” and that their assertions in their appeal were “patently false.” Ambroz further stated: “It is a shame that we are now seeing CEQA used as a tool to both delay community redevelopment and potentially not harm by not improving the environment. It is so dismaying and a trend that I do not see stopping anytime soon without significant reform.”
Only when their intensive and illegal efforts failed did the Unions then file a lawsuit to further delay the project, the complaint alleges.
The problem is not confined to Icon’s Panorama City project. There are at least 13 other significant mixed-use real estate projects in the city of Los Angeles that are facing similar coercive tactics from the unions as the projects move through the planning process, the complaint alleges.
Among other things, the lawsuit seeks permanent injunctions barring the unions from trying to continue to control the supply of construction labor and spreading false and inaccurate information about the project, as well as the additional expenses, damages and legal fees that the company has suffered as a result of the union’s illegal activities.
About The Icon Company
The Icon Company is a Los Angeles-based real estate development company formed in 2008 by Billy Ruvelson and Eran Fields. Icon specializes in the construction of multi-family and student housing. The developers have developed more than 2 million square feet of projects valued at $600 million nationwide.
About Steptoe & Johnson LLP
In more than 100 years of practice, Steptoe has earned an international reputation for vigorous representation of clients before governmental agencies, successful advocacy in litigation and arbitration, and creative and practical advice in structuring business transactions. Steptoe has more than 500 lawyers and other professional staff across offices in Beijing, Brussels, Chicago, London, Los Angeles, New York, Phoenix, San Francisco, and Washington. For more information, visit www.steptoe.com.
View source version on businesswire.com:https://www.businesswire.com/news/home/20190110005650/en/
CONTACT: Karl Tilleman
Steptoe & Johnson LLP
KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA
INDUSTRY KEYWORD: PROFESSIONAL SERVICES LEGAL CONSTRUCTION & PROPERTY COMMERCIAL BUILDING & REAL ESTATE RESIDENTIAL BUILDING & REAL ESTATE
SOURCE: Steptoe & Johnson LLP
Copyright Business Wire 2019.
PUB: 01/10/2019 02:01 PM/DISC: 01/10/2019 02:01 PM