General Growth, Caruso do battle

LOS ANGELES — As the controversial and highly anticipated Americana at Brand continues to fill out the Glendale skyline, developer Rick Caruso and the owners of the Glendale Galleria remain entrenched in a tense, three-year legal battle that went to trial this month.

Caruso filed a $40-million antitrust suit against General Growth Properties in 2004, alleging that the Chicago-based real estate investment trust engaged in interference and unfair business practices by strong-arming tenants away from potential deals at the Americana.

General Growth denies the claim.

After three years of collecting evidence and preparing their cases, lawyers from both parties gave opening statements in a downtown Los Angeles courthouse on Oct. 2. The jury trial is ongoing, and is expected to last through early November, court officials said.

Before the $400-million mixed-use development was approved by the City Council in April 2004 and then by voters in a September 2004 referendum, General Growth submitted a comprehensive objection to the Americana’s environmental impact report to the city.

Caruso Affiliated Holdings argued that the complaint was a tactic to block the project and crush a competitor in the regional retail market, but General Growth contends that it merely opposed the project as designed and would have supported a different design.

After the council approved the project despite the mall’s opposition, General Growth filed a suit against Caruso Affiliated Holdings in May 2004 alleging that the Americana’s environmental impact report violated California law.

A judge rejected that claim in a January 2005 decision, paving the way for the project to proceed.

Though some predicted that decision would be the final chapter in the Americana-General Growth conflict, Caruso has pressed ahead with his own antitrust case, which attorneys have outlined in court over the past three weeks.

Economist Harry Frech, a UC Santa Barbara economics professor who testified Monday on behalf of Caruso, returned to the witness stand Thursday to face cross-examination.

General Growth attorney David Battaglia needled a report by Frech that positioned the Galleria above the Americana and Old Town Pasadena in terms of regional market share, arguing that Frech inflated the Galleria’s share by not including key retail centers like the Glendale Exchange and Glendale Marketplace in the study.

Frech defended the report on grounds that centers like the Exchange were not in direct competition with more traditional malls like the Galleria and Americana.

“I don’t believe it’s a relevant market,” Frech said of a number of Tri-City retail centers that Battaglia suggested were left out.

After Frech’s morning testimony Thursday, Caruso Affiliated’s lead attorney Henry Shields wrapped up the plaintiff’s case in the afternoon and the defense initiated its case Friday.

The trial is expected to continue through early November, court officials said.

Meanwhile, the under-construction 15.5-acre retail and residential megaplex that is the Americana is on tap for its scheduled spring 2008 opening.

 RYAN VAILLANCOURT covers business, politics and the foothills. He may be reached at (818) 637-3215 or by e-mail at ryan.vaillancourt@latimes.com.