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Gregory, MMSA, escape Hot Creek fallout

January 21, 2011

Mammoth Mountain CEO Rusty Gregory. Photo/Mammoth Times

A couple of very high-profile Mammoth players in the Hot Creek lawsuit remained invisible in last month’s $30 million judgment against the Town of Mammoth Lakes.

Mammoth Mountain Ski Area and its CEO, Rusty Gregory, were left unscathed – not even mentioned. This is in spite of the fact that at the beginning of the case, in 1997, both MMSA and Gregory himself were caught in some nasty crossfire.

They still are, in a sense.

When the case first was filed, both Gregory and MMSA were named as defendants, along with the Town.
However, the presiding judge in 2005 said the suit should not lump the ski area and Gregory in with the town, and he pulled them from the case.

Hot Creek responded with an astonishing, separate action against MMSA and Gregory, suing them to the tune of $185 million, arguing that both interfered with the Town Council and the Hot Creek developers.
Hot Creek based its case on the principle of “tortious interference,” which occurs when a person intentionally damages the plaintiff’s contractual or other business relationships.

“The position we took,” Gregory said this week, “was that first of all, we didn’t get in the middle.
“We were very involved, but we didn’t interfere with the contract between the town and Hot Creek.
“We were trying to facilitate an agreement among all of us, including the FAA, so that Hot Creek and the Mountain and air service would work out for everybody.

“It was complicated, so I’m not blaming anybody on the outcome one way or the other; nor am I blaming Hot Creek.”

Also, Gregory said the case for him and MMSA was based in First Amendment rights.

The sheer amount of the lawsuit, Gregory’s team held, was that it qualified as a strategic lawsuit against public participation – a so-called SLAPP case.

A SLAPP case is a retaliatory lawsuit intended to silence, intimidate or punish those who have used public forums to speak, petition or otherwise move for government action on an issue.

Gregory’s team fired back with an “anti-SLAPP” motion.
“That’s a protected First Amendment right – that any of us have – that we have the right to petition our government,” he said.

Gregory’s team filed the motion challenging the principles of the case, and when the court agreed to hear the motion, the Hot Creek litigants dropped the case against Gregory and MMSA “without prejudice.”

“That means, pending the outcome of the Town of Mammoth Lakes case, they (Hot Creek) could, at their discretion come back and start the suit again.”

Currently the Town is appealing the $30 million judgment to the California Supreme Court.
“It’s a little bit like a case within a case,” Gregory said.

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