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Daily Journal Loses Bid to Assume Rival’s Contract

(CN) - The Daily Journal Corp. lost its bid to take over a legal-ad contract between Los Angeles County and rival Metropolitan News Co. A California appeals court said the issue is moot because the contract expired, and the plaintiff can't force Met News to reimburse the county for allegedly wasteful overpayments.

The Daily Journal challenged the 2004 contract awarded to Met News to place legal advertising in its own paper and in other newspapers throughout the county. The Daily Journal claimed that the contract was improperly awarded, and that Met News was overbilling the county by as much as $375,000 a year.

It also claimed that the Met News bid understated the true advertising rates from other newspapers, some of which allegedly complained that Met News used unethical and strong-arm tactics.

The Daily Journal demanded that the county cancel its contract with Met News and award it to the Daily Journal instead. In the alternative, it wanted the county to seek reimbursement for any overpayments, saying the county's failure to do so constitutes taxpayer waste.

The 2nd District Court of Appeal in Los Angeles ruled that the contract can't be canceled and transferred to the Daily Journal because it expired in 2008.

The appeals court similarly rejected the plaintiff's taxpayer waste claim.

"In the absence of allegations showing fraud or collusion," Justice Rubin wrote, "this was purely a matter of the County's discretion and is therefore not subject to a claim for waste or an action in mandate."

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