San Bernardino to Pay $1.3M to Settle Federal Suit

Car Being Towed By Tow Truck

The City of San Bernardino (“City”) has agreed to pay Larson O’Brien client Pepe’s Towing Service (“Pepe’s”) $1.3 million to settle a federal lawsuit filed in 2019 accusing former and current city leaders of awarding no-bid tow contracts to six companies in exchange for political contributions, the San Bernardino Sun reported.

The article reviewed the history of Pepe’s attempts to secure a tow contract with the City for the better part of two decades, resulting in Pepe’s filing suit against the city and more than a dozen city officials for constitutional rights violations. Pepe’s owner Manny Acosta alleged that through the City’s rotation contracts, which are governed by resolutions adopted by the City Council, the City “leaders and tow contractors have created a monopoly on towing in town.” 

Larson O’Brien’s press release on Sept. 25 explained that the City only enforced certain contract requirements such as “minimum lot size” against new applicants, including Pepe’s, which were knowingly impossible to meet. Meanwhile, tow companies with already existing contracts continued to be approved with missing, incomplete, or falsified inspection results.

As Pepe’s counsel, partners Stephen G. Larson and R.C. Harlan, prepared for trial, they also “found that the tow companies in the city’s rotation had contributed to the campaigns of certain elected officials.” 

“More than anything else, I hope this sends an important message to other cities and counties that this type of favoritism is unacceptable and won’t be tolerated,” Stephen stated in the article. “The city of San Bernardino is not the only city that has engaged in this kind of favoritism and cronyism that we saw in this case, but rather unfortunately it’s something which we are seeing happening in other places as well. It’s my hope that folks look at what happened here and learn from it.”

Read the full article by Brian Whitehead of the San Bernardino Sun covering the settlement and case history here


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