San Diego County Fair still under cloud of bid-rigging lawsuit

The San Diego County Fair opens June 7, and while fair organizers at the 22nd District Agricultural Association are focused on rebuilding after the damage cause by the COVID-19 pandemic, the three-week long event remains under the shadow of a lawsuit alleging district officials manipulated the award for a contract to operate the popular midway.

The lawsuit was filed in 2021 by Talley Amusements, a carnival company that contends it lost out on a potentially lucrative contract to run the midway — home of rides, games and food — for that year’s fair.

A recent ruling by the judge overseeing the suit turned aside a bid by district lawyers to dismiss the case, concluding Talley at this time has enough evidence to allow the case to move on.

The suit contends that the district’s chief executive Carlene Moore ordered changes to the scoring of proposals from Talley and a competitor, RCS, that ended up making RCS the contract winner. Though the fair was not held because of the pandemic, the district later awarded a contract to run the midway to RCS for the 2022 fair.

Talley is arguing it was the rightful winner of the 2021 contract, and because it was a five-year deal, it should now have the rights to the midway. It also contends that the qualifications to bid on the contract awarded for the 2022 fair were slanted to favor RCS.

While last year’s fair went off without a hitch and preparations for this year’s “Get Out There” themed event have been moving along, the lawsuit has not gone away.

In March, San Diego Superior Court Judge Kenneth Medel issued a ruling declining to dismiss the case, as lawyers for the district had sought, and also said that Moore and another executive, Melinda Carmichael, could still be sued individually for fraud and contractual interference.

Tristan Hallman, the chief communications officer for the district, said in an email that Medel’s ruling did not address any evidence in the case and noted the judge also dismissed some claims against the district from Talley.

“The District and its board, which has done its due diligence on this matter, believe this lawsuit is wholly without merit,” he wrote. “To be frank, the allegations are hogwash, and we look forward to presenting our defense and evidence at trial.”

John Moot, the lawyer for Talley, welcomed Medel’s latest ruling.

“The court’s ruling means that the District’s attempts to have the case dismissed failed and Carlene Moore and Melinda Charmichael can be held personally responsible for interfering with the contract Talley won as having the highest score and best bid before they changed the scores not once but twice, as testified to by the District’s contracts manger and contract analyst,” he wrote in an email.

Just two days after Medel’s ruling, the district board of directors, after meeting in a closed session, gave Moore a raise, boosting her 2022 pay retroactively by 4.65 percent and granting her a 2.7 percent hike for 2023. Hallman said the raises are in line with pay packages for someone with her experience, and that Moore “has performed exceptionally well under very challenging conditions since joining the District just before the pandemic hit.”

The district has vigorously fought the lawsuit, saying the suit is over a contract that was never awarded. They have also argued that fair officials were concerned Talley’s proposal was way outside the mainstream of bids and was an attempt to make an offer so tempting it amounted to an effort to “buy” the contract. They have also said that Moore did nothing improper.

The allegations against her rely on deposition testimony from two former district workers who said under oath the scores for Talley were changed after the proposals had been open and Moore was told that Talley had won.

Last year, just weeks before the fair was set to begin, Medel ruled Talley had presented enough evidence that the contract scoring process for the 2021 fair was tainted to warrant an injunction, which blocked the contract awarded to RCS for the 2022 fair.

At the time, the district warned the injunction may not only imperil the midway operations but could cause cancellation of the entire fair. However, within days both sides worked out an arrangement in which RCS got 60 percent of the midway and Talley 40 percent.

The litigation largely stems from an effort undertaken several years ago by the district to turn over operating the midway to a single operator. For decades the fair operated under a so-called “independent” midway, in which the district inked individual contracts with ride vendors and game operators.

But the process has been buffeted by protests over contract awards and accusations of favoritism and bid rigging, and the district has not yet had a master operator in place. This year will, again, be an independent midway with more than 20 independent operators on site, Hallman said.