Local Publisher Faces Charges

By Jorge Casuso

June 24, 2009 – The City has become a player in what is shaping up to be an old-fashioned newspaper war when the City Attorneys office last week filed a lawsuit against a local paper charging it was illegally printing legal notices.

The City charged that David Ganezer is falsely claiming that the newspaper he publishes, the Santa Monica Observer, is "legally adjudicated” by a Superior Court judge as a newspaper of general circulation for the city and can therefore publish legal notices, including property notices such as foreclosures.

The lawsuit alleges that Ganezer, who claims his paper is the only one adjudicated for Santa Monica, “has not obtained the required court authorization to publish notices.”

The City also is questioning his adjudication for the County, allowing him to publish notices such as DBAs. The Santa Monica Daily Press and the British Weekly are the only other local papers with such adjudication, according to the County Registrars Office.

The Observer was one of more than half a dozen news sources that tried to help fill the local news gap left when the Santa Monica Outlook shut down in March 1998 after 123 years covering the beachfront city of some 85,000.

The Lookout News on surfsantamonica.com, one of the nation’s first independent local Internet news sites, was the first, being launched in March 1999 by former writers and editors from The Outlook.

The site was followed by Our Times, a section of the Los Angeles Times that folded shortly after it was started, as well as the weekly Santa Monica Mirror and the Santa Monica Daily Press, both of which are still publishing.

The lawsuit is not the first time the City steps into the fray. In 2001, Ganezer filed a lawsuit against the City when it refused to print its legal notices in his paper, said Gary Rhoades, Deputy City Attorney in the Consumer Protection Unit.

“The judge found that the paper was not a viable paper,” Rhoades said.

Rhoades said that the Santa Monica Observer does not have either County adjudication, which allows it to publish DBA notices, or City adjudication, which allows it to publish legal notices.

“He got (an adjudication) back in 2000 for a different newspaper, but that paper went out of business, if it ever got off the ground,” Rhoades said.

As a result, the Observer is violating the law by illegally publishing both County and City notices, Rhoades said.

Ganezer’s attorney did not return calls for comment by Tuesday’s deadline.

In fact, only one paper published in Santa Monica can run legal notices, such as foreclosures and probate notices, and that is the British Weekly, the Lookout found.

Neither the Daily Press nor the Mirror can run such notices. (The City uses the Daily Press to print City notices, primarily items relating to public bidding and land use matters, which under the City Charter must be published in a newspaper of general circulation published in the city.)

The Daily Press’s adjudication to print legal notices was vacated six months ago when The Observer and the British Weekly challenged it in court. The Daily Press prevailed, but the ruling was overturned on appeal.

The Daily Press plans to reapply, while the British Weekly’s adjudication will likely be challenged, according to sources.

Obtaining adjudication to print legal notices is not an open and shut case. Under the law, a newspaper must meet at least one of two major requirements – it must be physically published in the city, or it must have a paid subscription base in the city.

None of the papers being circulated in Santa Monica print in the city, since there are no offset web presses, the current style used for printing newspapers.

While all of the papers are free, the Daily Press met the second requirement because it also has a paid subscription base, according to sources.

But its adjudication was vacated when a judge -- ruling on Ganezer’s appeal -- found that a list of readers who make voluntary contributions to a free newspaper did not qualify the requirement for a bona fide list of paying subscribers. The same ruling had been made last year by the California Court of Appeal for the First District

The lawsuit comes at a time when technology is spurring proposed changes in newspaper adjudication laws. A proposed bill in the California legislature would change a 125-year-old law that requires that every ordinance be signed and published at least once in a newspaper or printed and posted in at least three places.

Last week, members of a state Senate committee said they would not support the bill to amend the law by allowing city and county governments to post final ordinances on their Web sites, instead of paying for the legal notices in newspapers.

Sponsored by the City Clerks Association of California, the proposed bill is viewed as a way to save local governments money during tough economic times. The association noted that newspapers no longer had the largest readerships and that many residents requested notices via email instead of regular mail.

William Macfadyen, founder and publisher of www.noozhawk.com , “urged the senators to pass the bill because it legitimizes online publishing and would be an important first step in transforming and modernizing the state's legal adjudication process,” according to a report in the Lake County News. ("Senate committee holds back legal publishing bill," June 18, 2009)

“It would offer the public more access to the notices, many of which only appear in print, not on newspapers' Web sites,” Macfadyen said during the committee hearing last Wednesday.

The only person who testified against the bill at the hearing was Thomas Newton, general counsel for the California Newspaper Publishers Association (CNPA), which represents some 750 daily newspapers.

Newton said that “newspapers exist to draw advertisers and readership, adding that people don't go to city and county Web sites for news,” according to the report.

The suit filed by the City against Ganezer last week did not limit itself to the adjudication issue. It also alleges that two of the businesses the publisher operates have been illegally providing legal services.

“While providing services through MyDBA.com and Easy Legal Services, Ganezer has held himself out as entitled to practice law, offering attorney consultations, ‘family law’ services, and general legal assistance,” according to a statement issued by the City Attorneys Office Tuesday.

The lawsuit claims that Ganezer “gave up his law license in 2001 pending charges filed against him by the California State Bar,” according to the statement.

The suit alleges that Ganezer and his businesses are engaged in a number of unlawful business practices, including false advertising, falsely holding oneself out as entitled to practice law and providing legal document assistance services without registration;

The suit also alleges that Ganezer committed perjury on a business license application and is operating in Santa Monica without a business license.

Anyone using legal services should always double-check the provider on the State Bar website, Rhoades said. Those seeking to publish a legal notice should verify the authority of the newspaper to do so with the County.