La Costa Resort and Penthouse End Legal Fight

A $522-million libel suit filed over a 1975 Penthouse magazine article alleging organized crime ties to the exclusive La Costa resort has been settled out of court, ending a decade of costly litigation.

According to the agreement reached between owners of La Costa, located in northern San Diego County, and Penthouse publisher Robert Guccione, each side will pay for its own legal costs, estimated at more than $20 million, and that is all.

A lengthy letter scheduled to be filed in court Friday and signed jointly by Guccione and La Costa’s owners, explained the reasons for the settlement. Each side concluded that “continued litigation will only be further torture and cause more expense to all parties. . . . It appears that if the case were to continue through yet additional court proceedings, whoever would ultimately win would enjoy a Pyrrhic victory at best.”

Exchange Praise

In the letter, Penthouse lauds La Costa resort owners for their “commendable civic and philanthropic” endeavors while La Costa praises Guccione and Penthouse for their “personal and professional awards.”

The lawsuit was spawned by a 1975 article entitled “La Costa: The Hundred-Million-Dollar Resort With Criminal Clientele.” The story by two free-lance writers attempted to link the resort and its owners to organized crime, calling La Costa a meeting place for gangsters.