Paramount : Judge Pares Swap Meet Suit

A Los Angeles Superior Court Judge has dismissed a part of a lawsuit seeking $5 million each from three City Council members, the city manager and the former finance director for their support of a daily tax levied against the swap meet in Paramount last year.

Modern Development Co., which operates of the swap meet on its 27-acre Paramount Drive-In, is also seeking $5 million from the City of Paramount. That portion of the suit was allowed to stand by Superior Judge Edward M. Ross in his July 3 ruling.

The judge dropped the suit against Councilmen Charles R. Weldon and Gerald A. Mulrooney and Councilwoman Esther Caldwell who voted for the tax on June 4, 1985, and City Manager Bill Holt and then-Finance Director David Spellman.

City Atty. Maurice O’Shea said Ross ruled that “continuous prosecution of the five people was frivolous” and served no “good cause.”

The court also ordered Modern Development to pay the city $5,000 to help defray the cost of litigation, O’Shea said.

Swap meet vendors are required to pay $1 per day and Modern Development a business license fee of $1 per day for each vendor.

The collections are expected to generate about $360,000 a year.

After the council approved the tax, Modern Development, which had been paying the city about $45,000 in annual business fees before, refused to pay the tax. The city sued the company. The company countersued, charging that the tax is a violation of civil rights and an attempt to drive the company out of business.

In March, the Superior Court ordered the company to turn over to the city the money it had been collecting but was withholding.

By the end of May, the company had paid the city $362,117 in delinquent taxes, according to city officials.