Seeking at least $13 million in damages, 10 Orange County cable TV operators sued Assessor Bradley L. Jacobs Wednesday, accusing him of waging a "vendetta" against them by charging illegally high taxes that will boost customer prices and cost taxpayers millions more in legal fees.
Cable representatives warned that the suit, filed in Orange County Superior Court, could drag on for six years and end up forcing the county to pay $50 million to $75 million in damages, costs and backtaxes.
Through Deputy Assessor Ron Cooper, Jacobs declined comment on the suit. But Jacobs, who is running for reelection in June, defended his assessments in a campaign statement earlier this week.
"I'm going to see that no one gets special treatment just because they have a lot of money to throw around," Jacobs said, in a reference to a massive media blitz that the cable industry has undertaken to drum up public opposition to the taxes.
Jacobs has said he is only following the lead of several other California counties that have initiated similar assessment methods to more accurately reflect the soaring value of cable properties. But the companies say no other assessor has done it as aggressively as Jacobs.
While expressing confidence in their case at a news conference Wednesday, cable representatives have continued a behind-the-scenes effort to enlist the Board of Supervisors in an arm-twisting campaign against Jacobs.
Supervisor Roger R. Stanton confirmed in an interview that industry representatives met with him for an hour last Friday, urging that the board deny Jacobs the legal fees necessary to defend against the suit. The representatives met with the other four supervisors in a series of private meetings earlier this month. (Although the assessor is an independent constitutional officer, the supervisors approve his budget.)
Cable spokesman John Gibbs described the lobbying effort as "simply pragmatic" and said it had nothing to do with the strength of the industry's case. The 10 companies allege that their tax bills climbed from a total of $2.5 million last year to $13.5 million this year because of a new--and unconstitutional--method of assessing their properties.
"We will prevail . . . , " Gibbs said, but added, "I think if they hire a law firm and pay them a million or more we will be doing this for at least six more years. We'll be litigating this forever."
Stanton said he told cable representatives during their private meeting that it would be "absurd" to deny legal fees to Jacobs after paying to defend numerous lawsuits against other elected officials, such as Sheriff Brad Gates.
"All of the sudden we don't do it with Jacobs? Do you have any idea how that would look?" Stanton said he told them. "As a citizen I would be outraged that the board is favoring one industry."
As for the industry's public relations campaign, which has consisted of full-page newspaper ads and thousands of mailers urging residents to complain to the supervisors, Stanton dismissed it as "nonsense."
At issue in the legal battle is a method of computing the tax value of a cable company's property, including buildings, equipment, cable lines and public rights of way granted by the county to lay those lines.
Under Jacob's new assessment method, the county now also considers how a cable company's value is enhanced by its exclusive franchise to provide service to an area.
The county contends that, mostly because of that franchise, the cable companies have tripled or quadrupled in market value since the late 1970s, as reflected in the selling prices of companies that have changed ownership in recent years.
The industry contends that company values have soared largely because of intangibles, such as business enterprise and community goodwill engendered by good service.