Studio’s $20-Million Suit Accuses City of Conspiracy, Rights Violations

GMT Studios has sued Culver City for $20 million, alleging that the city conspired against the company and violated the constitutional rights of its owners.

The suit, filed in U.S. District Court in Los Angeles, names the city, the chief of police, members of the City Council, City Treasurer Sue McCabe, former Mayor Albert Vera and former Fire Chief Michael Olsen.

The suit says GMT executives were denied due process of law and freedom of speech, and were subjected to illegal search and seizure, arrest and invasion of privacy.

The lawsuit follows a two-year dispute between the commercial production studio and city officials over the amount GMT owes in business license taxes.

Although the city tax rolls listed GMT as a motion picture studio for 11 years, Culver City tax officials reclassified the business in 1992 as commercial rental property. The change means that producers who film at GMT must pay an extra $230 a day in fees or $1,500 for a year.

The company opened in Culver City in 1981 after it received permission from the city to convert a warehouse on Buckingham Parkway into a studio. Today, GMT operates five stages and grosses $1 million a year, according to company executives.

GMT’s clients produce television commercials, music videos, feature films and TV shows. In March, pre-production began at GMT on “The James Dean Story,” which the studio says will gross about $100 million.

However, the lawsuit says, the James Dean Foundation has threatened to cancel its agreement with Alan Hauge, owner of GMT, to produce the film as a result of the city’s action.

The suit was filed on March 29. Only the Culver City city attorney has been willing to comment on the case.

Previously, however, city officials pointed out that GMT is not in the city’s pre-established studio zones, areas currently occupied by Sony Entertainment Pictures and Culver Studios. A number of small studios produce films and television shows in Culver City in converted warehouses and are classified as commercial property rentals, officials say.

“All other film operators . . . of the warehouse-based studios comply with the letter of the law,” City Atty. Norm Herring said.

The lawsuit states that the city arbitrarily changed its tax classification without notifying the company’s top three executives: Hauge, Dennis Beck and Frank Di Pasquale. When GMT refused to comply, the suit says, fire inspector James Forte harassed and threatened GMT employees and clients.

The harassment continued even after GMT obtained an annual on-location permit in the name of its subsidiary, the Laser Film Co. GMT has used the permit to co-produce movies, videos and commercials with its clients, so that clients would not have to pay the city’s on-location fees.

On March 31, 1994, Culver City police officers raided GMT Studios and Hauge’s home, seizing tax documents and personal items, according to the suit. The suit also alleges that GMT executives were not allowed to produce any of the materials listed in the search warrant.