Decision to toss lawsuit against San Bernardino upheld by appeals court - San Bernardino County Sun

A federal court's decision to toss a lawsuit by a company claiming it was discriminated against by the city of San Bernardino was upheld Thursday by the U.S. 9th Circuit Court of Appeals in Pasadena.

"It's a big win for us," said City Attorney James F. Penman. "They were demanding $14 million (to settle) this lawsuit." A federal court in 2008 threw out the lawsuit by Alvarez and Associates, a development and contracting company run by Jaime Alvarez and daughter Marisela Labastida. The company worked with the city's Economic Development Agency on a low-income housing project in the 1990s.

Alvarez ran a federal government program for the city where he would fix up houses and then sell them to low-income families.

Alvarez filed a lawsuit in March 2000 alleging police and fire investigators told people his business was engaged in criminal activities during their investigations.

Around a year later, felony charges were filed against Alvarez and Associates, alleging the company falsified documents and made up phony employment records to help sell homes through San Bernardino's Acquisition, Rehabilitation and Resale program.

The District Attorney's Office later dropped the case because of an unavailability of witnesses, Chief Deputy District Attorney Gary Fagan said. A judge in the the U.S. District Court's Central District in Los Angeles threw out Alvarez's federal claims and dismissed the state claims in December 2008.

The U.S. 9th Circuit Court of Appeals ruled that the district court rightly dismissed the claim because Alvarez did not provide any evidence that the city prevented his company from making or enforcing contracts, or that they did so on the basis of race.

Alvarez was unable to prove that the city discriminated against his company, or that the city prosecuted any other Hispanic developers based on race, the court ruled.

Alvarez claimed that his business was damaged by the city's alleged defamation against him.

The court ruled that Alvarez did not show that the city subjected him to criminal charges based on false evidence or that the city's alleged defamation damaged his business.

Penman said the city's redevelopment agency has civil cases pending in state and federal courts against Alvarez over the alleged fraud.

The city is trying to recover money lost in the alleged fraud, he said.

"Of course we're very pleased with the decision of the court that (we received Thursday)," Penman said.

The city spent about $700,000 on the case.

An attorney for Alvarez could not be reached for comment Thursday.