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Shy Suit Against Homeowners Alleges Defamation, Loss of Business

By Eric Richardson
Published: Friday, August 08, 2008, at 01:32PM
SB Grand Eric Richardson [Flickr]

The two homeowners named in Shy's suit live in SB Grand, at 5th and Broadway.

On June 17th, developer Barry Shy and 5th St Lofts LLC filed a lawsuit against two homeowners in the SB Grand lofts. The lawsuit alleges that the two, along with an unknown number of "John Does," made statements on the internet that led to a loss of business for 5th St Lofts and slandered both Shy and the company.

While this site is not named in the suit, the section alleging defamation against Shy includes six examples of disparaging statements made against the developer, and all are taken from comments here on blogdowntown.

It would not seem a controversial thing to say that Downtown residents hold developer Barry Shy in less than the highest esteem. In September of 2004, the Downtown News wrote about the condo conversion dispute at the Higgins building, Shy's first Downtown project.

Tenants in the Higgins Building at Second and Main charge that owner Barry Shy has exhibited a pattern of deceit and intimidation. Among the accusations are that Shy overstated the size of their units to lure them into the building, and that he promised in writing to sell units for tens of thousands of dollars less than he is now asking. Many charge Shy with bullying them into purchasing their units before they are legally required to do so.

Despite that trouble, Shy has continued to expand his Downtown collection, opening the Bartlett at 7th and Spring in 2005, SB Grand at 5th and Broadway in 2006, and more recently rental projects SB Manhattan and SB Lofts at 6th and Spring in 2007-2008.

Jessica Jordan, a resident of SB Grand and one of the named defendants, runs the website truedowntown. On the site she says that it was created to "inspire positive change at the Shybary Grand by identifying issues that need to be dealt with by the board and management company, especially if those issues have ignored California Law." A favorite topic has been a lack of transparency by the Homeowners Association board.

Jordan is one of two homeowners at SB Grand named in the suit, which she has posted on her site. Though the suit claims that the other homeowner, Alan Dylan, is also connected with truedowntown, Jordan says that's not that case. Her defense has been taken up by the The First Amendment Project, a nonprofit advocacy organization that handles free speech cases. Attorney Jamey Leonard said that it's important people like Jordan are able to keep speaking:

"We encourage Ms. Jordan to continue to contribute to this debate, even in the face of strategic litigation, and we commend her for her courage. The United States and California Constitutions both guarantee that Ms. Jordan and her fellow citizens have the right to truthfully comment on matters of public interest. It is the goal of the First Amendment Project to insure that Ms. Jordan and others are not silenced, intimidated or removed from public discussion due to intimidating litigation. We encourage Ms. Jordan and others in her position to keep speaking-up and participating in America’s unique and powerful marketplace of ideas."

The suit contains three sections. The first alleges that Jordan and Dylan started truedowntown to publish false statements about Shy and 5th Street Lofts, with the "intention of discouraging prospective tenants and purchasers from moving into the building." The second alleges libel and slander against 5th St Lofts, alleging intentionally false statements about the work on the building.

The third alleges libel and slander against Shy, and the "disparaging statements" included are all drawn from comments on our two-paragraph story from March of 2006 about Shy's purchase of three buildings in the Historic Core. The story has attracted sixty comments, continuing to receive traffic to this day.

From the suit:

The disparaging statements made by Defendants were intentional, false, misleading and malicious, and include amoung other things, the following:

a) Barry Shy is a criminal

b) Barry Shy is a "slum lord"

c) Barry Shy is "dishonest" and only cares about "making a profit"

d) "Do Not Buy or Rent from Barry Shy you will regret it"

e) Barry Shy has broken Federal Laws

f) Barry Shy is a horrible business man with no principals

Given that plenty of the aforementioned sixty comments reflect this point of view, one might suspect that the courts aren't the place for Shy and 5th St Lofts to restore their image.

Shy and 5th St Lofts are represented by Lyden & Jackson, located in Woodland Hills. The case is filed in the State Superior Court.

Update (August 13): Added a longer quote from Jordan's attorney, Jamie Leonard. That portion of the story had previously read: "Attorney Jamey Leonard could not comment on the case itself, but expressed that the goal of the organization's legal defense was to allow people to keep talking."

PREVIOUSLY: Shy Keeps Buying on Spring

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