Tuesday, January 06, 2015
Company that won Joplin skating park project facing $10 million fraud suit
The accusations, all of which were denied by ARC in court filings, are included in a lawsuit filed December 20, 2010, in U. S. District Court for the Central District of California. A jury trial is scheduled to begin June 28, according to court records.
Joplin City Council members, including Dr. Benjamin Rosenberg, who cast the only vote against awarding the contract to ARC, should be concerned by some of the allegations incliuded in the petition.
Rosenberg noted the lack of bid specifications, cost, and the fact that the bidding procedure included a note that preference would be given to a company that had knowledge of Joplin. American Ramp is headquartered in Joplin.
The lawsuit, being brought by a competitor, Spohn Ranch, Inc. accuses ARC of fixing bid specifications so that it is the only company that can possibly be awarded contracts.Also listed as plaintiffs in the case are the United States, and the states of California, Massachusetts, Virginia, Tennessee, New York, and Delaware. The U. S. and the other states are not actively participating in the lawsuit, according to court documents, but all have consented to remain as plaintiffs and have asked to be kept informed. The petition claims ARC has violated fair trade practices and committed fraud in each of those states and has also violated federal regulations.
The lawsuit says ARC weeds out the competition through the aggressive marketing of its steel "fastener-free" skate parks, the petition says.
ARC has successfully marketed its Pro Series as all-steel skatepark equipment that has "fastener-free riding surfaces." The "fastener-free" aspect of the Pro Series is its competitive advantage. ARC advertises this claim in every in every possible way, from brochures catalogs, websites, e-mail, and actual product specifications.
While doing this, the petition says, ARC has taken advantage of the fact that there have been no industry-wide standards to claim that its product meets such standards.
"Cities and other purchasers are typically their first and only park; thus, they are uneducated and lack any objective information to rely upon."
Oftentimes ARC has convinced municipal governments and other entities wanting to build skate parks that its specifications are the industry standards, and the cities end up offering the same specifications to potential bidders, saying it is vital that skating parks be "fastener-free."
The lawsuit claims ARC's boasts of higher safety for its "fastener-free" parks is false because its testing takes place with fasteners and then the parks are installed without them. That claim was made by a third-party engineer, Daniel Ryan, who conducted the safety tests, according to the petition.
Ryan's sworn statement proves that, in conjunction with relator's investigation, ARC's statements, promises, and representations were false, and were made with sufficient knowledge that ARC knew they were false.
The petition indicates the plaintiffs have been unable to find any records of anyone besides Ryan who had tested ARC's equipment.