Judge rules that San Diego County Fair contract was rigged, issues injunction throwing midway into doubt

A San Diego Superior Court judge on Tuesday issued an injunction blocking a contract approved by the 22nd District Agricultural Association for a single company to run the midway at the San Diego County Fair, throwing into doubt what kinds of rides and games the fair can put on this year.

The ruling by Judge Kenneth Medel comes just nine weeks before the annual fair in Del Mar is scheduled to open, following a scaled-down event in 2021 and a complete cancellation in 2020 because of the COVID-19 pandemic.

It is unclear what the district will now do. The contract gave Ray Cammack Shows, or RCS, the exclusive right to run the collection of rides and games, which are a central attraction at the fair. A competing company, Talley Amusements, sued the district over the awarding of that contract and the scoring behind a second contract in 2021.

Medel concluded that the district had essentially rigged the qualifications to win the contract to favor RCS. In a 14-page ruling, the judge said Talley could likely prove that the bid requirements for the contract for this year’s fair were “specifically tailored” so that RCS would be the winner.

That conduct violates state public contracting laws that are designed to encourage open and competitive bidding. “There is at least the appearance of favoritism which is contrary to public policy,” the judge wrote.

He also noted that courts have long held that the competitive bidding process exists to protect taxpayers and the public, and the conduct of the district over the past several years is suspect.

“The evidence presented at this stage supports an inference of ‘favoritism,’ ‘fraud’ and ‘corruption’ as to the award of public contracts, although no such definitive findings are made herein,” Medel wrote.

“An important principle, the integrity of our institutions, is at stake. Process matters.”

John Moot, the lawyer for Talley Amusements who has been battling the district over the midway contacts for more than two years, welcomed the ruling.

“Talley Amusements has been a ride operator at the San Diego County Fair for 18 years,” he said in a statement. “They agree with the court that neither favoritism, fraud or corruption should play any role in the awarding of public contracts and remain committed to working with responsible parties, and will to do everything in its power to see that the 2022 fair has the best darn rides, games and food San Diego has ever seen.”

At a court hearing last week Moot had deflected concerns from lawyers for the district that issuing an injunction would not leave the district time to have a midway and would imperil the fair. He said Talley was willing to sit down with RCS and the district and work out a one-year agreement for this year.

Medel’s ruling was issued late Tuesday afternoon. In a statement after the ruling was released the district said it was reviewing the ruling to determine what impact it has on the upcoming fair.

“We are very concerned by some of the contentions upon which the Court’s ruling is apparently based, which have not been proven,” the statement said. “With fewer than ten weeks before the start of the fair, the 22nd DAA is committed to doing everything it can to save this beloved summer ritual that is enjoyed by 1.5 million San Diegans and Californians. Fair officials are considering all options and hope to make a determination about how to proceed in the coming days.”

The case is complicated and while it focuses on the contract for this year’s fair, it also includes events that go back to when the district embarked on a plan to to issue a contract for a single company to run the midway. For decades the fair had inked individual contracts with dozens of ride and game operators, but in 2018 decided to turn to a single company.

Last year both Talley and RCS submitted proposals to be the master operator. Talley’s bid was more lucrative — the fair would get $9.9 million more over the life of the five-year deal than it would get from RCS. But when the scores were announced, the district said RCS had won.

Talley filed a bid protest in March 2021, contending that the scoring was riddled with errors that decreased Talley’s score and favored RCS. Days after the protest was filed, the district canceled the entire process.

Talley contended that was done because the company would win the protest and get the contract. District officials said they had the right to withdraw the contract and, moreover, there would not be a fair for 2021 because of COVID.

However, the district did mount a smaller version of the fair called Home Grown Fun last year. And then in the fall, the district issued another request for bidders to run the midway for this year’s fair.

By then Talley had filed a lawsuit. The company contends it was the rightful winner of the 2021 contract, and because that was a five-year deal, it should now have the rights to the midway.

Talley did not submit a bid for the 2022 fair, arguing that qualification criteria was slanted toward RCS. The criteria included a provision that the contractor had to have managed a midway with games, rides and concessions and a digital ticketing system at three different fairs between 2017 and 2019 with attendance of 1 million or more.

Only RCS could meet that criteria, Talley argued, relying on the opinion of a carnival industry expert cited by Medel who dismissed the district’s argument that there were other companies that could meet the qualifications.

Just before the district was set to award RCS the contract for this year’s fair, two former fair officials testified in a deposition taken in Talley’s lawsuit that the scores for the 2021 contract competition between the two companies had been changed.

Former contracts manager Michael Ceragioli said that after the proposals were opened and scored, Talley came out the winner. But when he told district CEO Carlene Moore of the results, he testified, she looked “confused” that Talley had won and then said, “We might have to change some scores.”

Ceragioli and a second former employee testified scoring sheets for Talley were changed twice, and after the second change RCS was the winner.

Lawyers for the district had argued that the explosive testimony did not matter, because it concerned a contract — the 2021 fair — that was never issued. Moore disputed Ceragioli’s version of events, and another fair employee who changed her scores said she was not instructed to do so by Moore.

Moot argued that Talley was the rightful winner of the 2021 contract when the scores were changed, and that rigging the qualifications for the 2022 contract to favor RCS made that award void. In making his ruling, Medel agreed.