LOS ANGELES, March 4 /PRNewswire/ -- Judge Robert J. Kelleher presiding in
the United States District Court for the Central District of California has
ruled that violations of the Federal Civil Racketeer Influenced and Corrupt
Organization Act ("RICO") asserted in a lawsuit against Telemundo Network and
one of its television stations, KWHY Channel 22 Los Angeles, remain part of
the case.  The Judge also ruled that the RICO claims were predicated upon
allegations that KWHY and Telemundo Network committed extortion within the
meaning of the Hobbs Act.
    The lawsuit, filed in December 2002 by Fronteras Entertainment, seeks in
excess of $34,000,000 in compensatory damages, and an unspecified amount of
punitive damages against Telemundo, which in 2002, was acquired by NBC, a
company wholly owned and operated by General Electric, Inc.
    Fronteras is a Hispanic owned independent television production company
based in Burbank, California.  The lawsuit alleges that Fronteras signed an
agreement with KWHY to provide studio and production services for twenty
television shows consisting of 220 episodes each.  The shows were to be
broadcast on KWHY's Channel 22 in Los Angeles as a test bed for later
syndication throughout the entire Telemundo Network.  The complaint further
alleges that after only 100 episodes of the first show under the deal were
produced and aired, Telemundo backed out of the agreement.
    Pursuant to the RICO claims, the complaint alleges that KWHY's Vice
President of Programming demanded to be made a co-owner of Fronteras to assure
Telemundo's support and continued performance under the agreement and shortly
after Fronteras refused these demands, the deal was terminated.  The lawsuit
also alleges that the same vice president made similar demands on at least
three other independent producers, none of whom are parties to the lawsuit.
It is upon these claims that the lawsuit alleges extortion, which in turn
serve as predicate acts under RICO.  Fronteras' complaint also includes
allegations of fraud, breach of contract, civil conspiracy, specific
performance and copyright infringement.
    In December 2003, Telemundo's attorneys filed a motion to dismiss the RICO
claims, vigorously contending that only their employee, and not Defendants
themselves, participated in the extortion scheme, and even if Defendants
themselves did so participate, the allegation of only one scheme can not
establish a "pattern" of racketeering as required by the RICO statute.
Telemundo's attorneys also took the position in the motion that what Fronteras
describes as extortion, was nothing more than "hard bargaining" in a
contractual dispute.
    Judge Kelleher denied Defendants' motion, finding that both KWHY and
Telemundo Network themselves were alleged to have actively participated in the
operation of the RICO enterprise by following through on their employee's
threats and demands.  The Judge noted that such participation by KWHY and
Telemundo Network included allegations such as reducing promotional support
for Fronteras' show, actively promoting the show for the wrong time slot,
defaming its hosts, reducing the length of the show from two hours to one
hour, and ultimately canceling the show.

    The Judge also found that the alleged schemes involving three other
producers, combined with the fourth used against Fronteras, satisfy the RICO
pattern requirement because the "four alleged extortion schemes were aimed at
a similar purpose: to obtain, without pay, a partial ownership in a production
company or to receive kickbacks."  The Judge further ruled that because the
complaint alleged Defendants' participation in a scheme to obtain something to
which Defendants were not entitled, i.e., partial ownership of Fronteras,
"Defendants were not merely employing hard bargaining, but rather committing
extortion within the definition of the Hobbs Act."

    Fronteras' attorneys with the firm of Kramer & Kaslow maintain offices in
Los Angeles, California and Calabasas, California.  For more information or a
copy of the Court's Order, contact John Jahrmarkt, Esq.

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