Ruling in Champion Chevrolet case upheld by 9th Circuit

Sandra Chereb

Thursday, March 11, 1999 | 9:45 a.m.

RENO, Nev. - A federal appeals panel ruled there was no foundation for allegations of civil rights violations by police and prosecutors against management and some employees of a Reno car dealership.

A ruling last week by a three-judge panel of the 9th U.S. Circuit Court of Appeals upheld a previous decision by U.S. District Judge David Hagen in Reno.

At the same time, the appeals panel overturned Hagen's ruling that awarded Washoe County attorneys' fees for its cost in defending against the suit filed by John Stanko of Champion Chevrolet and others.

The appellate court's decision marks the latest in a lengthy legal battle that began in 1990 when a criminal investigation was launched into allegations of consumer fraud at Champion Chevrolet.

In 1993, a Washoe County grand jury indicted Stanko, Champion general manager, and 15 employees on charges of racketeering, obtaining money and signatures under false pretenses and embezzlement.

Prosecutors agreed to dismiss most of the charges in 1994, and a judge tossed out the rest on grounds that prosecutors abused their authority while presenting their case to the grand jury.

Stanko and some of the other previous defendants then filed a civil suit against the county, prosecutors and investigators. Among other things, the suit alleged authorities violated the defendants' civil rights because they did not have probable cause to seek search warrants and a grand jury probe of the dealership business.

Before the case went to trial, Hagen granted the county's motion for summary judgment, essentially ruling in the county's favor.

The appeals court upheld that action.