Ad exec sues publisher of ‘What’s On’ tourist mag

By Steve Green

Thursday, Sept. 24, 2009 | 11:30 a.m.

An advertising executive is suing the publisher of tourist magazine "What's On, The Las Vegas Guide,'" charging she was fired after complaining about alleged irregularities including what she claims were inflated circulation numbers.

Tammy Scarpati filed suit Tuesday in Clark County District Court against Kellogg Media Group LLC.

Andrea Collier, vice president of operations at Kellogg Media, said Thursday she couldn't comment on the lawsuit except to say the company's circulation numbers are audited. A message seeking comment was also left Thursday with David Peeler, Kellogg president and group publisher.

A company press release announcing the hiring of Scarpati and other executives in February said: "Tammy L. Scarpati provides more than 13 years of sales management experience in the publishing arena and expertise in her ability to successfully form partnerships and build relationships to facilitate exceptional and profitable publications. Scarpati’s knowledge of creating custom advertising programs, publications and inserts, as well as multi-platform advertising opportunities specific to client needs, has proven her approach to be influential by showing increased growth in new business development and annual revenues.''

Scarpati now says in the lawsuit that before and after she was hired as director of media sales she was advised that Kellogg published 205,000 copies of "What's On,'' but later learned fewer than 50,000 copies were being printed and circulated.

The lawsuit claims Kellogg has provided false information to the Audit Bureau of Circulations and that she learned of other alleged problems regarding other aspects of the business involving employees' health and workers' compensation insurance and their retirement accounts; and numerous other issues.

A spokesman for the Audit Bureau of Circulations in Schaumburg, Ill., on Thursday said its circulation number for the twice-monthly "What's On'' was 204,804 as of December 2008.

The lawsuit, filed by attorney Sharon Nelson, says Scarpati was fired Sept. 3, one day after complaining about alleged problems at the company. The suit alleges Scarpati's discharge was retaliatory and alleges infliction of emotional distress and breach of contract.

"Plaintiff complained about and refused to participate in activities which plaintiff, in good faith, believed to be illegal," the suit said. It claims Kellogg asked "plaintiff to engage in fraudulent activities with respect to advertisers'' and that she was fired "in retaliation for her refusal to engage in illegal activity."

This is the fifth lawsuit to be filed in Clark County District Court against Kellogg Media during the past 13 months.

In August 2008, City National Bank sued Kellogg Media and Peeler, claiming Kellogg was delinquent on a loan with a balance of $298,000; and that Peeler had failed to resolve the delinquency as a guarantor.

Attorneys for Kellogg Media and Peeler filed a response to that complaint in March disputing the allegations.

In April of this year, landlord CIP Hughes Cheyenne Fixed Portfolio LLC sued Kellogg Media, claiming it breached a lease agreement and owed some $44,000 for office space. The suit said Kellogg had been evicted in March from the space at 980 Kelly Johnson Drive, Suite 100.

In a July court filing, attorneys for Kellogg Media disputed the breach of agreement claims, saying: "The economic recession has destroyed the fundamental purpose of the lease agreement. The economic recession has rendered performance of the lease agreement impracticable."

Also in April, Kellogg Media and Peeler were sued by Creel Printing & Publishing Co. over allegations Kellogg had a past-due balance of more than $800,000 for the printing of "What's On" and that Peeler was delinquent on a $50,000 loan to him from Creel.

Court records show the defendants have not filed responses to that suit and that Creel moved in July for entry of a default judgment.

Earlier this month, Kellogg was sued by three former "What's On" executives claiming Kellogg owed about $10,000 to cover arbitration costs in a dispute between the former executives and Kellogg. The dispute involved Kellogg's cancellation of consulting contracts with the executives. The arbitrator found Kellogg was justified in canceling the consulting contracts, but said the parties had to share the arbitration costs.

Kellogg has not yet responded to the lawsuit over the arbitration fees.