Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 1 of 20

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

TV ONE, LLC
1010 WAYNE AVENUE
TENTH FLOOR
SILVER SPRING, MD 20910

REACH MEDIA, INC.

13760 NOEL ROAD
SUITE 750
DALLAS, TX 75240
COMPLAINT AND JURY DEMAND
Plaintiffs,

v.

UNIVERSAL MCCANN WORLDWIDE, INC.

100 WEST 33RD STREET
NEW YORK, NY 10001

Defendant.

COMPLAINT

Plaintiffs, TV One, LLC (“TV One”) and Reach Media, Inc. (“Reach”) (collectively,

“Plaintiffs”), by and through undersigned counsel, bring this Complaint against Defendant

Universal McCann Worldwide, Inc. (“McCann” or “Defendant”), and allege as follows.

Introduction

This case involves a fraudulent scheme whereby the Defendant conspired to identify a

small business media buying agency to use as their puppet in order to collect hundreds of

thousands of dollars in incentive bonuses from the United States government, defrauding the

Plaintiffs in the process. Defendant McCann conspired to defraud and mislead the Plaintiffs into

doing business with and extending credit to Defendant’s sham buying agent, Penn, Good &

Associates, LLP (“PGA”), all so that the Defendant could continue to collect Army incentive
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 2 of 20

bonuses for which it would otherwise no longer qualify. Defendant represented to Plaintiffs that

PGA had the financial capacity to manage advertising accounts with Plaintiffs and later hid

PGA’s cash flow problems from Plaintiffs. Based on the assurances of and a longstanding

business relationship with Defendant, Plaintiffs extended credit to PGA and placed Army

advertisements on their respective networks. To date, Plaintiffs have not been paid for certain

ads, the invoices for which total over a million dollars. Defendant knew of PGA’s credit

problems, and yet, persisted in making material misrepresentations and omissions to Plaintiffs

regarding PGA’s financial condition as well as its ability to manage a major advertising account.

Defendant’s behavior was indeed fraudulent and done with reckless disregard for the damage

that it could cause, and did cause, to the Plaintiffs.

Parties, Jurisdiction & Venue

1. Plaintiff TV One is a limited liability company organized and existing under the laws of

Delaware. TV One’s principal place of business is in Silver Spring, Maryland.

2. For purposes of diversity jurisdiction, a limited liability company is a citizen of each state

of which any of its members are citizens. See JBG/JER Shady Grove, LLC v. Eastman Kodak

Co., 127 F. Supp. 2d 700, 701 (D. Md. 2001).

3. The sole member of TV One is Radio One Cable Holdings, LLC (“Radio One”). Radio

One is a limited liability company organized and existing under the laws of Delaware.

4. The sole member of Radio One Holdings is Urban One, Inc. (“Urban One”). Urban One

is organized under the laws of the State of Delaware. Urban One’s principal place of business is

in Maryland.

5. Thus, TV One is a citizen of Delaware and Maryland and is not a citizen of any other

state.

2
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 3 of 20

6. Plaintiff Reach is incorporated under the laws of the State of Texas. Reach’s principal

place of business is in Dallas, Texas.

7. Thus, Reach is a citizen of Texas and is not a citizen of any other state.

8. Defendant McCann is a global media and advertising corporation organized under the

laws of the State of New York. McCann’s principal place of business is in New York, New

York.

9. Thus, McCann is a citizen of New York and is not a citizen of any other state.

10. This Court has diversity jurisdiction over this action pursuant to 28 U.S.C. § 1332

because the Defendant is not a citizen of any state of which Plaintiffs are also citizens and the

amount in controversy exceeds $75,000 exclusive of interest and costs.

11. Defendants are subject to personal jurisdiction in this Court and venue is proper under 28

U.S.C. § 1391(b) because Defendants conduct business in the District of Maryland and because a

substantial amount of the events giving rise to this action occurred in the District of Maryland.

Factual Background

The United States Army Contract Arrangement

12. In or around 2004, McCann won a contract with the United States Army to formulate and

execute advertising designed to increase Army recruitment within the African American

community.

13. The U.S. Army’s contract with McCann included an incentive reward if McCann placed

sufficient subcontracts with small, minority-run, and disadvantaged businesses. The incentive

reward was meant to further the United States government’s goal, under the Small Business

Administration’s 8(a) Business Development Program, of trying to award at least five percent of

all federal contracting dollars to small, disadvantaged businesses each year.

3
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 4 of 20

14. Starting in at least 2006, McCann, wanting to capitalize on the incentive award, sought

out and engaged Carol H. Williams Advertising, Inc. (“CHWA”) to plan and place advertising

on behalf of the U.S. Army in African American-targeted media outlets.

15. In mid-2006, Defendants honed in on Plaintiff TV One because it was a popular and

well-respected African American-targeted cable television network. On June 16, 2006, CHWA

signed an agreement with TV One entitled “New Customer Information Form and Credit

Application and Agreement” (the “CHWA Credit Agreement”). Under the CHWA Credit

Agreement, CHWA established a business relationship with TV One on behalf of itself and

McCann for the placement of advertising on TV One’s cable television network.

16. After seizing on TV One, McCann was able to reap the benefit of the Army’s incentive

reward. CHWA would submit its invoices to McCann reflecting the cost of placing the ads

along with its labor costs, and McCann would then submit the invoices to the U.S. Army for

payment.

17. From July 2006 to June 2009, Defendant benefitted from this system wherein CHWA

purchased hundreds of thousands of dollars of advertising from TV One on behalf of McCann

and the U.S. Army.

18. When CHWA became too large to qualify as a small business, Defendants decided to

partner with LaGrant Communications (“LaGrant”) in order to continue to qualify for the

incentive reward.

19. It is common in the media/advertising world for the same company to both plan and buy

advertising. Thus, CHWA, under ordinary circumstances, would be completely replaced by

LaGrant and would no longer take part in the Army contract. CHWA, however, did not want to

be cut out of the U.S. Army contract with McCann. Instead, McCann suggested that CHWA

4
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 5 of 20

continue planning all aspects of the media strategy and simply direct another entity, one that still

qualified as a small business under the SBA regulations, to be the go-between and place the buys

on behalf of McCann.

20. CHWA and LaGrant purchased media advertisements on behalf of McCann with

Plaintiffs for several years without incident.

21. Thereafter, the lucrative Army contract arrangement was again in jeopardy when

Defendant discovered that LaGrant did not actually qualify as a small business, so Defendant

scrambled to find a different small business in order to maintain the flow of money from the

Army contract, as well as the incentive reward.

22. On or about January 16, 2009, Defendants found PGA to replace LaGrant as the small

business through which CHWA would place advertising orders. PGA was certified by the Small

Business Administration’s 8(a) program as a small business and majority owned by

disadvantaged individuals. Therefore, signing a contract with PGA enabled McCann to continue

collecting the incentive reward in connection with the U.S. Army contract.

23. In practice, PGA (and LaGrant before it), was merely a “paper pusher,” meaning that

CHWA did all of the media planning and buying using PGA only to push the media buying

paperwork through so that the Defendant could realize the benefits associated with engaging a

qualified small business.

McCann Induces TV One into Doing Business with PGA

24. On February 4, 2009, CHWA, at the direction of Defendant, notified TV One that PGA

would be taking over all buy contracts for Army advertising on the network, effective March 31,

2009.

5
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 6 of 20

25. After receiving notification that PGA was going to take over as buying agent for

Defendant, TV One requested that PGA fill out a New Customer Information Form and Credit

Application Agreement so that TV One could verify PGA’s creditworthiness.

26. Upon running a credit check and engaging in other due diligence, TV One immediately

raised concerns to Defendant about PGA’s poor credit rating and history. In fact, PGA’s credit

was so poor that TV One initially required that PGA be a cash-in-advance client or that its orders

be guaranteed.

27. In an effort to salvage the relationship with TV One and ensure that Army advertising on

the network was uninterrupted, CHWA represented, at McCann’s urging, that it would remain

lead in order to make TV One believe that payment for all advertising purchases would be paid

as it had been in the parties’ prior history of working together. By email dated February 4, 2009,

CHWA’s Tuyet Nguyen represented to TV One that CHWA “will remain the lead African

American planning and buying agency for the U.S Army AACM media buying segment” but

that invoices should be directed to PGA.

28. CHWA also urged TV One not to take further action to protect itself from PGA by

representing that CHWA and McCann were working on a solution to PGA’s credit issues.

29. Specifically, by email dated April 1, 2009, when discussing TV One’s hesitancy to accept

advertising buys from PGA due to its poor credit and financial history, Tuyet Nguyen of CHWA,

continued to put pressure on TV One to work with PGA and stated “[m]oving forward, I’m

requesting TV One does not interrupt Army schedule as I’m working through the hiccups.”

30. In an email response that same day, TV One’s Elverage Allen advised CHWA’s Nguyen

that TV One will require cash in advance prior to running Army advertising with PGA due to

PGA’s lack of credit worthiness and requested a phone conversation.

6
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 7 of 20

31. During that call, CHWA, at the direction of McCann, pressured TV One to accept

advertising buys from PGA and assured them they would get paid.

32. TV One reasonably and foreseeably relied upon and accepted CHWA’s representations,

made on behalf and at the request of McCann, that PGA was merely an implementation agency

and that the relationship would remain the same as it had in the past.

33. In fact, TV One stated to CHWA by email dated April 1, 2009, “[o]ur credit application

states that ‘the agency and the advertiser will be jointly and severally liable’…. Based on this

provision and our relationship with CHW[A], we will continue to run Army spots….”

34. At no point did McCann’s agent, CHWA, correct TV One’s understanding of the

arrangement or state to TV One that CHWA did not intend to ensure that PGA, as merely a

puppet-buying agency, paid TV One for advertising placed at the direction of Defendants.

35. McCann also did its part directly to ensure that TV One would continue to place ads

despite PGA’s financial issues. McCann feared that TV One would decline to place further

advertisements if PGA remained the “buying agent,” so, in a desperate bid to prevent TV One

from pulling out of the arrangement, McCann fraudulently misrepresented the financial status

and capabilities of PGA in order to induce TV One to place advertisements at PGA’s request.

36. By email dated April 22, 2009, Gary Barsky, McCann’s Senior Vice President and

Managing Partner of Portfolio Media, pressured TV One to continue to allow Army advertising

to be placed through PGA, claiming that PGA only faced challenges by reason of being a small

business, that McCann had worked with PGA to develop processes and procedures to manage

the assignment, and that PGA had the “financial capacity and integrity to manage the account.”

37. McCann misrepresented that the financial condition of PGA was sound and that TV One

should feel comfortable signing an advertising agreement with PGA on PGA’s credit.

7
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 8 of 20

38. McCann, in the same April 22 email to TV One, also vouched for CHWA, claiming that

although PGA will be doing the media buying, CHWA will remain the lead agency for media

planning and will work closely with PGA on all U.S. Army buying initiatives.

39. Also on April 22, McCann’s David Barsky forwarded the email between him and TV

One to Austin Patrick and Kay Lucas at CHWA, telling CHWA: “We need to do what we can to

make this work.”

40. Although TV One was unaware at the time, the Defendant’s representations were, in fact,

false and made in an effort to induce TV One to do business with PGA so Defendant could

continue to realize monetary benefits under the U.S. Army contract.

41. First, at no time did the Defendant work with PGA to develop any processes or

procedures to manage the TV One advertising contract.

42. Next, Defendant did not engage in the necessary due diligence to verify that PGA was

economically stable enough to handle the advertising account with TV One. Based on

information discovered in 2017, McCann only performed a cursory check to see if PGA qualified

as a small business for purposes of the U.S. Army’s goals and incentive award payment rather

than conduct the “due diligence” McCann told TV One it had performed.

43. Lastly, Defendant misrepresented PGA as being financially sound. Having failed to

perform even the most basic of financial checks, Defendant could not claim that PGA was

financially healthy. Defendant knew or should have known that PGA had emerged from Chapter

11 bankruptcy in August 2008, only months before being engaged by McCann and that Garrick

Good, one of the principals of PGA, had been involved in approximately a dozen lawsuits prior

to McCann engaging PGA as its “buying agent.” Thus, at the very least, Defendant recklessly

represented that PGA was financially sound.

8
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 9 of 20

44. McCann characterized the relationship between it, PGA, and TV One as a “partnership”

and agreed to pay for all advertising placed on its behalf. McCann also set forth a payment

process which it stated was to “eliminate exposure” to McCann’s partners, in this instance, TV

One.

45. These communications and representations by McCann were made in an effort to lull TV

One into a false sense of comfort and to ensure that TV One would not discontinue running

advertisements for the Army contract despite the fact that McCann knew that it had no intention

of making good on the partnership in the event that its puppet buying agent, PGA, collapsed.

46. Defendant also took advantage of the parties’ course of dealing. By 2009, TV One and

the Defendant had established a three-year business relationship. Defendant therefore had a duty

to act in good faith towards TV One and to avoid making harmful misrepresentations. Instead,

Defendant manipulated the trust and good faith that had been built over that time to make false

assurances to TV One, and had every reason to know, given the parties’ history, that TV One

would rely on those representations.

47. Defendant made or directed to be made numerous misrepresentations and material

omissions regarding which parties were going to be ultimately responsible for the advertising

buys, the financial condition of PGA, and other critical facts in order to induce TV One into

doing business with PGA. TV One had no way of knowing that McCann did not intend to make

sure that TV One was paid in full for the advertising placed on McCann’s behalf.

48. Based on the above misrepresentations and assurances, TV One allowed PGA to place

advertising buys with TV One. However, PGA failed to pay TV One for such advertising in the

approximate amount of $930,268.11.

9
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 10 of 20

49. TV One has been damaged because it did, in fact, rely on the parties’ course of dealing

and the Defendant’s misrepresentations and assurances in allowing PGA to place Army

advertisements for which $930,268.11 remains due and owing. Absent the Defendant’s

misrepresentations, TV One would have never entered into a business arrangement with PGA.

McCann Induces Reach into Doing Business with PGA.

50. TV One was not the only business harmed by the Defendant’s fraudulent scheme.

51. Plaintiff Reach is an African-American targeted radio network, most popular for airing

the Tom Joyner Morning Show, a radio program airing in approximately 105 media markets and

reaching nearly eight million listeners.

52. In April 2009, the time period when Defendant was attempting to install PGA as the

puppet buying agent for the Army contract, a substantial percentage of Reach’s current business

operations, including its Corporate Sales department responsible for placing radio ads, was still

part of TV One’s parent company, Radio One.

53. Accordingly, in 2009, Defendant engaged Radio One (which later became Reach for

purposes of the radio advertising placements), through their puppet buying agent PGA, to place

radio advertisements in order to increase the frequency and amount of U.S. Army advertising to

the African American market.

54. Similarly to TV One, Radio One had serious reservations about PGA’s creditworthiness,

including PGA’s recent Chapter 11 bankruptcy, and informed McCann that Radio One would not

run advertisements on credit with PGA absent assurances from McCann that it would ensure that

Radio One was paid for all advertisements placed on McCann’s behalf.

55. By email dated April 22, 2009, McCann’s Gary Barsky, pressured Radio One to allow

Army advertising to be placed through PGA, claiming that PGA only faced challenges by reason

10
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 11 of 20

of being a small business, that McCann had worked with PGA to develop processes and

procedures to manage the assignment, and that PGA had the “financial capacity and integrity to

manage the account.”

56. However, as discussed above, McCann either misrepresented that it engaged in due

diligence with respect to PGA and its financial stability or affirmatively misrepresented that

PGA was in good financial condition as PGA had just emerged from bankruptcy and faced a

continuous financial struggle.

57. Thereafter, William Brown from Radio One reached out to Gary Barsky at McCann to

voice Radio One’s continued concern with PGA’s financial stability and to inform McCann that

it could not extend credit to PGA under these circumstances absent assurances of joint and

several responsibility from McCann. McCann represented to Radio One that there was “nothing

to worry about” and that McCann would “make sure” that Radio One was paid for advertising

placed on its network on behalf of McCann.

58. In other correspondence from McCann to Radio One, McCann characterized the

relationship between it, PGA, and Radio One as a “partnership” and agreed to pay for all

advertising placed on its behalf. McCann also set forth a payment process which it stated was to

“eliminate exposure” to McCann’s partners, in this instance, Radio One and later, Reach.

59. These communications and representations by McCann were made in an effort to lull

Radio One into a false sense of comfort and to ensure that Radio One would run advertisements

for the Army contract despite the fact that McCann knew that it had no intention of making good

on the partnership in the event that its puppet buying agent, PGA, collapsed.

11
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 12 of 20

60. Radio One ultimately agreed to allow PGA to order advertising on credit based on the

representations made by McCann as well as the understanding that McCann would be jointly and

severally liable for all advertising buys made on its behalf.

61. In December of 2012, due to corporate restructuring, Radio One’s Corporate Sales

function, which was responsible for the Army advertising, moved to Plaintiff Reach.

62. Defendants, through their sham buying agent, PGA, placed orders with Reach for a

number of advertisements on behalf of the U.S. Army during the last quarter of 2014. Reach

accepted these orders, based on the representations made to its predecessor, Radio One, and

broadcasted the Army radio commercials as requested, for which Defendant agreed to

compensate Reach in the amount of $545,000.00.

63. Reach as successor-in-interest to Radio One, reasonably and foreseeably relied on

McCann’s representations. Absent the above representations, Radio One would not have

extended credit to PGA in the first instance and Reach, as its successor-in-interest, would not

have continued to do business on credit with PGA after December 2012.

64. At no time did McCann deny or make any attempt to alter Radio One’s understanding

that McCann was jointly and severally liable for the advertising buys and Radio One had no way

of knowing that McCann did not intend to make sure that Radio One (and its successor) were

paid in full for the advertising placed on McCann’s behalf.

65. Defendant also took advantage of the parties’ course of dealing. By 2009, Radio One and

the Defendant had established a three-year business relationship. Defendant therefore had a duty

to act in good faith towards the Radio One and to avoid making harmful misrepresentations.

Instead, Defendant manipulated the trust and good faith that had been built over that time to

12
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 13 of 20

make false assurances to Radio One, and had every reason to know, given the companies’

history, that Radio One, and later Reach, would rely on those representations.

66. By and through the misrepresentations and omissions made to its predecessor-in-interest,

Radio One, Reach has been damaged in the amount of $375,218.60, which Defendant have thus

far failed to pay.

Defendant McCann “Props Up” PGA to Hide Its Financial Problems from Plaintiffs

67. Despite being fully aware of Plaintiffs’ hesitancy to do business with PGA due to PGA’s

poor credit and financial history, Defendant failed to inform Plaintiffs when PGA began having

financial troubles as early as 2012.

68. Defendant knew or should have known that a principal of PGA, Garrick Good, filed for

chapter 7 bankruptcy in September 2012.

69. And as early as January 2013, Defendant was also aware that not only PGA’s principals

but PGA itself was running into financial problems.

70. In an effort to conceal PGA’s financial troubles from Plaintiffs, McCann launched a

campaign to “prop up” PGA with the hope that it might recover before endangering Defendant’s

lucrative arrangement with the Army.

71. In early 2013, McCann advanced PGA funds to cover its high labor costs which were not

covered by the U.S. Army contract.

72. On November 5, 2013, and unbeknownst to Plaintiffs, McCann apprised PGA that

McCann would start withholding certain amounts owed to PGA in order to pay back the amounts

that McCann had advanced.

13
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 14 of 20

73. Under this new process, McCann submitted invoices to the U.S. Army for the running of

advertisements, but McCann never ensured that the money for advertisements was paid to the

Plaintiffs.

74. McCann also falsely represented to the U.S. Army that the funds the U.S. Army paid to

McCann for the advertisements were being paid to the Plaintiffs.

75. At no point did Defendant inform Plaintiffs that Plaintiffs’ greatest concern regarding this

relationship – PGA’s financial condition and ability to make good on monies owed to Plaintiffs –

was coming to fruition.

76. PGA failed to pay TV One for services rendered pursuant to the U.S. Army contract

beginning in September 2013.

77. PGA failed to pay Reach for services rendered pursuant to the U.S. Army contract in the

last quarter of 2014.

78. Had Defendant informed Plaintiffs of PGA’s financial troubles, Plaintiffs would have

taken steps to mitigate any damages and, in fact, may have been able to prevent all damages

caused in this case.

79. Plaintiffs foreseeably and reasonably relied on Defendant’s misrepresentations and

material omissions regarding PGA’s financial difficulties. Otherwise, Plaintiffs would not have

continued to place advertisements requested by McCann and CHWA through PGA and would

have taken affirmative steps to mitigate damages.

80. Plaintiffs did not discover the Defendant’s above-described misrepresentations and

omissions until the fall of 2017.

81. As a further consequence of Defendant’s misrepresentations and material omissions, TV

One has incurred $506,543.77 in litigation expenses to recover the amounts due from

14
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 15 of 20

Defendant’s “partner” entity, PGA. Absent Defendant’s misrepresentations and omissions

regarding PGA’s financial status, TV One would have been aware of PGA’s true financial status

and would have required McCann to pay cash in advance instead of extending credit through

PGA. As such, TV One has been further damaged in the amount of $506,543.77, which

represents the attorney’s fees TV One spent to recover funds based on McCann’s

misrepresentations and omissions.

82. Due to the Defendant’s misrepresentations and material omissions, TV One has been

damaged in the amount of no less than $1,436,811.88.

83. Due to the Defendant’s misrepresentations and material omissions, Reach has been

damaged in the amount of no less than $375,218.60.

Breach of Oral Agreement

84. Prior to discovering McCann’s fraudulent misrepresentations and omissions, but based on

the nonpayment described above, TV One brought a breach of contract lawsuit against CHWA

and PGA to recover the amounts due to TV One.

85. As part of those proceedings, CHWA asserted that McCann was required to indemnify it

for any amounts that were determined to be owed by it to TV One.

86. On February 9, 2017, in an effort to resolve the claims against CHWA and any potential

exposure to McCann by way of CHWA’s indemnity claim, Plaintiff and Defendant participated

in mediation.

87. At this mediation, McCann and TV One entered into an oral agreement to settle TV

One’s claims against CHWA and thereby limit McCann’s exposure through CHWA’s indemnity

claim. The parties mutually agreed that TV One would dismiss all claims with prejudice against

CHWA and in exchange McCann would pay TV One $550,000.00.

15
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 16 of 20

88. Within days, and despite TV One’s intent to fulfill its end of the bargain, McCann

repudiated the oral contract and indicated that it would not pay TV One the amount previously

agreed upon.

89. To date, McCann has failed and refused to fulfill its contractual obligation and this

breach has caused damage to TV One.

COUNT I: BREACH OF ORAL CONTRACT

90. Plaintiffs restate and re-allege each of the foregoing allegations as though fully set forth

herein.

91. On February 9, 2017, Defendant and Plaintiff entered into an oral contract which

provided that TV One would dismiss its claims against CHWA with prejudice and, in exchange,

McCann would pay TV One $550,000.00.

92. TV One had every intention of fulfilling its end of the agreement, namely, dismissing its

claims against CHWA with prejudice.

93. However, before TV One could do so, McCann repudiated the oral contract and indicated

that it would not pay TV One the amount previously agreed upon.

94. Due to Defendant’s breach of the oral agreement, TV One has been damaged in the

amount of no less than $550,000.00.

COUNT II: FRAUDULENT MISREPRESENTATION

95. Plaintiffs restate and re-allege each of the foregoing allegations as though fully set forth

herein.

96. As described in detail above, McCann made affirmative misrepresentations of fact

concerning PGA’s financial ability and its intent to keep CHWA as the lead buying agent in

charge of the Plaintiffs’ accounts.

16
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 17 of 20

97. McCann either knew these statements were false when made or made the statement with

reckless indifference as to its truth so that Plaintiffs would cooperate with PGA and McCann

could meet the U.S. Army’s goals and receive the incentive award.

98. Through its affirmative misrepresentations, McCann led Plaintiffs to believe that the

addition of PGA did not change the fact that McCann and/or CHWA was actually in control and

lead on all advertising buys and payment of the same.

99. McCann made these statements in order to induce Plaintiffs to extend credit to PGA so

that McCann could meet the U.S. Army’s goals and receive the incentive award.

100. Plaintiffs were entitled to and did reasonably rely upon the misrepresentations made by

McCann in deciding to do business with and extend credit to PGA as the sham “buying agent.”

101. Plaintiffs suffered damages as a result of its reliance on the misrepresentations by

McCann. Specifically, Plaintiffs have suffered damages in the amount of $1,812,030.48, plus

interest, costs, and attorney’s fees.

COUNT III: FRAUDULENT OMISSION

102. Plaintiffs restate and re-allege each of the foregoing allegations as though fully set forth

herein.

103. Based on the nature of the parties’ historical and ongoing relationship, McCann had a

duty to disclose PGA’s financial troubles starting in 2012-13 but failed to disclose such

information to Plaintiffs.

104. McCann failed to disclose PGA’s financial troubles to Plaintiffs because it did not want

to lose the incentive award it received from using PGA as a puppet subcontractor.

105. McCann failed to disclose PGA’s financial condition to Plaintiffs intending and knowing

that Plaintiffs would rely on the omission.

17
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 18 of 20

106. Based on the longstanding business relationship between the parties, Plaintiffs justifiably

relied on McCann’s omission.

107. Plaintiffs were injured by such reliance and have suffered damages in the amount of

$1,812,030.48, plus interest, costs, and attorney’s fees.

COUNT IV: NEGLIGENT MISREPRESENTATION

108. Plaintiffs restate and re-allege each of the foregoing allegations as though fully set forth

herein.

109. Based on the longstanding business relationship between McCann and Plaintiffs,

McCann owed a duty of care to Plaintiffs.

110. McCann negligently made various false statements to Plaintiffs regarding the financial

condition of PGA as well as the active role CHWA and McCann would play in the arrangement.

111. McCann made the false statements regarding PGA’s financial condition and CHWA and

McCann’s role in ensuring payment of invoices intending and knowing that TV One would rely

on them.

112. Based on the longstanding business relationship between the parties, Plaintiffs

foreseeably and reasonably relied on McCann’s representations.

113. Plaintiffs were injured by such reliance and have suffered damages in the amount of

$1,812,030.48, plus interest, costs, and attorney’s fees.

COUNT V: NEGLIGENT OMISSION

114. Plaintiffs restate and re-allege each of the foregoing allegations as though fully set forth

herein.

115. Based on the longstanding business relationship between McCann and Plaintiffs,

McCann owed a duty of care to Plaintiffs.

18
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 19 of 20

116. McCann had a duty to disclose PGA’s financial problems to Plaintiffs.

117. McCann failed to disclose PGA’s financial troubles because it did not want to lose the

incentive award it received from using PGA as a puppet subcontractor.

118. McCann failed to disclose PGA’s financial condition intending and knowing that

Plaintiffs would rely on the omission.

119. Based on the longstanding business relationship between the parties, Plaintiffs

foreseeably and reasonably relied on McCann’s omission.

120. Plaintiffs were injured by such reliance and have suffered damages in the amount of

$1,812,030.48, plus interest, costs, and attorney’s fees.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs respectfully request judgment against each and every

Defendant, jointly and severally, as follows:

1. Damages in the amount of $1,812,030.48.

2. Prejudgment and post-judgment interest on any monetary award at the highest rate

allowed by law.

3. Punitive damages.

4. Reasonable attorney’s fees and costs of suit.

5. Such other and further relief as this court deems just and proper.

19
 Case 1:18-cv-02543-GJH Document 1 Filed 08/17/18 Page 20 of 20

Dated: August 17, 2018 Respectfully submitted,

MORRIS, MANNING & MARTIN, LLP

/s/ Bonnie Y. Hochman Rothell

Bonnie Y. Hochman Rothell
Jessica A. Rodriguez
Pro hac vice motion forthcoming
Curtis Arnold, Jr.
Pro hac vice motion forthcoming
1401 Eye Street, NW, Suite 600
Washington, DC 20005
Telephone: (202) 408-5153
Facsimile: (202) 408-5146
bhrothell@mmmlaw.com
jrodriguez@mmmlaw.com
carnold@mmmlaw.com

Attorneys for Plaintiffs TV One, LLC and

Reach Media, Inc.

20