Wrong 'Guess': Jeans Mogul Gets Stone-Washed in Defamation Verdict

Image by newagecrap via Flickr

Guess Jeans co-founder and prospective California gubernatorial candidate Georges Marciano must pay a total of $370 million to five former Guess Jeans employees, said a Los Angeles Superior Court jury following a week-long damages trial in a defamation case.

In late 2007, Marciano sued the five ex-employees, including a receptionist, office manager and computer technician, alleging they were pilfering his Emails and personal information and conspiring to sell artwork and wine from his collection (Georges Marciano et al. v. Joseph Fahs et al., Case No. BC375824), and the former employees countersued for defamation. Los Angeles County Superior Court Judge Elizabeth A. White tossed Marciano's lawsuit and struck his answer to the counterclaims, imposing the sanctions because he repeatedly failed to appear at his deposition and was otherwise uncooperative during pretrial proceedings.

The former employees won their case by default once Marciano's response was struck. In a bench trial, last May, Judge White found Marciano liable for defamation and intentional infliction of emotional distress. Marciano had sent Emails and letters to authorities and others accusing the five individuals of malfeasance.

The jury awarded each of the cross-complainants roughly $69 million in compensatory damages and $5 million in punitive damages. Meanwhile, Marciano has filed suit in the U.S. District Court for the Central District of California, Western Division against Judge White, accusing her of violating his constitutional rights (Georges Marciano v. Hon. Elizabeth A. White et al. Case No. cv09-3437).

Marciano co-founded Guess in 1982 with his three brothers, who bought him out in 1993 for $240 million. Guess introduced stone-washed jeans to the U.S. For the first quarter of fiscal year 2010, Guess?,Inc. (NYSE:GES) reported net earnings of $32.5 million, down nearly 32 percent from first quarterly earnings a year ago.