PR firm sues former client; former client sues PR firm

LOS ANGELES: If you thought being sued by industry titans and laying off two-thirds of your staff was a PR disaster, how about getting sued by your own PR firm to boot? That's the newest crisis facing multimedia file-swapping start-up Scour, which has to fight a lawsuit filed at the Los Angeles Superior Court last week by CarryOn Communications, its PR firm of record, over non-payment of more than dollars 150,000 in fees.

LOS ANGELES: If you thought being sued by industry titans and laying off two-thirds of your staff was a PR disaster, how about getting sued by your own PR firm to boot? That's the newest crisis facing multimedia file-swapping start-up Scour, which has to fight a lawsuit filed at the Los Angeles Superior Court last week by CarryOn Communications, its PR firm of record, over non-payment of more than dollars 150,000 in fees.

LOS ANGELES: If you thought being sued by industry titans and laying off two-thirds of your staff was a PR disaster, how about getting sued by your own PR firm to boot? That's the newest crisis facing multimedia file-swapping start-up Scour, which has to fight a lawsuit filed at the Los Angeles Superior Court last week by CarryOn Communications, its PR firm of record, over non-payment of more than dollars 150,000 in fees.

Not to be outdone, however, Scour filed a Declaration of Opposition to the suit a day later alleging that CarryOn's work was 'unsatisfactory' to the point that it actually 'damaged' the defendant. The statement continues: 'Plaintiff has created a crisis of confidence which has made it unfairly difficult for Defendant to retain and attract needed venture-capital funding.' It also claims that CarryOn's press releases contained errors and that over-budget work was performed without proper authorization.

'Because PR has been given so much importance in marketing start-ups, lots of dot-coms are starting to blame their PR firms when they fail,' pointed out one source close to the companies.

It's easy to see how the PR bills escalated. In July, Scour was faced with a joint copyright infringement lawsuit filed by the National Music Publishers Association and the Motion Picture and Recording Industry Association of America. The embattled company, watching Napster's parallel battle in court this summer, also lost the interest of Michael Ovitz, a key early investor. Both situations sent the communications team into media relations overdrive.

CarryOn CEO Kevin Grangier said he has not made any changes to his agency's billing procedures, although he is considering precautions: 'We have always taken deposits up front and we have been very careful in taking on new business. But in this dotcom frenzy, it's impossible to predict unforeseen circumstances.'

CarryOn's client roster is heavily weighted with b-to-c dot-coms.



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