Business
Fight over L.A. County’s oldest cafe boils over in trademark claims, court filings
After the longest-operating cafe in L.A. County announced in late December that it would shut down after 139 years, customers of the Original Saugus Cafe began buying up its branded hats, T-shirts, mugs and other merchandise.
When the merch sold out, some took to filching from the tables: glassware, salt and pepper shakers, and even utensils.
To Jessie Mercado, 31, and her father, Alfredo — who has owned the beloved cafe in Santa Clarita for 30 years — it was amusing and sweet that many held the establishment so close to their hearts that they wanted to take pieces of it home with them.
A sign posted to the Saugus Superette, the liquor store adjacent the Original Saugus Cafe, promises the reopening of the restaurant.
(Jenn Harris / Los Angeles Times )
But a property manager who took over handling their lease in recent months saw it differently. He left an angry voicemail for her 59-year-old father, reviewed by The Times, telling him to “get the Godd— s— back,” or he would sue.
Customers of the Original Saugus Cafe didn’t have long to mourn the loss of the landmark. The restaurant, which closed on Jan. 4, has already reopened under new management. Meanwhile, behind the scenes, a dispute over the cafe’s ownership has boiled over into a lawsuit as the Mercados insist that they were pushed out.
For decades, Mercado’s father said he had a friendly relationship and verbal lease agreement with the property owner, Hank Arklin Sr., a former state Assembly member who owned several commercial spaces in the area.
But difficulties arose after Arklin died at the age of 97 in August, the Mercados said, and they began dealing with Larry Goodman, who handles properties on behalf of the Arklin family’s company, North Valley Construction.
The Mercados alleged in a lawsuit filed last week that Goodman, North Valley Construction and Arklin’s wife, Louise, had treated the family poorly, tainted the brand, ignored their legal claim to the business and equipment so they would abandon the restaurant.
Despite the ongoing legal challenge, the cafe reopened on Monday at 5 a.m. under new owner Eduardo Reyna and with a slightly different name: Saugus Restaurant. Much of the furniture appears to have remained the same, along with menu items and even some of the employees.
People wait in line to eat at the Original Saugus Cafe during what was thought to be its last day of business after nearly 140 years in Saugus.
(Juliana Yamada / Los Angeles Times)
“People think we lied to them [about shutting down]. That it was a publicity front. I want them to know we were scammed into this,” Mercado said. “It’s sad it had to go down this way.”
Steffanie Stelnick, an attorney representing the Mercados, said that for the new owner and landlord “to open up and run [the cafe] in the same location, representing it as the same business without purchasing it or without permission” is effectively stealing.
Stelnick said she planned to amend the lawsuit to include Reyna.
Reyna did not respond to a phone call request for comment.
Goodman did not respond to multiple phone calls and messages from The Times requesting comment. Louise Arklin also did not respond to requests for comment.
But earlier this month in an interview with the Santa Clarita Valley news outlet the Signal, Goodman disputed that the Mercado family owned the business and said the father had wavered about keeping the restaurant going.
“They don’t have nothing to sell. I own everything,” Goodman said. “We own the cafe. We own the building. The stove. The dishes. The forks. We own everything in there.”
The cafe, in a long, narrow building, was beloved by Santa Clarita residents and was locally renowned for its long-running operation, its cameos in various films and television shows, and visits by Hollywood stars such as Frank Sinatra and John Wayne.
Mercado said her family hadn’t wanted to close. They wanted to continue supporting the 17 employees who worked there. But, she said, they entertained the possibility of selling the business if the right offer came along. Dealings with Goodman, however, had felt hostile and left her father feeling “humiliated” and like they had no option but to leave.
A sign on the door posted in late December announced the cafe’s closure, noting that the “decision was not made lightly.”
On its last day of operation, the line stretched down the block. Among customers saying their goodbyes was Charlane Glover, who shared countless Sunday morning breakfasts with her husband there before his death.
“I can’t imagine it being gone,” said Glover, who waited for over an hour for a table for her and her granddaughter. “We are losing all of our history.”
Mercado’s father got a shock the next morning, his daughter said, when he arrived to pack up only to find the locks had been changed and a sign posted saying the cafe would be “reopening under new ownership soon!”
Alfredo Mercado had started at the restaurant busing tables and washing dishes, she said, working his way up the ladder to bartender and cook positions to eventually acquire ownership of the cafe and its name in 1998. Her father is the sole name listed on the LLC.
Stelnick, the family’s attorney, wrote in a Jan. 6 cease-and-desist letter to Goodman that he made a “wrongful attempt” to take her client’s business and that his alleged “ongoing threats and force have already caused significant damage.”
The Mercados filed suit Jan. 14 in Los Angeles County Superior Court and are pursuing damages — including the taking of their personal property — of at least $500,000.
The complaint alleges that, in August after Arklin’s death, Goodman pressured Mercado’s father to sign a lease that stated that, in addition to the premises, all manner of appliances and utensils were under the purview of the rental agreement — including “kitchen equipment, booths, counters, stools, chairs, registers, utensils, pots, plates, cutlery, and other cooking & mechanical systems” — even though the Mercados had purchased and maintained those items, the lawsuit argued. Goodman, the lawsuit alleged, had indicated the Mercados would not be able to remain on the property as tenants if they did not sign.
At the end of August, the Arklin family’s company, North Valley Construction, submitted trademark applications for the names “Saugus Café,” “The Original Saugus Café” and “Saugus Café1.”
The lawsuit said the filing of applications showed the property owner was pursuing a “confusingly similar” name and that infringement on the Mercados’ business was thus “willful, deliberate, and malicious.”
Mercado said her father hadn’t acted sooner because he didn’t understand the extent of his claim over the business.
“We just didn’t know our rights,” Mercado said.
Staff photographer Juliana Yamada contributed to this report.
Business
MrBeast company sued over claims of sexual harassment, firing a new mom
A former female staffer who worked for Beast Industries, the media venture behind the popular YouTube channel MrBeast, is suing the company, alleging she was sexually harassed and fired shortly after she returned from maternity leave.
The employee, Lorrayne Mavromatis, a Brazilian-born social media professional, alleges in a lawsuit she was subjected to sexual harassment by the company’s management and demoted after she complained about her treatment. She said she was urged to join a conference call while in labor and expected to work during her maternity leave in violation of the Family and Medical Leave Act, according to the federal complaint filed Wednesday in the U.S. District Court for the Eastern District of North Carolina.
“This clout-chasing complaint is built on deliberate misrepresentations and categorically false statements, and we have the receipts to prove it. There is extensive evidence — including Slack and WhatsApp messages, company documents, and witness testimony — that unequivocally refutes her claims. We will not submit to opportunistic lawyers looking to manufacture a payday from us,” Gaude Paez, a Beast Industries spokesperson, said in a statement.
Jimmy Donaldson, 27, began MrBeast as a teen gaming channel that soon exploded into a media company worth an estimated $5 billion, with 500 employees and 450 million subscribers who watch its games, stunts and giveaways.
Mavromatis, who was hired in 2022 as its head of Instagram, described a pervasive climate of discrimination and harassment, according to the lawsuit.
In her complaint, she alleges the company’s former CEO James Warren made her meet him at his home for one-on-one meetings while he commented on her looks and dismissed her complaints about a male client’s unwanted advances, telling her “she should be honored that the client was hitting on her.”
When Mavromatis asked Warren why MrBeast, Donaldson, would not work with her, she was told that “she is a beautiful woman and her appearance had a certain sexual effect on Jimmy,” and, “Let’s just say that when you’re around and he goes to the restroom, he’s not actually using the restroom.”
Paez refuted the claim.
“That’s ridiculous. This is an allegation fabricated for the sole purpose of sparking headlines,” Paez said.
Mavromatis said she endured a slate of other indignities such as being told by Donaldson that she “would only participate in her video shoot if she brought him a beer.”
“In this male-centric workplace, Plaintiff, one of the few women in a high-level role, was excluded from otherwise all-male meetings, demeaned in front of colleagues, harassed, and suffered from males be given preferential treatment in employment decisions,” states the complaint.
When Mavromatis raised a question during a staff meeting with her team, she said a male colleague told her to “shut up” or “stop talking.”
At MrBeast headquarters in Greenville, N.C., she said male executives mocked female contestants participating in BeastGames, “who complained they did not have access to feminine hygiene products and clean underwear while participating in the show.”
In November 2023, Mavromatis formally complained about “the sexually inappropriate encounters and harassment, and demeaning and hostile work environment she and other female employees had been living and experiencing working at MrBeast,” to the company’s then head of human resources, Sue Parisher, who is also Donaldson’s mother, according to the suit.
In her complaint, Mavromatis said Beast Industries did not have a method or process for employees to report such issues either anonymously or to a third party, rather employees were expected to follow the company’s handbook, “How to Succeed In MrBeast Production.”
In it, employees were instructed that, “It’s okay for the boys to be childish,” “if talent wants to draw a dick on the white board in the video or do something stupid, let them” and “No does not mean no,” according to the complaint.
Mavromatis alleges that she was demoted and then fired.
Paez said that Mavromatis’s role was eliminated as part of a reorganization of an underperforming group within Beast Industries and that she was made aware of this.
Business
Heidi O’Neill, Formerly of Nike, Will Be New Lululemon’s New CEO
Lululemon, the yoga pants and athletic clothing company, has hired a former executive from a rival, Nike, as its new chief executive.
Heidi O’Neill, who spent more than 25 years at Nike, will take the reins and join Lululemon’s board of directors on Sept. 8, the company announced on Wednesday.
The leadership change is happening during a tumultuous time for Lululemon, which had grown to $11 billion in revenue by persuading shoppers to ditch their jeans and slacks for stretchy leggings. But lately, sales have declined in North America amid intense competition and shifting fashion trends, with consumers favoring looser styles rather than the form-fitting silhouettes for which Lululemon is best known.
“As I step into the C.E.O. role in September, my job will be to build on that foundation — to accelerate product breakthroughs, deepen the brand’s cultural relevance, and unlock growth in markets around the world,” Ms. O’Neill, 61, said in a statement.
Lululemon, based in Vancouver, British Columbia, has also been entangled in a corporate power struggle over the company’s future. Its billionaire founder, Chip Wilson, has feuded with the board, nominated independent directors and criticized executives.
Lululemon’s previous chief executive, Calvin McDonald, stepped down at the end of January as pressure mounted from Mr. Wilson and some investors. One activist investor, Elliott Investment Management, had pushed its own chief executive candidate, who was not selected.
The interim co-chiefs, Meghan Frank and André Maestrini, will lead the company until Ms. O’Neill’s arrival, when they are expected to return to other senior roles. The pair had outlined a plan to revive sales at Lululemon, promising to invest in stores, save more money and speed up product development.
“We start the year with a real plan, with real strategies,” Mr. Maestrini said in an interview this year. “We make sure decisions are made fast.”
Lululemon said last month that it would add Chip Bergh, the former chief executive of Levi Strauss, to its board to replace David Mussafer, the chairman of the private equity firm Advent International, whom Mr. Wilson had sought to remove.
Ms. O’Neill climbed the organizational chart at Nike for decades, working across divisions including consumer sports, product innovation and brand marketing, and was most recently its president of consumer, product and brand. She left Nike last year amid a shake-up of senior management that led to the elimination of her role.
Analysts said Ms. O’Neill would be expected to find ways to energize Lululemon’s business and reset the company’s culture in order to improve performance.
“O’Neill is her own person who will come with an agenda of change,” said Neil Saunders, the managing director of GlobalData, a data analytics and consulting company. “The task ahead is a significant one, but it can be undertaken from a position of relative stability.”
Business
Angry Altadena residents ask officials to halt Edison’s undergrounding work
Eaton wildfire survivors’ anger about Southern California Edison’s burying of electric wires in Altadena boiled over Tuesday with residents calling on government officials to temporarily halt the work.
In a letter to the Los Angeles County Board of Supervisors, more than 120 Altadena residents and the town’s council wrote that they had witnessed “manifest failures” by Edison in recent months as it has been tearing up streets and digging trenches to bury the wires.
The residents cited the unexpected financial cost of the work to homeowners and possible harm to the town’s remaining trees. They also pointed out how the work will leave telecommunication wires above ground on poles.
“The current lack of coordination is compounding the stress of a community still reeling from the Eaton Fire, and risks causing further irreparable harm,” the residents wrote.
The council voted unanimously Tuesday night to send the letter.
Scott Johnson, an Edison spokesman, said Wednesday that the company has been working to address the concerns, including by looking for other sources of funds to help pay for the homeowners’ costs.
“We recognize this community has already faced a number of challenges,” he said.
Johnson said the company will allow homeowners to keep existing overhead lines connecting their homes to the grid if they are worried about the cost.
Edison’s crews, Johnson said, have also been trained to use equipment that avoids roots and preserves the health of trees.
The utility has said that burying the wires as the town rebuilds thousands of homes destroyed in the fire will make the electrical grid safer and more reliable.
But anger has grown as work crews have shown up unexpectedly and residents learned they’re on the hook to pay tens of thousands of dollars to connect their homes to the buried lines.
Residents have also found the crews digging under the town’s oak and pine trees that survived last year’s fire. Arborists say the trenches could destroy the roots of some of the last remaining trees and kill them.
Amy Bodek, the county’s regional planning director, recently warned Edison that a government ordinance protects oak trees and that “utility trenching is not exempt from these requirements.”
Residents have also pointed out that in much of Altadena, the telecom companies, including Spectrum and AT&T, have not agreed to bury their wires in Edison’s trenches. That means the telecom wires will remain on poles above ground, which residents say is visually unappealing.
“While our community supports the long-term benefits of moving utilities underground, the current execution by SCE is placing undue financial and planning burdens on homeowners, causing irreparable harm to our heritage tree canopy, and proceeding without adequate local oversight,” the residents wrote.
They want the project halted until the problems are addressed.
Edison announced last year that it would spend as much as $925 million to underground and rebuild its grid in Altadena and Malibu, where the Palisades fire caused devastation.
The work — which costs an estimated $4 million per mile — will earn the utility millions of dollars in profits as its electric customers pay for it over the next decades.
Pedro Pizarro, chief executive of Edison International, told Gov. Gavin Newsom last year that state utility rules would require Altadena and Malibu homeowners to pay to underground the electric wire from their property line to the panel on their house. Pizarro estimated it would cost $8,000 to $10,000 for each home.
But some residents, who need to dig long trenches, say it will cost them much more.
“We are rebuilding and with the insurance shortfall, our finances are stretched already,” Marilyn Chong, an Altadena resident, wrote in a comment attached to the letter. “Incurring the additional burden of financing SCE’s infrastructure is not something we can or should have to do.”
Other fire survivors complained of Edison’s lack of planning and coordination with residents.
“I’ve started rebuilding, and apparently there won’t be underground power lines for me to connect with in time when my house will be done,” wrote Gail Murphy. “So apparently I’m supposed to be using a generator, and for how long!?”
Johnson said the company has set up a phone line for people with concerns or questions. That line — 1-800-250-7339 — is answered Monday through Saturday, he said.
Residents can also go to Edison’s office in Altadena at 2680 Fair Oaks Avenue. The office is open Monday to Friday from 8 to 4:30.
It’s unclear if the Eaton fire would have been less disastrous if Altadena’s neighborhood power lines had been buried.
The blaze ignited under Edison’s towering transmission lines that run through Eaton Canyon. Those lines carry bulk power through the company’s territory. In Altadena, Edison is burying the smaller distribution lines, which carry power to homes.
The government investigation into the cause of the fire has not yet been released. Pizarro has said that a leading theory is that a century-old transmission line, which had not carried power for 50 years, somehow re-energized to spark the blaze.
The fire killed at least 19 people and destroyed more than 9,400 homes and other structures.
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