In a letter dated December 16, 2002, Costco’s Chief Legal Officer has threatened Al Norman of Sprawl-Busters with a libel lawsuit for making false statements regarding Costco’s project in Cuernavaca, Mexico. (Search this Newsflash database by “Cuernavaca” for 4 earlier stories). Residents in Cuernavaca have charged that Costco has destroyed many centenary trees in the Casino De La Selva area, harmed historic murals in the hotel building itself, and that the bidding process for the hotel was flawed with irregularities. Costco denies all these charges, and claims that Al Norman’s letter to the Mexican Consulate in New York City “contains a number of false statements.” Costco charges that Sprawl-Busters published these statements “without making any effort to independently verify the allegations you have published..in reckless disregard for the truth or falsity of those statements.” “While we respect the rights of any person or group for any reason to lawfully oppose and responsibly voice their opposition to this or any other project,” Costco’s lawyer writes, “such freedom of expression carries with it the great responsibility to exercise the right of freedom of speech in a truthful manner.” Costco says the Sprawl-Busters letter “displays a disregard for this responsibility by disseminating false and unsubstantiated statements that are harmful to Costco’s reputation and, as such, constitute actionable libel against Costco.” The company “demands” that Al Norman retract “false statements” made to the Mexican Consul, publish a retraction of such statements “in a visible place on your website”, and cease and desist from “publishing any future untrue statements or allegations concerning the project.” Costco, headquartered in Issaquah, Washington, is the nation’s second largest warehouse membership corporation in the world, second only to Sam’s Club. The company operated 374 warehouses as of September 1, 2002, plus 20 warehouses in Mexico under a joint venture. The company had revenues last year of roughly $38 billion, and claims to have more than 19 million members. The Cuernavaca project to build a warehouse on land that once housed an historic and culturally important Casino de la Selva, has been the subject of intense opposition for more than a year. On August 21, 2002, 33 people opposing the project were arrested and beaten by the police in Cuernavaca, according to local residents. Opponents of the project are trying to get Costco to agree to a plebiscite on the development, to demonstrate whether or not local people support the Costco location. “The Civic Front for the Defense of the Casino de la Selva and its supporters are not opposed to Costco building a store in Cuernavaca,” opponent Charles Goff told Costco. “What they are opposed to its building it on the grounds of the Casino.” Residents claim that Costco has destroyed hundreds of old trees, while Costco claims it has destroyed only 85 trees. Ironically, the name “Cuernavaca” is from the native word meaning “near the woods.” In a letter to Mexican officials last October, the Sierra Club indicated that the sale of the Casino “has been plagued by serious irregularities from the start,” and criticised the government’s repression of demonstrators in August. The government’s responses, the Sierra Club said, “demonstrate that in Mexico, Costco-Commercial Mexicana’s business transactions are above the protection of the environment, human rights, and the law itself.”
In response to Costco’s threat of legal action, Sprawl-Busters sent a letter back to the company on December 27th. offering to publish Costco’s response to Al Norman’s statements on this website. Norman states that he does not consider any of his statements as libelous, and concludes: “I have no reason to believe that the statements made by local citizens are false or recklessly disregard the truth. I have had extensive communications with local residents about this project, and I do not believe that I failed to act with due care in this situation.” Norman notes that “there is reasonable basis in fact for many of the charges raised by area residents.” “If Costco wishes space in my publication to get out ‘your side’ of the story,” Norman wrote, “I am offering that to you.” No response from Costco has been received as of today’s date.