Lawsuit Over La Costa Resort & Spa Article
In March 1975, Penthouse published an article headlined "La Costa: The Hundred-Million-Dollar Resort with Criminal Clientele," written by Jeff Gerth and Lowell Bergman. The article indicated that the La Costa Resort and Spa in Carlsbad was developed by Mervyn Adelson and Irwin Molasky using loans from the Teamsters Pension Fund and that the resort was a playground for organized crime figures. The owners, along with two officials of the resort, Morris B. Moe Dalitz and Allard Roen, filed a libel lawsuit for $522 million against the magazine and the writers. In 1982, a jury absolved the magazine of any liability against the lawsuit from the owners. The plaintiffs appealed, but in December 1985, before a new trial could begin, the two sides settled. Penthouse issued a statement that they did not mean to imply that Adelson and Molaskey are or were members of organized crime. In turn the plaintiffs issued a statement lauding Penthouse publisher Guccione and his magazine for their "personal and professional awards." Total litigation costs were estimated to exceed $20 million.
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