The Orange County Fair didn't violate state law by setting up its bid process for the rights to run the Fair's carnival to ensure only the company that had run the Fair's carnival for more than two decades could qualify to land the contract, a state appeals court has ruled.
Attorneys for a rival company which had hoped to bid for the contract said the court's decision was a "mystery" and "wrong" on the facts and the law.
On June 18, a three-justice panel of the California Fourth Appellate District Court in Santa Ana ruled an Orange County Superior Court judge was correct to deny a request for an injunction sought by Texas-based carnival and amusements operator Talley Amusements.
Talley had sought a court order blocking the 32nd District Agricultural Association, which oversees the Orange County Fair, from continuing to give Arizona-based carnival and amusements operator Ray Cammack Shows to run the OC Fair's carnival midway.
For more than 20 years, Ray Cammack Shows has operated the Orange County Fair's midways, which includes the Fair's Ferris wheels, roller coasters, various other rides, carnival games and concession stands.
Ray Cammack is one of the largest carnival operators in the U.S. and has annually run the carnival midways at the Los Angeles County Fair, the Arizona State Fair and the Houston Livestock Show and Rodeo, among others.
The Orange County Fair still ranks among its largest contracts, as the Fair draws more than 1 million visitors every year.
In 2021, the 32nd District Agricultural Association put out a call for companies to bid on the contract for "master carnival operator." According to court documents, it marked the first time the contract could potentially be up for bid since Ray Cammack won the contract more than 20 years earlier.
Under the terms of the so-called Request for Proposal, the District required that any bidder must have no less than "65 quality rides ... one of which must a Sky Ride;" must have held similar contracts "for three different fairs with attendance of over 500,000 at each during the past three years" and must have the capability to allow for electronic ticketing systems for its rides and games.
The contract would be worth $80 million over five years, not including revenue from concessions.
Cammack won the bid, as the only bidder. The company took in more than $18 million from the 2022 OC Fair, while also generating $8.7 million for the District, according to court documents. The 2023 Fair similarly produced big money for both Cammack and the District, court documents said.
However, Talley Amusements challenged the entire process, saying it was intended to make Ray Cammack the only qualified bidder in the entire country.
Talley filed suit, asserting the process violated California state law, which requires state agencies to competitively bid their projects.
According to Talley's attorney, John S. Moot, of the firm of Freeman Mathis & Gary, the factual record in the case includes documents in which the OC Fair organizers agreed to competitively bid the carnival contract under the state's government contract code.
However, in court, Orange County Superior Court Judge Deborah Servino denied Talley's request for a preliminary injunction.
On appeal, the Fourth District justices also denied the injunction request.
The decision was authored by Justice Thomas M. Goethals. Justices Thomas A. Delaney and Martha K. Gooding concurred.
In the decision, the justices rejected Talley's assertion that the carnival contract amounted to a "contract 'for services to be rendered to the state.'"
They said the contract amounted to "a service ... to fair patrons, not to the Association or the state."
The contract "did not require the Association or the state to pay the winning bidder for any services; rather, it required fair patrons to pay the winning bidder for services rendered to them, and it required the winning bidder to pay a percentage of those revenues to the Association," the justices wrote.
"The master carnival operator contract ... is therefore not a contract 'for services to be rendered to the state,' so it is not subject to the competitive bidding requirements..."
If anything, the justices said, the contract is more akin to a "rental agreement" than to a contract for "services."
The justices further rejected the argument that a bidding process tailored to ensure only one qualified bidder can emerge is necessarily invalid under the law.
In response to the ruling, Moot said he believed "the court got it wrong."
"How they got to their decision is a bit of a mystery to me," Moot said.
He said a contract awarded by the Orange County Fair to a company to operate a carnival at the Fair - "a service the Association cannot provide on its own" - fits "the very definition of services."
"It wouldn't be a Fair if not for the rides and games on the midway," Moot said.
He said he was unsure what the next steps may be following the ruling, but said the case will continue, despite the denial of the preliminary injunction.
The 32nd District Agricultural Association was represented by attorneys from the California Department of Justice, which represents state agencies in court.