Bay Guardian awarded $15.6 million in lawsuit

by Mark Fitzgerald, Editor and Publisher

A California jury Thursday awarded the San Francisco Bay Guardian $6.39 million -- which is automatically trebled under state law to $15.6 million –- in the alt-paper’s predatory pricing lawsuit against the rival SF Weekly and its parent Village Voice Media (VVM).

The jury had deliberated for more than three days before delivering its unanimous decision.

“We’re delighted that a San Francisco jury sent out the message that a newspaper chain from Phoenix, Arizona, can’t just gallop into town and kill off a locally run independent newspaper,” Bay Guardian co-owner and Editor Bruce B. Brugmann told E&P.

VVM reacted to the verdict with a prepared statement blasting Brugmann:

“Today's verdict in Bruce Brugmann's suit was an expensive lesson in laws, lawyers, and lawsuits, and how one man's obsession manipulated the system.

“Like Ralph Nader, Bruce Brugmann is out of touch with reality. Feigning obliviousness to the Internet, the dot-com bust, 9/11, the Bush economy -- and the $330 million lost by the San Francisco Chronicle to these very factors -- Brugmann insisted in court that only SF Weekly threatened his wallet.

“Jurors agreed and hit Village Voice Media with more than $15.6 million in damages. Brugmann thus earned in court more than he ever earned in 40 years of publishing.”

Bay Guardian Executive Editor Tim Redmond reported on his blog that Rod Kerr, an attorney for SF Weekly, “told me immediately afterward that the 16-paper chain intends to appeal.”

Brugmann sued the Weekly and VVM under a California state law that makes it illegal to price product below-cost in an effort to put a competitor out of business. The Guardian contended that VVM used profits from its papers that don’t have a direct alternative rival to allow the Weekly to sell advertising below its cost.

In the five-week trial, witnesses and attorneys for SF Weekly and VVM argued that there are many causes for whatever financial ails the family-owned Guardian had, including the fierce competition among alt-papers in the Bay Area, the devastating effect of the Internet on classified -- especially by the founded-in-San Francisco Craigslist -- and the secular decline of newspapers in general.

VVM adamantly denied trying to put the Guardian out of business. "We have not sought to injure the Bay Guardian; we just don't want to read it," VVM Executive Editor Michael Lacey, who did not immediately return a phone message seeking comment, said in a statement.

VVM also criticized Brugmann personally for asking the court to monitor the price SF Weekly charges for ads in the future.

"Instead of competing in the marketplace, Brugmann sought a court-ordered price-fixing scheme," the VVM statement said. "Brugmann, grasping a dog-eared copy of George Orwell's Animal Farm, seeks a court injunction to set and monitor advertising rates. 'We continue to believe that the marketplace sets rates,' said Jim Larkin, Village Voice Media CEO. 'We intend to resist any state-sanctioned collectivization of journalism.'

For his part, Brugmann said the verdict is a victory for all independent papers.

"We like to look at this as not just a victory for us, but for small busiensses and small newspapers everywhere. Not just alternatives, but community papers and family-owned papers, and independent papers who are facing battles by chains who are using predatory methods," he said.

The Guardian, he said, is "just happy this part" of the litigation is over. "We spent three and a half years getting this to trial, two weeks in jury selection, five weeks at trial, and four days of jury deliberation," Brugmann said. "That's a lot of time to spend on the simple issue of just protecting your paper from these kinds of predatory practices."

article originally published at http://www.editorandpublisher.com/eandp/search/article_display.jsp?vnu_content_i....

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