Community group ends court fight against owners of Times, P-I

by Eric Pryne, Seattle Times

The Committee for a Two-Newspaper Town dropped its claims against the owners of Seattle's two daily newspapers Wednesday, tying up one of the last loose ends in the city's long-running newspaper dispute.

The group had vowed just two weeks ago to continue its legal fight, saying it wasn't convinced the April settlement agreement between The Seattle Times Co. and The Hearst Corp., owner of the Seattle Post-Intelligencer, would keep both papers alive for the foreseeable future, as the companies maintain.

That uncertainty remains, Anne Bremner, the committee's co-chair, said Wednesday. But a recent court ruling left the group boxed in, with no way to learn more and no other legal avenues to pursue, the Seattle attorney said.

"Hopefully our work is done," Bremner said. "We will rise again if we have to, in a heartbeat."

Representatives of the two companies applauded the committee's move.

"Getting the entire legal dispute behind us allows us to focus all our attention on the substantial business challenges ahead of us," Times Vice President Jill Mackie said in an e-mail.

"The case was effectively over two months ago," said P-I Publisher Roger Oglesby. "The settlement is exactly what the committee was seeking."

The companies had been preparing motions to dismiss the committee's claims, and several outside legal observers said those motions were likely to succeed.

While it is withdrawing from court, at least for now, Bremner said the committee's work hasn't been in vain. It's at least partly responsible for Seattle remaining a two-newspaper town, she added.

Times Publisher Frank Blethen has said the prospect of continued litigation with the committee and others was a factor in the decision to settle.

The Times and P-I are linked by a joint-operating agreement (JOA). They maintain separate news operations, but the larger Times handles the production and business end for both papers in return for a larger share of the joint proceeds.

Hearst sued The Times in 2003 after The Times invoked an escape clause in the JOA contract that could have led to shutting down the P-I. King County Superior Court Judge Greg Canova let the Committee for a Two-Newspaper Town intervene in the case, saying it appeared to represent the public interest.

Despite Hearst's lawsuit, the committee had concerns the companies might be colluding. It challenged a JOA provision that allowed Hearst to close the P-I and collect 32 percent of The Times' profits until 2083, calling it an unconstitutional restraint of trade.

The companies settled in April on the eve of a binding-arbitration hearing. Among other things, the 32 percent provision was eliminated, and The Times agreed not to invoke the escape clause again for at least nine years.

Lawyers for the companies met with a committee attorney the day the settlement was announced and asked the group to drop its claims. But the committee resisted, in part because some information had been redacted — edited out — of versions of the settlement documents provided to the group and the public.

It raised the possibility Hearst and The Times might have had a secret understanding to close one paper later, a suggestion that both denied.

The group suffered a setback June 6, when Canova rejected its bid to subpoena documents and question newspaper executives under oath. Even so, the committee said it wouldn't drop its claims unless the companies promised to keep publishing both papers until at least 2019.

The group didn't get that assurance. But Bremner said Wednesday it did succeed in getting the companies to state in court papers that there was no secret deal.

She noted the companies had agreed to join the committee in moving to dismiss its claims "without prejudice," meaning the group is free to resurrect them later.

"That's very important," she said. "We've decided to take a wait-and-see approach."

In a related matter, Bremner said the committee will file a lawsuit seeking information from the state Attorney General's Office concerning the JOA that the office so far has refused to provide.

The office blacked out some material from JOA-related documents it provided last month to the committee in response to a public-records request. In earlier court papers, committee lawyer Kathy George argued the black-outs suggest the attorney general is investigating the settlement agreement and considering legal action.

"We want to see whether there in fact has been an investigation and whether there's anything of concern," Bremner said.

But Tina Kondo, chief of the attorney general's antitrust division, said there is no investigation and no legal action is planned.

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