Judge withdraws from JOA case involving Seattle papers

A King County Superior Court judge has removed himself from hearing a lawsuit brought by the owners of the Seattle Post-Intelligencer against The Seattle Times over the joint operating agreement between the two newspapers.

Judge Bruce W. Hilyer signed an affidavit this morning recusing himself from the case at the request of The Times, according to Hilyer’s bailiff, Lee Walters.

The move will likely delay preliminary arguments, scheduled to begin Tuesday, in the case. A new judge must be randomly assigned, just as Hilyer was, and "it will be a few days before that’s known," Walters said.

In a two-page motion filed Wednesday with the King County Superior Court, Times attorney Douglas Ross of Davis Wright Tremaine requested that Hilyer step down.

"I believe that a fair and impartial trial in this case cannot be had before Judge Bruce Hilyer," Ross wrote.

The affidavit did not specify The Times’ objections to Hilyer. Newspaper spokeswoman Kerry Coughlin would say only that The Times was "acting on advice of counsel."

Ross did not immediately return calls Thursday from The Associated Press.

Under Superior Court rules, either side in the dispute is allowed to reject one judge without explaining its reasons, Walters said.

The Post-Intelligencer’s parent company, New York-based Hearst Corp., is suing The Times, seeking to block the newspaper from invoking a clause in the companies’ joint-operating agreement that could lead to its dissolution.

Since 1983, The Times has handled all non-news functions for both papers under the JOA. The two papers share profits in a 60-40 split, with The Times taking the larger share. The papers operate separate newsrooms.

The Times officially notified Hearst on Tuesday that it was invoking the "loss operations" clause in the JOA, which allows either partner to petition to end the collaboration if it has lost money for three consecutive years. The Times acknowledged in January that it had lost money in 2000, 2001 and 2002.

The two sides have 18 months to come to terms on publishing one newspaper. If no deal is reached, the joint-operating agreement ends.

The dissolution could lead to the Post-Intelligencer’s closure, or force it to find its own printer, as well as set up its own advertising, production and circulation operations.

In its lawsuit on Monday, Hearst and the Post-Intelligencer argued that the JOA precludes either paper from invoking the loss clause in cases of extraordinary circumstances, including events such as the 2001 terrorist attacks, the prolonged recession, or the strike at both papers in late 2000 and early 2001.

According to a February audit by Deloitte & Touche, The Times’ JOA losses totaled $2.1 million in 2000, $5.1 million in 2001 and $2.7 million in 2002.

Hearst has accused The Times of deliberately inflating its expenses last year, when The Times hired more than 60 newsroom employees.

Hearst attorney Guy P. Michelson said the audit shows The Times’ share of JOA revenues increased from $22.8 million in 2001 to $29.9 million last year. News and editorial expenses jumped from $27.9 million in 2001 to $32.6 million in 2002.

"But for that expense increase, there would have been a profit" in 2002, Michelson said.

Times spokeswoman Coughlin would not discuss the audit.

"We’re not going to have any comment on our finances," she said.

The Times, founded in 1896, is owned 50.5 percent by the Blethen family and 49.5 percent by San Jose, Calif.-based Knight Ridder. It has about 350 news and editorial employees among its 2,200-person staff.

The 140-year-old P-I has about 200 reporters, photographers, editors, graphic artists and other news and editorial employees.

The Times’ average Monday-through-Friday circulation was more than 224,000 copies during the quarter ended Sept. 30, 2002, according to the Audit Bureau of Circulations. The P-I’s average circulation was about 157,000 copies during the same period.

Hearst, one of the nation’s largest media companies, publishes 12 daily newspapers and 16 magazines in the United States