Judge grants citizens group right to enter JOA legal fight

An ad hoc citizens group yesterday won approval to intervene in a lawsuit over the future of Seattle's two daily newspapers. But King County Superior Court Judge Greg Canova left open how far the group can take its challenge of the papers' joint-operating agreement (JOA).

In a handwritten order, Canova granted the Committee for a Two-Newspaper Town permission to intervene in the lawsuit, saying the JOA itself "reflects the importance of the issues presented in this litigation to the citizens of the greater Seattle area." Canova said the committee's intervention would not "delay or prejudice" The Hearst Corp., which filed the suit, or The Seattle Times Co., the defendant.

The committee, which says it is made up of "concerned readers, subscribers, journalists, employees, citizens and elected officials," is challenging The Times' effort to shut down the Hearst-owned Seattle Post-Intelligencer. Among those listed as committee supporters are former Gov. Mike Lowry and U.S. Rep. Jim McDermott, D-Seattle.

Times officials have invoked a provision in the JOA that allows them to move for the shutdown after claiming financial losses for three consecutive years — 2000, 2001 and 2002.

In April, Hearst sued in Superior Court to block The Times' move. Among other things, Hearst contends the "force majeure" — or greater force — clause in the JOA prevents The Times from counting financial results in 2000 as a loss.

The Times blames that year's loss of $2.1 million on a 49-day strike against the paper that began in late 2000. Hearst argues that, as an extraordinary event, the strike should exempt the year's losses from being considered toward the shutdown provision.

In a complaint earlier this month, the citizens' committee's arguments paralleled Hearst's, and it petitioned Canova for permission to challenge the validity of The Times' loss in 2000. It also sought to contest a broader revision of the JOA that was approved by both papers in 1999.

Canova's ruling permits the committee to intervene in the case but says the judge may still determine the scope of the intervention in the future.

"What the judge decided was to give the committee the status of an official party, but he reserved ruling on the merits of our case for another day," said Phil Talmadge. The former state Supreme Court judge and current Democratic gubernatorial candidate is the committee's co-chairman with Seattle attorney Anne Bremner.

"We got exactly what we wanted," Bremner said, "which is a voice in the ongoing litigation and recognition that the people have a stake in this issue."

Seattle Times spokeswoman Kerry Coughlin noted Canova didn't rule on the validity of the committee's complaint.

"Our sense is that the judge is letting them in to hear more of what they have to say," Coughlin said. She said The Times, which opposed the committee's petition to intervene, thought the group would complicate the litigation.

Hearst did not oppose the committee's intervention.

Separately, attorneys for The Times and P-I yesterday submitted rebuttals to filings each side made June 27 that laid out their cases primarily over the force majeure issue.

In a nine-page memo to Canova, The Times disputed Hearst's claim that The Times' loss in 2000 was exempted under the force majeure provision.

The Times said in contracts like the JOA, force majeure is a term exempting either party from "failure or delay in performance" resulting from "any cause substantially beyond the control" of the other party in the agreement. The Times says the clause was meant for issues dealing mostly with production of the newspaper.

Under Seattle's JOA, The Times prints, distributes and markets both papers, while each paper has separate newsrooms.

The Times' attorneys argued that Hearst is attempting to stretch the meaning of the force majeure concept beyond the JOA's original intent. That reading, they said, "is not even remotely workable."

No other case "in the history of the world" has used an interpretation of the concept similar to the one Hearst is seeking to use, The Times said.

Preventing The Times from invoking the so-called "stop-loss" provision for 2000 could mean staving off a possible P-I shutdown for at least an additional year while The Times determined whether 2003 would be added to its string of losses. Times officials say that would put their financially strapped company at risk.

In their 10-page rebuttal, Hearst attorneys said there is nothing in the JOA to limit force majeure from applying to the three-year, stop-loss provision. Lawyers for The Times, who drafted both the original JOA that took effect in 1983 and the 1999 revision, made no attempt to exclude the three-year loss part of the agreement from force majeure coverage, Hearst said.

"The reach of the force majeure clause is clear and broad," the New York-based media company said. "It applies to the entire JOA."

Hearst cited a speech in 2000 by Times Publisher Frank Blethen to the American Society of Newspaper Editors in Washington, D.C., as evidence that Times officials believed the strike loss was a one-time event. In it, Blethen called newspapers "cash machines," adding, "and they will remain so for a long time."

Court officials said a hearing set for Friday on motions filed in the case by The Times and Hearst would be rescheduled.