CHARLESTON, W.Va.—The owners of Charleston’s two daily newspapers want a federal antitrust suit thrown out of court.
The Daily Gazette Co. and Denver-based ap contend in court documents filed Monday in U.S. District Court in Charleston that there’s ample reason to dismiss the case. The lawsuit, filed by the U.S. Department of Justice in May, seeks to reverse the 2004 sale of the Charleston Daily Mail to the Daily Gazette Co.
Among other things, the Daily Gazette Co. and MediaNews contend the lawsuit would do “grave damage to First Amendment principles.”
The companies further argue that protections offered by the Newspaper Preservation Act and various exemptions to antitrust laws are sufficient reason to dismiss the case.
Key to their arguments is the joint operating agreement signed by the newspapers in 1958. That agreement remained in place after MediaNews sold the Daily Mail to the Daily Gazette Co. for $55 million in May 2004. Under terms of the sale, MediaNews provides “management and supervision” to the Daily Mail in exchange for a fee paid by the Daily Gazette Co. MediaNews no longer shares in the newspaper’s profits.
The Justice Department’s lawsuit argues the 2004 purchase “does not meet the statutory definition of a JOA under Newspaper Preservation Act” and does not give the deal immunity from antitrust laws.
But the Gazette Co. and MediaNews say that’s not the case.
Antitrust laws do not require an economically integrated joint venture such as the joint operating agreement to compete with itself, according to the companies’ motion to dismiss the suit.
Furthermore, the companies say there’s no commercial competition left to reduce or eliminate in their joint operating arrangement. All that remains is “noncommercial editorial competition—the competition of ‘thoughts and ideas’—that is beyond the scope of the antitrust laws,” they argue.
Finally, the companies say the Justice Department has not supported its argument that the joint operating agreement has lost the antitrust immunity offered by the Newspaper Preservation Act.
The Justice Department lawsuit argues the Daily Gazette Company and MediaNews broke federal law through a series of transactions that resulted in the Gazette’s owner buying the Daily Mail from MediaNews. The suit further alleges the Daily Gazette Company set about closing the Daily Mail after buying the Gazette’s smaller rival.
