A Clark County judge imposed a partial stay in a battle between Las Vegas’ two daily newspapers, citing serious concerns over whether a state court had jurisdiction in several matters also being litigated in federal courts.
Judge Timothy Williams issued the pause of one disputed matter, pending a ruling from the federal court over whether it will hear a case filed by the Las Vegas Sun against the Las Vegas Review-Journal.
In late September, the R-J announced its plans to try to dissolve the joint operating agreement under which the R-J and the Sun have operated since 1989 and which was amended in 2005. The R-J filed this action as a counterclaim to a pending state court action by the Sun accusing the R-J of changing its front page and diminishing the Sun’s presence on it in a manner not allowed under the contract.
When the R-J announced its plans, the Sun went to federal court and filed suit saying this effort and other R-J actions constituted an attempt to create an illegal monopoly in Clark County.
In Wednesday’s hearing, Williams expressed serious concerns — echoed by the Sun attorneys — about whether a state court has jurisdiction over antitrust issues raised by the R-J’s counterclaim, while reserving final judgment.
“I’m going to take a cautious approach,” Williams said at the end of a two-hour hearing. “I’m not going to rule for dismissal outright, but I’m going to stay this matter pending resolution to the Sun’s action in federal court.”
Williams stressed he wasn’t ruling that his court did not have jurisdiction in the matter, just that he wanted to see what happened in federal court. No date for hearing the case in federal court has been set.
“We have the utmost respect for the court, though we respectfully disagree with the decision,” said Benjamin Lipman, general counsel for the R-J. “It is a shame the Sun continues to waste the parties’ and court’s time and money in ongoing efforts to avoid its day of reckoning for failing to live up to the promises it made and continues to fight against allowing our justice system to rule on the Review-Journal’s claims.”
The Sun filed a lawsuit against Sheldon Adelson and the ownership group of the R-J in September in U.S. District Court in Las Vegas, alleging Adelson is trying to stop the Sun from publishing in order to silence an alternative editorial voice in Las Vegas.
The goal, as alleged by the Sun, is for Adelson — a billionaire casino owner and megadonor to the Republican Party — to muffle his local media critics, monopolize the local newspaper industry and squelch dissent to his newspaper’s right-leaning editorial views.
In federal court, the Sun seeks to force the R-J to cease its “abusive, unlawful and anticompetitive practices,” and a judgment ordering the R-J’s owners to either divest themselves of the newspaper or to at least turn over the newspaper’s non-editorial business operations to an independent agency or trustee.
“Today was a very important day,” Sun attorney James Pisanelli said. “While the court reserved its ruling on whether to dismiss the R-J’s counterclaims, which are designed to put the Sun out of business, the court expressed serious concerns over whether it had subject matter jurisdiction over those claims due to the preemptive effect of the Newspaper Preservation Act (NPA) and federal antitrust laws.”
The JOA structure was created under the act, which was approved by Congress and signed into law in the 1970s. The legislation provides limited antitrust protection for newspapers to combine business functions while remaining editorially independent.
The Sun and the Review-Journal have several distinct matters before Williams that will remain in state court. He promised a pre-Thanksgiving ruling on one of them, whether to affirm an arbitration award that found the Adelson-owned R-J engaged in improper accounting practices that deprived the Sun of profit payments.
Sun lawyers have asked Williams to affirm most of what the arbitrator ruled. R-J attorneys have argued to keep the arbitrator’s findings out of public view.
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