Kay stands by
his ruling on
Star-Bulletin closure

Gannett and Liberty will
have to wait for a higher court
to review the ruling

Shutdown announcement
Text of injunction halting shutdown
Text of refusal to lift injunction

By Debra Barayuga
Star-Bulletin

A court order is causing irreparable harm to newspaper subscribers and advertisers, and to employees of the Hawaii Newspaper Agency and Honolulu Advertiser, because it blocks the closure of the Honolulu Star-Bulletin.

That was alleged yesterday by Liberty Newspapers Limited Partnership, owner of the Star-Bulletin, and Gannett Pacific Corp., owner of the Advertiser, in calling for reconsideration of Wednesday's order by U.S. District Judge Alan C. Kay that preserves the Star-Bulletin's operations.

Gannett lawyers locally filed a notice of appeal of Kay's order to the 9th U.S. Circuit Court of Appeals, and in San Francisco filed papers to expedite the appeal and stay the judge's order granting a injunction.

"We look forward to the appellate court reviewing the injunction as soon as possible," Advertiser Publisher Mike Fisch said in a written statement.

But a state attorney said much of Gannett's and Liberty's arguments were based on an illegal plan. Kay yesterday also dismissed without a hearing Gannett's request to lift the injunction pending an appeal.

Kay issued the injunction saying the agreement to shut down the Star-Bulletin goes against the intent of the Newspaper Preservation Act, which granted anti-trust exemption to newspapers operating under joint operating agreements as long as they maintained separate editorial voices.

Kay ordered Liberty and Gannett to refrain from making any changes to the joint operating agreement, and not to take any steps that would adversely affect advertisers, subscribers or the Star-Bulletin as a viable newspaper.

The court's order hinders the Advertiser's ability to compete, Fisch said, in a declaration supporting a stay of the injunction.

"Every aspect of publishing the newspapers is in constant change," Fisch said. "The needs of readers constantly change and we must react to them on a daily basis."

The court's order prohibits addressing employee issues such as calculating severance, interviewing new employees, bargaining with unions, and providing outplacement services for employees who will lose their jobs.

The order also appears to prohibit them from advising advertisers and Star-Bulletin subscribers about what to expect after Oct. 30, he said.

Deputy Attorney General Rodney Kimura said the state is prepared to defend the court's decision and to oppose Gannett and Liberty's appeal.

Actions the Hawaii Newspaper Agency and Gannett said they have taken in anticipation of the shutdown include:

Planning to dissolve the Hawaii Newspaper Agency and creating a new entity to hire or transfer 700 to 800 employees.
Sending out termination notices to 800 newspaper carriers and dealers who distribute both papers, offering cash incentives to continue working until Oct. 31.
Redesigning circulation routes for Advertiser delivery routes to better serve former Star-Bulletin subscribers.
Stopping bills from being sent out to about 50,000 Star-Bulletin subscribers.
Offering special discounts for subscriptions to the Advertiser.
Recruiting new carriers to cover new and vacant delivery routes.
Reworking work shifts to accommodate printing only the Advertiser.
Making changes in payroll and accounting systems.
Notifying advertisers that their rates weren't going to rise because of the change in the joint operating agreement, and offering advertising incentives.
Buying ads to publicize the new plans for the Advertiser.

"These are all things being done for the purpose of implementing an agreement which is illegal," Kimura said.

"To the extent their obligations were established because of the termination agreement, we have concerns about those obligations being fulfilled."

If permitted to continue, their actions will lead to the Star-Bulletin's demise -- the basis for the state going to federal court in the first place, he said.

PR society cancels Advertiser luncheon The local chapter of the Public Relations Society of America is canceling an Oct. 20 luncheon. Speakers at the luncheon were to address the challenges facing the Honolulu Advertiser in light of the announced closing of the Honolulu Star-Bulletin. Refunds will be made for those who have already paid to attend.

Shutdown announcement
Text of injunction halting shutdown
Text of refusal to lift injunction