Wednesday, October 20, 1999

Star-Bulletin closing after 117 years

9th Circuit: No rush to close Bulletin

The 9th Circuit court will not hear
Gannett's request to overturn a
ruling until mid-November

The Bulletin will stay alive past the
planned shutdown on Oct. 30


Bullet Text of the court's ruling today
Bullet What today's ruling means and what's next
Bullet Analysts say the Star-Bulletin is a tough sell
Bullet 'Broken Trust' authors concerned

By Gregg K. Kakesako


The Honolulu Star-Bulletin will stay open until at least mid-November.

The 9th Circuit Court of Appeals today rejected a request by the owners of Honolulu's two daily newspapers for an emergency appeal of a measure that keeps the Star-Bulletin from closing on Oct. 30.

Gannett Pacific Corp., owner of the Honolulu Advertiser, and Star-Bulletin owner Liberty Newspapers are appealing a preliminary injunction issued by a federal judge last week that halts the closure of the Star-Bulletin.

The San Francisco appeals court, however, did agree to speed up the time set for all parties to submit arguments dealing with U.S. District Judge Alan Kay's preliminary injunction.

Gannett and Liberty have until Oct. 27 to respond to the ruling by Kay. The state's response is due Nov. 3.

The court also gave Gannett until Nov. 10 to respond to further arguments after the state files its briefs.

The ruling

Bullet Text of the ruling issued this morning by the 9th U.S. Circuit Court of Appeals:

Appellants' opposed emergency motion to stay the district court's preliminary injunction ... is denied.

Save Our Star-Bulletin's motion for leave to file an amicus curiae brief is granted.

Appellants' request to have the court take judicial notice of a case from the district court for the Southern District of Florida is denied as unnecessary.

Appellants' motion to expedite this preliminary injunction appeal is granted in accordance with Ninth Circuit Rule 3-3(e). The briefing schedule is set as follows: the opening brief is due October 27, 1999; the answering brief is due November 3, 1999; and the optional reply brief is due November 10, 1999. Service on opposing counsel shall be by hand delivery or facsimile.

This appeal and any motions pending when briefing is completed shall be referred to the next available motions panel for disposition.

The district court should expedite its handling of the permanent injunction.

See Sports Form, Inc., v. United Press Int'l, Inc., 686 F.2d 750 (9th Cir. 1982)

In San Francisco, Mark Mendenhall, assistant circuit court executive, said no oral arguments would be heard by the appeals court and an opinion should be issued soon after the Nov. 10 filing.

The agreement between Gannett and Liberty that would terminate the Joint Operating Agreement and result in the shutdown of the Star-Bulletin expires Dec. 23.

Sandy Davidson, attorney, University of Missouri associate professor of journalism and adjunct law school professor, said, "When you look at the briefing schedule, this is a case on the fast track for sure. I cannot imagine attorneys being on a much tighter briefing schedule. It's like the biggest term paper you have to do in your life" being due in short order, Davidson said.

She pointed to the Pentagon Papers case in 1971.

"When the New York Times published the Pentagon Papers, 13 days later the U.S. Supreme Court was hearing that case. In the normal case of judicial activity, you certainly don't get to the Supreme Court of the United States in 13 days. And, in the normal case of appellate activity, you do not have this kind of rapid briefing schedule and being bumped to the head of the docket."

Liberty lawyer Diane Hastert said today she had just received the panel's ruling and would check with mainland attorneys to determine whether an appeal will be filed with the U.S. Supreme Court.

Lisa Munger, attorney with the local firm of Goodsill, Anderson, Stifel and Quinn, which represents Gannett, did not return calls seeking a response to today's 9th Circuit ruling.

Robert Bernius, Gannett's Washington, D.C., attorney, and Michael J. Fisch, publisher and president of the Honolulu Advertiser, were unavailable for comment.

Jack Rosenweig, deputy state attorney general, said the court of appeals did agree to expedite the preliminary injunction appeals process, "recognizing the sense of importance of the newspaper's arguments."

He said Kay's preliminary injunction will remain in effect until Kay hears arguments on the state's request for a permanent injunction.

The appeals court did say, however, that Kay "should expedite its handling of the permanent injunction."

Rosenweig acknowledged that Kay probably won't hear arguments on the request for permanent injunction until after the court of appeals rules on the Gannett-Liberty appeal of his decision granting the preliminary injunction.

John Flanagan, the Star-Bulletin's editor and publisher, said today's order in effect pushes back the planned Oct. 30 closing at least until mid-November.

Flanagan said the paper is notifying its wire service and feature service providers that the newspaper will be running beyond the planned Oct. 30 closure date.

In the meantime, the challenge will be to keep the staff focused to produce a quality newspaper, he said.

"We just hope that everybody hangs in there, including our readers," Flanagan said.

On Oct. 13, Kay issued a preliminary injunction requested by the state of Hawaii to keep the Star-Bulletin open until the lawsuits protesting the closure are heard.

Kay said he wasn't convinced by Gannett that the Newspaper Preservation Act, which allows such joint operating agreements enjoyed by the Star-Bulletin and Advertiser, exempts the Gannett-Liberty termination agreement from antitrust scrutiny.

What it means and what's next

Today's action in the 9th U.S. Circuit Court of Appeals focused on the preliminary injunction issued last week by Judge Alan Kay. Action on permanent injunctive relief sought by both the state and the group Save Our Star-Bulletin has yet to be taken. Here's what today's federal appeals court action means, and what's next in legal actions regarding the Star-Bulletin:

Bullet The 9th Circuit order: Gannett Pacific Corp. and Liberty Newspapers Limited Partnership must keep the Honolulu Star-Bulletin open beyond its proposed Oct. 30 closing.

Bullet Next at the 9th Circuit: Judges denied Gannett and Liberty Newspapers' bid for an emergency hearing of their appeal to Judge Alan Kay's preliminary injunction staying the closure of the Star-Bulletin, but agreed to an expedited hearing. All filings are due Nov. 10.

Bullet Kay's order: The preliminary injunction preserving the status quo stands for the time being. Kay essentially barred Liberty and Gannett from taking any steps to close the Star-Bulletin.

Bullet The state: Still seeks a permanent injunction from the Oct. 6 suit against the owners. No trial date has been set.

Bullet Gannett Pacific/Liberty/Hawaii Newspaper Agency: Hearing on their motion to dismiss the state's suit is set for Dec. 20 in U.S. District Court here.

Bullet Save Our Star-Bulletin suit: Continuing on normal course; no upcoming deadlines. Filed "friend of the court brief" on Gannett-Liberty motion for stay of the preliminary injunction.

By Debra Barayuga and Gregg K. Kakesako

The purpose of the Newspaper Preservation Act is "to preserve papers," Kay said. However the termination agreement between Gannett and Liberty "would inevitably result in the closure of the Star-Bulletin because, without the JOA (joint operating agreement), it lacks the infrastructure to continue publishing the newspaper."

Signing today's order in San Francisco were federal Judges James Browning, J.C. Wallace and Edward Leavy.

Liberty, which bought the 117-year-old Star-Bulletin from Gannett in 1993, announced on Sept. 16 that it was closing the afternoon paper on Oct. 30 because it was not making as much money as its investors wanted.

Rupert Phillips, the general partner of Liberty, said he could have made 20 percent or more annually by investing in mainland newspapers.

The existing JOA between Liberty and Gannett guaranteed Liberty an annual return ranging from 12 percent this year to 17 percent in 2012 on its investment of $15 million.

Liberty was to be paid $26.5 million to cover the remaining years of the joint newspaper agreement it held with Gannett and which was due to expire in 2012.

The move would have meant that 97 Star Bulletin employees and an additional 50 who work for the Hawaii Newspaper Agency, would have lost their jobs. The Hawaii Newspaper Agency, under the joint operating agreement, owns and operates the business, publishing and circulation tasks for both the Star-Bulletin and the Advertiser. However, both newspapers maintain separate reporting staffs.

Kay also rejected Gannett's arguments that its First Amendment rights shield it from antitrust scrutiny.

The news was welcomed by Wayne Cahill, Hawaii Newspaper Guild administrative director, who said it proves that the state's argument that the Star-Bulletin would be irreparably harmed if it was closed before the case could be argued in court.

"I am delighted, it shows the only emergency was that Rupert Phillips wanted to get his $26 million as soon as possible," said Cahill, whose union's members work for both papers and the Hawaii Newspaper Agency.

Tom Gill, one of the founding members of Save Our Star-Bulletin, the citizens group formed to fight the closing of the afternoon paper, said the decision today was "a step in the right direction."

"Overall, people have to understand that having more than one paper is very important -- to just hand over a monopoly to Gannett is something we don't need," Gill said.

Star-Bulletin writers Richard Borreca, Rick Daysog
and June Watanabe, as well as the Associated Press,
contributed to this report.

Star-Bulletin closing Oct. 30, 1999
Kay issues preliminary injunction
Text of preliminary injunction
Text of refusal to lift injunction

E-mail to City Desk

Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]
[Stylebook] [Feedback]

© 1999 Honolulu Star-Bulletin