Antitrust Case Against Wash. Post Co. Dismissed

By: Carl Sullivan A U.S. district court last Friday issued an order granting summary judgment to Gazette Newspapers Inc. of Gaithersburg, Md., and its parent Washington Post Co. in an antitrust suit brought by several competing weekly newspapers. The competitors filed a motion for reconsideration yesterday and asked the court to unseal the record.

The suit was filed in February of last year by Berlyn Inc., parent of the Montgomery County Sentinel and Prince George's Sentinel, and Kenneth C. Rossignol, publisher of St. Mary's Today in Lexington Park, Md., after Gazette Newspapers bought 10 Maryland papers from Chesapeake Publishing Corp. of Elkton, Md. The purchase broadened the Post Co.'s reach in suburbs dominated by its flagship daily.

The plaintiffs allege that the purchase violated federal and state antitrust laws and that Gazette Newspapers cut advertising rates to ruin the plaintiffs' businesses. Also named in the suit was the Baltimore Washington Suburban Press Network, which is partly owned by Gazette and allows advertisers to place ads in multiple publications.

The defendants filed a motion for summary judgment and asked the court to exclude the testimony of the plaintiffs' expert witness, James B. Shaffer, former CEO of Guy Gannett Communications Inc., Portland, Maine, who also held executive positions at the Los Angeles Times and Chicago Sun-Times.

U.S. District Court Judge Frederic Smalkin agreed last week, saying Shaffer wasn't qualified to comment on the issues in this suit. The judge later granted summary judgment, saying the plaintiffs "failed to show that the defendants' actions in this case were anti-competitive."

"It's a complete victory for the Post [Co.], Gazette, and Suburban Press Network," said Charles Monk, a Baltimore-based partner of Saul Ewing LLP, which represents the defendants. "It was our view that Gazette's conduct was always consistent with the law, and we feel quite vindicated on that position."

George Liebmann of Liebmann & Shively PA, which represents the plaintiffs, said the judge's dismissal of Shaffer as an expert witness was "just plain wrong. ... The court held that he was a qualified expert on predatory pricing and damages, but not on the issues of markets. We strongly disagree."

The attorney said the court sealed much of the record because the defendants asserted that it contained confidential business information. "We're asking that the whole file be unsealed so that people like yourself can understand what's in there," Liebmann said.

If the court doesn't grant the plaintiffs' motion for reconsideration, Liebmann said they could decide to appeal. "We think our position is a meritorious one," he said. "The Post [Co.] absorbed the only significant competing newspaper in these counties and obtained a market share that violates the Clayton Act."

When Gazette Newspapers first purchased the suburban papers last year, The Washington Post's chief rival, The Washington Times, raised antitrust concerns in a letter to the U.S. Justice Department. Maryland authorities also indicated they were looking into the sale.

But, Monk said, "The Washington Times was not involved in this litigation -- and we have heard nothing from the Justice Department or [Maryland] state officials."