Judge Raises Damages in 'Bay Guardian' Suit, Slaps 'SF Weekly' With 10-Year Injunction

By: Mark Fitzgerald A California Superior Court judge has more than doubled the damages a jury awarded the San Francisco Bay Guardian in its lawsuit against rival alternative newspaper SF Weekly and Village Voice Media (VVM). She also issued an injunction barring the paper and parent from selling display advertising below cost for 10 years.

The injunction stems from the Bay Guardian's victory in March in its lawsuit accusing the SF Weekly and VVM of "predatory pricing." In her ruling Monday, Judge Marla J. Miller formally entered the judgment that SF Weekly and VVM must pay the Guardian $15.6 million in interest. The paper and parent were also ordered to pay the Guardian's unspecified attorneys' fees.

The jury had awarded the Bay Guardian $6.3 million in its lawsuit brought under a state law that forbids selling goods or services below cost for the purpose of driving a competitor out of business. Under the law, some of the damage awards can be tripled.

Miller's injunction runs for 10 years, and forbids SF Weekly or VVM from selling ads below cost unless it can prove that the pricing was not intended to harm the Guardian.

Lawyers for the paper and VVM have argued vigorously that the decision runs afoul of the First Amendment. They are preparing an appeal.

At the trial, SF Weekly and VVM argued that any financial problems of the Bay Guardian can be explained by an intensely competitive market that is the hometown of Craigslist, and by reader disinterest in the newspaper.

The Bay Guardian contended that SF Weekly priced display ads below its rates to steal market share, while relying on subsidies from VVM to stay in business.

"Most important, however, the court has issued an enforceable injunction mandating that the big chain do what the Guardian has been asking for all along: play fair," Guardian Editor Tim Redmond wrote on the paper's Web site Tuesday.

In its coverage of the judge's decision, SF Weekly noted that its attorney, James M. Wagstaffe, argued in court that the award "exceeds the total damages awarded and affirmed in every reported California sale-below-cost case in the last seven decades combined.

"The award is also far greater than the Guardian's total profits since its founding in 1966," wrote VVM Executive Associate Editor Andy Van De Voorde.