Federal judge questions newspaper lawsuit but grants temporary restraining order

A federal judge on Tuesday temporarily blocked a plan to eliminate the joint operating agreement between the Las Vegas Review-Journal and Las Vegas Sun by at least a week.

However, U.S. District Judge James Mahan questioned the merits of a lawsuit filed a week ago by Sun Publisher and Editor Brian Greenspun against Stephens Media, operators of the Las Vegas Review-Journal.

Greenspun claimed company executives conspired with members of his own family to end the 24-year-old agreement that governs the operation of the two publications.

Mahan set a hearing for Sept. 6 and gave parties in the case until Sept. 4 to answer his questions about the lawsuit.

In a four-page order, Mahan questioned whether Greenspun’s siblings — sisters Janie Greenspun Gale and Susan Greenspun Fine and brother Danny Greenspun — are “indispensable parties” and should also be sued by their brother.

The siblings, who are Las Vegas Sun stockholders and the directors of Greenspun Media, voted 3-1 during a special meeting Aug. 7 to end the joint operating agreement, accepting in return ownership of the URL lasvegas.com.

The website is owned by Stephens Media and leased to a company owned by Greenspun Media. The URL is being used by the Las Vegas Convention and Visitors Authority.

Brian Greenspun opposed both moves while his siblings supported the actions.

An Aug. 19 letter of intent that spelled out the agreement was sent by Stephens Media to Greenspun Media Group CEO Paul Hamilton. However, Brian Greenspun’s lawsuit was filed before the letter was signed.

“The plaintiff Brian Greenspun is a dissident minority board member who disagrees with the business decision of the majority of the board,” Mahan wrote. “Are Greenspun entities as the other party or parties to the letter of intent and the proposed resulting contract, indispensable parties in the present case?”

Mahan said that if the letter of intent and proposed agreement violate antitrust laws, the U.S. Department of Justice or the Nevada attorney general can intervene to prevent the violation.

Mahan also said the court “would be required to oversee the continuing business operations” of the Sun if the judge overrules the decision to end the joint operating agreement.

“The court is not inclined to reverse their decision and order … that they must continue to publish the newspaper regardless of the board’s determination,” Mahan wrote.

According to the letter of intent, the joint operating agreement would be terminated for a cost of $10, the website URL would be transferred to the Greenspuns, and Stephens Media would pay each Greenspun sibling a $70,000 closing price.

The Greenspun family, which has operated the Las Vegas Sun since 1950, would retain the newspaper’s intellectual property. A noncompete clause, keeping the Greenspuns from resuming any media operations, was not included in the letter of intent.

In the lawsuit, Brian Greenspun’s attorneys said ending the joint operating agreement and the annual payment would force the shutdown of the printed Sun and lasvegassun.com.

“Even if closing down the Las Vegas Sun is not expressly contemplated, the termination of the 2005 JOA will effectively destroy the Las Vegas Sun and its website by leaving it with no infrastructure or facilities within which to produce, print, edit or operate the Las Vegas Sun print newspaper and the lasvegassun.com website, without which each would be forced to close,” attorneys wrote.

In an affidavit filed with the lawsuit, Brian Greenspun said the 2008 recession reduced the Sun’s profits from the Review-Journal “by almost 90 percent.” The Sun and its sister publications employ about 200 people, he told the court.

Operators of the Review-Journal took over all business functions of the Sun in 1989 when the joint operating agreement was enacted.

In 2005, revisions to the agreement changed the Sun from a stand-alone afternoon newspaper to a six- to 10-page section distributed with the morning Review-Journal.

Contact reporter Howard Stutz at hstutz@reviewjournal. com or 702-477-3871. Follow @howardstutz on Twitter.