Court: Review-Journal’s joint operating agreement with Sun ‘unenforceable’
The Las Vegas Review-Journal’s 20-year-old joint operating agreement with the Las Vegas Sun never received required federal approval and is therefore unenforceable, a court ruled Monday.
The unanimous decision by a three-judge panel of the 9th U.S. Circuit Court of Appeals in favor of the Review-Journal reverses a District Court decision that the 2005 arrangement between the news organizations was lawful and binding, even though it was never signed by the U.S. attorney general, as required by the federal Newspaper Preservation Act.
“We conclude that, because it did not receive the required ‘prior written consent of the Attorney General,’ the 2005 JOA is unlawful and unenforceable,” the ruling said.
Monday’s opinion said the U.S. District Court erred in 2024 when it denied a Review-Journal motion to dissolve a preliminary injunction that preserved the terms of the joint operating agreement. The 2005 arrangement requires the Sun to appear as a printed section in the daily Review-Journal newspaper.
If left in place, the joint operating agreement would not have expired until 2040.
“We have been convinced from the outset that our arguments were correct, and it is good to have the court say so in its opinion,” Review-Journal Publisher and Editor Keith Moyer said Monday.
The 9th Circuit ruling remands the case to U.S. District Court “for further proceedings consistent with this opinion.”
“We are pleased the 9th Circuit completely agreed with our position,” said Ben Lipman, chief legal officer and senior vice president of the Review-Journal.
Lipman said the Review-Journal is reviewing the decision to determine its impact once the case is returned to the lower court.
Leif Reid, counsel for the Las Vegas Sun, said the company was disappointed with the panel’s decision.
“We believe that the Panel overlooked and misapprehended critical points of law and the factual record, and that this case involves questions of exceptional importance. We intend to petition for rehearing,” Reid wrote in an email.
Six-year-old lawsuit
The ruling from 9th Circuit Judges Daniel P. Collins, Lawrence VanDyke and Salvador Mendoza Jr. is the latest — and most significant — action in a 6-year-old federal antitrust lawsuit brought by the Sun against the Review-Journal. That case was filed in response to the RJ’s 2019 claim that the Sun had breached the joint operating agreement by producing a printed section that failed to meet quality standards.
Such agreements, once common in cities across the country, have nearly vanished as more and more Americans abandon metropolitan newspapers in favor of news websites, smartphone apps and social media. These agreements, originally intended to preserve multiple newspapers and their different editorial perspectives, typically combined the business, advertising, printing and delivery functions of two newspapers under one company while keeping newsroom operations separate.
The agreement between the Review-Journal and Sun was structured in this way, with the Review-Journal handling business, production and distribution responsibilities for the Sun section and the Sun producing, selecting and designing the editorial content of the Sun section’s pages.
At one point, there were nearly 30 newspaper joint operating agreements in the United States, from Anchorage, Alaska, to Miami. Monday’s ruling leaves the joint operating agreement in Detroit as the last enforceable arrangement in the country. That agreement, between the Detroit Free Press and The Detroit News, expires at the end of the year.
“JOAs have long since served their purpose,” Moyer said. “In the current environment in which newspapers compete with myriad news and entertainment sources, JOAs don’t make much sense.”
The Review-Journal and the Sun first entered a joint operating agreement in 1989, when the Sun was on the verge of collapse and declared itself a failing newspaper. Both companies had produced morning newspapers. The 1989 agreement made the Sun an afternoon newspaper Monday through Friday and a section within the morning Review-Journal on Saturdays, Sundays and holidays.
New JOA in 2005
The companies negotiated a new agreement in 2005, ending the Sun’s days as a standalone newspaper and making it a section within the RJ every day.
The Sun had claimed in its antitrust lawsuit that the 2005 agreement, which was negotiated with Stephens Media, the Review-Journal’s owners at the time, had been approved by the U.S. Department of Justice. But the discovery process revealed the 2005 agreement was never signed by the attorney general.
The Newspaper Preservation Act says, “It shall be unlawful for any person to enter into, perform, or enforce a joint operating arrangement, not already in effect, except with the prior written consent of the Attorney General of the United States.”
The Review-Journal appealed to the 9th Circuit on May 9, 2024.
“The injunction the district court left in place forces the Review-Journal to carry speech that is not its own in its newspaper, and yokes it to a toxic business partner who is intentionally degrading the newspaper’s quality and who has spent the last six years attacking and suing the Review-Journal — even going so far as to seek an order forcing the owners to divest themselves of their newspaper,” the appeal said.
“The district court’s order refusing to dissolve the injunction should be reversed.”
The San Francisco-based 9th Circuit obliged Monday.
Contact Review-Journal Executive Editor Glenn Cook at gcook@reviewjournal.com.
