Judge sets oral arguments in Inquirer lawsuit

Posted: October 24, 2013

Common Pleas Court Judge Patricia A. McInerney set oral arguments for next week in the lawsuit over the firing of Inquirer Editor William K. Marimow after meeting Tuesday with attorneys for feuding factions of the newspaper's ownership.

McInerney said that she wants to hear from the lawyers Monday on whether the case should be litigated in Philadelphia, where parent company Interstate General Media has its headquarters, or in Delaware, where IGM was incorporated.

"I have to decide whether I have jurisdiction," the judge said after a 30-minute conference behind closed doors in her chambers.

The dispute, which centers on accusations of interference with the editorial integrity of The Inquirer, has exposed a deep rift among the most prominent of the paper's co-owners: real estate magnate Lewis Katz and former cable TV mogul and philanthropist H.F. "Gerry" Lenfest on one side, and New Jersey Democratic Party leader and insurance executive George E. Norcross III on the other.

Katz and Lenfest sued publisher Robert J. Hall and the other partners of IGM in Philadelphia on Oct. 10, seeking Marimow's reinstatement and the removal of Hall.

Norcross countersued last week in Delaware Chancery Court, accusing Katz of breaching his duties under the partnership agreement that governs the company by seeking to undo Marimow's firing. That document bars owners from interfering in the "journalistic policies and decisions" of the company's media properties - The Inquirer, the Daily News, and Philly.com.

Hall, who fired Marimow on Oct. 7, argued in his response to the original lawsuit that the matter should be heard in the Delaware court, which specializes in corporate disputes.

Katz, Lenfest, and Marimow appeared in court Tuesday, sitting behind their lawyers. Norcross and his codefendant, publisher Hall, were absent, but sent their own legal teams.

Norcross, through his holding company, Tuesday asked to join the suit on behalf of IGM. McInerney said she granted that request after Katz's and Lenfest's lawyers dropped objections.

After the hearing, Robert Heim of the Dechert law firm, who is representing Norcross and his company General American Holdings Inc., declined comment. Hall's attorney, David H. Pittinsky of Ballard Spahr, also declined comment.

The lead attorney for Katz and Lenfest, Richard Sprague, also declined to speak with reporters.

The firing of Marimow, a two-time winner of the Pulitzer Prize with a record as an editor of fostering investigative reporting, has brought more turmoil to a newspaper that, along with its sister publications, has endured four ownership changes in the last seven years.

Marimow is not a party to the lawsuit, but he has been harmed, said the editor's personal attorney, William Chadwick.

"Unfortunately some have chosen to smear Bill Marimow," said Chadwick, a former prosecutor who investigated the Traffic Court scandal for the state Supreme Court.

A Hall memo justifying his decision was widely circulated. It said Marimow had resisted needed changes to the newspaper and the company's digital strategy - in which the free website Philly.com competes with each newspaper's subscription-only site while also having full access to the content their staffs produce.

Business lawyers say it often makes sense to file cases in Delaware involving companies incorporated there to ensure uniformity.

However, "the argument that the case should be dismissed in Philadelphia doesn't seem that strong," said Temple Law School professor Craig Green. "It's not unusual for Philadelphia courts to apply Delaware law, and it's not really an inconvenience if anything had to be brought from Delaware, and it doesn't seem like it since they are only incorporated in Delaware."

Lawrence Hamermesh, a professor at Widener University School of Law in Wilmington, said Chancery Court "has special procedures and statutes that enable it to cut through disputes quickly."


tfitzgerald@phillynews.com

215-854-2718

@tomfitzgerald

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