Judge rules Inquirer case to be heard in Philadelphia

Posted: November 02, 2013

A lawsuit by two co-owners of The Inquirer seeking to overturn the firing of editor William K. Marimow belongs in Philadelphia instead of Delaware, a Common Pleas Court judge ruled Thursday.

The decision by Judge Patricia McInerney was largely a procedural victory for Lewis Katz and H.F. "Gerry" Lenfest.

Still, it was the first legal ruling in their multistate battle with George E. Norcross III and three other partners for control of the company that runs the newspaper as well as the Philadelphia Daily News and Philly.com.

Lawyers for Norcross and the three others had argued that the dispute over who breached their partnership agreement should be heard in Delaware, where the owners incorporated parent company Interstate General Media last year.

McInerney decided that the case belongs in the jurisdiction where the alleged contract violation occurred. "This court is quite capable of applying Delaware law and providing justice," she wrote in an 11-page opinion.

The parties live in or near Philadelphia, the company operates in the city, and its fate is of interest here, the judge wrote. "This matter concerns a local newspaper which has served this community for years," her ruling said.

McInerney ordered lawyers for the IGM majority partners and publisher Robert J. Hall, who dismissed Marimow on Oct. 7, to present arguments Nov. 13 as to why she should not immediately reinstate Marimow as editor.

It was not clear if McInerney's ruling would affect a countersuit Norcross filed in Delaware Chancery Court. In their written arguments to the judge, the lawyers had stated that her ruling would dictate where the dispute was litigated.

"We look forward to trying this case and upholding the principle that owners not interfere with the journalistic process and the gathering of news," said Richard A. Sprague, attorney for Katz and Lenfest. "That is the goal of my clients."

A spokesman for Hall, Norcross, and the three other partners said they were not likely to appeal. "Although the majority owners of the company neither sought nor wanted this litigation, they are fine with the suit being heard in Philadelphia," said Dan Fee.

Fee also noted that McInerney had not made any finding on the decision to fire Marimow.

The judge dismissed arguments by the defendants that Lenfest had no standing to sue because he is not a member of the company's two-member operating committee, which is composed of Katz and Norcross, and that Hall could not be sued because he is not a party to the partnership.

Under the partnership agreement, Norcross, an insurance company executive and Democratic Party leader in South Jersey, and Katz, who made his fortune in parking lots and real estate, were to have equal power over major business decisions at the company, but no role in its newsrooms.

Katz claims he was not informed about Marimow's firing and had made it clear beforehand that he would not agree to it. He contends that the dismissal represented Norcross' meddling in the newsroom.

Hall has said he alone fired Marimow, using his authority as publisher. In court filings, Norcross has argued that Katz and Lenfest are interfering with the newsroom by trying to undo Hall's action.

Hall fired Marimow over what he called "philosophical differences."

In a memo that was widely circulated in recent weeks, the publisher said Marimow had resisted changes to the newspaper and refused Hall's directive to fire five members of his newsroom management team. That same memo said readership had plunged under Marimow.

William Chadwick, a lawyer for Marimow, pointed to an independent report Thursday that The Inquirer's daily circulation had risen over the last year.

The Alliance for Audited Media, which compiles circulation data, said the daily circulation of the paper was up to 258,127 in the six months ended in September, an 8.9 percent increase over the same period in 2012. Sunday circulation, however, was down by 2.6 percent.

The increase "refutes publisher Bob Hall's demeaning comments about Mr. Marimow's leadership and his performance," Chadwick said.

Marimow, who led The Inquirer between 2006 and 2010 before returning last year, is not a party to either lawsuit. In an interview Thursday, he said he was heartened by the judge's ruling that the case would stay in Center City.

He called the dispute "a case of major significance for every reader in Philadelphia, South Jersey, and the Pennsylvania suburbs."




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