Detroit Paper Asks Court to Lift Injunction : Joint Operating Pact Is an Emergency Measure, Free Press Contends

The Detroit Free Press urged a federal appeals court Friday to lift an order that for a second time stalled its plans to combine business and production departments with a larger rival newspaper.

Attorneys for the newspaper asked the U.S. Court of Appeals in Washington to allow the agreement to go forward, saying “entry into a (joint operating agreement) is by its nature an emergency remedy.”

The court late Thursday barred the joint operations from beginning after the expiration at 7:15 p.m. today of a lower-court stay. The superseding order carried no expiration date. The appeals court ordered the delay to gain time to study the complex case, the court clerk’s office said. The court gave no indication when a ruling might come.

Michigan Citizens for an Independent Press, a group of advertisers and readers opposed to the newspapers’ joint operating agreement, had asked for a delay in implementing the joint operating agreement. The court declined to grant the group’s request, but on its own authority issued a stay.

Approved by Meese

The general manager of the Free Press, Bob Hall, said the stay “just gives the judges a couple of days to look at the filings” and has no bearing on the merits of the case.

The partial merger under the Newspaper Preservation Act, requested by the newspapers in 1986, was approved last month by then-Atty. Gen. Edwin Meese III.

Michigan Citizens succeeded in blocking immediate implementation of the agreement through a challenge in U.S. District Court in Washington.

The lower court on Wednesday rejected the challenge, and Michigan Citizens the next day asked the appeals court to consider the case.

Free Press attorneys said Michigan Citizens had failed to show they were likely to succeed in an appeal or that denial of the stay would cause permanent damage.

Michigan Citizens contends that the joint operating agreement would set a precedent because it would allow a merger in a case where the newspapers’ financial losses were due to management decisions rather than the normal competition in the marketplace.

The group said such a precedent could end newspaper competition in 20 cities served by multiple newspapers.

The organization argued that the lower court, in granting a stay, had accepted the premise that allowing the partial merger to proceed while under challenge would be contrary to the public interest.

The Free Press, owned by Knight-Ridder Inc., had a daily circulation last year of 638,720; the News, owned by Gannett Co., had circulation of 678,720, according to the Audit Bureau of Circulation.

Knight-Ridder has said it will close the Free Press if the joint operating agreement does not go through, at a cost of 2,000 jobs. The merger of the newspapers’ business, advertising, circulation and production departments would result in the loss at both newspapers of 600 to 800 jobs.