Judge Won’t Keep Register From Canceling Contracts

A Superior Court judge refused Wednesday to issue a temporary order halting the Orange County Register’s plan to terminate contracts with its independent dealers without compensation.

Judge David H. Brickner found that the dealers, who stock stores and outdoor racks with newspapers, did not own franchises and, therefore, were not entitled to any protections under the state franchise laws.

Brickner also decided he could not compel either side to enter into a contract or continue a contract, leaving the issue of any breaches of contract for future court hearings and trial.

“The company feels more confident about its legal position than ever before,” said Patrick Elster, the Register’s vice president for circulation.

Taylor Daignault, attorney for 18 dealers who filed suit Monday against the newspaper, said the decision would not stop the dealers from pursuing either a preliminary injunction to win their routes back or a trial that would seek a minimum of $3.6 million in damages.

A hearing on the preliminary injunction is scheduled for March 11.

Wednesday’s ruling allows the Register to continue eliminating its 27 independent contractors, most of whom had bought their routes from former dealers. Some had paid $100,000 or more for the dealerships. The dealers say the newspaper’s action is wiping out their investments.

As of Monday, the Register had canceled contracts with eight dealers. Today, the newspaper will take over eight more dealerships to gain control of its single-copy street sales in Orange County, Elster said. Remaining dealers serve surrounding counties and may be kept on awhile, he said.

He said the Register wants to take distribution in-house because an undercover audit last fall found that some dealers had been cheating the paper.

The dealers deny the paper’s allegations. They charge that the newspaper breached its contracts with them by removing them without cause, notice or any provision for compensation.

Some dealers, Elster said, will be getting a month’s pay, and two are joining the paper as employees.