Newport News Sued in Dispute Over Circulation : Newspapers: The Newport Beach-Costa Mesa Pilot alleges that its rival has exaggerated its distribution figures to attract advertisers. The News denies any wrongdoing.

Some local muckrakers are throwing mud--at each other.

The Newport Beach-Costa Mesa Pilot, claiming that its rival the Newport News is inflating circulation figures and stealing away advertisers, has sued its competitor.

“The Pilot has lost and will continue to lose valuable advertising customers, who, on the basis of defendants’ false statements, opt to purchase advertising space in the ‘Newport News’ instead of the ‘The Newport Beach-Costa Mesa Pilot,’ ” Pilot officials charged in a lawsuit filed Friday in Orange County Superior Court.

The Newport News, which began publishing July 4, claims to have a circulation of 50,000 compared to the Pilot’s 45,000.

Both papers are distributed free of charge in Newport Beach, Costa Mesa and unincorporated areas of Orange County.

Newport News Publisher Lucie Kay Schrock denied any wrongdoing in a statement.

“I was shocked and chagrined--but not surprised--to read the blatantly self-serving attack on the Newport News,” Schrock said. “In recent months, the Pilot has dragged almost everyone in Newport Beach through the mud; today it was our turn.”

Earlier this year, the Pilot’s parent corporation filed a lawsuit against the paper’s former publisher, Robert Page.

Pilot Publisher Jim Gressinger did not return a call seeking comment.

The 19-page lawsuit accuses Schrock Communications Inc., parent corporation of the News, of defamation, unfair competition and false advertising, among other things. The Pilot claims those activities--along with a campaign to solicit its advertisers using allegedly false circulation information--began in October.

“The Newport News has engaged in no fraud nor have we misrepresented our circulation,” Schrock said in the statement.

The News, according to an internal Pilot memo provided to The Times by Schrock, has failed to deliver its papers to several areas, including Fashion Island.

Schrock admits that she has had trouble with several different distribution companies and in an interview last week said she suspects that the Pilot might be “sabotaging” her operation. She would not elaborate.

The Pilot memo, written by circulation director Rodger Starkey, indicates that his department is keeping close tabs on the News.

“The delivery company they are using is beginning to do an unsatisfactory job,” Starkey wrote. “This week they did not deliver any copies to West Bluff! I am sure that Kay Schrock is unaware that one of the most important areas in Newport Beach is being skipped. I think we should keep this part of the information to ourselves. That kind of distribution can only benefit the Pilot.”