As published in Toledo Business Journal - February 1, 2012

The Blade building in Toledo

The Blade building in Toledo

Toledo media firms in legal battle

Two Toledo media firms have entered into a bitter legal battle. In late October 2011, Block Communications, Inc. (BCI), parent company of The Toledo Blade, filed a law suit in Lucas County Court of Common Pleas against a competitor, The Toledo Free Press (TFP), and its president / publisher, Thomas Pounds, and its editor-in-chief, Michael Miller.

The defendants responded by filing a countersuit against the plaintiff, Block Communications, Inc. In an article in Toledo Free Press, the newspaper advised that it was seeking actual plus punitive damages from the countersuit.

The law suit filing was followed by articles published by both media firms in their respective publications. These articles have increased the visibility of this legal conflict and added a public relations element to this situation.

Toledo Business Journal attempted to contact John Robinson Block, The Blade publisher and editor-in-chief, for an interview for this article. The call was not returned. An attempt was also made to obtain information and an interview from Tom Pounds of Toledo Free Press. Information was not provided and an interview was not obtained from TFP for this article.

Costly litigation

This litigation has the potential to be costly to one or both parties involved.

The plaintiff, Block Communications, Inc., has filed a number of claims against the defendants in this case. One of the claims involves an alleged violation of the law and an attempt by the plaintiff to seek reimbursement of its legal costs. Another claim involves an alleged violation of the law and an attempt by the plaintiff to seek punitive damages if it prevails in this case and at the discretion of the court.

Defendants’ countersuit alleges tort claims for which it asks the court to award actual and punitive damages that it identifies in the amount of $10 million.

Significant legal costs and fees may be incurred in this litigation. Discovery has begun in the case and motions and counter motions have begun to be filed. There is already an indication that the list of potential depositions may be extensive.

Block Communications is being represented by the law firm of Shumaker, Loop, & Kendrick, LLP and two of its attorneys, Thomas Dillon and Stephen Rothschild. The defendants are being represented in this case by Matthew Rohrbacher and Todd Zimmerman with Rohrbachers Cron Manahan Trimble & Zimmerman Co., LPA

A jury trial of the issues has been requested by both parties which could further add to costs in this litigation if it proceeds to trial.

Allegation of violation of Ohio’s Deceptive Trade Practices Act

One of the claims for which the plaintiff is attempting to obtain reimbursement of legal fees if it is successful is Block Communications’ allegation that defendant Toledo Free Press violated Ohio’s Deceptive Trade Practices Act.

The plaintiff provided information in its complaint concerning this allegation. “In its July 24, 2011 print edition of the Toledo Free Press, TFP published an advertisement allegedly providing ‘penetration’ data for TFP and The Blade in various local communities along with rates per column in each for advertising space.”

Information from the BCI complaint continues, ”The content of this advertisement is misleading. The Toledo Free Press is not a subscription based publication. Rather, it is deposited at various locations in the hope that a passerby takes a copy; a hope that may or may not be fulfilled. As such, the comparison between the Toledo Free Press’ gross distribution with The Blade’s circulation is misleading and deceiving.

“Further, the advertisement is misleading because it represents that The Toledo Free Press is a Sunday newspaper. As a weekly, The Toledo Free Press does not have a Sunday edition with enhanced content.

“Further, the advertisement identifies the source of its data as the 2010 ABC Audit Report. The impression created by the Toledo Free Press is that its comparison data has been verified by ABC (the Audit Bureau of Circulation). This impression is misleading and false because the Toledo Free Press is not a member of ABC and ABC would not have any circulation data regarding the Toledo Free Press.

“ABC prohibits the use of ABC information by non-members and TFP’s use and publication of ABC’s information was wrongful.

“Ohio’s Deceptive Trade Practices Act, R.C. 4165.01, et seq., prohibits TFP from (i) representing that its product has sponsorship, approval, or characteristics that it does not have; (ii) representing that its product is of a particular standard, quality, or grade that it does not have; and (iii) disparaging the goods, services, or business of another by false representation of fact.”

Defendants, including Toledo Free Press, have now filed an answer to the plaintiff’s complaint. In its answer, defendants deny the allegations contained in the BCI law suit pertaining to this issue.

Allegation of tortious interference with contract against Miller

In another claim, Block Communications has alleged a violation of tort law in Ohio and is attempting the recovery of compensatory and punitive damages if it prevails in the case and at the discretion of the court.

Plaintiff has alleged in the complaint that defendant Thomas Pounds entered into a separation agreement after he left the employment of Block Communications that included a provision that he would not disparage his former employer.

The plaintiff has provided information in its complaint concerning this claim against defendant Michael Miller. “Upon information and belief, Miller is and has been aware of the Separation Agreement and knows of Pounds’ obligation not to disparage whether directly or using others indirectly to disparage.

“Miller knowingly and intentionally interfered in the Separation Agreement by inducing, aiding and abetting Pounds’ breach of the Separation Agreement.

“Miller’s motive and means to accomplish Pound’s breach of the Separation Agreement was improper.

“Miller’s interference with the Separation Agreement was willful, wanton and done with actual and legal malice.”

Toledo Free Press office in Toledo

Toledo Free Press office in Toledo

Miller’s answer to BCI allegations

In the answer filed recently by defendants, they deny the allegations made by Block Communications concerning this issue. In an article published in a December 2011 issue of Toledo Free Press (TFP) further information is provided. “In the Toledo Free Press response and counterclaim, filed in the Lucas County Court of Common Pleas, it is asserted that Miller has never seen the Blade-Pounds separation agreement, which was created before the existence of TFP, and neither he nor TFP is a party to nor is bound by its terms. It is further asserted that Block Communications is attempting to exercise prior restraint on Miller’s First Amendment rights and has acted with malice in an attempt to interfere with Miller’s and TFP’s business.

Separately, in an editorial published in the October 30, 2011 issue of TFP, Miller provides his opinion. “I call ‘bullsh*t’. Let’s call this what it is: an arrogant ‘Hail Mary’ attempt to silence my criticism of The Blade and grossly impair my First Amendment rights, while perpetrating as much damage as possible on my employer and business.”

Miller continues and advises that he had no knowledge of the non-disparagement agreement involving Pounds. “At no time during our initial conversation, nor at any time in the subsequent nearly seven years did Tom ever discuss or share with me the details of his separation agreement with the plaintiff. I knew he had a non-compete agreement that forbade him from working at a daily newspaper for a period of time, but I had zero knowledge of any non-disparagement clause until I learned about it a half-decade later in one of the plaintiffs’ annual legal threat missives (at least two of which falsely accused me personally of offenses that were stretches or outright lies). I was not a party to Tom’s agreement with the plaintiffs, so my actions cannot breach it.”

Allegation of breach of contract against Pounds

Plaintiff provides information in its complaint concerning its allegation of a breach of contract against defendant Pounds.

“Pounds was employed by The Blade as its General Manager.

“On March 19, 2004, Pounds submitted his resignation to The Blade effective immediately.

“On May 27, 2004, Pounds executed a Separation Agreement, Waiver, and General Release (“Separation Agreement”) in connection with his termination of employment from The Blade. Plaintiff had no duty or obligation to provide Pounds with the significant compensation he received in the Separation Agreement. Further, Pounds was free to reject the payments and not make any contractual promises to The Blade or BCI. Pounds, however, consciously and voluntarily entered in the Separation Agreement, accepted the monetary benefits under the Separation Agreement, but now has ignored and breached his promises and contractual obligations. A copy of the Separation Agreement is not attached because it contains certain confidential terms and upon information and belief Pounds has a copy of the Separation Agreement.”

Toledo Business Journal (TBJ) has contacted Tom Pounds and Toledo Free Press and requested a copy of the separation agreement and an interview for this article. At the time of deadline, TBJ has not been successful in obtaining a copy of the separation agreement or an interview with Pounds.

“In paragraph 4 of the Separation Agreement, Pounds promised that he would not disclose any Confidential Information of his former employer. He also promised that if he breached his obligation in paragraph 4, he would repay certain payments received and forfeit any and all right he has to any future payments and benefits under the Separation Agreement.

“In paragraph 5 of the Separation Agreement, Pounds promised and agreed that he ‘must not disparage or take, directly or indirectly, any action intended to harm the Company, its parent, divisions, subsidiaries, or affiliates, or any of their directors, officers, shareholders or employees.’ Pounds further agreed that if he breached his obligations in paragraph 5, he would repay certain payments received and forfeit any and all right he has to any future payments and benefits under the Separation Agreement.”

Plaintiff provides additional information in its complaint concerning its allegations of breach of contract by Pounds.

“As President and Publisher of the Toledo Free Press and as owner of TFP, Pounds has directly and indirectly used the Toledo Free Press and/or its members or employees as his instruments and agents to disseminate disparaging comments regarding Plaintiff, its owners, shareholders, directors and employees. Knowing he cannot directly engage in disparaging and harmful conduct, Pounds has also used Miller, TFP and its employees to do so indirectly.

“Beginning in November 2010, Pounds began to engage in a more obvious pattern of conduct in breach of the Separation Agreement.

“In November 2010, Pounds directly or indirectly authorized, caused to be published or permitted The Toledo Free Press to post on its website confidential information belonging to The Blade. The information published had been prepared by internal staff of The Blade and BCI and its publication destroyed its confidentiality and was presented in such manner as to disparage The Blade.

“The publication of this confidential information was an action taken by Pounds, directly or indirectly, that was intended to disparage and harm The Blade and/or BCI.

“Plaintiff put Pounds and TFP on notice that their conduct was disparaging and in violation of the Separation Agreement.

“In November 2010 and to prevent any further disparagement, Plaintiff demanded and Pounds, Miller and TFP agreed not to publish articles or comment regarding The Blade union negotiations without first having representatives of each reach an agreement on permissible content or provide Plaintiff with two days advance notice. The agreement was a reasonable, business-like accommodation made to minimize, if not avoid, future disputes.

“On May 22, 2011, and in violation of the November 2010 agreement, Pounds directly or indirectly authorized, caused to be published or permitted the Toledo Free Press to publish an article entitled ‘Blade Unions Authorize Strike,’ that reported that the Block family, as owners of The Blade, were committing actions that were a ‘betrayal of the trust of the community.’

“The publication of the article on May 22, 2011 was an action taken by Pounds, directly or indirectly, that was intended to disparage and harm The Blade, BCI and the Block family.

“Again, Pounds and TFP were advised that their May 22, 2011 statements were disparaging and in violation of the Separation Agreement.

“Pounds and TFP’s bad acts continued. On or about August 15, 2011, Pounds, on behalf of himself and TFP, authored and sent a letter to Ben Roberts at the Lucas County Board of Election in which he wrote, ‘Having been the general manager at The Blade, I am well aware of the exorbitant rate you are currently charged for your legal notices.’

“Pounds’ August 15, 2011 letter was an action taken by Pounds directly that was intended to and which did disparage and harm The Blade and BCI.”

The plaintiff’s complaint provides additional information concerning its allegations involving a breach of the separation agreement.

In its answer filed with the court, defendants provide a response concerning the issue of contract breach. Pounds denies Block Communications’ allegations that he breached a contractual agreement with plaintiff.

In the December TFP issue, this is further explained. “In Pounds’ countersuit, it is stated, ‘The separation agreement between Pounds and (Block Communications) has been completed after Pounds’ covenant not to compete ran and (Block Communications) is using said agreement simply as a tool to economically harm the TFP and/or Pounds by attempting to enforce the non-compete after it expired.’”

Countersuit and allegation against Block Communications

Defendants have filed a countersuit for which they are seeking actual and punitive damages. The December TFP article provides further information concerning the counterclaims. “The TFP counterclaim further asserts that Block Communications has engaged in contacting various organizations around the City of Toledo seeking to preclude the TFP from being able to be sponsors of events, or limit its ability to do business with those companies and organizations; including but not limited to The Toledo Regional Chamber of Commerce, Partners in Education, United Way of Greater Toledo, the Toledo Mud Hens, CitiFest, University of Toledo, Boys and Girls Clubs of Toledo, Home Builders Association, the Toledo Symphony Orchestra, the City of Toledo Mayor’s Office, the Lucas County Auditor, Imagination Station, the Toledo Walleye, the Huntington Center, etc.”

In defendant Pounds’ counterclaim, he states “The Plaintiff (Block Communications) has intentionally interfered with TFP and Pounds in a tortuous manner seeking to cause them harm in an amount to be determined.”

The counterclaim continues, “The Plaintiff’s (Block Communications) activities have been intentional and done with actual malice for which punitive damages are available.”

The December TFP article states, “Toledo Free Press LLC is seeking actual damages plus punitive damages of $10 million from Block Communications.”

Both plaintiff and defendants have made a request to the Court for a jury trial of the issues in this case.