Members of the largest union at Seattle's two daily newspapers reversed course today and voted to cut ties with a citizens' committee that is fighting both newspapers in court.

The 70-38 vote by members of the Pacific Northwest Newspaper Guild is a significant financial blow to the Committee for a Two-Newspaper Town and raises questions about its future. The committee says it speaks for readers and employees in the 3-year-old legal dispute between The Seattle Times and The Hearst Corp., owner of the Seattle Post-Intelligencer.

More than 80 percent of the committee's money has come from the Guild, which represents news, advertising, circulation, marketing and composing workers at the two papers.

A three-year dispute

After three years of wrangling in court, the dispute between The Seattle Times Co. and The Hearst Corp. may be heading to binding arbitration.

2003

April 28: Hearst sues in King County Superior Court to block The Times Co. from triggering an escape clause in the two companies' joint-operating agreement that could result in shutting down the Post-Intelligencer or terminating the agreement.

April 29: The Times Co. notifies Hearst that The Times had financial losses under the JOA in 2000, 2001 and 2002. That allows The Times to exercise the escape clause.

June 6: The U.S. Department of Justice discloses it is investigating issues surrounding the Seattle JOA.

July 14: Superior Court Greg Canova grants the Committee for a Two-Newspaper Town intervenor status in the case, allowing the ad-hoc citizens group a seat at the table. The group has support from the local newspaper union.

Sept. 12: Canova hears arguments on one claim in Hearst's suit — that a newspaper strike caused The Times' losses in 2000 and 2001 and, therefore, loss claims for those years should be disallowed.

Sept. 25: Canova rules for Hearst, preventing The Times from invoking the escape clause.

Oct. 7: The Times Co. appeals Canova's decision to the state Court of Appeals.

2004

March 22: A three-judge Appeals Court panel rules in favor of The Times Co., remanding the case to Superior Court with orders to reverse the September decision.

April 19: Hearst appeals the ruling to the state Supreme Court.

2005

Feb. 15: The Supreme Court hears oral arguments in the case.

May 13: The Department of Justice says it didn't find enough evidence to pursue the case, calling off the investigation. It does suggest it could come back to the case if the dispute leads to closing one paper.

June 30: The Supreme Court unanimously upholds the Appeals Court decision, sending the case back to Superior Court.

Sept. 29: The Times Co. notifies Hearst it lost money under the JOA in 2002, 2003 and 2004. This is the second "loss notice" the company formally issues.

2006

March 30: The Times Co. and Hearst jointly announce they have agreed to binding arbitration of their dispute. In addition, The Times Co. says it had issued a third "loss notice," this one covering the years 2003, 2004 and 2005.

Previous stories

After a big victory in court nine days ago, the committee said it expected to actively pursue its claims against both papers. But co-chairwoman Anne Bremner said the group needed to raise more money first.

If it lost the Guild's backing, Bremner said this week, the group would need to appeal to the community for financial support.

Times reporter Steve Miletich, the Guild's vice president, introduced the resolution to sever ties. He has argued that the committee's "legal gamesmanship" was harming the interests of Guild members and threatened to undermine the newspapers' efforts to settle their differences through binding arbitration.

Two previous bids by Miletich and other members to disassociate the Guild from the committee had failed.

Today's vote also raises questions about whether Seattle attorney Dmitri Iglitzin can continue to represent the committee, because he also represents the Guild. If his two clients' interests diverge, "I've got a conflict, and I've got to deal with it," Iglitzin said earlier this week.

The Times and P-I have been bound since 1983 by a federally sanctioned joint-operating agreement (JOA). The Times handles advertising, circulation and production for both papers, but they maintain separate news and editorial operations. The Times gets 60 percent, Hearst 40 percent of what's left after the non-news expenses of producing both newspapers are paid.

The locally owned Times moved in April 2003 to trigger an escape clause in the contract that could lead to termination of the JOA, closure of the P-I, or both. It said the cost of producing the P-I had become a financial burden that threatened The Times' future.

New York-based Hearst, which maintains that the smaller P-I can't survive outside the JOA, filed a lawsuit challenging The Times' move.

The Committee for a Two-Newspaper Town was allowed to intervene in the lawsuit in July 2003. It has sided with Hearst in most legal proceedings so far but also has filed a claim against both companies.

That claim contends a provision of the JOA that guarantees Hearst 32 percent of The Times' profits until 2083 if it voluntarily closes the P-I is an unconstitutional restraint of trade.

The Times and Hearst announced in late March that they had agreed to submit their dispute to binding arbitration, with no appeal. They also said they didn't want the committee involved, and that its claims could be litigated later.

They asked King County Superior Court Judge Greg Canova to put all legal proceedings on hold until after the arbitration concludes next year. But the committee said such a freeze could damage its interests irreparably, and on April 27 Canova agreed.

The Times-Hearst arbitration deal allowed either newspaper to pull out within 30 days if Canova didn't freeze all legal proceedings. Neither has said yet what it will do.

In an e-mail to Guild members before today's vote, Miletich, the Guild vice president, said that "arbitration offers the best solution to ending the JOA dispute for all parties.

"The Committee for a Two-Newspaper Town is jeopardizing that process through legal gamesmanship that has taken it far beyond what it was originally intended to do," he added.

Others disagreed. In a posting on the Guild's Web site, Times page designer Paul Morgan said Miletich's motion was an empty gesture and a diversion from upcoming contract negotiations. The Guild hasn't given money to the committee in two years, he said, and there's no proposal to give it more now.

"Know that the case will go on with or without our support," Morgan wrote.

The Guild played a central role in organizing the committee in 2003. Liz Brown, the union's administrative officer, also is the committee's treasurer and sits on its board.

She said this week that the local Guild and its parent national union have provided $31,000 of the approximately $37,500 the committee has raised since 2003. The committee has just $4,000 in the bank now, she added.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com

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