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North Jersey Media Group, Inc v. Bergen Newspaper Group

January 18, 2013

NORTH JERSEY MEDIA GROUP, INC., PLAINTIFF-APPELLANT,
v.
BERGEN NEWSPAPER GROUP, L.L.C., DEFENDANT, AND BERGEN NEWS PUBLISHING CORP., DEFENDANT-RESPONDENT. BERGEN NEWSPAPER GROUP L.L.C., THIRD-PARTY PLAINTIFF- RESPONDENT,
v.
STEPHEN A. BORG AND JENNIFER BORG, THIRD-PARTY DEFENDANTS, AND PHYLLIS COHEN, JILL S. COHEN, AND LESLEY PROWDA, THIRD-PARTY DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-6894-11.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued December 11, 2012

Before Judges Reisner and Harris.

Plaintiff North Jersey Media Group (NJMG or plaintiff) appeals from two orders dated December 13, 2011 and March 2, 2012, dismissing its damages claims against defendants Bergen Newspaper Group, L.L.C. (Bergen Newspaper) and Bergen News Publishing Corp. (Bergen News) for failure to state a claim on which relief can be granted, and denying plaintiff's motion to amend the complaint. For the reasons that follow, we reverse the orders on appeal and remand this matter to the trial court for further proceedings consistent with this opinion.

I

Because the complaint was dismissed on defendants' motion under Rule 4:6-2(e), and plaintiff's motion to amend the complaint was denied, we focus on the facts pled in the complaint and amended complaint.*fn1 Those allegations, which must be taken as true for purposes of the motion, can be briefly summarized as follows. NJMG publishes The Record, a daily newspaper, and The Ridgewood News. Bergen Newspaper publishes a weekly newspaper called The Press Journal. Bergen News is the former publisher of The Press Journal.*fn2 The publications owned, respectively, by plaintiff and defendant were competitors for the business of municipalities and other government entities that are required by statute to publish official advertisements (e.g., public notices, ordinances, and resolutions) in newspapers of general circulation.

According to the complaint, the public advertising statute, N.J.S.A. 35:1-2.2, requires public notices to be published in newspapers that meet certain specific criteria, including having a "general paid circulation possessing an average news content of not less than 35%" and qualifying "for 2 years as second-class mail matter" under federal postal laws. To qualify as second-class mail matter, federal law requires that at least fifty percent of a newspaper's distribution be to persons who have paid more than a nominal price.

The complaint asserts that defendant intentionally interfered with plaintiff's prospective economic advantage by misrepresenting to public entity customers that The Press Journal met the statutory criteria to carry public notices when, in fact, it did not. As a result, according to the complaint, The Press Journal wrongfully obtained advertising business that would otherwise have been published by plaintiff's newspapers, "because they are the only newspapers in Bergen County qualified under the law to do so." The complaint sought a declaration that The Press Journal was not qualified to accept official advertisements for publication in Bergen County, an injunction barring defendant from accepting such advertisements, and monetary damages.

The proposed amended complaint set forth the same essential claim, but with greater factual specificity. The amended complaint, read indulgently, alleged that The Press Journal is not a newspaper of general paid circulation, but rather sells, at most, one-third of its newspapers and gives the rest away free or sells them at a nominal price. The amended complaint also asserted that the prior and current owners of The Press Journal were aware that it did not meet the statutory criteria but fraudulently certified to public entity customers that the newspaper was qualified to publish public notices. The amended complaint further asserted that defendants fraudulently solicited business from NJMG's customer base, knowing that by doing so they were depriving NJMG of that business.

Plaintiff initially filed the complaint in General Equity and sought preliminary restraints. At that time, Bergen Newspaper was the only defendant served with the complaint. Bergen Newspaper argued that plaintiff could obtain money damages and therefore equitable relief was not required. The General Equity judge denied injunctive relief, primarily on that basis, and transferred the case to the Law Division.*fn3

Thereafter, Bergen News was served with the complaint, and filed a motion to dismiss the complaint; Bergen Newspaper joined in that motion. Plaintiff filed a cross-motion for leave to add as individual defendants the principals of The Press Journal's parent company, and to add claims for unfair competition and punitive damages.

In a written opinion, the Law Division judge granted the motion to dismiss. The judge construed the complaint as an attempt to assert a private right of action against defendant for violating the official advertising statute. He reasoned that the statute, N.J.S.A. 35:1-2.2, was enacted to protect the public and the ...


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