NORFOLK
The Wall Street Journal and newspapers across the state, including The Virginian-Pilot, are battling in court over what has become the lucrative business of legal advertising.
The Journal wants to penetrate a number of Virginia markets, including Norfolk and Virginia Beach, and has sought court orders to be permitted to solicit for legal ads. The explosion in home foreclosures is driving the effort.
Just last week, Norfolk Circuit Judge Charles E. Poston thwarted the Journal's attempt to penetrate the Norfolk market. The judge ruled he does not have jurisdiction to hear the matter.
That's the opposite of what Virginia Beach Circuit Judge A. Bonwill Shockley decided in a similar case earlier this year. Shockley ruled that she did have jurisdiction, and she said the Journal could compete for legal ads.
The Virginian-Pilot's parent company, Virginian-Pilot Media Cos., appealed Shockley's ruling to the Virginia Supreme Court. The high court has agreed to hear the case probably early next year.
Legal ads, particularly foreclosures, have become lucrative for newspapers at a time when most other advertising has been flat or worse. The Virginian-Pilot doesn't want to lose that revenue stream.
Maurice A. Jones, The Pilot's president and publisher, and the newspaper's attorneys declined to comment because the cases are pending. As a private company, the newspaper does not publicly release its financial data.
A legal ad in The Pilot costs $7.48 per line. A typical foreclosure ad would net the paper more than $700. The Journal has offered cheaper rates, but an ad would not reach as large an audience.
A spokesman for Dow Jones & Co., the Journal's parent, said the company seeks to grow the Journal across the country.
"We consider classified advertising to be a growing part of our business and we are making efforts to ensure that we can serve our customers that need to publish legal notices," spokesman Robert H. Christie said in an e-mail statement.
The Richmond Times-Dispatch and The Washington Post have been fighting similar court battles on their turf. Judges in Richmond and Henrico County ruled the same as Poston, that they lacked jurisdiction. The Post's case is pending in Prince William County.
At issue is a state law that outlines the rules for newspapers seeking to run legal notices. Those notices - such as foreclosures, government bid proposals and public hearing announcements - are printed in the classifieds section.
The law requires that the newspaper have "general circulation" in the area where the notice is published, be printed in English and published at least once a week, and have a "bona-fide list" of paying subscribers. The paper also must have a second-class mailing permit.
A local court official, typically the commissioner of accounts, decides in which papers to publish legal ads.
If the newspaper does not have a mailing permit, it must seek court approval to run legal ads.
Dow Jones said in court filings that it meets all those requirements and should have been granted automatic inclusion by each municipality's commissioner of accounts. But many commissioners rejected the Journal's applications; the company then sought court orders.
The Pilot argued that the Journal doesn't have enough circulation in Norfolk to qualify. The Journal's court papers say it has 865 paid subscribers in the city. That's on par with the circulation of The Pilot's sister publication, Inside Business, which also prints legal ads from Norfolk.
The Pilot, Dow Jones said in a court filing, "cannot have it both ways."
Poston's opinion says that because Dow Jones meets the requirements and has a mailing permit, then the decision on whether to use the Journal as a method of placing legal ads rests with the court official or commissioner of accounts.
"It may be an opportune time for the General Assembly to revisit the issue of notice by publication in light of the variety of electronic means of mass communication available," the judge wrote.
Tim McGlone, (757) 446-2343, tim.mcglone@pilotonline.com
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