News Junkie Sues Paper Over Reporter Lay-Offs

July 11, 2008— -- When newspaper reader Keith Hempstead found out that the paper he had just renewed his subscription to was cutting its staff and its coverage, he didn't just get mad. He filed a lawsuit.

Hempstead, a real estate lawyer in Durham, N.C. and former newspaper reporter, alleges that Raleigh-based The News & Observer cheated him and other subscribers by changing its coverage after they signed up for service.

"I'm not doing it out of spite, I'm doing it because I still love the newspaper," said Hempstead, whose suit complains that fewer sections, thinner newspapers, and less newsroom staff are "changes that will substantially reduce the quality to what it is currently."

"I wanted to get the newspaper's attention," said Hempstead, "because I knew canceling my subscription wasn't going to hurt them."

A subscriber since 2002, Hempstead says he renewed his subscription – which he says costs about $100 per year – in late May.

The McClatchy Company, which owns about 80 newspapers across the country, including The News & Observer, announced June 16 that it was cutting about 10 percent of its staff, or about 1,400 full-time employees.

"The effects of the current national economic downturn -- particularly in real estate, auto and employment advertising -- make it essential that we move faster now to realign our workforce and make our operations more efficient," said McClatchy CEO Gary Pruitt in a statement. "I'm sorry this requires the painful announcement we are making today, but we're taking this action to help ensure a healthy future for our company."

The layoffs included 70 employees at The New & Observer and a consequent downsize in the size of the paper, which, Hempstead said, amounts to fraud.

"I liken it to a situation where somebody buys an airplane ticket from North Carolina to Los Angeles," said Hempstead. "They purchase it in advance and then find out a few days before the trip that the airline is no longer going to L.A. It's just going to Denver."

Newspaper industry analyst and American Journalism Review editor John Morton calls Hempstead's suit "unusual" and said that while he sympathizes with the complaint, "it's not going to go anywhere."

"Businesses are allowed to conduct themselves as they want and with what they perceive as their needs," Morton said.

And indeed that's what many newspapers have done, in what has been a difficult year for publications nationwide. This year, The New York Times, The Washington Post, and The Boston Herald have reported that they are cutting jobs through a combination of buyouts and layoffs. This month alone, The Los Angeles Times, The Chicago Tribune, and the publishers of the Milwaukee Journal Sentinel and the Palm Beach Post all announced job cuts, some as much as 40 percent.

Morton said that newspaper circulation has been declining since the late 1980s because of the Internet and a decreasing number of young readers. But he says this latest wave of job cuts goes beyond multi-media changes.

"The most immediate impact, and the one that's causing so many layoffs, is that the newspaper industry is very dependent on classified advertising," said Morton. "Since the middle of last year, the three major sources of classified advertising - automotive, real estate and job formations - have themselves been in a tail spin and, consequently, so is classified advertising."

Hempstead said his legal action was born out of "frustration with what's happening within the newspaper industry." He said he wanted to make a point, especially since he still has friends employed by newspapers.

"Someone has to bring some common sense to the industry," said Hempstead, who added that he would drop the suit if The McClatchy Co. put him on its board of directors. "[Newspapers] have to start thinking they have to do more than cut jobs and the quality of the product."

The publisher of The News & Observer, Orage Quarles, dismissed the validity of the lawsuit.

"My response is pretty simple," Quarles said in an e-mail to ABC News. "We think it's a frivolous lawsuit and believe the judge will see it that way too."

Since Hempstead is not a litigation attorney, he is currently looking for legal representation to take his case forward. He said he welcomes other unhappy newspaper subscribers to join him in his fight.