Dealer Law

A class-action suit that started in 2004 when more than 40 car dealers sued Newsday for fudging circulation numbers was settled this week.

Fraud and antitrust charges had been brought by the dealers to support allegations that the Long Island newspaper inflated its circulation number by hundreds of thousands of copies. The settlement, the terms of which were not disclosed, accelerated in recent weeks, according to attorney Leonard Bellavia, who filed the case on behalf of the dealers, writes Newsday.

A Newsday spokeswoman confirmed the settlement.
Bellavia said he believes the acceleration was prompted by his firm’s offer to provide experts to assist a federal judge determine the financial impact of the Newsday circulation fraud in criminal cases against former executives. According to Bellavia, the David-and-Goliath-style suit “was a really hard-fought case, and I think they saw we were loaded for bear.” Bellavia would not reveal the terms of the settlement, but indicated the award his clients had sought was substantial. “We felt that if the case went to trial we could recover from $50 million to $100 million” if the dealers got a favorable judgment, he said.

Most of the auto dealers are advertising with Newsday again, which may be surprising given that the tabloid initially refused to accept ads from the dealers after the suit was brought. Newsday did eventually agree to carry the ads when the dealers agreed that the new ads would be exempt from damage claims. Another federal class-action suit brought against Newsday by advertisers who first brought the claims of falsified circulation remains unresolved.