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Civil Rights museum sues News and Record for libel

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The International Civil Rights Center and Museum and its affiliate non-profits refiled a libel lawsuit against the Greensboro News and Record late last month, bringing back to the surface some of the most contentious news coverage in recent public memory.

The suit, originally filed and dismissed in a 48-hour period last December, resurfaced on Nov. 30 when attorney David M. Dansby Jr. refiled the case in Guilford County Superior Court.

The suit alleges that the News and Record repeatedly misreported facts surrounding the museum’s financial state in late 2014 and mid-2015 during a time when debate of continued public financial support remained Greensboro’s most contentious topic.

The museum recently emerged debt-free from a complex web of corporate structures designed to bring millions of dollars in tax-credit financing to the drive to open and operate a civil right’s museum that pays homage to the Sit In Movement that developed in Greensboro in February 1960. The actions of four NC A&T students to demand equal access to a Woolworth’s lunch counter in Downtown Greensboro is considered the catalyst that launched the Civil Rights Movement of the 1960s.

Few reporters covering the topic, and far fewer members of the general public, scratch the surface of understanding historic and New Market Tax Credits that are available to major redevelopment projects. The lack of specific knowledge caused misinformation to haunt reportage regarding the museum’s finances.

In filing the suit, plaintiffs Sit In Movement LLC, Civil Rights Museum LLC, and board members Hurley Derrickson, Earl Jones, Richard Koritz and Melvin “Skip” Alston allege that the News and Record “conducted a public campaign in the newspaper against the museum and its Board of Directors in which the defendants persistently forecast that the Museum and the Board of Directors efforts would fail (which they did not).”

Prior to an article on Nov. 20, 2014, the suit states that the coverage “although obnoxious and objectionable at least had the saving grace of being Constitutionally protected free speech and free press.”

That changed with the publication, the suit states, of an article with the headline “Museum’s debt close to $26 million” wherein the article comingled millions of dollars in tax-credit financing obligations with actual debt. Opinion editor Allen Johnson, according to court documents, repeated the same false statements and Johnson is included as an individual defendant in the suit along with his employer, the News and Record.

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The suit alleges defendant knew these statements to be false because museum CEO John Swaine and co-founder Earl Jones explained the tax-credit structures to newspaper staff in recorded and videotaped interviews. Museum staff “explained that they were not debt by any normal understanding of debt, but instead, the money was essentially free and neither principal nor interest were repaid.”

“There was, therefore, no reason to report either a $25.9 million dollar debt or a $26 million debt, particularly without any qualifying language whatsoever and knowing full well that the average newspaper reader would believe that the museum was hopelessly mired in debt and would never climb out,” the suit states.

The newspaper’s coverage depicted the museum leadership as “hopelessly inept,” according to the court filing, “and had cast the museum into an impossible hole when in fact the true story reflected extremely well on the Board of Directors and the leadership.”

The suit also contests depictions of the museum’s visitor statistics. In a Jan. 24, 2015 article the newspaper reported visitation down to 1,958 a month in 2014 when in fact 2014 numbers exceeded 2013, with an average monthly total of 6,000 that year.

A July 29, 2015 article reported the museum lacked a required $1 million operating reserve and owed an internal transaction of $500,000 between tax-credit entities. “The museum is not and has never been required to maintain a reserve of $1 million,” the suit states. The report also left out a qualifying auditor’s statement regarding the internal transaction “that the money referred to was not required to be repaid ever and balanced out with other money circulating in the tax credit program.”

The suit seeks a jury trial on two counts of libel and one count of unfair and deceptive trade practices, claiming the false statements by the newspaper caused “actual damages in the form of ridicule, humiliation, public contempt, loss of reputation, public hatred and would tend to induce an evil opinion of the Plaintiffs in the minds of people who would hold normal mores.”

The suit requests actual damages in excess of $25,000 (the amount required to file a claim in Superior Court) and for punitive damages since the “libelous statements were made with a reckless disregard for the truth” and requests for retractions on Dec. 29, 2014 and Nov. 6 2015 had been ignored.

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