The Birmingham News’ $16 Million Undisclosed Conflict of Interest

By Donald V. Watkins

©Copyrighted and Published on January 3, 2019

From September 25 through October 9, 2002, I headed a three-person arbitration panel in Birmingham, Alabama consisting of attorneys Milton Davis, Mark White, and myself. The panel convened to hear the case of Sherry Horn, Hugh Stewart, Kameron Hyde, Jesse Glass, and James and Teresa McLendon against The Birmingham News Company. These plaintiffs are individuals who at one time had “dealer agreements” with the News to sell and distribute its newspapers to the public. The plaintiffs claimed the News wrongfully and illegally terminated those agreements.

After hearing testimony from a host of witnesses, reviewing numerous depositions, and receiving more than 400 exhibits into evidence, the arbitration panel issued a 49-page decision on December 30, 2002 finding that: (a) the plaintiffs' dealerships were franchises that the News had wrongfully and intentionally terminated and converted to the media organization's own economic benefit, (b) the News breached its fiduciary duties to the plaintiffs as franchisees, (c) the News defrauded the plaintiffs by intentionally and falsely representing to them that their dealership franchises would be renewed so long as they performed their work satisfactorily.  

The panel awarded the plaintiffs $20 million in compensatory and punitive damages.

Arbitrators Milton Davis and I wrote the majority opinion, while Arbitrator Mark White wrote a separate opinion, concurring in part and dissenting in part from the $20 million award.

The Birmingham News appealed the panel’s decision to the Alabama Supreme Court. On June 11, 2004, the Court issued a ruling which reduced the $20 million award to $16 million. After adjusting the aggregate amount of the award, the Court affirmed the panel’s findings of fact and reduced awards to each plaintiff. More importantly, the Supreme Court affirmed all of the compensatory and punitive damages awarded against the News under the fraud claims.

This was a stunning defeat for The Birmingham News. It was also embarrassing for the state's largest newspaper because the Supreme Court affirmed the panel’s finding that the News committed multiple acts of fraud against the plaintiffs.

The News privately blamed me for this Court loss because I authored the 49-page panel ruling that was upheld by the Supreme Court (with only a $4 million downward adjustment due to the Court’s removal of one element of damages). After losing in the Supreme Court, the News paid off the court judgment won by the plaintiffs.

The Birmingham News never published an article about its fraudulent conduct or the payment of the $16 million court judgment in this case. Instead, the News publicly and maliciously started bashing me every chance it got.

This event constitutes The Birmingham News’ $16 million undisclosed conflict of interest with me. It has never gone away.

Fast-forward to November 29 and December 25, 2018. On these dates, The Birmingham News, operating under the trade name AL.com, published a fabricated racist comment that the media organization attributed to me in a 1991 interview. The News reported as a statement of fact that my job as an attorney for a former Birmingham mayor was to “kick white people’s ass.”

The comment originated with reporter/columnist John Archibald and was first published in his November 29, 2018 article. Reckon at AL.com Managing Editor John Hammontree republished this fake racist comment in his Christmas Day article.

Of course, I never made the racist comment Archibald and Hammontree attributed to me.

Archibald readily admits he cannot prove I made this racist comment. In an article published on New Year’s Eve, Archibald said, “I sure hope he did say it, because I put those words in his mouth and if they’re wrong I did him a profound disservice.”

Archibald’s retreat from attributing the “kick white people’s ass” comment to me as a statement of fact, to “I can’t prove [Watkins] said it,” to “I sure hope he did say it,” is damning. His attempt to paint me as a racist who hates white people has collapsed.

Yet, Archibald has steadfastly refused to retract this fake quote or publicly apologize to me for publishing it.

All of this brings me back to Sherry Horn, Hugh Stewart, Kameron Hyde, Jesse Glass, and James and Teresa McLendon. The Birmingham News Company defrauded each one of these plaintiffs. My diligent work as an arbitrator brought justice in their case. All of these plaintiffs were strangers to me. The News’ fraudulent conduct in illegally terminating their distributorships caused each plaintiff tremendous mental anguish and financial hardship.

These plaintiffs happen to be white and I literally saved each one from a grave injustice in his/her personal and business life. The culprit that “kicked white people's ass” in this case was The Birmingham News, not me.

PHOTO: The Birmingham News logo.