Court Dismisses Fast Media Libel Case Against Courtenay Publication DRTV News

Scott H. Jenkins, Judge of the 53rd District Court in Austin, TX, has dismissed a lawsuit brought by Fast Media LLC against Courtenay Communications and its publication DRTV News, a supplement to DM News, alleging that an article published in the May 17, 1999, issue of DRTV News contained libelous statements about Fast Media.

The article, “Bankruptcy Trustee Grills Sarnow on Finances,” reported on a bankruptcy hearing in which an attorney for media creditor Tower Entertainment questioned Greg Sarnow, president of American Television Time, which had filed a Petition in Bankruptcy in U.S. Bankruptcy Court in Austin.

During the questioning, it was revealed that Linda Bartos, her daughter Carol Bartos and Steven Gotcher, all of whom were American Television employees, had resigned from American Television and formed Fast Media, which began operations on Feb. 1, 1999.

According to Courtenay's motion for summary judgment, American Television president Sarnow further testified: “That American Television leased its office space from the International Society of Divine Love and that the International Society of Divine Love temple was on the same property as the American Television offices; that he [Sarnow] was a 'devotee' of the International Society of Divine Love during the time he ran American Television; that Carol Bartos was an employee of American Television from April 1993 until February 1, 1999, was an employee of Fast Media at the time of the hearing, and was also a 'devotee' of the International Society of Divine Love; that he and Linda Bartos both lived on the premises of the International Society of Divine Love; that in 1997 American Television made an unsecured loan of $300,000 to Kent-Speigle (sic), an advertising firm whose principals were 'devotees' of the International Society of Divine Love; that the contract by which Fast Media acquired American Television's clients 'was put together in the time around the time' Linda Bartos left American Television.”

According to Courtenay's motion to dismiss, Tower Entertainment attorney Ken Schwartz stated at the hearing, “We have customers and goodwill that were transferred via one entity to another entity in preparation for a bankruptcy. And I'm not characterizing that now as bankruptcy fraud since I'd like to reserve judgment on issues like fraud, but if I ever saw a case that lent itself to that sort of interpretation this is certainly well on the road.”

In response to this statement, the bankruptcy trustee, Frank Laphem, had said, “Well, we're getting there, too,” according to the tapes of the hearing.

According to Courtenay's papers, DRTV News reporter Sean Sexton had obtained audiotapes of the American Television bankruptcy creditors meeting. The passage from the May 17, 1999, article — which was the basis of Fast Media's complaint — read: “There is concern in the media industry that the American Television bankruptcy is a part of an orchestrated attempt by the temple and its members to avoid paying stations and cable networks, while continuing to make money under a new company name, Fast Media LLC.”

In its motion for summary judgment, Courtenay argued that “a) the article does not contain a false statement of fact, which is defamatory toward Fast Media and b) because the article is a fair, true and impartial account of a judicial proceeding. … In addition, Mill Hollow [the former name of Courtenay Communications] is entitled to summary because, after adequate time for discovery, there is no evidence … that Mill Hollow published a false, defamatory statement about Fast Media.”

Courtenay Communications CEO Adrian Courtenay indicated that one of the most interesting aspects of the case to him was that both sides made arguments in the case based on First Amendment claims. As defendant, Courtenay had claimed protection for truthful reporting under the Freedom of the Press guarantees of the First Amendment, while Linda Bartos, president of Fast Media, had invoked religious freedom as the basis for her refusal to answer certain questions about her relationship to the International Society of Divine Love and its spiritual leader, H.D. Prakashanand Saraswati, who was also referred to as “Swamiji.”

Following this refusal by Bartos to answer questions relating to the International Society, Courtenay file a motion to compel her testimony. This motion was granted, and Bartos' appeal of that ruling was denied by the Texas appellate courts.

In her ultimate testimony, Bartos confirmed that a number of other executives in the direct response television industry also presently or formerly maintained residences on the premises of the International Society of Divine Love. These included Marsha Kent and Peter Spiegel, former principles of the bankrupt DRTV firm Kent & Spiegel, and Katie Williams, former principle of Williams Television Time.

In other testimony, Bartos indicated that she had never discussed Fast Media with the “Swamiji”; had never communicated with him by letter, fax or e-mail; and had rarely spoken to him at all since the communal dining at the temple was “silent dining.” Bartos recalled that she had contributed $20,000 to the temple in 2001.

Courtenay Communications was represented in this case by the law firm of Haynes & Boone LLP, which maintains offices in Austin, Dallas, Fort Worth, Houston, San Antonio, Washington and other cities.

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