Source Interlink Suit Headed For Court On Friday

Here's a summary of the latest happenings in the Source Interlink lawsuit.

Source Interlink, a magazine wholesaler controlled by billionaire supermarket magnate Ron Burkle, is on the ropes. But according to a suit filed by Source's lawyers at Kasowitz, Benson, Torres & Friedman, that's because a group of publishers, distributors, and wholesalers has plotted to run Source out of business. To prevent what Kasowitz lawyers call "the destruction of Source's business and the monopolization of the United States wholesale magazine distribution market," Source has asked Manhattan federal district court judge Paul Crotty for a temporary restraining order. A hearing on that request is scheduled for Friday.

According to the suit, the defendants have cut Source off from a supply of such major magazines as People, Soap Opera Digest, Soap Opera Weekly, and Entertainment Weekly; spread "disparaging rumors" about Source; and encouraged Source's customers to switch to competitors. The alleged plot began in January, after Source announced it would impose a 7-cent-per-copy distribution fee to recoup costs associated with retrieving unsold magazines at retailers.

After the publishers and distributors resisted the charge, Source says in its complaint, it backed off. But the defendants, "moving in virtual lockstep," nevertheless began to cut Source off from its supply of magazines. In Source's request for a TRO, Kasowitz lawyers ask Judge Crotty to prevent the defendants from "boycotting the distribution of single-issue magazines" to Source.

It will be a crowded courtroom on Friday. The defendants include: American Media, represented by David Keyko of Pillsbury Winthrop; Time Inc. and Time/Warner Retail Sales & Marketing, represented by Rowan Wilson of Cravath, Swaine & Moore; Bauer Publishing, represented by Stephen Rinehart of Troutman Sanders; Curtis Circulation, represented by Joseph Donley at Dechert; Kable Distribution Services, represented by I. Michael Bayda of McElroy, Deutsch, Mulvaney & Carpenter; Hudson News, represented by D. Jarrett Arp of Gibson, Dunn & Crutcher; and the News Group, represented by John Culver III of K&L Gates.