Argus Leader drops legal newspaper lawsuit, won’t take case to trial

Gannett-owned outlet sued city of Sioux Falls for using The Dakota Scout for public notices

This content is courtesy of SiouxFallsLive.com, a Sioux Falls news outlet that operates independently of The Dakota Scout.

The Argus Leader has ended its bid to reverse a decision by the City of Sioux Falls to publish legal notices in The Dakota Scout, a two-year-old newspaper and website based in Sioux Falls.

The Argus Leader, and its parent company Gannett, had filed suit in July asking for a temporary injunction in advance of a trial to block the City Council’s decision to name The Dakota Scout as the official newspaper. 

After Judge Douglas Hoffman denied the injunction, the Argus Leader requested a trial. That was scheduled for Nov. 7.

But on Monday, Gannett officials said they will ask for the case to be voluntarily dismissed.

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The Dakota Scout is an online and print news operation founded by two former Argus Leader reporters, Jonathan Ellis and Joe Sneve. The print newspaper is distributed free of charge in locations in the Sioux Falls area with additional content available through online subscriptions. 

“The Dakota Scout is glad to see the Argus Leader will no longer be burdening Sioux Falls taxpayers with its frivolous lawsuit, and we anticipate that next summer the city will continue to choose to publish its notices in a local newspaper and keep those tax dollars in Sioux Falls,” Sneve told Sioux Falls Live.

The Sioux Falls School District also named The Dakota Scout as its official newspaper following the city’s decision, but was not named in Gannett’s lawsuit. 

Local governments are required to publish legal notices. The contracts vary in value from year to year but the City of Sioux Falls spent an average of about $70,000 through the Argus Leader in previous years. 

Local newspapers across the state have guarded that requirement for decades saying it was a necessary element of open government and democracy. But the barrier to qualify always included a paid, audited subscriber base. 

Ellis and Sneve successfully pressed for changes in the law to allow The Dakota Scout and other freely distributed publications to qualify as the newspaper of record for local government. 

The City Council awarded the contract to The Dakota Scout in June, anticipating the change in law effective July 1.

But Gannett sued, saying the fledgling competitor didn’t qualify because it hadn’t filed the necessary paperwork before Jan. 1.

Lawyers for The Dakota Scout argued that it wasn’t possible to meet that standard because the changes in law had not yet been approved by the Legislature.

With the trial set to begin in less than three weeks, Gannett acquiesced. 

“Readers trust The (SIC) Argus Leader for news and important information, including public notices. We strongly disagree with the Sioux Falls City Council’s decision to stop relying on The (SIC) Argus Leader as the premier source for these important advertisements and believe that it could be detrimental to customers who place such notices. Although we disagree with the Judge’s statutory interpretation, we see no efficient way to appeal that decision and are discontinuing our legal action at this time,” said a Gannett spokesman in a written statement sent to Sioux Falls Live.

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