Jury to decide whether SLO County news website libeled businessman

Cal Coast News owner Karen Velie testifies Wednesday in court in the defamation trial against her.
Cal Coast News owner Karen Velie testifies Wednesday in court in the defamation trial against her. dmiddlecamp@thetribunenews.com

»» Update: Cal Coast News writers lose libel verdict, ordered to pay $1.1 million in damages

Two Cal Coast News writers are trying to convince 12 jurors that they did not libel a hazardous waste contractor when they accused him of illegal activity in a 2012 article.

The defamation trial of Karen Velie and Daniel Blackburn, current and former co-owner of Cal Coast News, respectively, began last week and concluded with closing arguments Wednesday.

Should jurors find the two liable, they can award the plaintiff damages from a single dollar to $1.5 million.

The case stems from a lawsuit filed by Charles Tenborg, past president of Arroyo Grande-based waste management company Eco Solutions, which contracted with public agencies such as the San Luis Obispo County Integrated Waste Management Authority.

Throughout the trial, Tenborg’s attorney, San Francisco-based James Wagstaffe, alleged the writers didn’t research easily verifiable facts or obtain appropriate records, seek sources with direct knowledge, or allow Tenborg a chance to defend himself against their allegations.

It brings all journalism down. ... It does not represent what great journalism can be.

James Wagstaffe, attorney for Charles Tenborg

The article “Hazardous waste chief skirts law” alleges that Tenborg illegally received a no-bid contract with the Integrated Waste Management Authority (IWMA), had been fired from his previous position with the county, and was “encouraging (clients) to break state law.”

The article — which features photos of Tenborg and IWMA manager William Worrell, as well as a stock image of a yellow barrel labeled “Radioactive” — remains on the Cal Coast News website.

Tenborg is seeking more than $1 million in damages for loss of future revenue and at least $500,000 in punitive damages.

Plaintiff’s case

Lawyers for Tenborg presented evidence to the jury that Tenborg’s contract with IWMA was under the legal limit requiring a public bid, showed jurors Tenborg’s resignation letter as proof that he was not fired, and argued that their client complied with all applicable laws while transporting waste. The article does not offer contrary evidence, they said.

Velie and Blackburn stand by the article and testified that it was to be the first in a series that never came to fruition, and said the allegations would have been proven in later articles.

During his testimony, Tenborg said that Eco Solutions transported low-grade hazardous waste for small businesses to waste facilities at local landfills as part of an IWMA program. He said he was contacted by colleagues from across the state about the allegations after the article appeared in a waste industry newsletter. He sold the business after his reputation suffered, he said.

“I had a good job,” Tenborg testified. “That’s what I wanted to do, to help people comply (with waste disposal regulations).”

He said Velie contacted him no more than three times before the article’s publication and he referred questions he couldn’t answer to the appropriate people. Velie never asked about licensing, his past employment or illegal transportation of waste, he said.

When he saw the article online, he said he felt “absolutely ill.” After Velie didn’t return his phone calls, he and Worrell sent a letter demanding a retraction.

“I never heard anything from them,” he said.

It was incomplete; it was not untruthful.

Cal Coast News co-founder Daniel Blackburn

On the stand, Velie said she investigated Tenborg for about eight months while Blackburn investigated tips about Worrell’s past employment. Velie testified that she relied on “a number of attorneys who donate their time to help” with the website, as well as former SLO city and IWMA employees.

Velie said she also communicated with an investigator for the California Department of Toxic Control and was told the agency had an investigation into Eco Solutions. That investigation stymied her efforts to obtain official records, Velie said.

Though she said “there were dozens” of sources used for information for the article, Velie often said she could not remember who gave her what information and could not provide her notes after they were lost due to a broken computer, she said.

Velie also testified that when she received the retraction letter, Cal Poly journalism professor Bill Loving, the website’s editor, told her to leave the article as is due to a pending lawsuit.

The letter, later shown in court, did not threaten a lawsuit and Loving later testified that he never instructed Velie to leave the article online.

Blackburn testified that the site follows “the strictest standards” and covers “stories that the other media ignore.” He said that he gave up co-ownership of the site in 2010 but continues to report as its “senior correspondent.”

Asked by Wagstaffe if he stood by the article, Blackburn responded, “That’s why we’re here, sir.”

“It was incomplete; it was not untruthful,” Blackburn said.

It seemed as if a conclusion was made and they wanted to go with that conclusion rather than digging deeper.

Venise Wagner, San Francisco State University journalism professor

Professor testifies

On Monday, Tenborg’s attorneys called to the stand Venise Wagner, a former reporter and current journalism professor at San Francisco State University, where Wagstaffe is listed as a lecturer.

After reviewing the article and Velie and Blackburn’s depositions about how they gathered their information, Wagner testified that the pair relied on “hearsay” from a group of sources who were granted anonymity and called the published product “all innuendo.”

“I kept reading and I thought, ‘Where’s the proof?’ and I never saw any proof,” Wagner said. “There were untruths and it didn’t seem that reasonable care was taken to get the truth.”

Wagner testified that professional news organizations follow the Society of Professional Journalists’ Code of Ethics, which calls for seeking the truth and reporting it, minimizing harm, acting independently, and being transparent and accountable. She said that once Velie and Blackburn realized the article was not accurate, it was their duty to remove the article from the website and correct the record.

“You have to get it right, whether you’re on deadline or not, or whether you’re online or in print,” Wagner said. “If you’re a journalist and you make a mistake, own that mistake — be accountable.”

Wagner critiqued the article paragraph by paragraph, noting the authors’ “passive voice,” imprecise language and use of unnamed sources. She also said it appeared as though Velie and Blackburn made a minimal effort to reach Tenborg for comment.

“You have to give that person the chance (to respond),” Wagner said. “It seemed as if a conclusion was made and they wanted to go with that conclusion rather than digging deeper,” Wagner said.

Velie’s inability to produce notes from the story made her “very suspicious,” Wagner said. “I don’t know how you can investigate a story for 10 months and have no notes,” she said.

Who goes reading news articles after they are 4 years old?

Cal Coast News’ defense attorney David Vogel

Closing arguments

During closing arguments Wednesday, Cal Coast News’ defense attorney David Vogel told the jury that the case was “difficult to unravel and understand.”

“This was what you would say, a teaser for the series ... which was never followed up on before they got a letter for retraction and they stopped the series,” Vogel said. “They weren’t going to say these things weren’t true, because they believed it.”

Vogel said the damages Tenborg seeks is “outrageous” and that his attorneys never proved he lost prospective clients because of the article.

“Who goes reading news articles after they are 4 years old?” Vogel asked the jury. “He’s a big boy — you get over your hurt feelings and you get on with your life.”

In his closing, Wagstaffe said Velie and Blackburn “targeted” his client and noted that they did not call any of the roughly dozen sources used for the story to testify in defense of the writers.

“That tells you everything you need to know about this case,” Wagstaffe said. “They knew what they were doing.”

In supporting the damages, Wagstaffe said Tenborg was forced to sell his business for $1.3 million, roughly $1.1 million less than it was valued.

He argued that the defendants could have retracted the article to avoid the lawsuit and urged jurors to send a message to Cal Coast News to protect the legitimacy of journalists.

“Do we want this article to be taught in Ms. Wagner’s class next week?” he asked. “It brings all journalism down. ... It does not represent what great journalism can be.”

Note: This story has been updated to correct an error. The defendants alleged in the article that Charles Tenborg was fired from his position with San Luis Obispo County. That allegation is not true.

Matt Fountain: 805-781-7909, @MattFountain1