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Santa Maria Sun / Cover Story

The following article was posted on April 19th, 2017, in the Santa Maria Sun - Volume 18, Issue 6 [ Submit a Story ]
The following articles were printed from Santa Maria Sun [santamariasun.com] - Volume 18, Issue 6

Fit to print? Defamation trial highlights the complicated legacy of CalCoastNews

By CHRIS MCGUINNESS

"We work in the public interest."

Karen Velie repeated a credo that many journalists live by from her seat on the witness stand in SLO County Superior Court.

As she answered another pointed question from an opposing attorney, Velie—a reporter, owner, and cofounder of CalCoastNews—was flanked by the massive display of a 2012 article she co-wrote with fellow CalCoastNews reporter and co-founder Dan Blackburn. Positioned just to her left, in sight of the jury, the bold headline was visible even to onlookers in the seats at the very back of the gallery:

"Hazardous waste chief skirts law."

The story has all the hallmarks of the kinds of articles the website has pledged to publish since it was founded in 2008. It was an exposé of supposed corruption, government malfeasance, regulatory corner cutting, and buddy-buddy cronyism, this time set in the world of hazardous waste transportation in SLO County.


READ ALL ABOUT IT
Karen Velie, journalist and owner of CalCoastNews, examines the article she co-wrote with reporter Dan Blackburn in 2012, which sparked a libel lawsuit.
PHOTO BY JAYSON MELLOM

The only problem was that some of the accusations made in the article, specifically those about a local waste management businesses owner, Charles Tenborg, simply weren't true. At least that's what the members of the jury, who sat through a weeklong trial staring at the larger-than-life article, decided. They found that Velie, Blackburn, and CalCoastNews libeled Tenborg in the story. The jury awarded the Arroyo Grande businessman $1.1 million in damages.

"It was a character assassination of my client," James Wagstaffe, the San Francisio-based attorney representing Tenborg, told jurors in his closing statement, which he pointed out took place, coincidentally, on March 15, Shakespeare's "ides of March."

Wagstaffe spent much of the trial picking the story apart, speaking about gaps, holes, and inconsistences in CalCoastNews' reporting—unnamed and unattributed sources, missing notes, and sloppy research. He argued that Velie and Blackburn skirted journalistic standards, ignoring information and facts that got in the way of their hopes for a splashy story on government corruption. Wagstaffe lumped them into the same category as disgraced journalists like Stephen Glass and Janet Cooke.

"They did not let this story go away when the facts didn't support it," Wagstaffe told the jurors. "They kept on going."

The questionable journalism wasn't an accident, Wagstaffe claimed, it was deliberate and malicious. The jury's verdict—handed down March 16—agreed, stating that a majority of the jurors found that Blackburn failed to use reasonable care to determine that statements in the article were false, and that Velie knew or had serious doubts about the validity of the statements in it.

The website's most vocal critics, some of whom claim to be the subject of similarly questionable reporting, pointed to the verdict as a vindication of their claims that CalCoastNews is, as Wagstaffe argued, no more than a tabloid masquerading as a legitimate news site. Those include at least two families who question the site's past reporting on the deaths of their loved ones and raise concerns similar to Tenborg's.

But those who champion the site as a truth-telling government watchdog see the trial as further evidence that enemies of Velie and Blackburn are trying to silence their reporting and run the site out of business. Both camps reflect similar trends at the national level, as the media grapples with an increasingly partisan American public, which is growing ever suspicious of lies and bias in news coverage.

In the weeks following the verdict, little appears to have changed in the day-to-day operations of CalCoastNews, which continues to publish articles. But the long-term impact of the verdict on the future of SLO County's most controversial media outlet remains to be seen. On April 10, CalCoastNews filed a motion for a new trial, calling the damages the jury awarded "excessive." Velie and Balckburn are next due back in court May 11 to begin the process of sorting out when and how the damages will be paid. 

On a mission

From the very beginning, CalCoastNews worked to set itself apart from the other local media outlets in SLO County. The site was initially founded in 2008 as uncoveredslo.com by Velie, a Cal Poly graduate and former reporter for New Times, the Sun's sister paper in SLO County, and Blackburn, who's written for New Times as well as other publications like The Orange County Register.

Their mission, according to statements on the website, was to create an independent outlet for investigative journalism in SLO County. They believed the media's role as a watchdog of government was shrinking, not only due to outsourcing and downsizing in the newspaper industry, but also due to the coziness of journalists and editors with the very officials they were supposed to be reporting on.

"When community newspapers are so openly soft in news selection and allow beat reporters, columnists, and editors to become socially entwined with the public officials and community personalities whose activities they cover, it's a formula for an informational vacuum and an uninformed citizenry," Blackburn wrote in a commentary published on the site in June of 2008.

The website, which was rebranded as CalCoastNews later that same year, promised to fill that vacuum. In its first month, the site appeared to deliver on that promise, publishing stories about alleged turmoil in SLO County's probation department, a controversial proposed deal between Cal Poly's engineering department and the Saudi government, and allegations of sex discrimination in the Atascadero Police Department.

A year later, the site began reporting on the financial dealings of a local development magnate, Kelly Gearhart. By 2015, Gearhart was convicted of wire fraud and money laundering and sentenced to 14 years in prison for bilking investors out of millions of dollars.

Still, in the nine years that followed CalCoast's founding, the website earned its share of detractors. Some of the most vocal critics were the very people they reported on, the most well known being SLO County 3rd District Supervisor Adam Hill, who has been mentioned in more than 150 CalCoastNews articles and opinion pieces. Those range from coverage of his divorce in 2011 to, more recently, his alleged involvement in Tenborg's lawsuit, which Hill denies. In a 2016 interview with New Times, Hill, the subject of two lawsuits brought against him by Velie, characterized CalCoastNews as an outlet that cloaked its personal vendettas as investigative journalism, referring to the site and its supporters as an "empire of hate."

While Hill has often stated publicly that CalCoastNews has printed false stories to damage him, it would be Tenborg who dealt the $1.1 million blow. 

Ripped from the headlines

In the nearly five years it took to get his lawsuit before a jury, Tenborg's lawyer, Wagstaffe, amassed a cache of evidence that he believed would show them that Velie and Blackburn's story about his client was false. The story claimed, among other things, that Tenborg had been fired from a previous job, received an illegal no-bid contract from SLO County's Integrated Waste Management Authority, and had encouraged Eco Solutions' clients to break the law.

Wagstaffe told the jury that the evidence would prove that CalCoastNews strayed from its promise to "adhere to the strictest journalism ethics" in favor of a poorly reported, yet sensationalized, story based on rumor and innuendo.

"It's a story that sells, but it isn't true," Wagstaffe said.

During the trial, Wagstaffe presented witnesses and documents that raised questions about the story and the methods used in its reporting. Many of the accusations about Tenborg in the story were printed without attribution. Some of the accusations that were sourced in the article primarily came from unnamed people—simply referred to as "city employees," without supporting details or an explanation as to why keeping their identities a secret was necessary.

Wagstaffe implied that inaccuracies in the story were more than unwitting mistakes. At one point in the trial, he all but accused Velie of lying on the stand. Near the end of the trial, Wagstaffe introduced a phone log that showed two calls between Tenborg and Velie's phone numbers, four minutes for the first and two minutes for the second, the day before the article was published. Tenborg said that, despite speaking to her previously, Velie never asked him about the most damaging allegations against him and his company, even during those final, last-minute phone calls. Tenborg's testimony and those records stood in direct conflict with claims Velie made under oath that her final calls to Tenborg, made at the request of CalCoastNews Editor Bill Loving shortly before the story's publication, weren't returned.

"We've been hearing a lie in this courtroom," Wagstaffe told jurors in his closing statements.

Taken together, the evidence showed that the reporting of the story, and the choice to publish it veered widely from established norms and best ethical practices in journalism, according to Venise Wagner, a working reporter and San Francisco State University journalism professor who was called by Wagstaffe as an expert witness in the trial.

"There didn't seem to be enough care taken to find out what the truth was," Wagner said.


VINDICATED
Charles Tenborg said a defamatory CalCoastNews article damaged his professional and personal life. He won $1.1 million in damages after a nearly five-year legal battle against the website.
PHOTO BY JAYSON MELLOM

Under questioning from Wagstaffe, Velie said that she believed "most" news stories in general had "one or two" small falsities in them.

"If it has a couple of small falsities, it can still be in the public interest," Velie said.

Still, Velie vocally defended the story in court, and said she spent about 10 months working on the story.

"We had interviewed dozens of sources and viewed hundreds of documents," she said.

But CalCoastNews and its team of attorneys provided little documentation to back up the claim in court. In part, Velie said, because her notes for the story had been lost when her computer broke sometime after the article was published. In statements made after the trial, CalCoastNews contended that it had wanted to present more evidence to jurors but was hampered by the deaths of two vital sources and that "a majority" of their evidence and witnesses were blocked from the trial or "excluded by judicial order."

For his part, Blackburn testified that he had little to do with the claims about Tenborg. Blackburn said Velie worked on the first half of the article about Tenborg, while he wrote a latter section of the story about William Worrell, a SLO County waste management official. However, Blackburn was included in emails containing drafts of the full article and testified that he believed the reporting work Velie did on the story was appropriate.

"I had confidence in her ability," Blackburn said.

Loving also stood by Velie’s article during the trial. It was his job to review the story and make the call to publish it, said Loving, a professor of journalism at Cal Poly.

"I was satisfied at the level of investigation," he said. "The number of sources found spoke to the truth of the article."

CalCoastNews refused to retract the article, allowing the story about Tenborg to remain online and propelling the lawsuit through the legal system.

"It would have gone nowhere had they issued some type of correction," Tenborg told jurors. 

Damaged reputation

While Tenborg said he never wavered in his belief that he'd eventually win and get the story taken down, he testified that the article deeply damaged him and became strain on both his professional and personal life.

"This was a devastating article," Tenborg said on the stand. "I took it very personally."

In addition to appearing on the CalCoastNews website, he testified that the story was included on an email listserv used by a large number of people in the state's waste management industry, including some of his then-clients or those who might potentially be interested in his services.

"I spent 15 years building my company's credibility, and it was gone in one fell swoop," Tenborg said.

During cross examination, Tenborg said that he could not definitively prove that he lost business as a result of the story but that he believed it impacted his leverage when he later decided to sell Eco Solutions. Tenborg said he sold the company's contracts for about $1.3 million, $1 million less that he believed they were worth. From the stand, Tenborg said he believed the company that purchased the contracts was aware of the article when it made the offer. He also noted that the company did not offer to keep the name Eco Solutions.

His life outside of business also suffered in the wake of the article's publication. From the stand, Tenborg described the difficulty of explaining what he was accused of to his then 14-year-old son. Tenborg also said he'd been through a divorce and eventually started dating. He was confident that some of those dates, including his current girlfriend, looked him up online and saw the article, which at the time of the trial, was still the top result from a search of his name on Google.

"It's a hard conversation to have on the first or second meet-and-greet," Tenborg said.

The article that implied he was corrupt remained a strain on his life and a stain on his reputation, according to Tenborg's testimony. That stain, he said, came at a price.

The jury agreed with Tenborg, awarding $600,000 of the total $1.1 million in damages, specifically for the harm the article did to Tenborg's reputation, and for the "shame, mortification, and hurt feelings" caused by the article. 

Not alone

Tenborg isn't the first person to claim he's suffered personally because of allegedly irresponsible reporting by CalCoastNews.

Speaking to the Sun shortly after the verdict, Cathy Weaver raised similar concerns over the website's coverage of the death of her husband, Steven Weaver, who was found dead on a Cayucos hiking trail in 2015. The CalCoastNews story, written by Velie, stated that a portion of Weaver's hand "appeared to be chewed off" and cited unnamed "neighbors" who claimed a large animal they suspected was mountain lion had been spotted near Weaver's body. The story ran on the website under the headline "Mountain lion chews off Cayucos man's hand."

The day after the story ran, officials with the SLO County Sheriff's Office told reporters from the San Luis Obispo Tribune that Weaver had died of a heart attack, that the injuries to his hand occurred after his death, and that they were likely made by a small animal like a skunk or raccoon.


A QUESTION OF ETHICS
CalCoastNews editor and outgoing CalPoly journalism professor Bill Loving defended Velie and Blackburn’s article in court.
PHOTO BY JAYSON MELLOM

The Weaver family declined to take any legal action over the story. Cathy said she still occasionally gets questions about the CalCoastNews story, which remains online.

"After that, it still comes up as a conversation piece," she said. "People still remember Steve like that. It's still upsetting."

Velie declined to answer questions about the story for this article.

Los Osos resident William Buccholtz said he had a similar experience with CalCoastNews when Velie reported on the suicide of his 13-year-old daughter, Nailani, in 2014.

The article that appeared on the CalCoastNews website after his daughter's death is still a sore spot for Buccholtz. He said the story inaccurately stated that his daughter took her own life because of "years of torment" and bullying.

Buccholtz said that when Velie contacted him following Nailani's death, he told her that bullying had nothing to do with his daughter's suicide. While he is quoted in the article, Buccholtz said his words were taken out of context and that the story was written to make it seem like much of the information was coming from him when it was not.

Similar to the article about Tenborg and Steve Weaver, some of the information in the story was attributed to unnamed sources, such as unidentified family members.

Buccholtz said an investigation by Nailani's school district and the SLO County Sheriff's Office concluded that his daughter's death was not the result of bullying. And based on his own review of Nailani's diaries, social media posts, and other evidence, he said he has no reason to doubt their assessment.

Both the district and the sheriff's department backed Buccholtz up in a Tribune article that ran one day after CalCoastNews published the story. Buccholtz said he had taken time away from helping his wife make cards and planning for Nailani's memorial service to go to The Tribune in an attempt to set the record straight, something that still bothers him.

"I feel robbed," he said. "I wasn't there. I should have been there."

Buccholtz never took the website to court to dispute the claims made in the article. He said he considered it at the time, but the financial and emotional costs of dragging the matter through court would have been too high.

The verdict in the recent trial, Buccholtz said, has offered some comfort.

"Do I find some relief in the outcome of the court case? Yes, I do," Buccholtz said. "I know that the public is seeing the true CalCoastNews, ... that puts me at peace."

Velie wouldn't answer questions about the 2014 story for this article.

The future and 'fake news'

Tenborg attorney Wagstaffe wasn't holding his breath waiting for anyone at CalCoastNews to admit fault and apologize to his client.

"You will not hear, I suspect, contrition from the witness stand," Wagstaffe told jurors at the beginning of the trial. He echoed a similar sentiment in his closing remarks, stating that CalCoastNews had "doubled down" on its insistence that the story about Tenborg was true despite the evidence they were confronted with on the stand.

"They are still doing it, and Ms. Velie ... is not getting it," he said.

For that apparent lack of contrition, Wagstaffe asked the jury for a hefty sum of $500,000 in punitive damages against Velie, specifically. The jury gave him every penny. News spread quickly, and coverage of the verdict landed Velie, Blackburn, and CalCoastNews in The New York Times, not as bylined reporters, but as the subjects of a story about the lawsuit.

Since the verdict, CalCoastNews continues to operate. The site hinted in an emailed statement, which characterized the verdict as disappointing, that it might appeal the case.

"We are evaluating our next course of action," the statement read.

Whether the site's operations will be impacted is unclear. One of the few mentions of the case on the site after the verdict was a short post urging readers to help fund further legal action via donations to GoFundMe and Paypal.

"During the trial, the majority of our evidence and witnesses were blocked. We are currently considering our options," the March 21 post read. "We are not going to cower to the wishes of those wanting to shut us down."

Nearly three weeks later, CalCoastNews' lawyer filed the motion asking for a new trial.

The website's defiant statements rallied some CalCoastNews supporters who sided with the site's claims that an inability to submit all of its evidence and witnesses lost them the trial. One of CalCoastNews' stalwart boosters, local radio host Dave Congalton, defended Velie to The New York Times, stating she was the "only game in town" when it came to investigative reporting.

For this article, Velie declined to respond to questions from the Sun about an appeal of the case or the website's future plans. Blackburn said he was unable to comment for this article. Both of their names remain on the website. Loving, who announced that he was leaving his post as a Cal Poly journalism professor to move to Wisconsin shortly before the verdict, indicated that he would likely remain the website's editor. Loving said his resignation was not related to the trial or verdict.

While CalCoastNews' digging in its heels may placate its most loyal readers, Tenborg's expert witness and journalism professor Wagner indicated it was that same refusal to admit mistakes that alarmed her while she was researching for her testimony.

"It was unusual to me that the news organization was so entrenched in their beliefs despite the facts," Wagner said in an interview with the Sun.

Wagner said she felt compelled to testify in the case, not only because she believed that the article and the way it was reported represents a breach of public trust, but because such cases damage the public perception of journalism as a whole. In a post-2016-election America, where fears and allegations of bias and "fake news" have been lobbed by people as visible as the president of the United States against venerated news outlets like The New York Times, Wagner said cases like CalCoastNews' only provide more fodder for people already suspicious and distrustful of the media.

"Every time something like this happens, it hurts journalism," she said.

Chris McGuinness is a staff writer at the Sun's sister paper to the north, the New Times. He can be reached at cmcguinness@newtimesslo.com, or on Twitter at @CWMcGuinness.

NOTE: This article was updated to reflect that Bill Loving is not leaving his position at Cal Poly until after the end of the spring quarter.
In the print version, the Sun misidentified the individual who questioned Karen Velie during the trial. The correct individual was attorney James Wagstaffe.




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