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Court of Appeals sides with News in libel suit

The Buffalo News’ four-year legal battle with the owner of an air cargo company ended last week when the state’s highest court ruled that the newspaper’s stories about the company were fair and true.

The State Court of Appeals, in a unanimous decision, concluded that The News accurately reported on a guilty plea agreement by National Air Cargo and its admission that it cheated the federal government out of millions of dollars.

The court’s decision reaffirms two lower court rulings and ends a legal fight that began in late 2008 when company owner Christopher J. Alf filed a libel suit against the newspaper.

“It’s a very strong decision, and it’s exactly what we wanted,” said Joseph M. Finnerty, The News’ lawyer. “It’s an unequivocal, unanimous statement that the reporting was accurate, and accuracy is what we strive for.”

The court’s ruling stems from a series of stories by News reporters Dan Herbeck and Michael Beebe about a 2007 plea agreement in which National Air Cargo admitted cheating the U.S. Defense Department.

The Orchard Park company, as part of the plea deal, agreed to pay more than $28 million in fines, restitution and forfeitures, which a federal prosecutor at the time called “the largest criminal recovery, in terms of dollars, in the history of Western New York.”

The paper also reported that no company officials, including Alf, would go to jail.

“The News provided substantially accurate reporting of the plea agreement and the fines and restitution,” the Court of Appeals said in its decision last week.

The plea deal, agreed to in U.S. District Court in Buffalo, followed a federal investigation into allegations that National Air Cargo engaged in fraudulent billing practices and submitted false documents to the Defense Department.

The company, at the time, was responsible for delivering food, medicine and military equipment to soldiers in Iraq, though the plea deal dealt only with military shipments within the continental United States.

Alf, in a State Supreme Court suit filed in 2008, claimed The News’ stories were false and misleading because they reported on numerous “inflated bills” and not just one admitted false statement.

He also argued that the average newspaper reader would think he was personally involved in the wrongdoing.

The court disagreed.

“As both Supreme Court and the Appellate Division held, viewing the articles as a whole, the average reader would conclude that the company, and not plaintiff, pleaded guilty to wrongdoing and that the amount of restitution covered more than a single, admitted incident,” the appeals court said in its ruling.

National Air Cargo, as part of its agreement with federal prosecutors, pleaded guilty to a single count of making a false statement but admitted to conduct that cost the government $4.4 million over a three-year period starting in 1999.

John J. Walsh, the New York City lawyer who represented Alf, declined to comment on the court’s ruling.