No Winner in Rosie Magazine Court Battle

NEW YORK -- Neither Rosie O'Donnell nor publisher Gruner+Jahr USA emerged a winner in an ugly and "ill-conceived" court battle over the defunct magazine Rosie and no money damages will likely be awarded, a Manhattan judge said Wednesday.

"It seems to me that neither side has proved any damages," state Supreme Court Justice Ira Gammerman said after lawyers for G+J and the former television host rested their cases after a two-week trial. Each side blamed the other for the magazine's 2002 demise, and each sought nine-figure damage awards in their civil lawsuits.

But the judge said that aside from one witness's guess about Rosie's future value, "there is no evidence that the magazine would have made any money at all." He said a damage award requires "more than the hope and expectation" of making money.

"It seems to me that aside from the issue of attorneys' fees, we're just dealing with bragging rights here, who wins and who loses," Gammerman said.

The judge's comments from the bench were not an official ruling but he offered no indication he would change his mind. The case was not heard by a jury, leaving the decision in Gammerman's hands. He said lawyers could submit briefs by Dec. 17 for a possible award of legal fees and on other issues they want him to consider before he makes an official ruling.

"I'm very happy that it's over," O'Donnell said outside court, where she plugged "Taboo," the Broadway musical she is producing. "The story of this case is not who won or lost, but how many times peace was offered and war was chosen by the other side.

"I have no vengeance toward (G+J)," O'Donnell said. "I will never speak about the company again, or any of its employees, not because I signed a confidentiality agreement, but because I'm simply happy about the fact that it's finally over."

Martin Hyman, lawyer for G+J, said he disagreed with Gammerman's characterization of the case. Despite the judge's comments, Hyman said he will submit papers asking Gammerman to reconsider damages for his client.

"I'm sure the judge will keep an open mind," Hyman said.

Rosie, a magazine reminiscent of Oprah Winfrey's successful publication, O, debuted amid much optimism two years ago.

G+J and O'Donnell, known then as the "Queen of Nice," had entered a joint venture agreement to remake the failing McCall's title in the mode of her successful television show. The magazine launched its first issue in April 2001.

In late summer 2002, as Rosie's sales declined, a bitter battle for editorial control ensued. The dispute climaxed in a fight over the cover photo for the September issue, which was to feature actresses from the television show "The Sopranos."

The cover photo, showing O'Donnell standing between actresses Lorraine Bracco and Edie Falco, never ran. Although O'Donnell prevailed and a photo she chose was used, she nevertheless quit the joint venture in mid-September 2002. Rosie folded after its December 2002 issue.

G+J sued O'Donnell for $100 million, accusing her of breach of contract for walking away. She countersued for $125 million, saying G+J broke its contract with her by cutting her out of key editorial decisions.

During the trial, Larry Diamond, G+J's chief financial officer, admitted he sent a memo recommending that the company "manage the financials" of the magazine so they could continue publishing it.

O'Donnell's lawyers said this signaled G+J's plan to manipulate Rosie's revenue figures so they remained above the level that would have allowed O'Donnell to quit without liability.

When O'Donnell testified, she was forced to admit that she lied during a deposition when she denied telling a cancer survivor, Rosie executive Cindy Spengler, that liars get cancer. O'Donnell was apparently angry that the woman did not speak up for her at a meeting.

Gammerman - who has heard many celebrity trials, including ones involving Joan Collins and Woody Allen - said there was no evidence proving either side caused the other to suffer damages. He suggested that O'Donnell would not have sued G+J if the publisher had not sued her first.