Blowback From Convention Center Exec’s Libel Suit

PHILADELPHIA (CN) - A union and its business manager say they were wrongfully sued by the Pennsylvania Convention Center executive who had been fired over his online chats.

The International Brotherhood of Electrical Workers, Local 98, and business manager John Dougherty seek punitive damages from David Morgenstern and his lawyers, claiming that they spent 3 1/2 years and more than $400,000 in legal fees fighting "frivolous claims."

Morgenstern had sued for defamation in 2008 after local news outlets reported that he had taken leave at the convention center amid allegations of an online dalliance with a 15-year-old girl.

The convention center had allegedly asked Morgenstern to go on leave in 2007 while it investigated the claims brought forward by the purported father of the girl. A man had called the Convention Center's CEO and told him that Morgenstern was inappropriately communicating on the Internet with his 15 year-old daughter, during business hours and on a company computer, according to the complaint.

Dougherty says he had tipped off Fox 29 investigative reporter Jeff Cole about the investigation out of "concern for the integrity of the Convention Center." He insists, however, that everything he told the reporter was "factually accurate."

"Dougherty never told Cole, nor was it reported by Cole, that Morgenstern actually 'engaged in inappropriate communications with a 15 year old girl,' or that Morgenstern was a 'repeat offender of some undisclosed deviant behavior.'"

In fact, Morgenstern allegedly confirmed the points that Cole had shared with the reporter: that Morgenstern was on leave, and that he had been accused of chatting with a 15-year-old girl.

Morgenstern also allegedly admitted that he had been using the company computer to chat, but he said the woman he had been talking told him that she was 23.

The complaint elaborates that Morgenstern had been warned over his online activities some years earlier. In 1999, the center had allegedly started investigating whether Morgenstern used work time to operate a website that allegedly contained pornographic images. Through the investigation, "it came to light that Morgenstern was operating a website (called 'naughtypass.com') which did not contain pornographic images, but which instead sold passwords to websites offering pornographic content," according to the complaint.

The Convention Center fired Morgenstern less than a month after the media started covering its investigation.

Subsequent coverage never even mentioned Dougherty or the union, nor were they interviewed for the stories, according to the complaint.

The union says it was was not a proper defendant in Morgenstern's subsequent suit.

"The federal court action was maliciously initiated against plaintiffs, despite its known lack of merit, in an effort by defendants to intimidate plaintiffs, to force them to defend against the lawsuit's claims by hiring legal counsel and vigorously challenging defendant's claims, and to humiliate plaintiffs in the public eye," according to the complaint.

After Cole's deposition during the discovery phase of the lawsuit, Morgenstern's counsel "finally acknowledged to plaintiffs that claims against them had no merit," the complaint states.

And yet, the attorneys allegedly still refused to withdraw claims unless the union and Dougherty agreed not to sue them.

The underlying action proceeded in federal court, but the union and Dougherty say that Morgenstern finally stipulated to dismissing the claims against them with prejudice in 2011.

By this point, however, the parties had spent over 3 1/2 years in court, incurring about "$400,000 in legal fees to defend the frivolous claims brought by Morgenstern and his attorneys," according to the complaint.

The union and Dougherty say that the lawsuit hurt their reputations and embarrassed them.

They sued for wrongful use of civil proceedings and abuse of process. Morgenstern is named as a defendant along with several lawyers and law firms: Joseph Blum; Adam Barrist; and Deeb Blum Murphy Frishberg & Markovich, as successor in interest to or dba Frey, Petrakis, Deeb Blum & Murphy.

The union and Dougherty are represented by Richard Sprague with Sprague & Sprague.

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