Its sister Gannett paper, USA Today, has also angered Taser, particularly after publishing a June 2005 story and graphic that significantly overstated the electrical output of Taser’s X26-model stun gun. Taser contacted the newspaper and the story was corrected the next day of publication.
But a few weeks later Taser sued, claiming that the Republic and USA Today “engaged in the ongoing publication of misleading articles related to the safety of Taser products, resulting in substantial economic damages to us, our customers and our shareholders.” Taser claimed the newspapers’ stories cost company shareholders more than one billion dollars in lost value.
Maricopa County (Ariz.) Superior Court Judge Paul J. McMurdie rejected Taser’s claims in granting Gannett’s motion for summary judgment. In his Jan. 25, 2006 ruling, he awarded McLean, Va.-based Gannett attorneys’ fees after finding one of the claims “clearly unjustified.” About three weeks later, the two sides asked the court to formally dismiss Taser’s claims—and with it Taser’s right to an appeal—while Gannett withdrew its claim to attorneys’ fees, court records show.
“It was a total victory,” said David Bodney, Gannett’s attorney in the case. But that’s not how Taser reported it to the SEC, or to Wall Street analysts who covered the company.
In a Feb. 22, 2006 conference call with financial analysts, Douglas Klint, Taser’s general counsel and executive vice president, said: “Our lawsuit against Gannett Company Incorporated was dismissed with the understanding that, in the future, the USA Today and the Arizona Republic newspapers would review their Taser stories with the company prior to publishing in order to ensure accuracy,” according to a transcript of the call.
The next month, in its Form 10-K filing, Taser wrote: “the parties entered into a stipulation for dismissal with the understanding that the USA Today and the Arizona Republic would review articles regarding the Taser device with us prior to publication.” That statement was repeated in the company’s May 18, 2006 quarterly report to the SEC.
A former Arizona Republic editor calls the assertion that Taser International would be reviewing the stories regarding taser, "completely false":
Current San Francisco Chronicle editor Ward Bushee, the Republic’s editor at the time of the settlement, and Randy Lovely, the Republic’s current editor, said they were unaware of Taser’s statements until asked about them recently by CIR, and denied that any such agreement ever existed.
“Taser's assertion in the SEC filing is completely false,” Lovely said. “The Arizona Republic would never allow a source to review a story prior to publication. To do so would completely violate our journalist principles and standards of independence. The Republic has aggressively reported on Taser during the past few years, and we stand behind the full scope and accuracy of our stories.”
Again, the whole piece is worth a read and would make me a very nervous Taser International shareholder.