The newspaper chain that used to control the Charleston Daily Mail said it never "sold" the newspaper to the owners of The Charleston Gazette.

In court documents filed recently in federal court, MediaNews Group Inc. lawyers stated emphatically that the company never sold the Daily Mail outright to the owners of its rival newspaper.

"MediaNews Group denies that it sold the Charleston Daily Mail to Daily Gazette Co. but admits that on or about May 7, 2004, MediaNews Group transferred its economic interest in the JOA to Charleston Newspapers Holdings Limited Partnership," attorneys for Colorado-based MediaNews wrote in an answer responding to a 2007 antitrust lawsuit filed by the U.S. Department of Justice.

MediaNews' attorneys later stated that since the 2004 asset transfer, the Colorado-based company neither "shares in the JOA's profits or losses nor contributes to the capital costs of the JOA."

The answer was filed in U.S. District Court for West Virginia's Southern District nearly 15 months after the initial DOJ lawsuit. The reason for the time gap was that U.S. District Court Judge John T. Copenhaver Jr. stayed everything in the case until he could decide on the newspaper companies' motion to dismiss.

In June, Copenhaver said he would not dismiss the lawsuit because there are significant questions that need to be answered. Those questions, he said, regard whether Charleston's two daily papers will continue to compete against each other or whether the owners of the Gazette were or are planning to shut down the Daily Mail, as the Justice Department alleges.

The Justice Department's lawsuit alleges a 2004 transaction between MediaNews and the Daily Gazette Co. in which MediaNews divested itself of its 50 percent ownership in a joint operating agreement between the two companies violated antitrust laws.

Joint operating agreements are special antitrust exemptions that allow two competing newspapers in one community to combine printing, advertising, circulation and distribution costs in an attempt to reduce costs. The caveat to the agreement is that the two newspapers must have independent and competing newsrooms. In a JOA, both newspapers share costs and profits equally.

According to Justice Department filings, as well as court filings by the two media companies, the Daily Gazette Co. spent $55 million to acquire MediaNews' ownership interests in the JOA after a third party expressed interest in acquiring those same interests.

That transaction, according to the Justice Department, enabled the Daily Gazette Co. to create a monopoly in the Kanawha Valley. The Justice Department also alleged the Gazette's owners took several steps to weaken the afternoon paper, including halting some home delivery routes, canceling promotions aimed at landing the Daily Mail more readers, actively encouraging Daily Mail readers to read the Gazette instead, merging the Saturday edition into one morning paper and not replacing Daily Mail newsroom employees who quit in the months following the sale.

As a result of those steps, the Justice Department alleged, the Daily Mail's circulation dropped to 23,985 readers. Before the sale, the Daily Mail had a circulation of 35,076.

In the Daily Gazette's answer, which like the MediaNews' answer was filed July 21, the company did not deny it made those changes to the Daily Mail. The company said it eliminated unpopular routes and reduced the newsroom's budget, among other things. But the company did deny all of the other allegations made by the Justice Department, including that the company came up with a scheme to close the Daily Mail within a few years.

The Daily Gazette also admitted the newspaper's circulation dropped following the transaction. The Daily Gazette Co.'s lawyers said by 2007, the Daily Mail's circulation was 22,358.

"Daily Gazette Co. further admits that the Charleston Gazette's circulation increased slightly, and at one point exceeded 52,000 between February 2004 and January 2005, and declined to 47,919 in 2007," the Daily Gazette's answer reads.

But the newspaper companies deny allegations that they plotted to close the Daily Mail or reduce competition in an attempt to create a monopoly. Instead, they say competition between the two papers had not existed for nearly 50 years.

"MediaNews Group denies the Daily Gazette Company faced commercial competition from the Charleston Daily Mail," MediaNews' attorneys wrote.

The two newspaper companies say it is impossible for the 2004 transaction to violate antitrust laws because the two newspapers haven't really competed against each other since they entered into the joint operation agreement in 1958.

"Daily Gazette Co. denies that the Charleston Gazette and Charleston Daily Mail were under separate ownership prior to May 7, 2004. Daily Gazette Co. further denies that the character of competition between the Charleston Gazette and the Charleston Daily Mail changed subsequent to May 7, 2004," the Daily Gazette Co's attorneys wrote, later adding, "Any elimination of commercial competition between the owners of the Charleston Gazette and the Charleston Daily Mail occurred at the time of the formation of the original JOA, and therefore the Justice Department's claims are barred by the statute of limitations."