By Bruce Schreiner
The Associated Press

FRANKFORT - An appeals court upheld the dismissal of two defamation lawsuits against a Cincinnati television station that reported allegations of favoritism in handing out federal loans.

In 1997, WCPO-TV (Channel 9) aired reports that focused on perceptions in Covington that Howard Hodge, who was the city's housing development director, gave favorable treatment to Esther Johnson, a real estate developer.

Both refused interview requests from the station.

Hodge and Johnson both filed defamation lawsuits.

Defendants included WCPO-TV; the station's owner, E.W. Scripps Co.; reporter Laure Quinlivan, and Toni Allender, a local resident.

Allender was sued for saying in the report that Hodge gave Johnson preferential treatment that enabled her to get a disproportionate share of federal loans for rehabilitation of historic and low-income properties.

The Kentucky Court of Appeals on Friday affirmed a lower court's decision to dismiss the lawsuits. As a public figure, Hodge needed to show the reports were false and done with actual malice, which he failed to do, said Judge David Buckingham, who wrote for the appeals court panel in both cases.

In her appeal, Johnson said the trial court erred by determining she was a "limited purpose public figure." But the appeals court noted that she was a high-profile and outspoken businesswoman.

Johnson alleged that evidence disallowed by the trial judge showed the station acted with actual malice. She said she and Hodge were chased in their vehicles at high speeds by the station's investigators, which she said amounted to harassment.

The appeals court noted that the Covington City Commission had looked into the controversy before the TV reports and was setting up a committee to oversee distribution of the federal loans when the reports were aired.

Also, local newspaper articles covering the allegations that Hodge gave favorable treatment to Johnson were published before WCPO's reports.