Dow Jones & Company, Inc. - November 13, 2006

By Marie Beaudette, Of DOW JONES NEWSWIRES

CACI International Inc. (CAI), which has provided services to the U.S. military during the Iraq war, wants to move forward with a defamation lawsuit against liberal radio network Air America.

The Arlington, Va., company, which provides information technology to the federal government and the armed forces, on Friday asked the U.S. Bankruptcy Court in Manhattan for permission to appeal an April ruling on a defamation lawsuit stemming from comments radio talk show host Randi Rhodes made about CACI in August 2005.

Lawsuits against a company are automatically halted when it seeks Chapter 11 bankruptcy protection. CACI is asking the court to lift the automatic stay that blocks the company from appealing a U.S. District Court summary judgment in favor Air America Radio.

Air America and its corporate parent, Piquant LLC, filed for Chapter 11 protection on Oct. 13, listing assets of $7.8M and debts of $19.8M. The network is heard on 92 stations across the U.S.

CACI sued Air America and Rhodes on Sept. 23, 2005, seeking damages for statements Rhodes made about the firm's actions while working for the U.S. military in Iraq.

The firm said Rhodes "falsely stated" that CACI employees committed rape, murder and torture in Iraq. CACI said Rhodes also claimed the company's employees misrepresented themselves as members of the U.S. military, and fought on the side of the former South African government to support apartheid.

The firm sought compensatory damages of at least $1M and punitive damages of at least $10M, but the court granted Air America's request for summary judgment in April. The radio network claimed Rhodes' comments were protected opinion.

CACI on Oct. 20 filed a notice of appeal with the intent to move forward with the suit in the 4th U.S. Circuit Court of Appeals. Although the automatic stay has blocked the suit against Air America, the appeal against Rhodes is pending.

CACI said the bankruptcy court should lift the stay to allow the appeal because the costs of the lawsuit and any judgment against Air America would be covered by its insurance. The firm said it would agree to confine damages to the limits of a $5M policy from Landmark American Insurance Co.

A hearing on CACI's request is scheduled for Dec. 7 in the Manhattan bankruptcy court.

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