The ruling means The Times cannot pursue its attempt to dissolve the agreement and shut down the smaller P-I.

"It's a big victory," said Guy Michelson, an attorney for the P-I. "We're very happy."

Seattle Times spokeswoman Kerry Coughlin said The Times will assess its legal position.

"We still feel very strongly that the language and the intent of the loss clause is very clear," she said. "The Blethen family (the majority owners of the Seattle Times) would never have entered into the JOA without the ability to get out of it if it was threatening the survival of the Seattle Times. That's the position we're in, it's threatening the survival of an independent, locally owned newspaper in Seattle to be trapped in a losing business partnership."

The Times could appeal the ruling. If an appeals court decides to accept the case Thursday's decision by Judge Greg Canova would in effect mean nothing. When a summary decision is appealed and accepted on appeal, the judges who hear that appeal hear all of the arguments all over again and make their own decision.

Under the agreement, The Times handles the circulation, distribution and other non-news functions for both papers in exchange for a greater share of their joint profits.

The Times says the agreement is no longer financially viable. It invoked a provision that allows the parties to end joint operations if either sustains three consecutive years of financial losses. The Times said it has lost money in 2000, 2001 and 2002.

Without the joint-operating agreement, which has governed operations at both papers since 1983, Hearst attorneys said the P-I could not survive.

Hearst attorneys argued that The Times' loss in 2000, when both papers were hit by a massive strike, should not count toward the three consecutive years of losses required as a condition for ending the operating agreement. They said the strike constituted "force majeure" and triggered a provision that protects both parties from harm in the event of such unusual circumstances that are beyond normal market conditions.

Times Publisher Frank Blethen has repeatedly charged that Hearst is using the joint operating agreement to "bleed" his company's assets and force a sale of The Times. Hearst holds a separate agreement that gives it the first opportunity to buy The Times if it is ever sold.