In yesterday's Virginia Weekly the relationship of Harvey Cohen to The Alexandria Port Packet was reported incorrectly. Cohen is the newspaper's attorney and has no financial interest in it.

When James W. Coldsmith took the editorial reins of The Alexandria Port Packet nearly seven years ago, the seasoned journalist intended to make the embryonic news weekly a "strongly local" newspaper for the everyday person.

Coldsmith, 53, a 6-foot-4-inch man with a shock of gray-blond hair, didn't imagine that a jury of those same everyday people one day would determine that his newspaper badly mishandled its responsibilities, and would render a libel judgment that could threaten the future of his little newspaper.

But that's what happened late last year, when an Alexandria Circuit Court jury found that the tabloid had libeled a couple whose son's accidental death was mentioned in a July 1980 article on child abuse. The jury awarded E. Greg and Carolyn G. Lewis $50,000 in compensatory damages and $100,000 in punitive damages for a story the couple's lawyer described as a blatant example of "sloppy reporting and yellow journalism."

The Packet is appealing the verdict to the Virginia Supreme Court. But the damage award--coupled with two other recent libel judgments in the state--is causing some newspaper officials, including Ray Carlsen, executive manager of the Virginia Press Association, to ask if newspapers aren't being placed at "unreasonable risk" when a simple error of fact or judgment can put them in "great jeopardy."

Others, like Joseph Tinkelman, a journalism professor at American University's School of Communications, say such a situation has become a simple fact of life in journalism today. "We have to take responsibility for our actions," he said. . . . If the news media just does not perform responsibly, it leaves itself open to most serious consequences."

Since the Packet verdict Dec. 2, Virginia juries have rendered libel verdicts against two other newspapers.

In the first case, The Powhatan Gazette, a weekly published west of Richmond in Powhatan County, was sued for $750,000 by three people who said an item in the newspaper made them appear to be the defendants in a sexual assault case against their children when actually they were the plaintiffs.

Gazette editor David A. Bovenizer said the item was published as taken verbatim from a public record. All the same, a jury awarded the plaintiffs $50,000.

In the other case, The Daily Progress in Charlottesville was sued for $300,000 for mistakenly referring to a married woman who was pregnant as "Miss" instead of "Mrs." That resulted in a jury award to the plaintiff of $25,000.

In all three Virginia cases, juries found against the newspapers for "simple negligence," which means that the juries believed the editors and reporters did not use reasonable care in checking their information before publishing it. In the case involving The Packet, however, the jury also found that the paper was grossly negligent and awarded punitive damages.

To The Packet, at least, there is a potentially more painful difference in the cases: While both the Charlottesville and Powhatan papers have libel insurance to protect them should they ever have to pay (and both are appealing their cases), The Packet does not.

Coldsmith blames an "administrative error" for that lack. He said that the newspaper, which has a paid circulation of 5,350 out of an overall circulation of about 28,000, inadvertently failed to pay its libel insurance premiums for two months during the summer the child abuse stories were published, allowing an existing policy to expire.

Troubles for The Packet, which typically runs about 40 pages and is dominated by news about city hall, crime, civic meetings and local sports, began when it published the first of a two-part series on an increase in child abuse in Alexandria. An unidentified infant who died of a fractured skull was mentioned in the article as one of several victims of child abuse.

It also quoted unidentified police officers as saying the infant's death was the result of a "vicious attack" and that it was being investigated as a homicide.

Days later, however, authorities ruled the death accidental.

Even though the name of the child and the names of his parents were never used in The Packet's stories, the Lewises nonetheless believed the story referred to their dead son. The allegation that his death was the result of child abuse subjected them to "public contempt and ridicule," their attorney argued.

Attorney William Cummings, a former federal prosecutor who represented them in the case, argued that The Packet failed to investigate the facts adequately and was therefore grossly negligent.

The Lewises declined to be interviewed for this story.

Packet attorney Harvey Cohen maintained that the newspaper did not publish the articles recklessly or with knowledge that they contained incorrect information. Therefore, he argued, malice was never present.

"We have a First Amendment, freedom of the press case here," Cohen said. "I think it is unfortunate that, in an article in which the plaintiffs were not even named, a small local newspaper like this runs the risk of being extinguished by a jury."

The Packet, located at 610 Madison St. on the northern edge of Old Town, has only one full-time reporter.

Soon after the verdict was delivered, Cohen, who owns the paper along with prominent local Republican and businessman Harry S. Flemming and local investor John W. Hanes Jr., suggested that the small paper could not pay the verdict and might be forced to declare bankruptcy if it lost on appeal.

Coldsmith said that, even though The Packet last year suffered a net financial loss, the newspaper is healthy and has come a long way since he joined the staff in 1976. Gross annual revenues, he said, are up from $60,000 to between $700,000 and $800,000.

But all that could change, Coldsmith said, if the paper eventually is forced to pay the libel verdict of $150,000, an amount he maintains is five times the newspaper's net worth.

"You might get through one of these, and I think we can," Coldsmith said of the libel judgment. "But how often is this going to happen when all your skills and experience tells you that you haven't committed libel and a jury says you have?"

Libel experts say the odds are that The Packet and the other two papers will end up never having to pay the awards, however.

Arthur B. Hanson, U.S. general counsel for the Mutual Insurance Co. Ltd. of Hamilton, Bermuda, said that "in the majority of instances, these matters are . . . reversed on appeal." Hanson has handled about 4,500 libel cases around the world in the past 20 years.

Even so, libel judgments like the one made against The Packet raise questions among journalists about whether small community newspapers have enough staff and legal resources to give them the confidence they need to serve their readers aggressively.

"The larger newspapers have experienced editors and lawyers," said Douglas A. Anderson, an associate professor of journalism for Arizona State University. "The smaller papers get a lot of reporters and editors who know what they know about communications law from a course they took in college, if that."

Anderson cited a survey of 150 daily newspapers that he and a University of Virginia professor conducted in 1980. In that survey, Anderson said, he discovered that editors felt that their press protections were being eroded. He said smaller newpapers, those with circulations less than 50,000, were "a little bit more intimidated" than larger ones.

Coldsmith, who teaches journalism part time at George Washington University, leaves no doubt about his feelings. He said his greatest fear is that the Virginia Supreme Court may not grant The Packet an appeal, thus permitting the jury's decision to stand.

"It would hurt like hell," he said.