Saturday, January 30, 2010

Urgent: Citing 'significant risks,' News Corp. agrees to pay $500 million to settle Valassis coupon suit

With a federal jury trial scheduled to begin Tuesday in Detroit, News Corp. said today that it had agreed to pay $500 million to settle a suit from direct-mail and coupon distribution rival Valassis Communications. In July, jurors found News America subsidiary News America Marketing liable for both unfair competition and tortious interference with business practices, Crain's Detroit Business says. "Tortious interference is intentional conduct, usually in violation of civil law, that disrupts a company’s contractual relationships or business practices,'' the business journal says.

In a statement today, News Corp. said it had agreed to settle the suit because of newly emerged "significant risks" that it might lose at trial. “It has become evident to our legal advisors from pre-trial proceedings over the past couple of weeks that significant risks were developing in presenting this case to a jury,” said Deputy Chairman and President Chase Carey said. “That, coupled with concerns over the venue, led us to believe it was in the best interests of the company and its stockholders to agree to a settlement.”

Valassis contends that News America, the industry leader in in-store coupon distribution, coerces client companies to participate in its free-standing insert or FSI market in newspaper delivery where Valassis tends to dominate, Crain's said.

Federal jury selection was to begin Tuesday and the trial was expected to last at least six weeks before U.S. District Judge Arthur Tarnow in Detroit. In July, Valassis won a $300 million verdict against News America in a related case before Wayne County Circuit Judge Michael Sapala; that case is under appeal, according to Crain's.

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