Update on Chocolate Price Fixing Litigation

I recently received an inquiry about the status of the chocolate price-fixing litigation, In re Chocolate Confectionary Antitrust Litigation, No. 08-MDL-1935.

Background - In late 2007, it was revealed that the U.S. DOJ and Canadian authorities were investigating possible price-fixing by major chocolate manufacturers.  A number of class action lawsuits were filed shortly thereafter against Hershey, Mars, Nestle, and Cadbury for alleged antitrust overcharges.  Defendants allegedly engaged in a series of parallel price increases, and were involved in conspiratorial communications in Canada.  While the manufacturers blamed the price increases on a rise in commodity prices, one study found that chocolate prices rose 38% between 2004 and 2008, whereas commodity prices increased less than 16% during the same time period.   The class action lawsuits were consolidated in federal court in Pennsylvania.  In April 2009, the Court denied the defendants’ motions to dismiss the complaint, finding that the allegations of a conspiracy were plausible.

Update – After the Court’s denial of defendants’ motions to dismiss, the case has progressed slowly.  The parties have engaged in discovery, and plaintiffs filed a motion for class certification, which has not yet been decided.  Most significantly, plaintiffs recently entered into proposed settlements with Cadbury.  Under the terms of the proposed settlements, Cadbury will pay $1.3 million into a fund that will be used to pay expenses of the direct purchaser plaintiffs, $250,000 to be paid to indirect purchasers for resale, and $250,000 to be used to pay for class notice and administration.  In addition, Cadbury has agreed to provide certain cooperation in the prosecution of the litigation against the remaining defendants.  The settlement does not provide for any funds to be distributed to direct purchaser class members.

Class members have until October 21, 2011 to opt out of the settlement, and have until November 28, 2011 to object to the settlement.  The Court will hold a hearing on December 12, 2011 to determine whether to approve the settlement agreement.

GAO Report Supports Antitrust Whistleblower Protection

In a recent report, the Government Accountability Office (“GAO”) found wide support for legislation to protect antitrust whistleblowers from retaliation.

Specifically, the report states that “all key stakeholders who had a position on the issue . . . generally supported the addition of a civil whistleblower protection provision for those who report criminal antitrust violations.” The GAO report explained that it is good public policy to protect those who take risks to expose illegalities, and that whistleblowers may be reluctant to report wrongdoing absent such protection.

Inspired by a whistleblower client who alleges that he was subjected to an industry-wide boycott, my firm and I have engaged in a pro bono lobbying effort seeking legislation to protect antitrust whistleblowers. After I participated in a roundtable discussion on the Hill, Congress mandated that the GAO conduct this study of our proposal for antitrust whistleblower protection.

We also proposed that affirmative rewards be offered to antitrust whistleblowers, similar to the qui tam provisions of the False Claims Act, but based on any criminal fines collected by the Antitrust Division. The GAO report was less supportive of this proposal, stating that DOJ and certain other stakeholders were against the proposal. DOJ expressed concern that a reward provision could jeopardize existing DOJ criminal cases because the possibility of a reward may hinder the informant’s credibility, many of which are already assisted by a leniency applicant. Such a concern could be overcome, however, if the reward were contingent on the whistleblower providing corroborating evidence, such as documentation of the collusion.

DOJ also cited concerns about false reporting by whistleblowers, but criminal penalties already exist to discourage making false statements to the government, and rewards would only be provided if the claims had merit and resulted in criminal fines.

While there does not appear to be sufficient support for antitrust whistleblower rewards at this point, England and South Korea have an antitrust whistleblower rewards program, and their programs may prove instructive in assessing the effectiveness of such a rewards program.

Meanwhile, there is a clear consensus in favor of anti-retaliation protections for antitrust whistleblowers, and we hope that Congress will include such provisions when they reauthorize ACPERA.

Eleventh Circuit Reverses Judgment Against News America Whistleblower

On June 8, 2011, the Eleventh Circuit Court of Appeal reversed a trial court's entry of summary judgment for breach of contract against Robert Emmel, a whistleblower who provided evidence of News America Marketing's anticompetitive behavior.

After his employment at News America was terminated in late November 2006, Mr. Emmel entered into a non-disclosure agreement with News on December 21, 2006. The day before signing the agreement, Mr. Emmel mailed confidential News America information to a Senate staffer. The lower court found that Mr. Emmel had breached the non-disclosure agreement, as the mailing was not delivered until after he signed the December 21, 2006 agreement. The Eleventh Circuit disagreed, finding that the contract only barred future disclosures, and did not extend to prior mailings. The case has been remanded to the trial court for further proceedings, during which Mr. Emmel is temporarily enjoined from further disclosures absent a court-ordered subpoena.

News America has spent substantial resources trying to prevent Mr. Emmel from sharing his knowledge because it implicated News America in major lawsuits brought by Valassis, Insignia, and Floorgraphics, all of which have settled -- for $500 million, $125 million, and $29.5 million respectively. With the settlement of those cases, the value of Mr. Emmel's testimony has diminished -- though there's a possibility that News America could be the target of related lawsuits, including possible lawsuits by consumer goods manufacturers who may have been overcharged for advertising by News America.

Related article: BNET

Insignia Releases Copy of Settlement Agreement with News America

In its most recent quarterly SEC filing, Insignia Systems included a copy of its February 9, 2011 settlement agreement with News America Marketing, in which the parties settled claims of anticompetitive conduct by News America for $125 million. As part of the settlement, the parties agreed to an exclusive selling agreement, but the terms of the exclusive selling agreement were not disclosed.

The settlement agreement also provided that News America would not enter into or enforce right of first refusal provisions in its agreements with retailers. (para. 3). Insignia similarly agreed not to enter into right of first refusal provisions in its agreements with retailers.

. . . .

SETTLEMENT AGREEMENT AND RELEASE

This Settlement Agreement and Mutual Release ("Agreement") is dated as of February 9, 2011 between Plaintiff Insignia Systems, Inc. ("Plaintiff"), Scott Drill ("Drill") and Defendant News America Marketing In-Store L.L.C. (sued in the Action (as defined below) as News America Marketing In-Store, Inc.) ("Defendant"). Plaintiff, Drill and Defendant are collectively referred to herein as "the Parties."

RECITALS

WHEREAS, Plaintiff filed a lawsuit against Defendant captioned Insignia Systems, Inc. v. News America Marketing In-Store, Inc., United States District Court for Minnesota, Civil No. 04-4213, to collect damages and seek injunctive relief for, inter alia, alleged violations of federal and state antitrust laws, unfair competition, and federal and state disparagement laws. Defendant filed a counter-claim against Plaintiff and Drill. Collectively, the complaint, included as amended, and the counterclaim are referred to herein as the "Action";

WHEREAS, all claims by Plaintiff against Defendant, and by Defendant against Plaintiff and Drill, have been vigorously contested, with all Parties denying any and all liability to each other;

WHEREAS, the Parties hereto desire to forever put to rest all disputes and claims through the date of this Agreement;

NOW, THEREFORE, in consideration of the foregoing and of the mutual promises hereinafter set forth, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:

1. Defendant shall pay Plaintiff the sum of One Hundred Twenty Five Million Dollars ($125,000,000) ("Settlement Amount"), less the Four Million Dollar ($4,000,000) payment owed by Plaintiff to Defendant under the Exclusive Selling Agreement (as defined below) for a net payment to Plaintiff of One Hundred Twenty Million Dollars ($121,000,000) (the "Net Amount"). The Net Amount is payable by the Defendants as follows: the Net Amount shall be paid on February 10, 2011, by wire transfer to [redacted].

2. Insignia and News America shall enter into an exclusive selling arrangement consistent with the terms attached hereto as Joint Exhibit A (the "Exclusive Selling Agreement"). The Settlement Amount is not part of the consideration for the Exclusive Selling Agreement. This Agreement, and any and all releases and covenants not to sue, shall survive and remain in full force and effect and be considered final and binding even if a dispute arises regarding the Exclusive Selling Agreement, including but not limited to a dispute in which there are claims that the Exclusive Selling Agreement has been breached, claims that the Exclusive Selling Agreement should be declared void or claims that the Exclusive Selling Agreement lacks consideration.

3. Defendant shall not seek to enforce any right of first refusal and/or right of last refusal provision contained in any of its current agreements with retailers and shall not include right of first refusal and/or right of last refusal provisions in any agreement it reaches with any retailer in the future. Similarly, Plaintiff shall not include right of first refusal and/or right of last refusal provisions in any agreement it reaches with retailers in the future.

4. The Parties mutually agree that they shall not do or say anything at any time which is falsely disparaging to the other Parties.

5. On or before February 9, 2011, Plaintiff shall provide Defendant with a stipulated order in the form of Exhibit B, dismissing the action with prejudice and without costs. The Parties shall take all reasonable steps to have the order on the stipulation entered.

6. Each Party shall bear its own expenses and attorneys' fees in connection with the Action.

7. The Parties agree that the United States District Court for Minnesota shall retain jurisdiction over the Action to enforce this Agreement. Pursuant to 28 U.S.C. § 636, Fed.R.Civ.P. 53 and Local Rule 72.1, the Parties further agree and consent to the appointment of the Honorable Arthur Boylan as the master to resolve all disputes in accordance with procedures established by him. Accordingly, concurrent with the execution of this Agreement, the Parties will exchange executed copies of the stipulation substantially in the form attached hereto as Exhibit C and Defendant will promptly file it with the Court. The Parties shall take all reasonable steps to have the order on the stipulation entered.

8. The terms of the Protective Order as originally entered in the Action on or about December 28, 2006 ("the Protective Order") shall survive dismissal of the Action and are hereby reaffirmed, including the provision that all Confidential Material (as that term is defined in the Protective Order) shall be destroyed. For the avoidance of doubt, the Parties agree that all Confidential Material (including but not limited to discovery responses, documents and things produced, depositions, summaries of the foregoing, and motion papers filed with the Court consisting of, incorporating or attaching Confidential Material) that are in the possession, custody or control of the Parties, their attorneys and/or their experts and consultants shall be destroyed on or before March 30, 2011, except that outside counsel for the respective parties shall retain for a period of six (6) years a copy of documents which formed a part of the court record in the Action.

9. Except for the Parties' obligations under this Agreement and the Exclusive Selling Agreement, each of Plaintiff and the Plaintiff Released Parties (as defined below) hereby releases, remises, acquits, and forever discharges Defendant or any of its past or present members, related or affiliated companies and any or all of its respective officers, directors, shareholders, partners, servants, employees, members, attorneys, accountants, agents, representatives, affiliates, subsidiaries, parents, successors and assigns, whether in their individual capacity or as principal or agent (collectively, the "Defendant Released Parties"), from any and all manner of actions and causes of action, suits, debts, obligations, contracts, torts, covenants, claims, rights of contribution and/or indemnification, rights of subrogation, sums of money, judgments, executions, liabilities, damages, interest, costs, expenses, attorneys' fees and legal costs, demands and rights whatsoever, contingent or noncontingent, in law or in equity, known or unknown, of any kind or character, from the beginning of time up to the date of this Agreement (collectively, the "Released Matters"). Each of Plaintiff and the Plaintiff Released Parties further promises, covenants and agrees not to sue, attempt to introduce as evidence, or otherwise assert any of the Released Matters and/or the underlying facts or conduct supporting the Released Matters against the Defendant or the Defendant Released Parties in any court, governmental or regulatory body or other proceedings.

10. Except for the Parties' obligations under this Agreement and the Exclusive Selling Agreement, each of Defendant and the Defendant Released Parties hereby releases, remises, acquits and forever discharges Plaintiff or any of its past or present members, related or affiliated companies and any or all of its respective officers, directors, shareholders, partners, servants, employees, members, attorneys, accountants, agents, representatives, affiliates, subsidiaries, parents, successors and assigns, whether in their individual capacity or as principal or agent (collectively, the "Plaintiff Released Parties"), from any and all manner of actions and causes of action, suits, debts, obligations, contracts, torts, covenants, claims, rights of contribution and/or indemnification, rights of subrogation, sums of money, judgments, executions, liabilities, damages, interest, costs, expenses, attorneys' fees and legal costs, demands and rights whatsoever, contingent or noncontingent, in law or in equity, known or unknown, of any kind or character, from the beginning of time up to the date of this Agreement (collectively, "Released Matters"). Each of Defendant and the Defendant Released Parties further promises, covenants and agrees not to sue, attempt to introduce as evidence, or otherwise assert any of the Released Matters and/or the underlying facts or conduct supporting the Released Matters against Plaintiff or Plaintiff Released Parties in any court, governmental or regulatory body or other proceedings.

11. Except for the Parties' obligations under this Agreement, Drill hereby releases, remises, acquits, and forever discharges Defendant and the Defendant Released Parties from any and all manner of actions and causes of action, suits, debts, obligations, contracts, torts, covenants, claims, rights of contribution and/or indemnification, rights of subrogation, sums of money, judgments, executions, liabilities, damages, interest, costs, expenses, attorneys' fees and legal costs, demands and rights whatsoever, contingent or noncontingent, in law or in equity, known or unknown, of any kind or character, from the beginning of time up to the date of this Agreement (collectively, "Released Matters"). Drill further promises, covenants and agrees not to sue, attempt to introduce as evidence, or otherwise assert any of the Released Matters and/or the underlying facts or conduct supporting the Released Matters against Defendant or any Defendant Released Parties in any court, governmental or regulatory body or other proceedings.

12. Except for the Parties' obligations under this Agreement, each of Defendant and Defendant Released Parties hereby releases, remises, acquits and forever discharges Drill from any and all manner of actions and causes of action, suits, debts, obligations, contracts, torts, covenants, claims, rights of contribution and/or indemnification, rights of subrogation, sums of money, judgments, executions, liabilities, damages, interest, costs, expenses, attorneys' fees and legal costs, demands and rights whatsoever, contingent or noncontingent, in law or in equity, known or unknown, of any kind or character, from the beginning of time up to the date of this Agreement (collectively, "Released Matters"). Each of Defendant and Defendant Released Parties further promises, covenants and agrees not to sue, attempt to introduce as evidence, or otherwise assert any of the Released Matters and/or the underlying facts or conduct supporting the Released Matters against Drill in any court, governmental or regulatory body or other proceedings.

13. Plaintiff and Defendant hereby warrant and represent to the other that they have not assigned or transferred, or purported to assign or transfer, to any person or entity, any rights, claims, counterclaims, obligations, demands, damages, actions or causes of action that they may have against the other, including but not limited to rights, claims or damages arising out of or related in any way to the Action. Plaintiff and Defendant hereby represent and warrant that there are no other pending actions or claims by Plaintiff against Defendant, or by Defendant against Plaintiff.

14. Drill and Defendant hereby warrant and represent to the other that they have not assigned or transferred, or purported to assign or transfer, to any person or entity, any rights, claims, counterclaims, obligations, demands, damages, actions or causes of action that they may have against the other, including but not limited to rights, claims or damages arising out of or related in any way to the Action. Drill and Defendant hereby represent and warrant that there are no other pending actions or claims by Drill against Defendant, or by Defendant against Drill.

15. The Parties understand and agree that this Agreement, and the Parties' obligations and payments made hereunder, are entered into and done solely to compromise disputed claims, and shall not constitute an admission of liability on the part of any Party. Further, this Agreement, the Parties' obligations hereunder, and payments made hereunder, shall not be offered into evidence in any proceedings by any Party hereto, except as necessary in an action to enforce the terms hereof.

16. This Agreement, including the exhibits hereto, is the entire, integrated agreement between the Parties, and any and all discussions, understandings, and agreements heretofore had by the Parties with respect to the subject matter hereof are merged into this Agreement, which alone fully and completely expresses the Parties' agreement, except as set forth in the other documents executed by the Parties. No amendments, waivers, or termination can be made except in a writing signed by each of the Parties.

17. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota, without regard to the conflicts of law provisions thereof.

18. Other than to announce that the parties have amicably settled the Action, neither party hereto nor its attorneys shall disclose to any third party any information with respect to the terms and provisions of this Agreement except: (i) to the extent necessary to comply with the law or a valid order of a court of competent jurisdiction, in which event(s) the party making such disclosure shall so notify the other as promptly as practicable (if possible, prior to making such disclosure), and shall seek confidential treatment of such information and/or in camera review, (ii) to the extent necessary to comply with the S.E.C. or other regulatory authorities or similar disclosure requirements under any applicable laws, (iii) as part of its normal business activities or reporting or review procedures to its parent and affiliated companies (other than Valassis), banks, auditors, attorneys, accountants, insurers and similar professionals, provided, however, that such companies, banks, auditors, attorneys, accountants, insurers and similar professionals agree to be bound by the provisions of this paragraph, (iv) as required by the Internal Revenue Service or by any state tax authority, and (v) in any proceeding to enforce this Agreement.

19. All confidential information that the parties disclose to each other pursuant to the Settlement Agreement or Exclusive Selling Agreement, including but not limited to the terms of their respective agreements with retailers, shall be kept confidential by the receiving party and not shared with any competitors, including Valassis. The receiving party shall treat the other party's confidential information with the same care and take the same precautions that the receiving party uses to maintain the confidentiality of their own confidential and competitively sensitive documents and information.

20. No provision of this Agreement may be waived, amended, supplemented, terminated or repealed in whole or in part, except only by the written consent of all Parties. Any waiver, amendment or supplement agreed to by the Parties will apply only to the instance or circumstance expressly provided therein, and not to any other instance or circumstance, whether similar or dissimilar.

21. The Parties each represent and warrant to the other that the persons executing this Agreement on their respective behalves are authorized to do so. All terms and conditions of this Agreement are binding upon and will inure to the benefit of the Parties and their respective members, transferees, successors and assigns. Plaintiff acknowledges that it sought and obtained approval to enter into this settlement from its board of directors. Defendants acknowledge that they sought and obtained approval to enter into this settlement from the board of directors of News Corp. No provision of this Agreement gives any third persons any right of subrogation or action against any party hereto. All representations, warranties, indemnities, covenants and agreements in this Agreement shall survive execution and delivery of this Agreement and continue to be binding.

22. It is agreed that this Agreement was prepared by counsel for each of the Parties hereto. Each of the Parties acknowledges that each signed this document voluntarily, without duress, undue influence or oppression and each represents to the other that it acts voluntarily and with full advice of counsel. Each Party recognizes and acknowledges that its knowledge may not be full and complete. Each Party elects to assume the risk of partial knowledge and elects to settle on the terms stated herein. Each Party further acknowledges to the other that it does not rely upon any representations of any kind or character made by or on behalf of the other, including by way of illustration and not of limitation, any representation about the nature or extent of any claims, demands, damages, rights or defenses which one Party may have against the other Parties, and that no Party relies upon any representations of the other Parties, its officers, agents, directors, employees or attorneys in entering into this Agreement, except as set forth in this Agreement. Each Party acknowledges that the consideration received has been actual and adequate. This Agreement may be executed in counterparts and facsimile copies of signatures shall be treated as originals for all purposes.

IN WITNESS WHEREOF, this Agreement was executed the 9th day of February, 2011.

INSIGNIA SYSTEMS, INC.

By: /s/ Scott Drill

Its: CEO

SCOTT DRILL

/s/ Scott Drill

NEWS AMERICA MARKETING IN-STORE SERVICES L.L.C.

By: /s/ Eugenie Gavencek

Its: Senior Vice President

###

Third Circuit Denies Floorgraphics' Request to Reopen Lawsuit Against News America

The U.S. Court of Appeals for the Third Circuit denied Floorgraphics' appeal of an order denying its request to reopen its case against News America Marketing.

After News America had settled with Valassis for $500 million, and after Floorgraphics learned about damaging evidence that was produced in discovery to Valassis (but which had not been produced to Floorgraphics), Floorgraphics sought to undo its $29.5 million settlement and reopen its case under Federal Rule of Civil Procedure 60(b).

The trial judge denied Floorgraphics request. The Third Circuit affirmed, finding that the lower court "ably applied the correct standards in denying relief."

The ruling should not come as a surprise given Floorgraphics' loss in the trial court and abuse of discretion standard of review.

Insignia Settles with News America Marketing for $125 Million

Insignia entered into a settlement agreement today with News America Marketing for $125 million. The parties also agreed to a 10-year exclusive agreement related to price-based shelf signs. The agreement comes after lengthy settlement negotiations last week, and on the third day of trial.

“I am pleased that we were able to reach a mutually agreeable settlement and avoid protracted litigation,” said Scott Drill, Insignia’s President, Chief Executive Officer and Secretary, in a press release.

Insignia originally filed suit in 2004.

Related Post: Insignia Trial Begins.

Insignia Systems v. News America Marketing Trial Begins

Jury selection began Monday in Insignia Systems v. News America Marketing, No. 04-4213 (D. Minn.). Insignia Systems is seeking over $200 million in damages (before trebling). (BNET).

Insignia Systems alleges that News America engaged in a campaign to exclude Insignia and other competitors of News from the in-store industry by, e.g.: bundling its various advertising programs to prevent Insignia from effectively competing; threatening retailers to stop doing business with News America’s competitors; and offering uneconomically large payments to retailers to exclude News America’s competitors, such as Insignia and Floorgraphics.

Beginning no later than 2001, News America allegedly began an anti-competitive campaign to drive Insignia from the market through various illegal tactics, including: dissemination of false and misleading statements about Insignia’s ability to perform on its contracts; falsely claiming authority to remove Insignia advertisements from stores; bundling its various advertising programs to prevent Insignia from effectively competing; threatening retailers to stop doing business with Insignia; and offering uneconomically large payments to retailers to exclude Insignia from the business. For example, News America claimed in a letter and promotional materials to CPGs that Insignia installed less than 20% of the signs CPGs paid Insignia to install and Floorgraphics installed less than 50%, when, in fact, their installation rate was much higher.

A similar lawsuit brought by Floorgraphics, an in-store floor, shelf, and coupon advertising provider, ended in a settlement during trial of approximately $30 million. Floorgraphics alleged that News America explicitly threatened to “destroy” Floorgraphics, and tried to carry through on the threat through a variety of anticompetitive tactics, including making false disparaging statements to CPGs and retailers, making uneconomic payments to retailers to gain exclusive contracts, and even infiltrating a password-protected computer system to gain sensitive information.

Another advertiser -- Valassis – brought suit against News America for engaging in similar anti-competitive tactics in the market for Free Standing Inserts (“FSIs”) – coupons frequently distributed in Sunday newspapers. Valassis alleged that News America “created and implemented a scheme to obtain then exploit monopoly power in the in-store advertising and promotions market with the goal of utilizing that monopolistic power to gain an unfair advantage over Valassis in the FSI market.” For example, Valassis alleged that News America entered into long-term exclusive contracts with retailers, offering large guaranteed minimum payments to large retailers. Valassis asserted that News America threatened price increases on in-store ads if consumer packaged goods manufacturers (“CPGs”) did not purchase their FSIs from News America. After trial in state court, a jury awarded Valassis $300 million, which News America appealed. Valassis also had a case pending in federal court, and News America eventually settled both cases for $500 million.

Some of the evidence elicited during the Floorgraphics and Valassis trials may prove damaging to News America in the Insignia trial as well. For example:

• News America’s CEO Paul Carlucci admitted showing a film clip to sales staff from the movie The Untouchables, and admitted to using several mafia references.
• A News America executive admitted to bundling in-store advertising with FSIs, inflating prices to CPGs for in-store advertising if they did not also purchase FSIs from News America. A video clip was played of the sales executive describing “the game plan whereby we would use the in-store products to drive FSI volume and the FSI to drive in-store depending on which particular client.”
• News America executive Marty Garofalo, in a video clip of a sales summit that was played at trial, stated that News America intentionally sought out long-term exclusive contracts with retailers: "Our strategy is to secure long-term retail deals . . . . For instance, our current deal at Kroger is for seven years. Ahold agreement currently stands at eight years and we recently signed Safeway last year to a 10-year deal.” Mr. Garofalo also stated that News America intentionally erected barriers to entry by potential competitors, stating in the same video clip that “we also staggered the deals to prevent a large percentage of our network from being vulnerable at any specific point in time. . . . [T]his method . . . means a competitor who wants to develop a critical mass for their network would have to dedicate a lot of money over a considerable period of time in order to break into the in-store game in any significant way.”
• Several CPG representatives testified to being upset with the bundled pricing.
• A former News America employee, Robert Emmel, testified that News America engaged in a campaign to target retail accounts to take away from competitors, and overpaid for exclusive contracts with retailers. He also testified that they made false disparaging statements about in-store competitors Floorgraphics and Insignia.
  

The Court issued pre-trial rulings last week on the admissibility of a variety of evidence that was being challenged by News America or Insignia. The Court agreed to exclude: reference to the possibility of treble damages; certain expert testimony; evidence of layoffs at Insignia; and evidence of an alleged gift to a Winn-Dixie employee responsible for awarding the in-store advertising contract to News America, as described by BNET.

But the Court decided to allow: evidence of Insignia’s now-defunct Senior Management Litigation Incentive Plan, which would have rewarded Insignia executives with bonuses if the litigation is successful; evidence related to the Floorgraphics and Valassis lawsuits (but only to the extent that they are not offered for the truth of the matter asserted); certain CPG hearsay statements made to Insignia employees; testimony regarding News’ influence in the FSI market; evidence of News Corp’s size and wealth; testimony and notes of Debra Lucidi regarding News America, including notes about News’ price increases and poor service, in which she stated that it “[f]eels like they are raping us and they enjoy it.”

Last week, Insignia and News America engaged in lengthy court-ordered settlement discussions, but those discussions were apparently unsuccessful. As with the Floorgraphics lawsuit, a settlement during the middle of trial is a definite possibility.