Friday, May 2, 2008

Summary Judgment Motion Denied in FLOORgraphics v. News America Marketing

On April 24, the U.S. District Court for the District of New Jersey denied News America Marketing's motion for Summary Judgment in Floorgraphics, Inc. v. News America Marketing In-Store Services, Inc., No. 04-3500 (D.N.J.), a case I mentioned in this previous post. Floorgraphics alleged that News America engaged in a variety of anticompetitive conduct in an effort to drive it out of the in-store floor, coupon, and shelf advertising business, including computer hacking, false and disparaging statements, and tortious interference with contract.

In the summary judgment motion, Defendants argued that Floorgraphics mischaracterized News America's vigorous, aggressive competition as tort, and that there is no admissible evidence that Defendants made any false and disparaging statements about FGI, threatened retailers, or used confidential Floorgraphics information in bidding on retailer contracts. Defendants also argued that there is no evidence of causation.

Relying partly on affidavits and exhibits that were filed under seal, the District Court held that there are "genuine issues of material fact that would preclude the granting of summary judgment in Defendants' favor at this time." The court denied News' summary judgment motion on all counts. (Click here for the order).

Having lost its motion, News America Marketing now faces the prospect of a trial by jury in federal court. A jury trial is risky for any defendant, especially when the plaintiff alleges pernicious misconduct that could cause the jurors to strongly dislike the defendant.

I received an e-mail from a reader of this blog yesterday about this case. He suggested that a verdict against News America would lead to a number of related Plaintiffs' cases against News. I am not as positive as he is that a verdict for Floorgraphics will necessarily lead to new related cases. But if Floorgraphics prevails at trial, evidence of News' wrongdoing in this case might be used against News in related pending cases, and consumer goods manufacturers and retailers may want to assess whether they were negatively affected by News America's allegedly tortious and anti-competitive conduct.

Related Post: Court Denies Insignia's Request for Documents from Other Litigation Against News America

 

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