Friday, April 3, 2009

Additional Details of News America’s Alleged Conduct Emerge

Floorgraphics Trial Transcript Excerpts. A few excerpts from the Floorgraphics trial transcript were posted today by Jim Edwards of BNET. The excerpts include testimony by a Floorgraphics executive that former News America CEO Paul Carlucci threatened to "destroy" Floorgraphics if it competed with News America, and a statement by Robert Emmel that, on an internal News America conference call, Paul Carlucci stated that "if there were individuals that were concerned about doing the right thing, bed wetting liberals in particular . . . , then he could arrange for those individuals to be out-placed from the company."

News America's Gift Card Deal with Safeway. Edwards also posted a story earlier about a lawsuit News America brought against two former employees in the Smart Source Direct ("SSD") division of News America. The former employees, much like Robert Emmel, were accused of breaching nondisclosure obligations to the company. Among the confidential information allegedly disclosed by the employees was that News America "gave up business from Ahold in order to obtain other business from Safeway." (Complaint ¶ 52). Sources indicate that, specifically, the allegation was that News America gave up an agreement with Ahold to distribute third-party gift cards through Ahold stores, relinquishing the Ahold opportunity to Safeway's Blackhawk Marketing Division, which is one of the leading companies in the third-party gift card market (along with InComm). Allegedly in return, Safeway awarded its in-store floor and shelf advertising program to News America rather than Floorgraphics. According to BNET, the case against the two former employees settled.

Update on Valassis and Insignia. Valassis' Michigan state court lawsuit against News America, which had previously been scheduled to begin in March, has been rescheduled for May 27, 2009 because of a conflict in the Judge's schedule. Valassis also has upcoming trials against News America scheduled in California for August 2009, and in federal court in Michigan, which is likely to take place sometime this year, but was delayed after the previous Judge recused himself in February.

In the Insignia lawsuit against News America, motions for summary judgment are scheduled for a hearing on May 11, 2009. Trial would likely occur several months after the hearing.

Related posts about: News America; Insignia; Valassis.


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