Sunday, October 4, 2009

Court Denies News America’s Summary Judgment Motion in Insignia System’s Lawsuit

On September 30, the U.S. District Court for the District of Minnesota largely denied News America's motion for summary judgment and granted Insignia Systems' motion for summary judgment on News America's counterclaims.

Insignia had alleged that News America engaged in anticompetitive business practices in the market for in-store shelf advertising, while News America filed a number of counterclaims.

News America had asked the Court to dismiss Insignia's claims on the grounds that the undisputed material facts failed to prove the violations alleged by Insignia, including claims for monopolization, conspiracy, and false advertising. The Court ruled in favor of News America, however, on Insignia's claim that News America has monopsony power over retailers, pointing out that Insignia's own expert witness indicated that he did not believe that News had monopsony power.

Insignia filed a motion seeking dismissal of News America counterclaims, which the Court granted. The Court held that News America had failed to produce evidence of damages on six of its claims, and could not recover damages on those claims. The Court dismissed claims that were predicated on allegedly disparaging statements because those statements, which included statements expressing the opinions of Scott Drill, were not actionable, and there was no evidence to suggest that Drill believed his statements to be false. The Court found that News had failed to present sufficient evidence of tortious interference with contract, tortious interference with prospective business relationship, and unfair competition, and dismissed those claims.

In response to an unrelated discovery motion, the Court's order granted in part a motion to compel, and extended discovery for an additional 45 days, which could affect the trial date.

In light of the Court's order, News America will likely face two trials in federal court in early 2010 – Insignia's lawsuit, and Valassis's lawsuit, both of which raise similar allegations of News America's anticompetitive practices in the in-store advertising industry.

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