After a lengthy trial, a jury in a Michigan state court awarded $300 million in compensatory damages to Valassis, finding that News America Marketing had engaged in unfair competition.
Valassis issued a press release on the verdict:
"We are pleased with the jury's verdict, and we look forward to moving ahead with our two other cases, including the antitrust case in the Eastern District of Michigan where any compensatory damages will be trebled," said Alan F. Schultz, Valassis Chairman, President and Chief Executive Officer. "Furthermore, I am very proud of the efforts of our employees who have been competing on this uneven playing field for nearly a decade."
Valassis has additional lawsuits pending against NAM in the United States District Court, Eastern District of Michigan, asserting violations of the Sherman Act, and in the Supreme Court of the State of California for the County of Los Angeles raising claims under California's Cartwright, Unfair Competition and Unfair Practices Acts. The Eastern District of Michigan case and the California case are currently not scheduled for trial, however, Valassis intends to aggressively pursue both remaining claims.
In addition to Valassis' remaining lawsuits, News America also faces a lawsuit from Insignia Systems, which asserts that News America engaged in similar anti-competitive tactics that harmed Insignia. Given the overlap between the cases, Insignia is probably feeling confident about its prospects.
The stock prices of both Valassis and Insignia jumped on the news of the verdict.
News America's President, Chris Mixson, stated, "[w]e are disappointed with today's decision." "[W]e will appeal this decision and are confident that we will prevail." As one grounds for News America's appeal, Mixson cited the Court's ruling to exclude evidence of a Federal Trade Commission complaint against Valassis, which alleged that Valassis had publicly invited News America to collude on the pricing of FSIs in an investor conference call. Valassis entered into a consent order with the FTC to resolve the case, agreeing not to invite competitors to collude. It seems that such evidence would be more prejudicial than probative in Valassis' case against News America, and that the Court's evidentiary ruling was likley correct. Even if that evidence had been admitted, it is unclear that it would have affected the verdict. Though News America will undoubtedly raise several additional issues on appeal.