Saturday, January 30, 2010

Valassis Accepts $500 Million Settlement from News America

A few days before Valassis' federal trial against News America Marketing was scheduled to begin, Valassis announced that it has accepted a $500 million settlement to resolve not only the federal case, but also the pending California state court case, and the Michigan case where a $300 million jury verdict is on appeal.

In addition to the monetary payment, the settlement provides that the judge will issue a permanent injunction preventing News America from engaging in certain of the business practices at issue, and News America will also enter into a 10-year shared mail distribution agreement with Valassis Direct Mail.

While $500 million is a large sum of money, Valassis had alleged that News America's anti-competitive conduct, including alleged violations of the antitrust laws, had caused $1.5 billion in damages to Valassis, and Valassis was seeking treble damages.

Valassis CEO Alan F. Schultz stated, "I am pleased that we were able to reach a mutually agreeable settlement and avoid protracted future litigation."

In a press release issued by News Corporation today, News stated:

"It has become evident to our legal advisors from pre-trial proceedings over the past couple of weeks that significant risks were developing in presenting this case to a jury. That, coupled with concerns over the venue, led us to believe it was in the best interests of the Company and its stockholders to agree to a settlement."
News America was concerned that the Detroit, Michigan venue would favor Valassis, which is based in Livonia, Michigan. News America had requested that they be allowed to submit a questionnaire to jurors about possible bias, and to move to transfer venue if the responses suggested such a bias. Judge Tarnow denied the request for a written questionnaire on January 22, 2010, though News America still had an opportunity to question potential jurors about possible bias during voir dire.

Given the outcome of the Michigan state court trial, and the damaging evidence that Valassis introduced in that case, News America had reason to be concerned about the risk of trial. News America had filed motions with the Court seeking to exclude certain evidence, including, for example, references to the state court verdict against News America, an internal Valassis memo – dubbed the "Valassis Dolphin Project Memo" – analyzing the reasons for News America's aggressive tactics, and a statement made a representative of Sara Lee who stated that it "[f]eels like they [News America] are raping us and they enjoy it."

With the settlement of all three Valassis cases against News, and the prior settlement with Floorgraphics, the only major lawsuit News America still faces is the Insignia v. News America case currently pending in federal court in Minnesota.

Tuesday, January 26, 2010

Conference on Consumer Goods, Retail, and Antitrust

The Global Competition Review is sponsoring a conference on "Competition Law, Consumer Goods and Retail," to be held in London on March 23, 2010.

According to GCR's conference web site:
The focus of competition regulators on the supply chain and retailing of fast moving consumer goods continues to grow. More enforcement activity at EU and national level is expected. This conference will examine the key areas of concern.
  • Information flows - the dangers: supplier/retailer contacts; 'hub and spoke' cartels; information exchange; collaboration to achieve environmental and other policy objectives; trade associations
  • The customer/competitor relationship - resale price maintenance; category management, pricing (rebates, over-riders, stocking allowances, delisting)
  • Buyer power - nature and sources; buyer alliances; approaches of regulators
  • Consolidation: FMCG and retail mergers
  • Online distribution and sales restrictions
More information is available here.

Wednesday, January 13, 2010

Oral Arguments Heard in American Needle v. NFL

The Supreme Court heard oral argument today in American Needle v. NFL, a case this blog previously posted about here.

The NFL argued that it constituted a single entity that can collectively license its merchandise and enter into exclusive licenses on behalf of all NFL teams, even if the result is increased prices. At issue was an exclusive licensing deal that the NFL entered into with Reebok, giving Reebok exclusive rights, thereby excluding American Needle, which previously sold NFL-branded headwear.

As reported by the New York Times here, the Supreme Court was skeptical of the NFL's argument that its licensing activities were entirely immune from antitrust scrutiny under the single-entity Copperweld doctrine. Justice Scalia, for example, asserted that the purpose of apparel sales was to make money, not to promote the game. This blog's previous post on the topic was similarly skeptical of the NFL's arguments, suggesting that the teams do not act as a single economic unit in the sale of team apparel.

A transcript of the oral argument is available here.

Kotchen & Low LLP Appointed Co-Lead Interim Class Counsel in Airline Baggage Fee Antitrust Litigation

On January 5, 2010, Judge Timothy Batten of the U.S. District Court for the Northern District of Georgia appointed Kotchen & Low LLP as Co-Lead Interim Class Counsel in MDL 2089, In Re Airline Baggage Fee Antitrust Litigation. Kotchen & Low LLP represents a proposed class of airline passengers who paid first checked bag fees to Delta or AirTran Airlines and who allege that these two airlines colluded prior to imposing the fee.

In the order appointing Kotchen & Low LLP and its partner law firms, the Court stated that:

[T]hese firms are well suited to manage this litigation and efficiently litigate this action in the best interest of the putative class. It is particularly significant to the Court that the law firms of Kotchen and Low LLP [and its partner firms] initiated this litigation by filing the first complaint pertaining to this matter. Indeed, these firms have performed all of the substantive work – spanning seven months – in identifying, investigating, and drafting the claims that have now been largely adopted by other attorneys in the tag-along actions. Additionally, these firms have extensive antitrust and class action experience, and have abundant resources to effectively litigate this action.

Kotchen & Low and its partner law firms – Richardson, Patrick, Westbrook & Brickman LLC; McCulley McCluer PLLC; and Conley Griggs LLP – filed the original complaint in this case in May 2009. Eleven cases making virtually identical allegations were filed by numerous other law firms, and they were consolidated before Judge Batten by the Judicial Panel on Multidistrict Litigation in October 2009. The Court appointed Kotchen & Low and its partner law firms despite competing motions from attorneys in the tag-along actions.

Kotchen & Low LLP Appointed Co-Lead Interim Class Counsel in Wholesale Grocery Antitrust Litigation

On December 15, 2009 Judge Ann Montgomery of the U.S. District Court for the District of Minnesota appointed Kotchen & Low LLP as Co-Lead Interim Class Counsel in In re Wholesale Grocery Products Antitrust Litigation, MDL 2090. Kotchen & Low LLP represents a proposed class of retail grocery stores that purchased wholesale grocery products from Defendants C&S Wholesale Grocers Inc. or Supervalu Inc. and allege that the two defendants engaged in a per se unlawful customer and territorial allocation conspiracy in connection with an asset swap agreement.

In the order appointing Kotchen & Low LLP, Judge Montgomery stated that: “the Court finds that Kotchen & Low’s efforts in originating the first action that was filed in the multi-district litigation warrants their inclusion as co-lead counsel.”

Kotchen & Low filed the original complaint in this case in December 2008. Several cases making virtually identical allegations were filed by other law firms, and the cases were consolidated before Judge Montgomery by the Judicial Panel on Multidistrict Litigation in October 2009. Plaintiffs filed a Consolidated Amended Class Action Complaint on January 4, 2010.

 

The Law Firm of Kotchen & Low LLP - Civil Litigation, Counseling, and Representation Before Government Agencies


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