Thursday, January 28, 2016

Advertiser Class Action Against News Corp Related to In-Store Advertising Scheduled for February 29, 2016 Trial

A class action lawsuit filed by Dial Corporation against News Corporation has survived multiple procedural hurdles and appears to be headed for trial on February 29.

On June 18, 2015, Dial won a motion for class certification, permitting Dial's lawsuit to proceed as a class action. The court found that Dial had satisfied the requirements of Federal Rule of Civil Procedure 23, and certified a class of "non-retailer consumer packaged goods firms . . . which have directly purchased in-store promotions from News Corp. . . . and were not subject to mandatory arbitration clauses." 

News Corp. argued that class certification was inappropriate where some class members potentially benefited from decreased competition, as the lack of competition created a larger network of stores in which News Corp.'s customers could place ads. The court found that the question of potential ancillary benefits was subject to common proof at trial. The court also found that, although damages may present individualized issues, common issues predominated, as a key common issue was whether News Corp. is liable under the antitrust laws.

On January 15, 2016, Dial defeated News Corp's motion for summary judgment.  The court's Order denied summary judgment on the Section One exclusive dealing claim under the Sherman Act because, "on the current record, this Court cannot conclude as a matter of law that the procompetitive benefits of the exclusive contracts are outweighed by the harm to competition."

In denying summary judgment on the Section Two monopolization count, the court found that "Plaintiffs present ample evidence that News Corp. intended to use their exclusive retailer contracts . . . to exclude rivals," and that "Plaintiffs present[ed] evidence sufficient to withstand summary judgment that News Corp.'s exclusionary acts may be anticompetitive."

Trial has been scheduled for February 29, 2016.

News Corp. previously entered into settlement agreements with competitors Floorgraphics and Insignia over related conduct, as discussed in previous posts.


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