June 9, 2011 5:14 PM
- Text
The Real Reason Rupert Murdoch's Top Lawyer Resigned: $656M in Defeats
(MoneyWatch) 
News Corp. (NWS) senior evp/general counsel Lawrence "Lon" Jacobs resigned June 8, a move the New York Times linked to the celebrity phone hacking scandal at owner Rupert Murdoch's London tabloids. Wrong. It's the supermarket antitrust fiasco wot done it, as Murdoch paper The Sun might have put it.
The phonetap affair has, at most, cost News ?£40 million in legal fees and settlements to people such as actress Sienna Miller.
By contrast, Jacobs' resignation came just two days after a judge signed off on the last of three massive antitrust cases involving News America Marketing, Murdoch's grocery coupon empire. Those settlements have cost News $656 million to date -- more than the company's profits from the movie Avatar, at one point. And it came on the same day that News was handed a defeat on all counts in a federal appeals court case aimed at silencing a former whistleblower whose information provided the basis for those cases in the first place.
During his tenure, Jacobs supervised this trifecta of failure:
Jacobs couldn't even pick an unconflicted law firm to litigate the Insignia case. Days before the trial, News' legal team at Constantine Cannon abruptly resigned without explanation. The firm's name partner, Jan Friedman Constantine, was a former chief ethics officer for News.
Jacobs leaves the NAM antitrust issue unresolved. The 11th Circuit federal appeals court remanded the case back to a trial judge for a new decision on whether an injunction should prevent former NAM account director Robert Emmel from publicizing internal documents he alleges describe "billing and revenue-sharing fraud" and "News's fraudulent inflation of its reported earnings," as the judge put it.
The litigation bankrupted Emmel. It cost News even more.
Related:
News Corp. (NWS) senior evp/general counsel Lawrence "Lon" Jacobs resigned June 8, a move the New York Times linked to the celebrity phone hacking scandal at owner Rupert Murdoch's London tabloids. Wrong. It's the supermarket antitrust fiasco wot done it, as Murdoch paper The Sun might have put it.The phonetap affair has, at most, cost News ?£40 million in legal fees and settlements to people such as actress Sienna Miller.
By contrast, Jacobs' resignation came just two days after a judge signed off on the last of three massive antitrust cases involving News America Marketing, Murdoch's grocery coupon empire. Those settlements have cost News $656 million to date -- more than the company's profits from the movie Avatar, at one point. And it came on the same day that News was handed a defeat on all counts in a federal appeals court case aimed at silencing a former whistleblower whose information provided the basis for those cases in the first place.
During his tenure, Jacobs supervised this trifecta of failure:
- $125 million: To tiny Insignia Systems (ISIG), which accused NAM of anticompetitive practices.
- $500 million: To Valassis (VCI), which accused NAM of forcing clients to choose its services or face price rises if they gave business to Valassis.
- $29.5 million: To Floorgraphics Inc., which alleged NAM hacked into its computer systems (sound familiar?) to steal competitive information.
Jacobs couldn't even pick an unconflicted law firm to litigate the Insignia case. Days before the trial, News' legal team at Constantine Cannon abruptly resigned without explanation. The firm's name partner, Jan Friedman Constantine, was a former chief ethics officer for News.
Jacobs leaves the NAM antitrust issue unresolved. The 11th Circuit federal appeals court remanded the case back to a trial judge for a new decision on whether an injunction should prevent former NAM account director Robert Emmel from publicizing internal documents he alleges describe "billing and revenue-sharing fraud" and "News's fraudulent inflation of its reported earnings," as the judge put it.
The litigation bankrupted Emmel. It cost News even more.
Related:
- Why News Corp.'s Settlement With Insignia Creates a Grocery Ad Cartel
- Murdoch's Grocery-Ad Lawyers Balking and Bailing as Their Final Battle Nears
- News America Paid $29.5M in Mysterious Floorgraphics Acquisition
- News America Marketing Forces Whistleblower Into Bankruptcy
- News America Marketing Group Buys Floorgraphics Just Hours After Settling Spying Lawsuit
Latest Now in MoneyWatch
- Ask the Experts: Gas Prices
- HP sales miss highlights growth challenges
- HP earnings sink, miss analyst targets
- Microsoft files EU complaint against Motorola, Google
- Why Apple's labor practices may never improve
- Geithner presses case for revamping corporate taxes
- The 10 best places to retire
- How much is your leisure time worth?
- What Uncle Sam can REALLY do for small business owners
- Existing home sales up, inventory down -- for now
- Corporate tax cut: Good idea, but won't stimulate economy
- Generate leads like a management guru
- The Investor Edition: Featuring Allison Goldberg and David S. Rose
- A simple strategy to keep your inbox clean
- Why even great employees get average evaluations
- Fitch downgrades Greece
- Retirement planning inspiration from the Oscars
Latest CBS News Headlines
on Facebook
on CBS News
- Fitness program for mentally ill expands in NH
- Newark mayor seeks probe of NYPD Muslim spying
- Feds crack down on rhino horn smuggling ring
- Philippine official opposes more public holidays
on Facebook
- Six decades of Oscar fashion
- Christie: Buffett should "write a check and shut up"
- "Biggest Loser" contestants reportedly threaten to quit
on CBS News
