Last Updated Apr 14, 2010 2:02 PM EDT
The failure sets the stage for a third trial, this time against tiny Insignia Systems (ISIG), in an area where News has already lost $530 million to its adversaries. In those three cases, a trio of grocery-coupon ad agencies claim that News uses restrictive contracts and predatory pricing to maintain an illegal monopoly on coupons and in-store advertising for food and household goods. The market may seem obscure one, but it's obscenely lucrative: News' legal losses in its coupon division roughly equal its profits from the movie Avatar.)On paper, it would appear there's no way News can win. Its News America Marketing division settled with one agency, Floorgraphics Inc., after three days of trial testimony for just under $30 million. It then lost a $300 million jury verdict against a second rival, Valassis (VCI), and days before a second trial against the same company it settled the whole thing for $500 million. News now goes to trial against Insignia, which has the benefit of all the evidence produced against News in the Valassis and FGI cases.
Does this mean News assumes that this time it will beat the odds -- and history -- to snatch a victory? No. News appears to be literally hoping to stave off the inevitable for as long as possible, apparently in the belief that money you haven't actually paid is money you may never pay. There's a pattern here: Before the settlement talks, News' lawyers suddenly claimed that after years of preparation they were unready for trial. One of News' legal firms even resigned from the case, throwing another wrench in the works. News settled with Valassis only after a grueling month-long trial in Michigan state court and just days before a federal trial. And News' settlement with FGI occurred after the trial had already begun but before it got the the jury.
In other words, this is a company whose legal philosophy is, "Hey, you never know what might happen. We'll deal with it tomorrow."
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