A New York federal judge has now approved a $244-million settlement in a class action in which consumer product makers such as Dial and Heinz accused News Corp. of monopolizing the market for third-party, retail store promotions. The settlement came one day after the judge demanded that changes be made in the original settlement. Granting preliminary approval of the class action settlement, U.S. District Judge William H. Pauley, III, approved a plan by which News Corp. would pay the settlement funds into the government’s Court Registry Investment System no later than July 5.
Judge Pauley had objected to a plan to have the settlement funds held at private banks and instead ordered the money to be held in the government’s Court Registry Investment System (CRIS). He had said on that aspect of the settlement:
All of the funds will be deposited into a CRIS account – and the plaintiffs’ counsel can learn something new about CRIS accounts.
Therefore, under Judge Pauley’s order, the funds will be held in a CRIS account. A hearing on the settlement is slated for Sept. 21. The class action brought by hundreds of product makers proceeded with opening statements at a jury trial in February when an apparently very unhappy Judge Pauley was made aware of the settlement by the parties.
News Corp. maintained an illegal monopoly over the market for such promotions since about 2004 by striking long-term, exclusive contracts, according to the Plaintiffs. They said that News Corp. used its market dominance among retailers to charge product makers unfairly high prices. While the media giant denied the allegations and did not admit liability, it did agree to make changes to the way it contracts with retailers.
Judge Pauley also said that potential objectors would not have to appear in person at the Sept. 21 fairness hearing if they lodge objections in the docket. He said that the sides will have to act fast on his fixes to the settlement in order to preserve the proposed timeframe for closing the case.
News Corp. has agreed not to object to attorneys’ fees of up to 30 percent of the settlement amount. The class is represented by James T. Southwick, Ryan v. Caughey and Richard W. Hess of Susman Godfrey LLP and Steven F. Benz of Kellogg Huber Hansen Todd Evans & Figel PLLC. The case is in the U.S. District Court for the Southern District of New York.
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