A federal judge in Manhattan has approved the settlement reached by a class of major consumer goods makers with News Corp. over its alleged monopolization of in-store advertising. U.S. District Judge William H. Pauley III agreed to distribute the funds from the $244 million settlement consumer goods giants including the Dial Corp. and Kraft Heinz Foods Co., reached with News Corp. and its in-store ad unit. The released funds also include another $6 million in fees going to class counsel from the $30 million in settlements News Corp. reached with five large absent class members shortly before this trial was set to begin in February 2016.
The payments will go to 400 class members, which accounts for more than 96 percent of the class by volume, according to the Plaintiffs lawyers. Steven Benz, a lawyer with Kellogg Hansen Todd Figel & Frederick PLLC, stated:
This is what class actions were meant to be because we had a monopolization of a market that needed to be remedied. It’s very rare to have six corporate class representatives who fund a case and see there’s a problem in the marketplace that they want to remedy, and they band together to assist in remedying that through antitrust.
The case dates back to 2012, when Dial, Kraft Heinz, Foster Poultry Farms, Smithfield Foods Inc., HP Hood LLC and BEF Foods began filing what eventually became the current suit accusing News Corp. of working for years to shut would-be rivals out of the market for in-store advertising services like coupon dispensers and shopping cart advertisements.
Judge Pauley sent the case to trial, where the class ultimately settled just as opening arguments got underway. The $244 million settlement the class reached came just days after News Corp. signed separate settlement agreements with absent class members Johnson & Johnson Consumer Inc., General Mills Inc., The Dannon Co. Inc. and Reckitt Benckiser LLC.
The settlement amounted to “an outstanding result,” Judge Pauley wrote in October when he approved the settlement, compared to the class’ two estimates of the single damages the consumer goods giants had suffered because of the alleged monopolization. The “core” damages theory focusing purely on overcharges estimated the companies paid $355 million more than they would have if News Corp. had not kept rivals out of the market. The “adjusted” damages theory puts the figure at $674 million by factoring in the millions of dollars the Plaintiffs say News Corp. gave retailers to lock out other in-store advertising providers.
The class is represented by James T. Southwick, Ryan V. Caughey and Richard W. Hess of Susman Godfrey LLP, Steven F. Benz of Kellogg Huber Hansen Todd Evans & Figel PLLC, Daniel B. Goldman of Kramer Levin Naftalis & Frankel LLP, R. Stephen Berry of Berry Law PLLC and Lewis T. LeClair, John C. Briody and James H. Smith of McKool Smith PC. The case is Dial Corp. et al. v. News Corp. et al. (case number 1:13-cv-06802) in the U.S. District Court for the Southern District of New York.
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