Valassis v. NAM Federal Trial Set for February; Judge Denies Pretrial Motions

Valassis and News America Marketing are set to enter a federal court trial in February over the former’s claims that NAM illegally monopolized the supermarket advertising business, a source tells BNET.

Separately, the two sides have entered mediation in their California state court case, suggesting that the federal trial will take place before the California case is heard.

The mediation is not a sign that the two sides are eager to settle, it is believed. The parties agreed on a mediator at the behest of the judge in the case.

Previously, it was assumed by some that Valassis had hoped that federal trial would come after the California case. That would put Valassis’ lawyers in the position of entering the federal trial with solid records from both an earlier Michigan case (which Valassis won) and the California case, making it very difficult for NAM to defend its side. In federal court, damages are tripled.

And finally: Pretrial motions for both sides in the federal case were denied, as judge Arthur Tarnow (whom BNET readers met here) decreed that there were triable issues of fact. The text of his order follows. New readers skip to the story ladder (below) and begin clicking backwards:

Case No. 06-10240
District J. Arthur J. Tarnow
ORDER DENYING CROSS-MOTIONS FOR SUMMARY JUDGMENT

Before the court are defendants’ motion for summary judgment and plaintiff’s motion for partial summary judgment. The court received supplemental briefing The motions came on for a hearing on September 3, 2009. For the reasons stated on the record, the motions are DENIED. The state-court trial before Judge Sapala does not have issue-preclusive effect on the proceedings before this court. Accordingly, there are genuine issues of material fact for a jury to consider. The following are some of the factual issues that remain:

1. Whether the free-standing–insert (FSI) and in-store–promotions (ISP) markets are relevant markets for antitrust purposes

2. Whether News America has a monopoly over the ISP market

3. Whether News America coerced manufacturers of consumer packaged goods (CPGs) to buy FSIs from News America

4. Whether there is a dangerous probability of success that News America will monopolize the putative FSI market

5. Whether the bundled discounts were anticompetitive

SO ORDERED.

S/ARTHUR J. TARNOW
Arthur J. Tarnow
United States District Judge

Dated: September 4, 2009

• See BNET’s previous coverage of the in-store marketing wars:
• News America Talks Tough on Valassis Appeal But Borrows $1B, Just in Case
• News America Marketing Q2: Numbers Support Valassis’ Monopoly Case
• Clients Overcharged by News America Listed in Court; Sara Lee: NAM “Is Raping Us and Enjoying It”
• News America Marketing Q2: Numbers Support Valassis’ Monopoly Case
• News America Marketing’s Carlucci Is Touchy About The Untouchables
• Valassis Q2: “We Have Hit Bottom,” Says CEO Schultz; Legal Bills 23% of Profits
• News America Exec Tells How Ahold Account Was Won; Paid Kroger $25M
• The Day After: News America CEO Carlucci Finds Options Limited