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Judge Green-Lights $244M News Corp. Deal

MANHATTAN (CN) — A federal judge approved a $244 million settlement in a class-action lawsuit claiming a News Corp. subsidiary monopolized the market for in-store promotions.

Calling the settlement "fair, reasonable, and adequate", U.S. District Judge William Pauley granted final approval of the deal Monday, along with $48 million in attorneys' fees and $7.5 million in expenses.

Pauley also added incentive awards in the amount of $50,000 each to plaintiffs Henkel Consumer Goods, formerly Dial Corporation, Kraft Heinz Foods, Foster Poultry Farms, Smithfield Foods, HP Hood LLC and BEF Foods.

The settlement provides that News Corp. and its subsidiaries will pay $244 million into a common settlement fund to be distributed on a pro-rata basis to the class members, determined by the amount of in-store promotions purchased by each plaintiff during the class period.

Lead plaintiff Dial Corporation filed its class-action lawsuit against News Corp. and its subsidiaries News America, News America Marketing FSI, and News America Marketing In-Store Services in 2012, in Eastern Michigan federal court.

Dial and the other plaintiffs accused Rupert Murdoch's news empire of a 20-year scheme to suppress the promotion of "a massive number of consumer goods in forty thousand retail stores, and scores of newspapers nationwide, to acquire and maintain two unlawful monopolies and earn large monopoly profits at the expense of its purchasers."

In September 2013, the case was transferred to the Southern New York, where Pauley granted class certification in June 2015.

News Corp. announced the settlement on Feb. 29 of this year, ending a trial seeking $674.6 million in damages, which could have ballooned to $2 billion under federal antitrust law.

The media giant said in a statement at the time that it denied any wrongdoing by subsidiary News America Marketing.

"We are pleased to have concluded this settlement, which allows us to avoid the expense and uncertainty of further litigating this matter," News Corp. said. "While we had full confidence in our case, we believe this decision is in the best interests of our company and stockholders."

Attorneys for the plaintiffs had initially sought $73.2 million in fees, or 30 percent of the settlement fund. Pauley took umbrage at the counsel's "bloated billing," which he says was "saturated by excessive partner time and timekeeper rates." The judge adjusted the attorneys' fees down to $48 million.

Pauley acknowledged in Monday's ruling that the News Corp. defendants are "part of a multi-billion dollar conglomerate recognized as one of the world's largest and most powerful enterprises."

"Although they have now resolved this action through a $244 million settlement, the notion that Defendants could withstand a judgment in the amount of Plaintiffs' damages estimate is not far-fetched," the judge wrote in his 26-page opinion.

The settlement includes several forms of structural relief designed to protect the class of plaintiffs against the anticompetitive conduct alleged in their complaint.

Such relief includes preventing News Corp. and its subsidiaries, for the next five years, from entering into any exclusive in-store promotions contracts with a retailer for a term longer than 30 months, other than to meet competition or at the written request of the retailer.

The settlement agreement also stipulates that the defendants cannot prohibit retailers from disclosing the termination dates of their in-store promotions contracts to prospective competitors.

The plaintiffs were represented in the case by R. Stephen Berry of Berry Law PLLC in Washington, D.C.

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