Largest verdict of 2009 settles for $500M, leads to new business deal

On the eve of the second of three major trials, one of the largest business lawsuits in Michigan history has settled for $500 million.

Livonia-based Valassis Communications, Inc. reached an agreement to settle its outstanding lawsuits against News America Marketing (NAM), a division of Rupert Murdoch’s News Corp.

U.S. District Court, Eastern District of Michigan Judge Arthur Tarnow OK’d the agreement, which would have prevented a Feb. 2 trial in asserting violations of the Sherman Act. If Valassis had prevailed in this suit — as it did in a $300 million July 23, 2009, trial asserting unfair competition and tortious interference — the damages would have been trebled.

Besides paying Valassis $500 million, NAM also will enter into a 10-year shared mail distribution agreement with Valassis Direct Mail, a Valassis subsidiary. In addition, the judge will issue a permanent injunction related to certain business practices at issue in the lawsuits, and Valassis also will drop a pending state court case in California.

“It has become evident to our legal advisors from pre-trial proceedings over the past couple of weeks that significant risks were developing in presenting this case to a jury,” said News Corp. Deputy Chairman, President and Chief Operating Officer Chase Carey in a statement. “That … led us to believe it was in the best interests of the Company and its stockholders to agree to a settlement.”

Valassis asserted that, over a six-year period, NAM tried to monopolize the free-standing coupon insert (FSI) market. Valassis contended that, by 2006, NAM had more than 60 percent of the FSI market, and did so by illegally bundling deals on its FSIs with its other consumer marketing division, in-store and point-of-purchase media.

Valassis was represented by Gregory L. Curtner and A. Michael Palizzi of Miller, Canfield, Paddock and Stone, P.L.C., and David Mendelson of Birmingham-based Law Offices of David Mendelson.

The $300 million verdict was the highest 2009 verdict reported in Michigan Lawyers Weekly. By comparison, the top verdict in 2008 was $9.1 million — a difference of 97 percent.

Old GM billed $23M in bankruptcy filing

“A consulting firm is charging General Motors’ bankruptcy estate more than $23 million for three months’ work leading up to and following one of the largest corporate bankruptcy filings in U.S. history,” the Detroit News reported.

“According to a quarterly report filed Thursday in U.S. Bankruptcy Court, crisis management firm AP Services LLC charged GM and its bankruptcy estate $23 million for about 90 days of work and expenses that included airfare, hotels, meals and rental cars. U.S. Bankruptcy Court records give the most detailed look at costs related to GM’s bankruptcy case and offers insight into the number of people needed to prepare GM to be dismantled and liquidated.”

Federal judge steers clear of union’s campaign against home builder

The Associated Press reports that U.S. District Court Judge Lawrence Zatkoff says he has no authority to tell a labor union to stop encouraging people to protest the firing of a Pulte Homes Inc. employee.

Zatkoff on Thursday denied the homebuilder’s request for an injunction against the Laborers’ International Union of North America.

Bloomfield Hills, Mich.-based Pulte says union allies were jamming voicemail and e-mail after a construction crew leader was fired Sept. 4 in Tucson, Ariz.

New trend: fewer business suits

This has nothing to do with casual Fridays or clothing shortages at your favorite tailor or department store.

This has everything to do with the declining involvement of U.S. businesses in litigation, both as defendants and plaintiffs, as reported in a survey released yesterday by the Houston-based, mega-international law firm of Fulbright & Jaworski.

For the first time since the firm began tracking such matters, major U.S. corporations have reported “a distinct drop in the number of lawsuits filed against them.”

In the firm’s “Fourth Annual Litigation Trends Survey Findings,” 17% of in-house counsel at 250 major U.S. corporations say they haven’t had to defend a new suit in the last year, compared with 11% in the 2005-06 reporting period.

They’ve also been a little less eager to sue. Sixty-five percent of the survey respondents reported filing at least one new suit, down from 70% in the prior reporting period and down more sharply still from 2004, when 88% said their company filed at least one new suit.

But there’s plenty of unfinished business. One-third of the companies say they have more than 25 suits in process at any one time, and 18% have over 100.

Governmental action against corporations continues to be a significant source of litigation. Almost half reported some type of regulatory proceedings brought against them in the last 12 months.

The survey notes a dip in securities and bankruptcy disputes and an up-tick in product liability and patent cases.

The survey also includes information about average settlements, use of outside counsel and attorney billing (including alternative fee structures) and company attitudes toward their outside lawyers, to name a few.

Download a copy here.