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Late on Friday afternoon last week, News Corp. filed its 10-K annual report with the Securities and Exchange Commission. In the middle of the report was a tally of the financial fallout of the ongoing hacking scandal. The company has paid out a total of $382 million in settlement money, including $183 million in the past year.
At the same time that News Corp. was releasing this information, its lawyers were busy in an attempt to defeat the first lawsuit brought in a U.S. court by an alleged victim.
The company has now filed a motion to dismiss a lawsuit brought by Eunice Huthart, who says she worked as a stunt double for Angelina Jolie. A California federal judge is being urged to dismiss the claims because lawyers for News Corp. say that the United Kingdom is the more convenient forum. In making such an argument, News Corp. reveals the full legal toll of the hacking scandal, the process set up to handle the many claims and the scores of settlements tied to alleged hacking by News of the World and its private investigator Glenn Mulcaire.
First, a recap of Huthart’s allegations.
Huthart says that she is a resident of Liverpool, England, and first worked with Jolie in 2000 and on the movies Beyond Borders and Tomb Raiders 2. She says she developed a close relationship with the actress and is a godmother to Jolie’s first biological child.
In 2004, after Huthart began living with Jolie in a Brentwood house while filming Mr. and Mrs. Smith, she says she noticed suspicious activity around missed messages left on her cell phone system. Others including Jolie, asked why she had not replied. Later, when her name, cell number, account number and PIN number surfaced in the notes of Mulcaire, she figured it out.
Her wiretapping lawsuit against News Corp. alleged that News of the World had printed certain stories, including that Jolie had threatened to quit making movies for good, on the basis of intercepted communications.
She’s suing in California federal court, and News Corp. doesn’t like this one bit. Huthart might have been living in Los Angeles during the time that her voicemail was allegedly hacked, but the company asserts that the U.K. connection is much stronger.
“This case is brought by a citizen and resident of the United Kingdom, against U.K. newspapers and their parent companies, alleging that U.K.-based journalists, with the assistance of a U.K. private investigator, impermissibly accessed the voicemail of plaintiff’s U.K. cellular telephone account, for the purpose of obtaining information to use in articles published in U.K. newspapers.”
News Corp. says this lawsuit is the only one of more than 600 claims not proceeding “either under a voluntary U.K. compensation scheme established by [News Group Newspapers] or in the English High Court, pursuant to a specialized set of procedures painstakingly developed to balance the competing interests of the U.K. authorities (which are still investigating these matters) and the parties to the litigation, and to put compensation in the hands of victims as quickly and efficiently as possible.”
And about that process, News Corp. has some numbers. This is what the company says has been the result of the hacking scandal:
“The compensation scheme has been extraordinarily successful at delivering satisfaction to applicants: it has received 611 inquiries from individuals alleging they were victims of voicemail interception, of whom 426 applied to join the scheme, resulting in 359 being invited to join the scheme, and 272 settling their claims thus far. Not a single applicant to date has seen fit to take his or her case to a hearing.”
Other claims are happening in U.K. courtrooms under a judicial process that News Corp. says has provided for expedited access to police materials, early assessment of claims, enhanced case management to reduce attorneys’ fees and means to obtain discovery beyond the subpoena powers of U.S. courts.
How many claims are going through this process? Here are more numbers from News Corp’s attorneys:
“To date, 250 claims have been brought under the MTVIL procedures in the U.K. and further claims have been intimated on a pre-action basis; of those claims and pre-action notifications, there have been 276 settlements. There are currently 32 active claims. No claimant has to date pursued his or her case to trial.”
News Corp. says that the conduct alleged by the Angelina Jolie stunt double isn’t much different from the allegations in the hundreds of cases proceeding in the U.K., which includes the 32 active claims in U.K. court and the others proceeding through the compensation scheme.
“Whatever strategic interest plaintiff or her counsel may have in a U.S. forum, the matters at the heart of the complaint are uniquely U.K. issues, involving U.K. parties, evidence and witnesses,” says the company. “Accordingly, Ms. Huthart’s claims ought to proceed alongside those of the hundreds of other alleged victims of Mulcaire’s conduct.”
And if the judge doesn’t buy the argument about the U.K. providing a better forum for adjudication, News Corp. says that the complaint still should be dismissed because Huthart’s claims fall outside of the statute of limitations and that she hasn’t pierced the corporate veil in naming News Corp. as a defendant for the actions of its U.K. news division subsidiaries.
News Corp. recently split its company into a publishing unit and a film and television unit. In the 10-K, it’s noted that 21st Century Fox will indemnify News Corp. for fees and expenses paid in connection to the hacking allegations. 21st Century Fox also has the right to control the defense of civil claims.
The full motion to dismiss is below.
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