Thursday, February 22, 2007

Whip Inflation Now

Les Enfants Terrible directs us to a web site associated with a class action lawsuit against the Star Tribune for alleged circulation reporting irregularities.

The Complaint alleges that between 2000 and 2006, the Star Tribune Company falsely inflated sales and circulation volume on paid subscriptions, marketed and promoted those false sales and circulation figures to potential advertising customers, used those figures to set advertising rates, and, as a result, charged its advertising customers excessively high advertising rates.

The Star Tribune was sued for similar reasons back in 2005:

In a lawsuit filed Tuesday in U.S. District Court in Minneapolis, the plaintiffs accuse the Star Tribune of overstating its circulation figures by as much as 15 percent since 1999.

Among other things, the advertisers say the Star Tribune required distributors to dump unsold newspapers at hospitals, hotels, schools and shopping centers, and counted them toward its circulation numbers.


That case was settled with a cash payout to the plaintiffs:

Keith Moyer, president and publisher of the Star Tribune, said, "When the plaintiffs approached us to settle the suit, we felt an obligation to explore a way to end this matter that we have said from the outset had no merit. This nuisance settlement allows us all to move forward."

Under the terms of the agreement, lawyers for Masterson Personnel Inc. and Alternative Staffing Inc. will receive up to $40,000 for out-of-pocket expense incurred by their clients. In addition, the two employment agencies will share up to $15,000 in advertising rebates on a pro-rated basis for advertising in 2007 based on their advertising spending next year.


Not sure if this new case has any merit or not. But the term "class action" being used by lawyers tells me $55,000 will probably not be enough to make them go away this time.

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