Murdoch Victory, Jury Rejects Spying Charges
May 15, 2008— -- A jury has rejected allegations of spying in a $1 billion lawsuit alleging that a company in Rupert Murdoch's NewsCorp empire participated in spying and hacking against a rival company.
While the jury did find in favor of the plaintiffs on some charges, they awarded the minimal amount possible, less then $2,000 in total.
The lawsuit was brought by the satellite television company EchoStar more than five years ago.
According to the suit, a NewsCorp subsidiary, NDS, hired computer hackers to crack the security code for the set-top boxes used by customers of EchoStar's Dish Network.
EchoStar alleged the NewsCorp hackers then posted the code on the Internet, allowing hundreds of thousands of people to access Dish Network for free.
Lawyers for EchoStar told jurors they should make NewsCorp's NDS pay $1 billion in damages, but in the end the jury only awarded damages of just over $1,500.
Lawyers for NewsCorp told the jurors its employees were not the ones responsible for posting the information on the Internet, although they conceded NDS had cracked the EchoStar security codes.
NewsCorp lawyers said such "reverse engineering" is standard in the cut-throat satellite television business.
EchoStar CEO Charles Ergen testified the NewsCorp hacking took place after merger talks between him and Murdoch broke off over the issue of which company had the better security system.
At one point, Judge Carter warned NewsCorp lawyers that if CEO Rupert Murdoch failed to testify and deny the allegations, the damages could reach in the "hundreds of millions of dollars."
Murdoch did not testify. He told ABC News that he "absolutely" denied his company had done anything unethical or improper.
"We are pleased that after four weeks of testimony on all the facts, the jury concluded that NDS violated the Federal Communications Act and the California Penal Code," Jeffrey H. Blum, EchoStar's vice president and associate general counsel, said of today's verdict. "We will continue to vigorously prosecute those individuals and companies that engage in stealing our satellite signals. While we are disappointed in the jury's damages award, we are pleased that NDS will be responsible for our attorney fees in this case, and that we were completely vindicated on NDS' meritless counterclaims."
