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United Magazine 2nd Amended Complaint Dated June 21, 2001

[1]A:\u1_comp4.Chp C:\&Style\AD7_41.Sty F#13 at 06/20/01

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

---------------------------------------x UNITED MAGAZINE COMPANY, THE STOLL 00 Civ. 3367 (AGS) (AJP)
COMPANIES, MICHIANA NEWS SERVICE, INC., GEO.
R. KLEIN NEWS CO., CENTRAL NEWS COMPANY, and 2ND AMENDED
THE SCHERER COMPANIES, COMPLAINT

Plaintiffs, (Jury Demand)

-against-

MURDOCH MAGAZINES DISTRIBUTION, INC.,
TV GUIDE DISTRIBUTION, INC., CURTIS
CIRCULATION COMPANY, COMAG MARKETING
GROUP, LLC, HEARST DISTRIBUTION GROUP, INC.,
KABLE NEWS COMPANY, INC.,
TIME DISTRIBUTION SERVICES, INC.,
WARNER PUBLISHER SERVICES, INC., and
CHAS. LEVY CIRCULATING CO.,

ÿ Defendants.

-------------------------------------x

Plaintiffs, by their attorney, Carl E. Person, as and for their 2nd amended complaint (the "complaint"), respectfully allege:

JURISDICTION

1. This controversy involves Sections 1, 2, 4, 4B, 12 and 16 of the Clayton Act (15 U.S.C. Sections 12, 13, 15, 15B, 22 and 26), Section 1-2 of the Sherman Act (15 U.S.C. Section 1-2), and 28 U.S.C. Section 1337.

2. This Court has original jurisdiction over the antitrust claims under 28 U.S.C. Section 1337(a) and 15 U.S.C. Section 15(a), as hereinafter more fully appears.

3. Each of the defendants is qualified and doing business in the State of New York and in the Southern District of New York, or the defendant is transacting business in the State of New York and in the Southern District of New York, and this Court has personal jurisdiction over each of said defendants by reason of their presence in New York or under the New York long-arm statute, CPLR 302(a)(1) or 302(a)(4).

4. Venue as to each of the defendants is appropriate under 15 U.S.C. Sections 15 and 22, and 28 U.S.C. Section 1391(b).

5. Plaintiff also invokes the supplemental jurisdiction of this Court to consider claims arising under state law, including Ohio Rev. Code Section 1333.63 (misappropriation); Ohio Rev. Code Section 4165.02(12) (false statements re price reductions); and Ohio Rev. Code Section 1333.63, Uniform Trade Secrets Act.

PLAINTIFFS

6. Plaintiff United Magazine Company ("UNIMAG") is a corporation organized in 1964 under the laws of Ohio and has its principal place of business at 5131 Post Road, Dublin, OH 43017-1160. UNIMAG owns directly, or indirectly, 100% of the stock of each of the other plaintiffs. UNIMAG is a publicly-held company.

7. At all relevant times up to the date it ceased business during 1999, UNIMAG has been operating a wholesale business distributing mass-market magazines, newspapers, and paperback books in the states of Michigan and Ohio and parts of Connecticut, Illinois, Indiana, Kentucky, New York, North Carolina, Pennsylvania, South Carolina and West Virginia directly (under an agreement with each of the National Distributors) and through its plaintiff subsidiaries, and in the business of management of, and the development of systems software and data warehousing for, the distribution of mass-market magazines, newspapers and paperback books in the United States.

8. UNIMAG operated as a Magazine Wholesaler starting in February, 1998, when UNIMAG merged with the following wholly-owned Magazine Wholesaler subsidiaries: (i) Triangle News Co., Inc. (a Pennsylvania corporation, operating in PA); (ii) Ohio Periodical Distributors, Inc. (an Ohio corporation operating in OH, IN, WV and KY); (iii) Service News Company, a/k/a Yankee News Company (a Connecticut corporation operating in CT and NY); (iv) Service News Co. (a North Carolina corporation operating in NC and SC); (v) MacGreger News Agency, Inc. (a Michigan corporation operating in MI); (vi) Ludington News (an asset purchase during January, 1998, operating in MI, OH, IN & KY); and (vii) Northern News Company (an asset purchase in February, 1998, operating in MI). Prior to the start of the Covered Period (see Paragraph 37-A below), UNIMAG acquired all of the outstanding shares of stock of these first four corporations. During the Covered Period prior to February, 1998, UNIMAG was operating as a Magazine Wholesaler through these predecessor corporations.

9. Annual consolidated sales ending October 3, 1998 and October 2, 1999 [an incomplete year] for UNIMAG were $324.1 million and $276.6 million, respectively, but have declined presently to zero (not including current efforts in collecting accounts receivables).

10. Plaintiff The Stoll Companies ("Stoll") is a corporation organized in 1938 under the laws of Ohio and has its principal place of business at 5131 Post Road, Dublin, OH 43017-1160. Stoll is a wholly-owned subsidiary of UNIMAG, acquired pursuant to agreement dated July 31, 1996.

11. At all relevant times up to the date it ceased business during 1999, Stoll has been in the business of distributing magazines, newspapers and paperback books in the states of Ohio, Michigan and Indiana, under a distribution agreement with each of the National Distributors.

12. Plaintiff Michiana News Service, Inc. ("Michiana") is a corporation organized in 1971 under the laws of Michigan and has its principal place of business at 5131 Post Road, Dublin, OH 43017-1160. Michiana is a wholly-owned subsidiary of UNIMAG, acquired pursuant to agreement dated July 30, 1996.

13. At all relevant times up to the date it ceased business during 1999, Michiana has been in the business of distributing magazines, newspapers and paperback books in the states of Michigan, Indiana, Illinois and Ohio, under a distribution agreement with each of the National Distributors.

14. Plaintiff Geo. R. Klein News Co. ("Klein") is a corporation organized in 1958 under the laws of Ohio and has its principal place of business at 5131 Post Road, Dublin, OH 43017-1160. Klein is a wholly-owned subsidiary of UNIMAG, acquired pursuant to agreement effective August 30, 1996.

15. At all relevant times up to the date it ceased business during 1999, Klein has been in the business of distributing magazines, newspapers and paperback books in the states of Ohio, West Virginia and Pennsylvania, under a distribution agreement with each of the National Distributors.

16. Plaintiff Central News Company ("Central") is a corporation organized in 1959 under the laws of Ohio and has its principal place of business at 5131 Post Road, Dublin, OH 43017-1160. Central is a wholly-owned subsidiary of UNIMAG, acquired pursuant to agreement effective August 30, 1996.

17. At all relevant times up to the date it ceased business during 1999, Central has been in the business of distributing magazines, newspapers and paperback books in the states of Ohio, West Virginia and Pennsylvania, under a distribution agreement with each of the National Distributors.

18. Plaintiff The Scherer Companies ("Scherer") is a corporation organized in 1984 under the laws of Delaware and has its principal place of business at 5131 Post Road, Dublin, OH 43017-1160. Scherer is a wholly-owned subsidiary of UNIMAG, acquired pursuant to agreement dated August 2, 1996.

19. At all relevant times up to the date it ceased business during 1999, Scherer has been in the business of providing management services and computer hardware, software and technical support services to the other plaintiffs and their affiliated companies for the distribution of Magazines, newspapers and paperback books in the geographic areas in which these other plaintiffs and their affiliated companies were operating.

20. Service News Company, a Connecticut corporation doing business as Yankee News Company ("Yankee"), merged into UNIMAG during March, 1998. All of Yankee's tangible assets were sold to Hudson News as of January 12, 1998. Yankee's claims (as made by successor UNIMAG) are being made against all defendants other than Levy.

21. At all relevant times up to January 12, 1998, Yankee was in the business of distributing magazines, newspapers and paperback books in the states of Connecticut and New York, under a distribution agreement with each of the National Distributors.

22. Collectively, the plaintiffs are hereinafter referred to as the "plaintiffs", and the plaintiffs other than Scherer are referred to as the "Wholesaler Plaintiffs".

DEFENDANTS

23. Defendant Murdoch Magazines Distribution, Inc. ("Murdoch" or "Murdoch-I"), which may also be known through recent change of name as TV Guide Distribution, Inc., is a corporation organized in 1994 under the laws of Delaware and has its principal place of business at 1211 Avenue of the Americas, New York - 31st Flr., New York 10036.

24. Defendant TV Guide Distribution, Inc. (also referred to as "Murdoch" or "Murdoch-II") is a corporation organized, upon information and belief, in 2000 under the laws of Delaware and has its principal place of business at 1211 Avenue of the Americas, New York - 31st Flr., New York 10036. Murdoch-II, as alternative pleading to Paragraph 23 above, is a newly-created corporation formed to take over all or substantially all of the business activities of Murdoch-I, and as such is a successor to Murdoch-I.

25. Defendant Curtis Circulation Company ("Curtis") is a corporation organized in 1986 under the laws of Delaware and has its principal place of business at 730 River Road, New Milford NJ 07646-3048, and a registered agent for service at c/o The Prentice-Hall Corporation System, Inc., 80 State Street, Albany NY. Curtis is a successor to one or more earlier Curtis Circulating companies.

26. Defendant Hearst Distribution, Inc. ("Hearst" or "Hearst-I"), a/k/a "HDG", which may also be known through recent change of name as Comag Marketing Group, LLC, is a corporation organized in 1979 under the laws of Delaware, and has its principal place of business at 250 W. 55th Street, New York NY 10019 or 959 Eighth Avenue, New York NY 10019.

27. Defendant Comag Marketing Group, LLC (also referred to as "Hearst" or "Hearst-II") is a corporation organized, upon information and belief, in 2000 under the laws of Delaware and has its principal place of business at 250 W. 55th Street, New York NY 10019 or 959 Eighth Avenue, New York NY 10019. Hearst-II, as alternative pleading to Paragraph 27, is a newly-created corporation formed to take over all or substantially all of the business activities of Hearst-I, and as such is a successor to Hearst-I.

28. Defendant Kable News Company, Inc. ("Kable) is a corporation organized in 1965 under the laws of Illinois, and has its principal place of business at 641 Lexington Avenue - 6th Flr., New York NY 10022.

29. Defendant Time Distribution Services, Inc. ("Warner" or "Warner-I"), a/k/a "TDS", which may also be known through recent change of name as Warner Publisher Services, Inc., is a corporation organized in 1974 or 1989 under the laws of Delaware, and has its principal place of business at 1271 Avenue of the Americas - 45th Flr., New York NY 10020.

30. Defendant Warner Publisher Services, Inc. ("Warner" or "Warner-II") is a corporation organized in 1932 under the laws of New York, and has its principal place of business at 1271 Avenue of the Americas - 45th Flr., New York NY 10020. Warner-II, as alternative pleading to Paragraph 29 above, is a newly-created corporation formed to take over all or substantially all of the business activities of Warner-I, and as such is a successor to Warner-I.

31. Defendants Murdoch, Curtis, Hearst, Kable and Warner are hereinafter referred to as the "National Distributors", and each of the National Distributors is one of the five major distributors of Magazines in the United States, distributing anywhere from 1 to 13 of the 38 Magazine "supertitles", as described in Paragraph 37-F below, together with a substantial number of titles of Magazines and other periodicals, and paperback books.

32. Upon information and belief, each of the National Distributors distributes Magazines, newspapers, paperback books and other periodicals directly and through one or more subsidiaries, and is the alter ego of each such subsidiary, and dominates and controls the practices and policies of each of such subsidiaries. Also, each of the National Distributors (other than Kable) is the alter ego of each of its affiliated companies which publish many of the titles being distributed by the National Distributor.

33. Defendant Chas. Levy Circulating Co. ("Levy") is a general partnership organized in 1987 under the laws of Illinois, as a successor organization, and has its principal place of business at 1200 N. North Branch Street, Chicago IL 60622. Levy is owned by The Chas. Levy Company (the "Levy Company") and each is the alter ego of the other. The Levy Company operates under various names, including Levy Home Entertainment Co. and Chas. Levy Transportation Co.

34. Levy directly and through the Levy Company is in the business of purchasing Magazines, newspapers and paperback books from Murdoch and other National Distributors and reselling them as wholesaler to newsstands, convenience stores, supermarkets and other retailers for resale. Also, Levy is selling directly to Major Retailers for delivery outside of Levy's exclusive territories.

35. Upon information and belief, Levy is the alter ego of each subsidiary owned by it, and dominates and controls the practices and policies of each of its subsidiaries.

36. Each defendant maintains an office, transacts business, is found, or has an agent within the Southern District of New York.

DEFINITIONS

37. The following definitions are used in this complaint:

A. "Covered Period", unless stated otherwise, refers to the period commencing four years prior to the filing of the complaint during May, 2000.

B. "Proprietary Data System" refers to Scherer's data processing and data warehousing system, including Scherer's SMARTS system to keep track of purchases and sales of Magazines, newspapers, other periodicals and mass-market paperback books and enable Scherer (and the other plaintiffs, defined in Paragraph 37-L below as the "Wholesaler Plaintiffs") to predict with greater accuracy than anyone else in the industry the titles and quantity of such Magazines, newspapers and paperback books which would most likely sell to consumers at specific retail locations; included within such system is Scherer's SMARTS system analysis to analyze available display space of a specific retailer and allocate the space by title based on a SMARTS number calculated for relative potential sales performance at that particular location with cutoffs for each of the various categories of Magazines.

C. "Discounts, Rebates and Deductions" refers to all ways in which Murdoch and the other National Distributors (as distributors to the Wholesalers) have been providing secret discounts, rebates, other payments, services of value and other benefits to Levy, Hudson News and other Wholesalers which were not offered, known, provided or made available to the Wholesaler Plaintiffs, as more fully described in Paragraphs 77 (a-s) below, as described in Paragraph 37-F ("National Distributors") below.

D. "Magazines" refers to magazine titles (including some in newspaper format such as National Enquirer, Weekly World News, Globe, and Star, and including comic books, crossword puzzle titles and miscellaneous other periodicals) published periodically (generally at intervals of no less than one week and no longer than three months) for distribution in the United States. Of all Magazines distributed in the United States during the Covered Period, the Publishers published and the National Distributors distributed for them approximately 4,000 to 5,000 mass-market Magazine titles to the Wholesalers (the "Mass-Market Magazines"), depending on the month and year.

E. "Major Retailers" refers to supermarkets, drug-stores, convenience-stores, discount-stores, airport terminals, other chain stores and large independent retail stores purchasing or potentially purchasing Magazines from Wholesalers or directly from Publishers, or from National Distributors for retail resale, including but not limited to: 1. Meijer, Inc. (Grand Rapids, MI), 2. Wal-Mart, 3. Kroger, 4. Rite-Aid, 5. Marsh, 6. K-Mart, 7. Walgreen, 8. Topp's Markets, Inc., 9. CVS, 10. Super Valu, and 11. Paradies.

F. "National Distributors" refers to defendant Murdoch and the four other major Magazine distributors in the United States (each of whom is a defendant herein), as follows (together with a list of the Magazine supertitles and total number of Magazine titles distributed by each of the five, respectively):

1. Murdoch Magazines Distribution, Inc. (12 supertitles: Country Weekly, First for Women, National Enquirer, New Woman, Readers' Digest, Seventeen, Soap Opera Digest, Soap Opera Weekly, Star, TV Guide, Weekly World News, and Woman's World; and a total of approximately 89 Magazine titles);

2. Curtis Circulation Company (10 supertitles: Family Circle, Jet, Ladies Home Journal, Maxim, McCall's, Newsweek, Penthouse, Prevention, Woman's Day, and YM; and a total of approximately 922 Magazine titles);

3. Comag/ICD/Hearst Distribution Group, Inc. (9 supertitles: Cosmopolitan, Country Living, Good Housekeeping, Marie Claire, Martha Stewart, and Redbook; also Country Weekly, National Enquirer, Star and Weekly World News, until such 4 titles were picked up for distribution by Murdoch; and a total of approximately 222 Magazine titles);

4. Kable News Company (1 supertitle: Shape; and a total of approximately 578 Magazine titles) and the only National Distributor which is not also a Publisher, or affiliate of the Publisher, of some of the Magazines distributed by it; and

5. Time-Warner Publisher Services, Inc. (13 supertitles: Better Homes & Gardens, Glamour, Globe, Mademoiselle, National Examiner, People, Playboy, Self, Sports Illustrated, Sun, Time, Us, and Vogue; and a total of approximately 346 Magazine titles).

G. "Other Favored Wholesalers" refers to non-party Wholesalers Hudson News and any other favored Wholesalers with whom any of the Wholesaler Plaintiffs competed, knowingly or not, for the business of the Wholesaler Plaintiff's existing customers located in such plaintiff's territory.

H. "Plaintiffs" or "plaintiffs" refers to UNIMAG (including its various merged-corporation divisions and other Wholesaler divisions as described in Paragraph 8 above), Stoll, Michiana, Klein, Central, and Scherer. [See "Wholesaler Plaintiffs" at Paragraph 37-L below, which excludes Scherer.]

I. "Publishers" refers to the following nine major publishers of various mass-market Magazine titles described in subparagraphs "D" and "F" above, for distribution in the United States through the National Distributors to each of the Wholesalers; and sets forth the number and names of the Magazine supertitles published by each of the Publishers:

1. American Media Corp. (4 supertitles: Country Weekly, National Enquirer, Star, Weekly World News) [Note: AMC acquired the Globe during early 2000];

2. Conde Nast (4 supertitles: Glamour, Mademoiselle, Self, and Vogue);

3. Gruner/Jahr (2 supertitles: Family Circle, and YM);

4. Hachette/Curtis Publishing (1 supertitle: Woman's Day);

5. Hearst Corp. (5 supertitles: Cosmopolitan, Country Living, Good Housekeeping, Redbook and Marie Claire);

6. Murdoch, through its affiliates (3 supertitles: TV Guide, Seventeen, and Soap Opera Weekly) [Note: During December, 1998, Seventeen was sold to publisher Primedia, Inc.];

7. Reader's Digest, Inc. (1 supertitle: Reader's Digest);

8. Time-Warner, Inc. (5 supertitles: In Style, People, Sports Illustrated, Teen People, and Time); and

9. Meredith Publishing (1 supertitle: Better Homes & Gardens);

J. "Relevant Market" or relevant submarket refers to the product market of Magazines in the geographic market of the United States and in the geographic submarkets of the states and territories in which each of the Wholesaler Plaintiffs and Levy did business during the Covered Period.

K. "Territory of Wholesaler Plaintiff _______" or "_________'s Territory" refers to the geographic area(s) of U.S. Census-Derived Designated Marketing Areas ("DMA" or "DMA's") [as derived from "1997 DMA Report for USA"] (i) as to UNIMAG, as set forth in Appendix A hereto; (ii) as to Stoll, as set forth in Appendix B hereto; (iii) as to Michiana, as set forth in Appendix C hereto; (iv) as to Klein, as set forth in Appendix D hereto; and (v) as to Central, as set forth in Appendix E hereto.

L. "Wholesaler Plaintiffs" refers to UNIMAG (including the various wholesaler divisions), Stoll, Michiana, Klein and Central. The term does not include Scherer.

M. "Wholesalers" refers to the Wholesaler Plaintiffs and the other wholesalers of mass-market Magazines in the United States, including the following major wholesalers:

1. Anderson News Co. LLC ("ANCO", Knoxville, TN);

2. ETD Kromar (Dallas, TX);

3. Hudson News (Journal Square, NJ);

4. Defendant Levy (Chicago, IL);

5. The News Group ("TNG", Charlotte NC, a/k/a Great Atlantic News, LLC and Pattison News Group); and

6. Plaintiff UNIMAG, including the Wholesaler Plaintiffs (Dublin, OH) [out of business].

Allegations in Support of the Wholesaler Plaintiffs' Alleged Relevant Market

38. The following facts are alleged as proof that the Relevant Market (as defined in subparagraph "J" in the preceding paragraph) includes all reasonably interchangeable products in the geographic market and submarkets:

A. Magazines of various types provide news and/or entertainment and advertising to various intended segments of the population.

B. Magazines are sold in various ways, including mail order offerings to subscribe to one or more Magazines to be selected from an array of Magazine offerings, or by the offering of an array of Magazines on magazine racks, for selection and purchase by the customers.

C. In retail stores, Magazines are grouped together, rather than placed separately in the stores for offering with related non-Magazine products, indicating that Magazines are interchangeable among themselves to a great extent, but are not as interchangeable with the products featured in the Magazines. For example, Magazines on automobiles are not interchangeable with automobiles.

D. Magazines are published by magazine publishers instead of by manufacturers of the products featured in the Magazines, further indicating that Magazines are interchangeable among Magazines more so than with the products or services on which the respective Magazines focus.

E. Magazines are distributed by the same distributors and wholesalers, instead of by the manufacturers or distributors of the products advertised or featured in the Magazines.

F. Writers generally write for more than one Magazine, indicating that the persons interested in a single writer can find his/her writings in more than one Magazine title.

G. Magazines have a short shelf life because of their replacement by the next edition of the periodical, which makes Magazines economic to distribute and exhibit together, in competition with each other for sales to consumers.

H. The covers of Magazines are used to compete with other titles then being displayed, by use of pictures, words and designs which attract the prospective customer to pick one Magazine title over all others being offered at the same time.

I. Magazines in a newspaper format (such as the National Enquirer and Star) are displayed in the retailers' racks together with other popular publications such as those listed in Paragraph 37-G (1-5) above.

J. Magazines are published in different sizes and appearances, including a smaller or pocket size, such as TV Guide and Jet magazine or typical size such as People magazine; or a newspaper tabloid format (such as the National Enquirer), but they compete with each other for purchase from racks of the retailers offering Magazines and compete with each other in mail-order offerings of subscriptions to each of many Magazines.

K. Magazines generally are not of local interest, although publishers do create regional editions (such as TV Guide or various city magazines) for distribution to a specific region or city, which enables the cover to feature the article of regional interest and increase sales for such magazine in such region.

SUMMARY OF THE COMPLAINT

39. For more than 60 years, the Wholesaler Plaintiffs were in the business of wholesale mass-market distribution of Magazines (as described in subparagraph Paragraph 37-D above), other periodicals and paperback books in the Designated Marketing Areas ("DMA" or "DMA's") described in relation to the U.S. Census, as identified specifically for each Wholesaler Plaintiff in Paragraph 9 of the Appendix for such plaintiff at the end of this complaint, with annual net sales of about $325,000,000 and with an estimated 10% wholesale market share in the United States.

40. Murdoch is the leading National Distributor of Magazines in the United States by reason of Murdoch's substantial market share of Magazines being sold through Wholesalers to Major Retailers, including the following 12 Magazine supertitles: Country Weekly, First for Women, National Enquirer, New Woman, Readers' Digest, Seventeen, Soap Opera Digest, Soap Opera Weekly, Star, TV Guide, Weekly World News, and Woman's World.

41. The Wholesaler Plaintiffs (as a group, one of the top 5 Wholesalers in the U.S. as of 1997) were put out of business by Murdoch and (upon information and belief) the 4 other National Distributors and defendant Levy through (i) the National Distributors' sales of Magazines to defendant Wholesaler Levy (also one of the top 5 Wholesalers in the U.S.) and Other Favored Wholesalers at prices significantly lower than the prices charged at the same time by the National Distributors to the Wholesaler Plaintiffs for the same Magazine titles (Count I); (ii) interference by Levy with the Wholesaler Plaintiffs' relationships with their customers and the National Distributors (Count V); (iii) breach by all National Distributors of their fiduciary duty and duty to hold in confidence of Wholesaler Plaintiffs' proprietary business information (Count VII); (iv) misappropriation by Murdoch of Scherer's Proprietary Data System in Violation of Ohio Uniform Trade Secrets Act (Count VIII); (v) misappropriation by Levy of Plaintiffs' trade secrets in violation of the Ohio Uniform Trade Secrets Act (Count IX); (vi) breach by Murdoch of Confidential Relationship and Fiduciary Duty with Scherer with a Wrongful Taking of Scherer's Proprietary Data System (Count XI); and (vii) deceptive trade practices by Levy (false statements re price reductions injuring the Wholesaler Plaintiffs) in violation of Ohio Deceptive Trade Practices Act (Count XIV).

BACKGROUND OF MAGAZINE DISTRIBUTION INDUSTRY

42. The Magazine distribution industry began in 1864 when American News Company started distributing, through its own wholesale divisions, publishers' magazines, books (primarily pulp and paperback books), and periodicals to retailers.

43. Around 1900, other national distributors arose who competed with American News by distributing to a network of regional and local wholesalers who in turn supplied the retailers. Within each distribution area, a single wholesaler competed directly against a single American News branch.

44. American News declined and, by August, 1957, withdrew from the national magazine distribution industry, and the remaining national distributors acquired the distribution rights to the titles previously handled by American News and distributed them through the single wholesaler left in each distribution area.

45. Since the late 1950's, the number of national distributors has decreased from about 15-16 to the present five National Distributors (see Paragraph 37-F above). By 1995, the number of Wholesalers decreased from approximately 850 to approximately 155, operating in 290 locations. At present, the number has decreased to 4 major Wholesalers and about 20 minor Wholesalers.

46. The distribution system devised by the non-American News national distributors did not materially change from 1900 to 1995. Basically, the National Distributors acquire from the Publishers the rights to distribute certain titles of Magazines, paperbacks, and other periodicals. The National Distributors and/or Publishers determine the quantity of each title to be shipped to each Wholesaler, and the National Distributors direct the publishers' printers to ship them directly to the Wholesalers, and send a written Notice of Allotment to the Wholesalers.

47. From each allotment of a title, the Wholesalers (subject to all adjustments imposed on them by the National Distributors) determine how many of the copies of that title received by the Wholesalers should be supplied to each retailer in the Wholesaler's distribution area, prorated according to past sales history. The Wholesalers would then divide up each allotment according to the ultimate retailer destination, place the items on trucks, and deliver the publications to each retailer. All copies received are distributed in accordance with the National Distributors' return agreements (see Exhibit A as to the form of agreement with Murdoch), which is substantially similar in form for all National Distributors.

48. At the retail locations, the Wholesalers arrange and stock the shelves of display racks paid for and provided and maintained by the Wholesalers (with Publishers reimbursed for supplying wire checkout racks). Since most of the Magazines and other periodicals are time-sensitive products with fixed expiration dates, the Wholesalers must place new issues on the shelves as soon as they become available and must also remove outdated publications from the shelves.

49. The Wholesalers take the outdated publications back to their distribution centers and account for them in various ways, such as by tearing off the front covers and returning just the covers to the Publishers or, for Wholesalers who have affidavit agreements with National Distributors and/or Publishers, scanning the publication covers for the UPC code and providing the National Distributors with written affidavits of returns that itemize the quantity and issue of each returned title (see Exhibit A hereto).

50. The bulk of the outdated publications is then discarded by the Wholesalers. Full credit for the returns is awarded by the Publishers to the National Distributors, who pass it on to the Wholesalers, who in turn pass it on to the retailers.

51. The National Distributors make a profit in the manner comparable to a commission based solely on magazines, books, and periodicals actually sold at the retail level, because they buy and resell the publications with no direct costs other than the price paid for publications.

52. The National Distributors sell the publications to the Wholesalers at a discount from the price marked on the publications, and the Wholesalers sell the publications in a similar fashion to the retailers (except that the Wholesalers bear most of the distribution costs), and retailers sell to the ultimate consumer. Outdated and unsold publications generate a credit (i.e., a refund) starting with the retailer and moving upward to the Wholesaler, then to the National Distributor, which credit is ultimately given by the Publisher.

53. National Distributors have a strong economic incentive to distribute as many issues and copies of as many titles as possible. Since they enjoy credit for any unsold issues, they tend to overestimate the appropriate quantity to be shipped to the Wholesalers without much regard for the labor-intensive services the Wholesalers will have to provide to process, handle, shelve, "return", and discard unsold publications. Large National Distributors, such as Murdoch, entice Publishers to become their client with guarantees and assurances the distributor's market power will force more copies upon Wholesalers and force Wholesalers to add additional, unproductive retailers.

54. Since virtually the creation of the non-American News distribution system, the National Distributors have controlled the allotment of titles and quantity of issues which the Wholesalers receive and have required the Wholesalers to accept and distribute the allotments in their entirety.

55. These practices have required the Wholesalers to make substantial investments of capital in, for example, retail display fixtures, warehouse facilities, trucks, personnel and computer systems to a much greater degree than would be necessary if the Wholesalers were free to determine appropriate titles and quantities. Also, this oversupply at retail locations reduces visibility and sales of many lesser Magazine titles.

56. In return for accepting the responsibility and burdens for handling the extra work, including sales, marketing, timely delivery and information services, the sharing of proprietary information with Murdoch and the other National Distributors, and incurring the extra expenses resulting from the full-line forcing and tie-in sales described in the preceding paragraph, the Wholesalers have enjoyed the exclusive right to distribute Magazines within certain defined geographic areas.

57. This exclusive right was either agreed at the outset of the relationship between the National Distributor and the Wholesaler or evolved over the decades through trade custom and course of dealing between the National Distributor and the Wholesaler.

58. Prior to 1996, it became a well-established industry practice that a Wholesaler enjoyed the exclusive right to distribute Magazines to any retailer in the Wholesaler's distribution area.

59. This practice prior to 1996 was manifested in a number of ways. First, throughout the years, the National Distributors have allotted each Wholesaler, through Notices of Allotment, editions of national Magazines such as TV Guide and Cosmopolitan which have been customized with local advertising and/or local content only for that Wholesaler's particular geographic-sensitive product, National Distributors have strictly circumscribed that Wholesaler's ability to sell outside its geographic area and, conversely, other Wholesalers' ability to invade that Wholesaler's area. See Exhibit A (Affidavit form) for some of the terms restricting the Wholesaler.

60. Secondly, National Distributors have punished Wholesalers who have invaded other Wholesalers' exclusive geographic areas (as to Magazines). For example, National Distributors including Murdoch, have refused to allocate local editions of TV Guide to such invading Wholesalers, and have refused to increase the quantity of other titles to the invading Wholesaler. Additionally, National Distributors including Murdoch have threatened to cut off all supply of Magazines to invading Wholesalers. In addition, the National Distributors would suspend or terminate the affidavit return privileges of invading Wholesalers (thus drastically increasing a Wholesaler's costs by requiring the physical return of all unsold copies).

61. Thirdly, in light of the industry practice of exclusive geographic areas as to Magazines, Wholesalers who have wished to expand into a certain geographic area have done so by acquiring the Wholesaler in the desired area. National Distributors including Murdoch have acknowledged that practice and reaffirmed the exclusive nature of the Wholesale distributorship in that area by insisting that they (the National Distributors) approve the sale and the purchaser.

62. Also, through approximately mid-1995 there existed a practice in the Magazine distribution industry of continuation of the exclusive territorial practice (including customer protection) unless the National Distributor finds and proposes a buyer of all or part of a territory upon payment of reasonable compensation payable to the Wholesaler, which was often set at approximately 60% of the Wholesaler's annual net sales, plus or minus the Wholesaler's net worth.

63. Starting in 1995, the National Distributors acceded to the requests of some Major Retailers and permitted some Wholesalers to supply Magazines to retail locations of Major Retailers without regard to the exclusive geographic areas of the Wholesalers, which has caused substantial shifting of business and profits, generating losses for Wholesalers who lost such business to the Wholesalers who have been permitted to invade the exclusive territories of other Wholesalers.

64.For the first time in the industry's 70-year history, the National Distributors have endorsed the actions of Wholesalers invading other Wholesalers' territories and provided support to such invasion of exclusive territories by providing the successful bidders with the local editions and sufficient quantities of all titles to enable the successful-bidding Wholesaler to take over Magazine sales formerly being made, on an exclusive-territorial basis, by the former Wholesaler.

65. This bidding process has destroyed the independent Wholesalers and the customer-protected territorial exclusive system of Magazine distribution, with the inevitable result that smaller retail stores will not be serviced by any Wholesaler, and smaller Magazines and other publications will lose distribution both to the smaller retail stores as well as to the Major Retailers, and be unable to continue in business, and/or becoming unable to survive as publications in any given marketplace due to lack of a cost effective distribution system, and replaced by one dominated by their competitors (i.e., Murdoch and some of the other National Distributors).

66. As of recent, the market share for retail sales of Magazines is: supermarkets (44.06%), mass marketers (15.83%), drugstores (9.76%), convenience stores (8.28%), bookstores (7.62%), terminals (4.29%), newsstands (3.81%), and miscellaneous (6.36%), with supermarkets focused on selling a majority of units coming from the supertitles, which trend is increasing.

COUNT I

Violation of Robinson-Patman Act, Sections 2(a), 2(c) and 2(f) - All Wholesaler Plaintiffs against All Defendants

67. The Wholesaler Plaintiffs repeat and reallege each of the allegations set forth in Paragraphs 1-66 above and further allege that the activities of each of the defendants are in violation of the Robinson-Patman Act Sections 2(a) and 2(c) as to each of the National Distributors, and Sections 2(c) and 2(f) as to Levy.

DISCRIMINATORY ACTIVITIES OF THE NATIONAL DISTRIBUTORS

68. Upon information and belief, starting no later than 1995, Levy has been purchasing Magazines from Murdoch and the other National Distributors at a unit price per Magazine which is substantially lower than the unit price per Magazine then being paid by each of the Wholesaler Plaintiffs for the same Magazine title from the same National Distributor.

Plaintiff-Specific and Defendant-Specific Allegations

69. Each of the Wholesaler Plaintiffs was purchasing Magazine titles and reselling them in competition with Levy and specific Other Favored Wholesalers, pursuant to a pricing system under which Magazines were grouped and priced the same within a group by each of the National Distributors, as follows:

A. Wholesaler Plaintiff UNIMAG was purchasing on a periodic basis substantially all Magazine titles (described in Paragraph 37-D above) and all of the Magazine supertitles (described in Paragraphs 37-F and 37-I above) from each of the respective National Distributors during the Covered Period and during such period UNIMAG was competing with Levy and Other Favored Wholesalers for sales of the same Magazine titles to UNIMAG's customers within UNIMAG's Territory, and with Levy for customers of Levy in Levy's Territory and for customers of Other Favored Wholesalers in their respective territories; and at the same time Murdoch and the other National Distributors were selling the same Magazine titles (being the same Magazine dates) to Levy and Other Favored Wholesalers at the discriminatory prices described in Paragraphs 73-75 and Appendices A-E below. The Wholesaler Plaintiff UNIMAG and Levy competed for the sale of the same goods (Magazine titles sold to them at the same time by each of the National Distributors), and there was price discrimination between Wholesaler Plaintiff UNIMAG and Levy during such period, and in UNIMAG's Territory, as to all such Magazine sales.

B. Wholesaler Plaintiff Stoll was purchasing on a periodic basis substantially all Magazine titles (described in Paragraph 37-D above) and all of the Magazine supertitles (described in Paragraphs 37-F and 37-I above) from each of the respective National Distributors during the Covered Period and during such period Stoll was competing with Levy and Other Favored Wholesalers for sales of the same Magazine titles to Stoll's customers within Stoll's Territory, and with Levy for customers of Levy in Levy's Territory and for customers of Other Favored Wholesalers in their respective territories; and at the same time Murdoch and the other National Distributors were selling the same Magazine titles (being the same Magazine dates) to Levy and Other Favored Wholesalers at the discriminatory prices described in Paragraphs 73-75 and Appendices A-E below. The Wholesaler Plaintiff Stoll and Levy competed for the sale of the same goods (Magazine titles sold to them at the same time by each of the National Distributors), and there was price discrimination between Wholesaler Plaintiff Stoll and Levy during such period, and in Stoll's Territory, as to all such Magazine sales.

C. Wholesaler Plaintiff Michiana was purchasing on a periodic basis substantially all Magazine titles (described in Paragraph 37-D above) and all of the Magazine supertitles (described in Paragraphs 37-F and 37-I above) from each of the respective National Distributors during the Covered Period and during such period Michiana was competing with Levy and Other Favored Wholesalers for sales of the same Magazine titles to Michiana's customers within Michiana's Territory, and with Levy for customers of Levy in Levy's Territory and for customers of Other Favored Wholesalers in their respective territories; and at the same time Murdoch and the other National Distributors were selling the same Magazine titles (being the same Magazine dates) to Levy and Other Favored Wholesalers at the discriminatory prices described in Paragraphs 73-75 and Appendices A-E below. The Wholesaler Plaintiff Michiana and Levy competed for the sale of the same goods (Magazine titles sold to them at the same time by each of the National Distributors), and there was price discrimination between Wholesaler Plaintiff Michiana and Levy during such period, and in Michiana's Territory, as to all such Magazine sales.

D. Wholesaler Plaintiff Klein was purchasing on a periodic basis substantially all Magazine titles (described in Paragraph 37-D above) and all of the Magazine supertitles (described in Paragraphs 37-F and 37-I above) from each of the respective National Distributors during the Covered Period and during such period Klein was competing with Levy and Other Favored Wholesalers for sales of the same Magazine titles to Klein's customers within Klein's Territory, and with Levy for customers of Levy in Levy's Territory and for customers of Other Favored Wholesalers in their respective territories; and at the same time Murdoch and the other National Distributors were selling the same Magazine titles (being the same Magazine dates) to Levy and Other Favored Wholesalers at the discriminatory prices described in Paragraphs 73-75 and Appendices A-E below. The Wholesaler Plaintiff Klein and Levy competed for the sale of the same goods (Magazine titles sold to them at the same time by each of the National Distributors), and there was price discrimination between Wholesaler Plaintiff Klein and Levy during such period, and in Klein's Territory, as to all such Magazine sales.

E. Wholesaler Plaintiff Central was purchasing on a periodic basis substantially all Magazine titles (described in Paragraph 37-D above) and all of the Magazine supertitles (described in Paragraphs 37-F and 37-I above) from each of the respective National Distributors during the Covered Period and during such period Central was competing with Levy and Other Favored Wholesalers for sales of the same Magazine titles to Central's customers within Central's Territory, and with Levy for customers of Levy in Levy's Territory and for customers of Other Favored Wholesalers in their respective territories; and at the same time Murdoch and the other National Distributors were selling the same Magazine titles (being the same Magazine dates) to Levy and Other Favored Wholesalers at the discriminatory prices described in Paragraphs 73-75 and Appendices A-E below. The Wholesaler Plaintiff Central and Levy competed for the sale of the same goods (Magazine titles sold to them at the same time by each of the National Distributors), and there was price discrimination between Wholesaler Plaintiff Central and Levy during such period, and in Central's Territory, as to all such Magazine sales.

Each of the Wholesaler Plaintiffs Separately Stated

70. Various competitive facts concerning each of the Wholesaler Plaintiffs and their competitive relationship with Levy and other Wholesalers are set forth in Appendices A through E attached hereto, separately stated for each of the Wholesaler Plaintiffs UNIMAG (see Appendix A hereto); Stoll (see Appendix B hereto); Michiana (see Appendix C hereto); Klein (see Appendix D hereto); and Central (see Appendix E hereto).

Additional Facts Concerning the Alleged Discrimination

71. Levy's purchasing at discriminatory prices from Murdoch and each of the other National Distributors has been taking place, based upon information and belief, for more than 10 years, and was based on higher union costs in Chicago and Philadelphia which Levy was experiencing for at least the past 10-year period preceding the commencement of this

action, and thereafter.

72. Prior to Levy's actual sales (starting in 1995) to the Wholesaler Plaintiffs' Major Retailer customers in plaintiffs' territories, Levy was a potential competitor of the Wholesaler Plaintiffs for such customers, with the lower prices to steal plaintiffs' customers from plaintiffs for many years prior to 1995.

73. The amount of the discrimination for such period was substantial, amounting to a range of 5 cents to 20 cents per copy of each Magazine involved, where even a 1-cent discrimination per copy amounts to an aggregate discrimination of $1,000,000 per year on purchases of 100 million Magazine copies. During its last full year, the Wholesaler Plaintiffs purchased and distributed approximately 500 million copies of Magazines.

74. On their purchases of Magazines from each of the National Distributors, the Wholesaler Plaintiffs received a discount from the Publisher's cover price amounting to about 40% as to Magazines and about 50% as to paperback books. The discount at which the National Distributor sold its Magazines to each of the Wholesaler Plaintiffs is set forth in Appendices A through E below, for each of said plaintiffs respectively.

75. Upon information and belief, the average difference in unit price, when all discriminatory payments to Levy and the Other Favored Wholesalers are taken into account, ranged from an additional 2% to 8% discount off the Publishers' cover price of the Magazine over the discount provided by each of the National Distributors to each of the Wholesaler Plaintiffs.

76. The Wholesaler Plaintiffs lost substantially all of their business, assets and profits during the period starting June 30, 1996 and continuing to the present by reason of this substantial difference in per-unit price between the Wholesaler Plaintiffs and Levy (and, upon information and belief, the Other Favored Wholesalers).

77. Upon information and belief, the National Distributors offered and/or Levy solicited, induced and knowingly received on its Magazine purchases from each of the National Distributors the following secret Discounts, Rebates and Deductions knowing that they were not being offered or made available to the Wholesaler Plaintiffs and that such Discounts, Rebates and Deductions were in violation of the Robinson-Patman Act:

(a) volume discounts in excess of the volume discounts granted to the Wholesaler Plaintiffs;

(b) per-unit prices in excess of the per-unit prices being paid by the Wholesaler Plaintiffs;

(c) transportation expense reimbursement or subsidy to offset Levy's higher operating costs of shipping Magazines, which were always higher than the Wholesaler Plaintiffs' operating costs; and starting in mid-1999, upon information and belief, a possible additional expense reimbursement or subsidy to assist Levy in operating within the Wholesaler Plaintiffs' respective territories;

(d) advertising allowances, including off-invoice deductions without requiring that the payments were applied for the purported purposes made;

(e) a "Retail Display Allowance" pass-through discount to Levy (and, upon information and belief, the Other Favored Wholesalers) as to large chains receiving a percentage-based RDA for selected titles purchased from the National Distributors;

(f) a percentage-based retail display allowance to major retailers for selected Magazine titles;

(g) return privileges, including additional compensation on the returns of Levy and Other Favored Wholesalers;

(h) slotting and start-up allowances;

(i) services (e.g., drop shipping);

(j) end cap, positioning and shelf display allowances;

(k) deductions from and renegotiations of unpaid invoices;

(l) end-of-year and full-line discounts;

(m) promotional payments without requiring that the payments were applied for the purported purposes made;

(n) expense reimbursement;

(o) free or non-invoiced Magazines;

(p) reporting system benefits;

(q) preferential quantity and title relief on forced distributions of non-supertitles;

(r) other ways of receiving discounts, rebates and refunds; and

(s) upon information and belief, Murdoch and the other National Distributors arranged for additional discounts and payments to or for the benefit of Levy:

...(1) from the Publishers of Magazines being distributed by each of the respective National Distributors, given directly to Levy; and

...(2) from said Publishers and the National Distributors, given indirectly as brokerage fees or brokerage commissions to Levy Trucking Company, Levy Book Company or other Levy affiliates for brokerage activities or services not performed by such Levy companies, which amounts were turned over to Levy, and constituted unlawful rebates paid to Levy by the National Distributors directly, or indirectly through the Publishers - in violation of paragraph 2(c) of the Robinson-Patman Act. Upon information and belief, these payments were used as a subsidy for Levy's delivery costs into the Wholesaler Plaintiffs' respective territories.

78. The Magazines of the National Distributors were sold in interstate commerce, and were purchased by the Wholesaler Plaintiffs and Levy and the Other Favored Wholesalers in interstate commerce, in various states of the United States.

79. During the Covered Period, the Wholesaler Plaintiffs have been in competition with Levy and the Other Favored Wholesalers for sales of Magazines to some of the Wholesaler Plaintiffs' Major Retailer customers and prospective customers in the 11-state territory serviced by the Wholesaler Plaintiffs, and in potential competition in the exclusive territories serviced by Levy and the Other Favored Wholesalers.

80. The activities of Levy and the National Distributors, as alleged, have had an adverse impact upon and injured competition between the Wholesaler Plaintiffs and Levy and the Other Favored Wholesalers.

81. Upon information and belief, the Wholesalers representing more than 70% of the entire United States market for wholesale sales of Magazines have either gone out of business or have suffered major financial reversals and are having a difficult time remaining in business starting in 1996 under the existing conditions.

82. The National Distributors, in the course of being engaged in commerce, have discriminated in price between the Wholesaler Plaintiffs and Levy, and between the Wholesaler Plaintiffs and each of the Other Favored Wholesalers, all as purchasers of the same Magazine titles (at the same time and of equal grade and quality), where the purchases involved in such discrimination are in commerce, and such Magazines are sold for use, consumption or resale within the United States or the District of Columbia.

83. Levy and the Other Favored Wholesalers have been and are the favored purchasers, and the Wholesaler Plaintiffs have been and are the disfavored purchasers.

84. The effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in the lines of commerce or Relevant Market and submarkets described in Paragraph 37-J above.

85. Also, the activities alleged tend to injure, destroy, or prevent competition by the Wholesaler Plaintiffs and the other disfavored Wholesalers with Levy, who knowingly receives and/or induced the benefit of such discrimination.

86. Murdoch was also soliciting Levy at the same time to invade the Wholesaler Plaintiffs' exclusive territory, to put the Wholesaler Plaintiffs out of business and consolidate said plaintiffs' businesses in the hands of Levy.

87. Murdoch, through its distribution of TV Guide and the tabloid newspapers Star, National Enquirer and Weekly World News, has wound up with a monopoly in distribution of Magazines through the checkout counters of the Major Retailers (particularly Supermarkets), enjoying sales of 80% of the units being sold at the checkout counters.

INJURY TO COMPETITION

88. Magazines, newspapers and other periodicals and a healthy Magazine and newspaper and other-periodical industry are vital to the United States economy and the well-being of persons in the United States.

89. Upon information and belief, the activities of Levy, the National Distributors and the Publishers, as alleged, have had, and/or are creating or increasing, the following adverse effects upon competition in the Magazine industry:

A. As to Consumers:

(1) reduction of number of outlets at which the public may buy Magazines;

(2) forcing Publishers to increase their cover price for Magazines (TV Guide doubled in cover price during the last 4 years);

(3) payment of higher retail prices for Magazines;

(4) reduction in number of Magazine titles available to the public;

(5) reduction in sales of copies of lesser Magazines due to less visibility;

(6) reduction in range of Magazine topics; and

(7) reduction in First Amendment freedoms.

B. As to Existing Magazine Wholesalers:

(1) elimination of existing Wholesalers (including the Wholesaler Plaintiffs);

(2) decline in the cost-effectiveness of providing Magazines to smaller retail outlets;

(3) sales of Magazines being concentrated with best-selling titles in the major retail and chain stores, and lesser titles unable to afford the price of entry in a monopolized market or to pay for larger returns of Magazines; and unable to afford what will be higher costs of distribution to smaller retail outlets, when the distribution volume represented by sales to the Major Retailers is taken away from the Wholesalers, requiring them to increase their prices for distribution to the smaller stores. Also, the smaller publications are not able to pay the slotting allowances being demanded by many Major Retailers as a condition for carrying their publications.

C. As to Magazine Publishers:

(1) loss of Magazine Publishers, through mergers and acquisitions;

(2) loss of Magazine Publishers due to their inability to satisfy the targeted circulation demand of advertisers;

(3) loss of such publishers through going out of business for an increasing inability to sell their Magazines in regions and local Designated Marketing Area ("DMA's", of which there are 212 in the United States) to retail outlets both large and small, and the inability to sell other than highly popular Magazine titles;

D. As to the United States Economy:

(1) reduction of the quality and quantity of Magazine titles, and an increase in the retail price of Magazines;

(2) decrease in competition in all aspects of the Magazine industry with consequent loss of employment and writing and business opportunities for many persons;

(3) increase in concentration of all parts of the Magazine industry, with a probability of efforts by Murdoch and the other National Distributors and Publishers to take over parts of the industry not yet owned by them.

CO-CONSPIRATORS

90. Upon information and belief, Levy has joined, conspired and acted in concert with the National Distributors and others (the "Co-Conspirators" identified below) to obtain the capital and the unlawful Discounts, Rebates and Deductions needed by Levy to (i) unnecessarily expand into territories being serviced by the Wholesaler Plaintiffs or other competing Wholesalers, to drive such companies out of business or into an unprofitable and deteriorating financial position; and force consolidation, concentration and vertical integration on the Magazine industry.

91. Upon information and belief, the Co-Conspirators (in addition to Levy and each of the National Distributors, identified in Paragraph 37-F above) are:

(i) each of the Publishers identified in Paragraph 37-I above;

(ii) Hudson and the other Favored Wholesalers; and

(iii) other persons the identities of whom are not now known to the Wholesaler Plaintiffs.

92. Upon information and belief, each of the Defendants and Publishers is engaged in commerce and in the course of such commerce, directly or indirectly, the National Distributors and Publishers have discriminated in price between Levy (and the Other Favored Wholesalers) on one hand, and the Wholesaler Plaintiffs and other competing Wholesalers on the other hand, who were the purchasers of commodities (Magazines) of like grade and quality.

93. Upon information and belief, the purchases involved in such discrimination were in commerce, such commodities (Magazines) were sold for use, consumption, or resale within the United States.

94. Upon information and belief, the effect of such discrimination may be, and has been, substantially to lessen competition or tend to create a monopoly in the retail, wholesale, distribution and publishing lines of commerce in the Magazine industry, and in the Relevant Market and submarkets described in Paragraph 37-J above; and has injured, destroyed, or prevented competition of the Wholesaler Plaintiffs with Levy and the Other Favored Wholesalers.

95. Upon information and belief, Levy and the Other Favored Wholesalers have been engaged in commerce, and in the course of such commerce, each of the National Distributors has offered and granted to Levy, and Levy has induced and knowingly received, discriminations in price as alleged above (in Paragraphs 77 and 85), also knowing that the prices Levy paid were unlawful under the Robinson-Patman Act.

96. Each of the Wholesaler Plaintiffs has been damaged by reason of the defendants' activities to the extent of the loss of all of their respective businesses ($325,000,000 per year in sales), profits (exceeding $25,000,000 per year) and assets (valued at $275,000,000), and were forced into closing their business as of September 17, 1999.

97. The aggregate dollar amount of the Wholesaler Plaintiffs' damages is approximately $250,000,000 or more, which will be ascertained with certainty at the time of trial. The damages for each of the Wholesaler Plaintiffs is approximately equal to a percentage (of the entire amount of damages) determined by dividing the Wholesaler Plaintiff's annual net sales by the total amount of sales of all the Wholesaler Plaintiffs.

98. Each of the Wholesaler Plaintiffs is entitled to an award of treble damages and attorneys' fees.

[COUNT II - REMOVED]

[COUNT III - REMOVED]

[COUNT IV - REMOVED]

COUNT V

Interference with Advantageous Business Relationships - All Wholesaler Plaintiffs against Levy

99. The Wholesaler Plaintiffs repeat and reallege each of the allegations set forth in Paragraphs 1-98 above and further allege that the activities of defendant Levy constitute an unlawful interference with the advantageous business relationships of the Wholesaler Plaintiffs with (a) their respective Major Retailer and other customers, and (b) with each of the National Distributors.

100. Levy was aware of the Wholesaler Plaintiffs' exclusive-territorial, customer-protection agreements with each of the National Distributors and was operating under the same type of exclusive-territorial agreement with each of them for different territories. Also, Levy was aware of each of the Wholesaler Plaintiff's respective business relationships with Major-Retailer protected customers pursuant to which the Wholesaler Plaintiff sold Magazines to such customers (as alleged in Count IX below).

101. Starting sometime in 1995 or 1996 and continuing into June, 1999, Levy communicated with Major Retailer, protected customers of the Wholesaler Plaintiffs and induced some of them to terminate their purchases of Magazines from the Wholesaler Plaintiffs and to purchase them instead from Levy.

102. Starting sometime in 1995 or 1996 and continuing into June, 1999, Levy communicated secretly with Murdoch and, upon information and belief, with the other National Distributors, and induced them to stop dealing with the Wholesaler Plaintiffs on an exclusive-territorial basis and further induced them to sell Magazines to Levy for resale by Levy in the Wholesaler Plaintiffs' exclusive territories for Magazines, to some of the Wholesaler Plaintiffs' Major Retailer, protected customers for Magazines.

103. Murdoch and, upon information and belief, the other National Distributors entered into agreements with Levy to sell Magazines to Levy for resale by Levy in the Wholesaler Plaintiffs' exclusive territories for Magazines, to the Wholesaler Plaintiffs' protected customers for Magazines, making the Wholesaler Plaintiffs' territories and customers non-exclusive as a result.

104. Levy employed wrongful means when communicating and dealing with the Wholesaler Plaintiffs' Major Retailer customers and Murdoch and (upon information and belief) the other National Distributors by

(a) violating Section 2(f) of the Robinson-Patman Act starting in 1995 as to competing with the Wholesaler Plaintiffs for said plaintiffs' customers in said plaintiffs' territories (see Count I above); and

(b) violation of Ohio Rev. Code 4165.02(12) through deceptive trade practices, b making material misrepresentations to the Wholesaler Plaintiffs' customers (see Paragraphs 179-183 in Count XIV below).

105. The activities of Levy constituted unlawful interference by Levy with the Wholesaler Plaintiffs' advantageous business relationships with said plaintiffs' Major Retailer customers and with Murdoch and the other National Distributors.

105A. Levy lacked any privilege as to Levy's conduct as alleged in this Count V.

106. The Wholesaler Plaintiffs were damaged by reason of such interference through the loss of substantially all of said plaintiffs' customers, business, profits and assets.

107. The Wholesaler Plaintiffs were damaged in the aggregate amount of $250,000,000 or more, which will be proven at trial with specificity.

108. Levy acted willfully and maliciously and with near-criminal indifference to the rights of the Wholesaler Plaintiffs, and Levy is liable to each of the Wholesaler Plaintiffs for punitive damages in an amount to be determined by the trier of fact.

[COUNT VI - REMOVED]

COUNT VII

Breach of Fiduciary Duty and Duty to Hold in Confidence - All Plaintiffs against All National Distributors

109. Plaintiffs repeat and reallege each of the allegations set forth in Paragraphs 1-108 above and further allege that the activities of each of the defendants constitute a breach of a fiduciary duty and breach of confidential relationship by them not to use the information obtained from plaintiffs to take away sales from the plaintiffs.

110. Each of the National Distributors had knowledge of plaintiffs' business through the continuous dealings over a period of more than 40 years between each of the National Distributors and the Wholesaler Plaintiffs, including periodic reports and other disclosures to Murdoch and the other National Distributors under the "Murdoch Agreement" (see Paragraph 136 below) and similar affidavit agreements with each of the other National Distributors.

111. Each of the Wholesaler Plaintiffs had a long-standing (in excess of 40 years) distributorship relationship with each of the National Distributors in which the National Distributor dominated the plaintiff with all material terms of business being imposed by the National Distributor (pursuant to an agreement similar to the Wholesaler Plaintiffs' Murdoch Agreement - see Paragraph 136 below - a copy of which is annexed hereto as Exhibit A).

112. Pursuant to this agreement between the Wholesaler Plaintiffs and each of the respective National Distributors, each of said plaintiffs was contractually required to disclose to the defendants proprietary information regarding its customers and all their purchases indirectly from the National Distributor. See Paragraphs 135-137 below.

113. Each of the Wholesaler Plaintiffs made these disclosures to each of the National Distributors starting years prior to the Covered Period.

114. Each of the defendants was required under law, by reason of the relationship with plaintiffs in which they acquired plaintiffs' business information, including customer lists, volume of purchases and size and type of orders for different locations, not to use such information against plaintiffs to compete for and/or destroy plaintiffs' respective businesses.

115. Each of the National Distributors acquired such fiduciary duty and a duty to hold such information in confidence by reason of their respective long-term business relationships with plaintiffs in which plaintiffs' business information was constantly being provided, as required, to the National Distributors to facilitate their business dealings, and to ensure that plaintiffs distributed Magazines and other periodicals as directed by the National Distributors.

116. Each of the National Distributors breached these duties to plaintiffs by using the information provided by plaintiffs to take away the Wholesaler Plaintiffs' protected customers without plaintiffs' knowledge and without any notice or warning to plaintiffs, which could not have occurred without use of plaintiffs' proprietary and confidential information.

117. Through their intimate knowledge of plaintiffs' businesses, Murdoch (and, upon information and belief, the other National Distributors) were able to prepare their personnel, transportation, and data processing systems to handle the new business being taken from plaintiffs without any loss of service to the Wholesaler Plaintiffs' customers. This could not have taken place if Murdoch and the other National Distributors did not have such information provided to them by plaintiffs.

118. These activities of Murdoch and the other National Distributors amounted to a breach of fiduciary duty to plaintiffs, a breach of duty by defendants to hold plaintiffs' business information in confidence and not to use such information to take away the customers from the Wholesaler Plaintiffs.

119. Each of the plaintiffs was damaged by reason of such breach of agreement through the loss of substantially all of plaintiffs' customers, business, profits and assets, including the loss of Scherer's valuable Proprietary Data System for the distribution of Magazines, other periodicals, and other products in the United States.

120. Plaintiffs were damaged in the aggregate amount of $275,000,000 or more, which will be proven at trial with specificity.

121. Each of the National Distributors acted willfully and maliciously and with near-criminal indifference to the rights of plaintiffs, and each of such defendants is liable to each of the plaintiffs for punitive damages in an amount to be determined by the trier of fact.

COUNT VIII

Misappropriation of Scherer's Business Property, Violation of Oh. Rev. Code 1333.63, Uniform Trade Secrets Act - Scherer against Murdoch

122. Scherer repeats and realleges each of the allegations set forth in Paragraphs 1-121 above and further alleges that the activities of defendant Murdoch constitute an unlawful misappropriation of Scherer's system for distribution of Magazines, other periodicals and other things in the United States and related Proprietary Data System, as defined in Paragraph 37-B above, by Murdoch's violation of Ohio Rev. Code 1333.63.

123. Plaintiffs' consolidated businesses as of fiscal year ending 10/03/98 consisted of annual net sales of Magazines, paperback books and other periodicals of approximately $325,000,000 and Scherer's computerized Magazine, paperback book and other periodicals distribution system, including data warehousing and the SMARTS system (the "Proprietary Data System", as defined in Paragraph 37-B above). This system enabled the Wholesaler Plaintiffs to distribute Magazines, paperback books and other periodicals more efficiently than any other Wholesaler, by producing superior sell-through results for the publications being distributed. Itÿreduced distribution costs and created substantial savings on returns.

124. Starting in approximately 1986, plaintiff Scherer started working on a data processing and data warehousing system which would keep track of purchases and sales of Magazines, newspapers and other periodicals by Scherer and enable Scherer to predict with greater accuracy than anyone else in the industry the titles and quantity of such publications which would most likely sell to consumers at specific retail locations.

125. Scherer's data system included a SMARTS system to analyze available display space of a specific retailer and allocate the space by title based on a SMARTS number calculated for relative potential sales performance at that particular location with cutoffs for each of the various categories of Magazines.

126. The Proprietary Data System, if and when applied, enabled Scherer (and the Wholesaler Plaintiffs) to gain competitive advantage in the industry by offsetting a significant part of the additional distribution costs forced on Wholesalers by the practice of the National Distributors to require the Wholesalers to buy more copies of publications than they wanted, and to buy all of the lines or titles of publications being distributed by the National Distributors, and resulted in increased monthly sales of all products and increased sales of all products.

127. By reason of this advantage and other reasons, Scherer was able to combine with the Wholesaler Plaintiffs into UNIMAG, and in this combined form Scherer's Proprietary Data System was extended and improved, and had no equal in the industry and derived independent economic value from not being generally known to or ascertainable by others.

128. The Proprietary Data System was unique.

129. Scherer protected its Proprietary Data System from public disclosure and from disclosure to anyone not required by agreement to hold it in confidence

(a) by having a single entity (i.e., Scherer) as the developer and owner of the Proprietary Data System;

(b) by having firewall and double-password protection to enable only authorized persons to access the system;

(c) by requiring programmers who wrote or had access to the data processing code and system design to agree to hold the code and other information in confidence as a trade secret and as proprietary information;

(d) by keeping all copies of the software and related documents in Scherer's system 400 computer or other secure place with no access to them by anyone but RonaldScherer and authorized programmers who had agreed to hold the information in confidence;

(e) by requiring authorized persons to sign out for and return any printouts taken by them;

(f) by having no disclosure of the Proprietary Data System from inception to the present to anyone not required by agreement to treat the information as a trade secret and to hold the information in confidence; and

(g) by permitting only Murdoch and the other National Distributors to see some of the information produced by the system when Scherer, on behalf of the Wholesaler Plaintiffs, provided statistical information about Magazine distribution in affidavits required by agreement with Murdoch and the other National Distributors to be submitted periodically to them.

130. Scherer's Proprietary Data System was not known to, or readily ascertainable by lawful means by, Murdoch or other persons who could obtain economic value from disclosure or use of the system.

131. Scherer has made a reasonable effort, under these circumstances, to maintain the secrecy of the Proprietary Data System.

132. Scherer kept the Proprietary Data System confidential to be able to sell use of the system to other wholesalers of Magazines and other periodicals (and to other types of wholesalers and distributors), under appropriate safeguards to preserve confidentiality and trade-secret status of the system. See Paragraphs 128-131 above.

133. The system was never licensed to anyone, and it was never operated as a system by anyone other than Scherer, before or after Scherer went out of business in 1999.

134. Omitted.

135. Scherer had a long-standing relationship with Murdoch and its predecessors (since the 1950's) under which Murdoch dominated Scherer and the Wholesaler Plaintiffs as alleged in Paragraphs 65 and Paragraphs 111 above, and as part of this relationship Scherer was contractually required to disclose proprietary and confidential information concerning Scherer's customers (i.e., the Wholesaler Plaintiffs) and the customers of the Wholesaler Plaintiffs, and the existence and some limited information about the Proprietary Data System to Murdoch, to fulfill the obligations of Scherer and the Wholesaler Plaintiffs to Murdoch regarding the Magazines and other periodicals distributed by them for Murdoch.

136. The Murdoch Affidavit of Magazine Return Privileges (the "Murdoch Agreement", Exhibit A hereto), states in part: at p. 1: "3) The wholesaler's system must have a complete audit trail as to copy balancing. The wholesaler agrees to cooperate fully with an audit and provide all documents requested for the purpose of an audit. ..."; at p. 1: "Failure to provide these reports for an audit will result in the immediate revocation of affidavit privileges."; at p. 5 "28) Wholesaler must provide to MMDI [Murdoch] electronic exchange of data (to and from wholesaler host site, and to and from site(s) identified by MMDI) per specifications determined by MMDI."; and at p. 5: "29) Suppression of information will be considered grounds for revoking the affidavit privilege. 30.) The determination as to whether the wholesaler is satisfactorily meeting the foregoing affidavit return privilege requirements is at the sole discretion of Murdoch Magazines Distribution, Inc."

137. By reason of Scherer's and the Wholesaler Plaintiffs' day to day dealings with Murdoch under the Murdoch Agreement, Murdoch learned about the existence of the capabilities of Scherer's Proprietary Data System and as supplier of Magazines to the various UNIMAG divisions and subsidiaries, in the distribution system alleged at Paragraphs 42-64 above, and requested from Scherer more information about the Proprietary Data System, for the purported purpose of enabling UNIMAG's divisions and subsidiaries and Murdoch to sell more Magazines and other periodicals in the exclusive territories (as to Magazines) in which such UNIMAG divisions and subsidiaries were operating.

138. Prior to making the requested disclosures to Murdoch, RonaldScherer, representing Scherer, had conversations with Mr. O'Reilly, representing Murdoch, and reached an oral agreement that Murdoch would hold in confidence the disclosures to be made by Scherer to Murdoch concerning the Proprietary Data System.

139. In the summer of 1999, Scherer estimated the value of ts Proprietary Data System at $25,000,000 or more.

140. Each of the Wholesaler Plaintiffs had an agreement with Murdoch for the distribution of Murdoch's Magazines and other periodicals in which such plaintiffs under the Murdoch Agreement were required to distribute titles and quantities imposed on them by Murdoch, and were wholly dependent on Murdoch; also, such plaintiffs (and Scherer acting on their behalf) were required weekly to provide Murdoch with substantially all of plaintiffs' recently-created data processing records for such period to prove each of the plaintiffs' compliance with the distribution agreements.

141. On 4 different occasions during 1999, Murdoch through its personnel visited with Scherer in Dublin, Ohio (2 times) and in New York, New York (2 times) for the specific, announced purpose of learning more about Scherer's Proprietary Data System and related activities, which system and activities were not known to third persons and constituted valuable trade secrets of Scherer. One or two of these meetings took place after Murdoch had signed the distribution agreement with Levy, without the knowledge or consent of UNIMAG.

142. Murdoch agreed in advance that it would not use any of the information being imparted to Murdoch for any use other than Murdoch's business activities with plaintiffs, and that Murdoch would hold such information in confidence.

143. By reason of this relationship, together with Murdoch's long-term existing relationship with Scherer and the Wholesaler Plaintiffs, Murdoch was in a fiduciary relationship with Scherer as to such information received from Scherer.

144. Murdoch breached its duty to Scherer by making use of such information acquired from Scherer by incorporating such information in a data processing system being developed by Murdoch and by using such system for the distribution of Magazines and other periodicals outside of the Wholesaler Plaintiffs' territories, and by using such system to enable Levy and other competing Wholesalers to distribute such publications in the Wholesaler Plaintiffs' territories in competition with said plaintiffs.

145. Murdoch deceived Scherer when requesting Scherer to make disclosures to Murdoch about Scherer's Proprietary Data System. When receiving the disclosures, Murdoch had the intention of misappropriating the information to help Murdoch develop a similar system which Murdoch secretly was starting to develop and to incorporate the unique and valuable elements of Scherer's Proprietary Data System.

146. Murdoch intended to destroy the value of Scherer's Proprietary Data System, and thereby Scherer's system itself, by requiring the national market to use Murdoch's competing system, through the distribution agreements which Murdoch had with each Wholesaler in the United States, thereby exhausting the market for Scherer's Proprietary Data System.

147. Scherer and the Wholesaler Plaintiffs were damaged by reason of such breach of duty and breach of agreement through the disclosure and use by Murdoch of Scherer's valuable Proprietary Data System for the distribution of Magazines, other periodicals and other products in the United States, and exhaustion of Scherer's market for its system.

148. Scherer is entitled to the actual loss caused by the alleged misappropriation and all unjust enrichment of Murdoch not included in the misappropriation award. 149. Scherer was damaged in the amount of $25,000,000 or more, which will be proven at trial with specificity. 150. Murdoch acted willfully and maliciously and with near-criminal indifference to the rights of Scherer, and Murdoch is liable to Scherer for punitive or exemplary damages in an amount equal to three times actual damages awarded to Scherer.

COUNT IX

Misappropriation of Plaintiffs' Business, Violation of Oh. Rev. Code 1333.63, Uniform Trade Secrets Act - All Plaintiffs against Levy

151. Plaintiffs repeat and reallege each of the allegations set forth in Paragraphs 1-150 above and further allege that the activities of defendant Levy constitute an unlawful misappropriation of plaintiffs' respective businesses, by Levy's violation of the Uniform Trade Secrets Act, Ohio Rev. Code Section 1333.63.

152. Plaintiffs' consolidated businesses as of fiscal year ending 10/03/98 consisted of annualized sales of Magazines and other periodicals of approximately $325,000,000.

153. On December 5, 1998, Levy and UNIMAG entered into a letter agreement dated December 5, 1998 (Exhibit B hereto) in which Levy agreed to hold in confidence information obtained from UNIMAG pursuant to negotiations leading up to an acquisition agreement being discussed between UNIMAG with Levy. The letter agreement stated, in part: "In consideration of receiving this information, for a period of two years from the date of receiving it, Unimag and Levy each agree to keep all information which has been provided to it confidential, including the fact that a transaction is being contemplated."

154. Under this letter agreement, Levy had a fiduciary relationship with plaintiffs as to all trade secrets and other proprietary information conveyed by plaintiffs to Levy prior to execution of the acquisition agreement on March 30, 1999 (the "acquisition agreement").

155. During this 4-month period prior to March 30, 1999, the plaintiffs had provided Levy with a substantial amount of the Wholesaler Plaintiffs' financial information, costs, prices, customer lists, delivery route systems and other information sought by Levy in the negotiations to enter into the March 30, 1999 acquisition agreement with UNIMAG; and subsequent to March 30, 1999, the plaintiffs provided additional information of the same type to Levy concerning the proposed asset purchase/combination transaction; the most critical of such information enabling Levy to take over the customers of the Wholesaler Plaintiffs was turned over to Levy prior to March 30, 1999; the most critical information about the Data Processing System was turned over to Levy after execution of the March 30, 1999 acquisition agreement. All of this information was proprietary to plaintiffs, not known to third persons, and constituted valuable trade secrets of the Wholesaler Plaintiffs and/or Scherer.

156. Substantially all of the information turned over to Levy about the Wholesaler Plaintiffs' respective businesses (as alleged in the preceding paragraph) had been created by Scherer's Proprietary Data System from all of the Wholesaler Plaintiffs' distribution transactions with Magazines and other periodicals, and such information was a trade secret owned by the Wholesaler Plaintiffs and Scherer and protected as such by the Wholesaler Plaintiffs and Scherer, as set forth in Paragraphs 128-133 of the preceding Count.

157. Upon information and belief, Levy used these trade secrets about the Wholesaler Plaintiffs' respective businesses prior to Levy's execution of the acquisition agreement on March 30, 1999, to enable Levy to make plans and enter into relationships required to take over such businesses without paying for them.

158. Levy agreed in the letter agreement (Exhibit B) that it would not use any of the information being imparted to Levy prior to the 3/30/99 agreement for any use other than the acquisition/combination being negotiated with plaintiffs, and that Levy would hold such information in confidence. Also, Levy had a duty under law not to use (to take away plaintiffs' customers and businesses) plaintiffs' trade secrets imparted to Levy by plaintiffs subsequent to execution of the acquisition agreement other than in accordance with the 3/30/99 agreement, and Levy entered into a new, exclusive distributor agreement with Murdoch and did not disclose it to UNIMAG during theeffectiveness of the acquisition agreement, in breach of the acquisition agreement.

159. By reason of this relationship, Levy was in a fiduciary relationship with plaintiffs as to such trade secrets and a duty imposed by law not to use such trade secrets to take away the customers and business of the Wholesaler Plaintiffs.

160. Levy breached its duty to plaintiffs by making use of such trade secrets to induce the Wholesaler Plaintiffs' customers to purchase Magazines and other periodicals from Levy instead of the Wholesaler Plaintiffs and to facilitate the uninterrupted sales of such publications to these customers.

161. Levy had no intention of completing the acquisition agreement with plaintiffs. This is evidenced in part by Levy's solicitation of some of UNIMAG's employees to work for Levy while the agreement between Levy and UNIMAG was being negotiated, and thereafter; and Levy's purchase of a building near plaintiffs' location in Solon, Ohio to be used by Levy to distribute Magazines and other periodicals to the Wholesaler Plaintiffs' customers in such territory. This purchase was made shortly prior to Levy's execution of the March 30, 1999 acquisition agreement, which purchase was made without UNIMAG's knowledge and was iniconsistent with any intent by Levy to acquire UNIMAG and its facilities. In addition, Levy entered into a new exclusive Wholesale agreement with Murdoch without disclosing this to UNIMAG during the effective period of the acquisition agreement.

162. Plaintiffs were damaged by reason of such wrongful use of plaintiffs' respective trade secrets, through the loss of substantially all of the Wholesaler Plaintiffs' customers, business, profits and assets (pleaded in the alternative to the prior count), and the consequent loss of Scherer's' valuable Proprietary Data System for the distribution of Magazines, other periodicals and other products in the United States.

163. Plaintiffs are entitled to the actual loss caused by the alleged misappropriation wrongful use of plaintiffs' respective trade secrets and all unjust enrichment of Levy not included in the award.

164. Plaintiffs were damaged in the aggregate amount of $275,000,000 or more, which will be proven at trial with specificity.

165. Levy acted willfully and maliciously and with near-criminal indifference to the rights of plaintiffs, and Levy is liable to each of the plaintiffs for punitive or exemplary damages in an amount equal to three times plaintiffs' awarded actual damages.

[COUNT X - REMOVED]

COUNT XI

Breach of Confidential Relationship and Fiduciary Duty - a Wrongful Taking of Scherer's Proprietary Data System - Scherer against Murdoch

166. Plaintiff Scherer repeats and realleges each of the allegations set forth in Paragraphs 1-165 above (particularly Paragraphs 128-133 in Count VIII above) and further alleges that the activities of Murdoch constitute a breach of confidential relationship and breach of fiduciary duty, as a wrongful taking of Scherer's Proprietary Data System for distribution of Magazines, other periodicals, and other products in the United States.

167. Scherer's Proprietary Data System was a valuable proprietary system that derived independent economic value from not being generally known to, or ascertainable by, others, and Scherer so informed Murdoch prior to the first meeting. The system created a competitive advantage to Magazines and other periodicals being distributed through the system, in comparison to a less sophisticated allocation, to obtain more display space and higher retail sales.

168. The information was created by Scherer's Proprietary Data System from all Magazine and other periodical distribution transactions of the Wholesaler Plaintiffs, and such information was a trade secret and protected as such by Scherer, as set forth in Paragraphs 128-133 of the preceding Count.

169. At Murdoch's request, Scherer met with Murdoch's personnel on four different occasions during 1999, twice in Dublin, Ohio and twice at Murdoch's offices in New York, New York during which visits Scherer demonstrated the capabilities of its Proprietary Data System, including the SMARTS system, to Murdoch.

170. The meetings were held with Murdoch's personnel with the understanding that what Murdoch was to learn about the Proprietary Data System was proprietary to Scherer and to be held in confidence by Murdoch and not to be used by Murdoch other than in furtherance of its business relationship with Scherer and the Wholesaler Plaintiffs; and one or two of such meetings took place after the 5/7/99 date of the agreement between Levy and Murdoch, and before UNIMAG knew of the existence of such agreement.

171. In the summer of 1999, Scherer estimated the value of its Proprietary Data System to be $25,000,000 or more.

172. The inherent value of the Proprietary Data System was disclosed to Murdoch prior to and during these four visits.

173. After and as a result of these meetings between Scherer and Murdoch, Murdoch used a substantial part of Scherer's proprietary information disclosed to Murdoch about the Proprietary Data System in creating its own data warehousing system, which substantially copied the substance of Scherer's Proprietary Data System, including Scherer's SMARTS system, and destroyed the value of Scherer's Proprietary Data System.

174. Such use by Murdoch enabled Murdoch to create a better and more valuable system than Murdoch could have created without using Scherer's proprietary information.

175. By reason of Murdoch's activities and its position as one of the top National Distributors, Murdoch destroyed the value of Scherer's Proprietary Data System.

176. Scherer was damaged by reason of these alleged activities of Murdoch through the loss of value in Scherer's Proprietary Data System for the distribution of Magazines, other periodicals, and other products in the United States.

177. Scherer was damaged in the amount of $25,000,000 or more, which will be proven at trial with specificity.

178. Murdoch acted willfully and maliciously and with near-criminal indifference to the rights of Scherer, and Murdoch is liable to Scherer for exemplary or punitive damages in an amount to be determined by the trier of fact.

[COUNT XII - REMOVED]

[COUNT XIII - REMOVED]

COUNT XIV

Deceptive Trade Practices (false statements re price reductions) - Violation of Oh. Rev. Code 4165.02(12) - All Wholesaler Plaintiffs against Levy

179. The Wholesaler Plaintiffs repeat and reallege each of the allegations set forth in Paragraphs 1-178 above and further allege that the activities of Levy constitute deceptive trade practices in violation of Oh. Rev. Code 4165.02(12) as false statements of fact concerning the reasons for, existence of or amounts of price reductions made to the Wholesaler Plaintiffs' customers.

180. Levy induced the Wholesaler Plaintiffs' customers to purchase from Levy instead of the Wholesaler Plaintiffs by offering said plaintiffs' customers lower prices than the prices then being charged by said plaintiffs for Magazines and other periodicals, and by falsely stating to these customers, actually or impliedly, that the prices were not predatory and that Levy would be making profits when selling to such customers at such offered prices.

181. These statements by Levy to the Wholesaler Plaintiffs' customers, described in the preceding paragraph, were material to said plaintiffs' customers, and were reasonably relied upon by such customers when they decided to and did purchase Magazines and other periodicals from Levy instead of the Wholesaler Plaintiffs.

182. Levy in fact was offering prices which were predatory and which made it impossible for Levy to make a profit on such sales or to continue selling to such customers at such prices.

183. Such statements by Levy to the Wholesaler Plaintiffs' customers were false statements of fact concerning the reasons for, existence of, or amounts of price reductions being offered to such customers by Levy.

184. The Wholesaler Plaintiffs were damaged by reason of statements through the loss of substantially all of the Wholesaler Plaintiffs' customers, business, profits and assets, including (pleaded in the alternative to a prior count) the consequent loss of Scherer's valuable Data System for the distribution of Magazines, other periodicals and other products in the United States.

185. The Wholesaler Plaintiffs were damaged in the amount of $250,000,000 or more, which will be proven at trial with specificity.

186. Levy acted willfully and maliciously and with near-criminal indifference to the rights of the Wholesaler Plaintiffs, and Levy is liable to each of the plaintiffs for punitive damages in an amount to be determined by the trier of fact.

[COUNT XV - REMOVED]



PRAYER

WHEREFORE, plaintiffs pray that a judgment and decree be entered against each of the defendants:

1. Adjudging or decreeing that each of the defendants acted unlawfully as alleged respectively in Counts I, V, VII-IX, XI and XIV above, and that each of the respective plaintiffs as to such Counts was injured as alleged;

2. Award Scherer damages of $25,000,000 or more, as proven by Scherer, and awarding each of the Wholesaler Plaintiffs its proven share of the total amount of such plaintiffs' $250,000,000 or more in damages against each of the defendants, including any unjust enrichment in excess of the plaintiff's respective damages [with the amount of the individual Wholesaler Plaintiff's damages being estimated as a percentage in accordance with Paragraph 97 above];

3. Awarding each of the Wholesaler Plaintiffs three times the total amount of such plaintiff's share (see Paragraph 97 above) of the $250,000,000 or more in antitrust damages proven by the Wholesaler Plaintiff (as to Count I) against each of the defendants, jointly and severally;

4. Awarding the respective plaintiffs punitive damages against each of the defendants, jointly and severally, as to Counts V, VII-IX, XI and XIV, in an amount to be determined by the trier of fact;

5. Awarding each of the plaintiffs its attorneys' fees against each of the defendants, jointly and severally;

6. Awarding each of the plaintiffs pre-judgment interest as appropriate and post-judgment interest;

7. Awarding each of the plaintiffs its costs against each of the defendants; and

8. Awarding each of the plaintiffs such other and further relief as the Court may deem just and proper.

Jury Demand

Plaintiffs hereby demand a trial by jury of all issues properly triable to a jury pursuant to Rule 38(b) of the Federal Rules of Civil Procedure.

Dated:New York, New York

........June 21, 2001

____________________________________

Carl E. Person (CP 7637)

Attorney for the Plaintiffs

325 W. 45th Street - Suite 201

New York NY 10036-3803

(212) 307-4444

APPENDIX A (UNIMAG)

1. The Wholesaler Plaintiff UNIMAG purchased substantially all of the 4,000 to 5,000 Magazine titles distributed by the National Distributors, as described in Paragraphs 37-D and 37-F above;

2. The geographic area(s) in which the Wholesaler Plaintiff UNIMAG distributed Magazines under its agreements with the National Distributors are as follows: DMA 9 Detroit MI, DMA 21 Pittsburgh PA, DMA 27 Hartford/New Haven CT, DMA 31 Cincinnati OH, DMA 35 Columbus OH, DMA 49 Louisville KY, DMA 55 Dayton OH, DMA 62 Flint-Saginaw/Bay City MI, DMA 94 Johnstown/Altoona PA and DMA 100 Youngstown OH, DMA 102 Greenville/New Bern/Washington NC, DMA 121 Traverse City-Cadillac MI, DMA 144 Wheeling-Steubenville WV-OH, DMA 156 Wilmington NC, DMA 203 Lima OH, DMA 206 Zanesville OH, and DMA 210 Alpena MI (the "UNIMAG Territory");

3. Any additional geographic area(s) in which the Wholesaler Plaintiff UNIMAG distributed Magazines are as follows: DMA 3 Chicago IL, DMA 19 Denver CO, DMA 30 Raleigh-Durham NC, DMA 37 Greenville/Spartanburg/Ashville NC/SC, DMA 50 Greensboro/Winston-Salem NC, DMA 56 Charleston/Huntington WV, and DMA 115 Florence-Myrtle Beach SC.

4. Any additional geographic area(s) in which the Wholesaler Plaintiff UNIMAG attempted without success to distribute Magazines are as follows: DMA 29 Charlotte NC, DMA 32 Milwaukee WI, DMA 39 Norfolk VA, DMA 43 Harrisburg/Lancaster PA, DMA 58 Richmond/Petersburg VA, DMA 69 Roanoke VA, DMA 70 Lexington KY, DMA 111 Charleston SC, DMA 141 Erie PA, and others.

5. The annual dollar amount of the Wholesaler Plaintiff UNIMAG's sales and the percentage of such sales to the sales of all Wholesaler Plaintiffs are as follows: $128,724,000 and 45.8%.

6. Customers of the Wholesaler Plaintiff UNIMAG known to be lost to Levy and/or Other Favored Wholesalers, or believed to be lost upon information and belief, including the date of customer loss, and the name of the Wholesaler to whom the customer was lost, if known, are as follows:

a. Lost by UNIMAG's Triangle division to Levy and/or Other Favored Wholesalers: Wal-Mart 1996, A&P 5/96, B Dalton / Barnes & Noble 7/96, Borders Inc. 6/96, Host Marriott Corporation 8/96, K-Mart 5/96 and others.

b. Lost by UNIMAG's Service/Yankee CT to Levy and/or Other Favored Wholesalers: A&P 5/96, Borders Inc. 6/96, Host Marriott Corporation 8/96, Walgreen 7/96, K-Mart 5/96 and others.

c. Lost by UNIMAG's Service/NC to Levy and/or Other Favored Wholesalers: Wal-Mart 1996, A&P 5/96, B Dalton / Barnes & Noble 7/96, Borders Inc. 6/96, K-Mart 5/96 and others.

d. Lost by UNIMAG's MacGreger to Levy and/or Other Favored Wholesalers: Wal-Mart 1996, Arbor Drugs 8/96, Meijer 6/96, Walgreen 7/96 and K-Mart 5/96 and others.

e. Lost by UNIMAG's Ludington (1/98 asset acquisition) to Levy and/or Other Favored Wholesalers: Wal-Mart 1996, A&P 1999, Arbor Drugs 1999, B Dalton & Barnes & Noble 7/96, Meijer 6/96, K-Mart 5/96 and others.

f. Lost by UNIMAG's Columbus, Ohio division (2/98 merger) to Levy and/or Other Favored Wholesalers: Wal-Mart 1996, B Dalton / Barnes & Noble 7/96, Buehler Food Markets, Inc. 6/96, Borders Inc. 6/96, Cub Foods 7/96, Meijer 6/96, Walgreen 7/96, K-Mart 5/96 and others.

g. Lost by UNIMAG's Cincinnati, Ohio division (2/98 merger) to Levy and/or Other Favored Wholesalers: Wal-Mart 1996, B Dalton / Barnes & Noble 7/96, Borders Inc. 6/96, Host Marriott Corporation 8/96, Meijer 6/96, Walgreen 7/96, K-Mart 5/96 and others.

h. Lost by UNIMAG's Northern News division (2/98 assets acq.) to Levy and/or Other Favored Wholesalers: Wal-Mart 1996, B Dalton / Barnes & Noble 7/96, Borders Inc. 6/96, Meijer 6/96, Walgreen 7/96, K-Mart 5/96 and others.

7. Customers taken away from Levy or other Wholesalers by the Wholesaler Plaintiff UNIMAG, including the date of acquiring the customer, and the name of the Wholesaler from whom the customer was taken, if known, are as follows:

a. Kroger, 1996 (from Wholesalers other than Levy)

b. Big Bear, Columbus OH 1996 (from Wholesalers other than Levy)

c. Paradies

d. Other customers.

8. The discount from cover price at which the Wholesaler Plaintiff UNIMAG was purchasing Magazines from the National Distributors, stated separately for each National Distributor, is as follows:

a. As to Murdoch, generally a 40% discount, with some less-favorable discount exceptions (leading titles such as TV Guide);

b. As to Curtis, generally a 40% discount, with some less-favorable discount exceptions (leading titles such as Penthouse);

c. As to Hearst I and Hearst II [a/k/a Comag or HDG], generally a 40% discount, with some less-favorable discount exceptions (leading titles such as Cosmopolitan, Good Housekeeping and National Enquirer);

d. As to Kable, generally a 40% discount, with few if any exceptions; and

e. As to Warner I and Warner II [a/k/a TDS], generally a 40% discount, with some exceptions (leading titles such as People, Time, and Playboy).

9. The estimated discount from cover price at which Levy was purchasing Magazines from the National Distributors in competition with the Wholesaler Plaintiff UNIMAG, stated separately for each National Distributor, is as follows:

a. As to Murdoch, 2-8% additional discount;

b. As to Curtis, 2-8% additional discount;

c. As to Hearst I and Hearst II [a/k/a Comag or HDG], 2-8% additional discount;

d. As to Kable, 2-8% additional discount; and

e. As to Warner I and Warner II [a/k/a TDS], 2-8% additional discount.

10. The location (city and state) of each of the Wholesaler Plaintiff UNIMAG's offices and distribution centers at any time during the Covered Period are as follows: Columbus OH, Pittsburgh PA, Cincinnati OH, Petoskey MI, Mt. Pleasant MI, Taylor MI, Detroit MI, Louisville KY, Findlay OH, Johnstown PA.

APPENDIX B (Stoll)

1. The Wholesaler Plaintiff Stoll purchased substantially all of the 4,000 to 5,000 Magazine titles distributed by the National Distributors, as described in Paragraphs 37-D and 37-F above;

2. The geographic area(s) in which the Wholesaler Plaintiff Stoll distributed Magazines under its agreements with the National Distributors are as follows: DMA 26 Indianapolis IN, DMA 38 Grand Rapids-Kalamazoo-Battle Creen MI, DMA 67 Toledo OH, DMA 106 Lansing MI, and DMA 197 Lafayette IN (the "Stoll Territory");

3. Any additional geographic area(s) in which the Wholesaler Plaintiff Stoll distributed Magazines are as follows: DMA 3 Chicago IL.

4. Any additional geographic area(s) in which the Wholesaler Plaintiff Stoll attempted without success to distribute Magazines are as follows: None.

5. The annual dollar amount of the Wholesaler Plaintiff Stoll's sales and the percentage of such sales to the sales of all Wholesaler Plaintiffs are as follows: $77,208,000 and 27.5%.

6. Customers of the Wholesaler Plaintiff Stoll known to be lost to Levy and/or other Favored Wholesalers, or believed to be lost upon information and belief, including the date of customer loss, and the name of the Wholesaler to whom the customer was lost, if known, are as follows: Arbor Drug 8/96, B Dalton / Barnes & Noble 7/96, Borders Inc. 6/96, Cub Foods 7/96, Host Marriott Corporation 8/96, Meijer 6/96, Walgreen 7/96, K-Mart 6/96 and others, to Levy and/or Other Favored Wholesalers.

7. Customers taken away from Levy or other Wholesalers by the Wholesaler Plaintiff Stoll, including the date of acquiring the customer, and the name of the Wholesaler from whom the customer was taken, if known, are as follows: Southland Corporation 1997 (Levy).

8. The discount from cover price at which the Wholesaler Plaintiff Stoll was purchasing Magazines from the National Distributors, stated separately for each National Distributor, is as follows:

a. As to Murdoch, generally a 40% discount, with some less-favorable discount exceptions (leading titles such as TV Guide);

b. As to Curtis, generally a 40% discount, with some less-favorable discount exceptions (leading titles such as Penthouse);

c. As to Hearst I and Hearst II [a/k/a Comag or HDG], generally a 40% discount, with some less-favorable discount exceptions (leading titles such as Cosmopolitan, Good Housekeeping and National Enquirer);

d. As to Kable, generally a 40% discount, with few if any exceptions; and

e. As to Warner I and Warner II [a/k/a TDS], generally a 40% discount, with some less-favorable discount exceptions (leading titles such as People, Time, and Playboy).

9. The estimated discount from cover price at which Levy was purchasing Magazines from the National Distributors in competition with the Wholesaler Plaintiff Stoll, stated separately for each National Distributor, is as follows: See Paragraph 9 in Appendix A above.

10. The location (city and state) of each of the Wholesaler Plaintiff Stoll's offices and distribution centers at any time during the Covered Period are as follows: Cleveland OH, Toledo OH, Jackson MI, Indianapolis IN, Grand Rapids MI, Madison Heights MI, and Taylor MI.

APPENDIX C (Michiana)

1. The Wholesaler Plaintiff Michiana purchased substantially all of the 4,000 to 5,000 Magazine titles distributed by the National Distributors, as described in Paragraphs 37-D and 37-F above;

2. The geographic area(s) in which the Wholesaler Plaintiff Michiana distributed Magazines under its agreements with the National Distributors are as follows: DMA 86 South Bend-Elkhart IN, and DMA 104 Ft. Wayne IN (the "Michiana Territory");

3. Any additional geographic area(s) in which the Wholesaler Plaintiff Michiana distributed Magazines are as follows: DMA 3, Chicago IL and DMA 113 Bloomington-Peoria IL.

4. Any additional geographic area(s) in which the Wholesaler Plaintiff Michiana attempted without success to distribute Magazines are as follows: None.

5. The annual dollar amount of the Wholesaler Plaintiff Michiana's sales for fiscal 1996 and the percentage of such sales to the sales of all Wholesaler Plaintiffs are as follows: $24,691,000 and 8.8%.

6. Customers of the Wholesaler Plaintiff Michiana known to be lost to Levy and/or Other Favored Wholesalers, or believed to be lost upon information and belief, including the date of customer loss, and the name of the Favored Wholesaler to whom the customer was lost, if known, are as follows:

a. Wal-Mart, 1996 (Levy)

b. K-Mart, 6/96 (Levy)

c. Target, 1997 (Levy)

d. Walgreen, 1996 (Levy)

e. Barnes & Noble & B Dalton, 1996 (unknown Favored Wholesaler)

f. Borders Inc., 1996 (unknown Favored Wholesaler)

g. Cub Foods, 1996 (Levy)

h. Meijer, 1996 (Levy)

g. Other customers.

7. Customers taken away from Levy or other Wholesalers by the Wholesaler Plaintiff Michiana, including the date of acquiring the customer, and the name of the Wholesaler from whom the customer was taken, if known, are as follows:

a. Southland Corp., 1998 (from Levy)

b. A&B Tobacco 1997 (Levy)

c. Butera Foods 1996 (Levy)

d. Edmar Foods 1996 (Levy)

e. Fairplay 1996 (Levy)

f. Gateway Newstand 1999 (Levy)

g. Kanti Tobacco 1997 (Levy)

h. Other small customers (Levy)

8. The discount from cover price at which the Wholesaler Plaintiff Michiana was purchasing Magazines from the National Distributors, stated separately for each National Distributor, is as follows:

a. As to Murdoch, generally a 40% discount, with some less-favorable discount exceptions (leading titles such as TV Guide);

b. As to Curtis, generally a 40% discount, with some less-favorable discount exceptions (leading titles such as Penthouse);

c. As to Hearst I and Hearst II [a/k/a Comag or HDG], generally a 40% discount, with some less-favorable discount exceptions (leading titles such as Cosmopolitan, Good Housekeeping and National Enquirer);

d. As to Kable, generally a 40% discount, with few if any exceptions; and

e. As to Warner I and Warner II [a/k/a TDS], generally a 40% discount, with some less-favorable discount exceptions (leading titles such as People, Time, and Playboy).

9. The estimated discount from cover price at which Levy was purchasing Magazines from the National Distributors in competition with the Wholesaler Plaintiff Michiana, stated separately for each National Distributor, is as follows: See Paragraph 9 in Appendix A above.

10. The location (city and state) of each of the Wholesaler Plaintiff Michiana's offices and distribution centers at any time during the Covered Period are as follows: Niles MI and Ft. Wayne IN.

APPENDIX D (Klein)

1. The Wholesaler Plaintiff Klein purchased substantially all of the 4,000 to 5,000 Magazine titles distributed by the National Distributors, as described in Paragraphs 37-D and 37-F above;

2. The geographic area(s) in which the Wholesaler Plaintiff Klein distributed Magazines under its agreements with the National Distributors are as follows: DMA 14 Cleveland OH [including Canton/Akron/Mansfield OH] (the "Klein Territory");

3. Any additional geographic area(s) in which the Wholesaler Plaintiff Klein distributed Magazines are as follows: None.

4. Any additional geographic area(s) in which the Wholesaler Plaintiff Klein attempted without success to distribute Magazines are as follows: None.

5. The annual dollar amount of the Wholesaler Plaintiff Klein's sales in fiscal 1996 and the percentage of such sales to the sales of all Wholesaler Plaintiffs are as follows: $42,128,000 and 15.0%.

6. Customers of the Wholesaler Plaintiff Klein known to be lost to Levy and/or Other Favored Wholesalers, or believed to be lost upon information and belief, including the date of customer loss, and the name of the Favored Wholesaler to whom the customer was lost, if known, are as follows:

a. Host Marriott Corporation, 1996 (Levy)

b. Walgreen, 1996 (Levy)

c. K-Mart, 1996 (Levy)

d. Barnes & Noble, 1996 (unknown Favored Wholesaler)

e. Borders 1996 (unknown Favored Wholesaler)

f. Other customers.

7. Customers taken away from Levy or other Wholesalers by the Wholesaler Plaintiff Klein, including the date of acquiring the customer, and the name of the Wholesaler from whom the customer was taken, if known, are as follows: None.

8. The discount from cover price at which the Wholesaler Plaintiff Klein was purchasing Magazines from the National Distributors, stated separately for each National Distributor, is as follows:

a. As to Murdoch, generally a 40% discount, with some less-favorable discount exceptions (leading titles such as TV Guide);

b. As to Curtis, generally a 40% discount, with some less-favorable discount exceptions (leading titles such as Penthouse);

c. As to Hearst I and Hearst II [a/k/a Comag or HDG], generally a 40% discount, with some less-favorable discount exceptions (leading titles such as Cosmopolitan, Good Housekeeping and National Enquirer);

d. As to Kable, generally a 40% discount, with few if any exceptions; and

e. As to Warner I and Warner II [a/k/a TDS], generally a 40% discount, with some less-favorable discount exceptions (leading titles such as People, Time, and Playboy).

9. The estimated discount from cover price at which Levy was purchasing Magazines from the National Distributors in competition with the Wholesaler Plaintiff Klein, stated separately for each National Distributor, is as follows: See Paragraph 9 in Appendix A above.

10. The location (city and state) of each of the Wholesaler Plaintiff Klein's offices and distribution centers at any time during the Covered Period are as follows: Cleveland OH; Mansfield OH; Solon OH; Sandusky OH; and Akron OH.

APPENDIX E (Central)

1. The Wholesaler Plaintiff Central purchased substantially all of the 4,000 to 5,000 Magazine titles distributed by the National Distributors, as described in Paragraphs 37-D and 37-F above;

2. The geographic area(s) in which the Wholesaler Plaintiff Central distributed Magazines under its agreements with the National Distributors are as follows: DMA 14 Cleveland OH [including Canton/Akron/Mansfield OH] (the "Central Territory");

3. Any additional geographic area(s) in which the Wholesaler Plaintiff Central distributed Magazines are as follows: Youngstown OH.

4. Any additional geographic area(s) in which the Wholesaler Plaintiff Central attempted without success to distribute Magazines are as follows: None.

5. The annual dollar amount of the Wholesaler Plaintiff Central's sales for fiscal 1996 and the percentage of such sales to the sales of all Wholesaler Plaintiffs are as follows: $8,020,000 and 2.9%.

6. Customers of the Wholesaler Plaintiff Central known to be lost to Levy and/or Other Wholesalers, or believed to be lost upon information and belief, including the date of customer loss, and the name of the Wholesaler to whom the customer was lost, if known, are as follows:

a. B. Dalton and Barnes & Noble 1996 (Ingram, IPD and Anderson/Austin)

b. Walgreen 1996 (Levy)

c. K-Mart 1996 (Levy)

d. Other customers.

7. Customers taken away from Levy or other Wholesalers by the Wholesaler Plaintiff Central, including the date of acquiring the customer, and the name of the Wholesaler from whom the customer was taken, if known, are as follows: None.

8. The discount from cover price at which the Wholesaler Plaintiff Central was purchasing Magazines from the National Distributors, stated separately for each National Distributor, is as follows:

a. As to Murdoch, generally a 40% discount, with some less-favorable discount exceptions (leading titles such as TV Guide);

b. As to Curtis, generally a 40% discount, with some less-favorable discount exceptions (leading titles such as Penthouse);

c. As to Hearst I and Hearst II [a/k/a Comag or HDG], generally a 40% discount, with some less-favorable discount exceptions (leading titles such as Cosmopolitan, Good Housekeeping and National Enquirer);

d. As to Kable, generally a 40% discount, with few if any exceptions; and

e. As to Warner I and Warner II [a/k/a TDS], generally a 40% discount, with some less-favorable discount exceptions (leading titles such as People, Time, and Playboy).

9. The estimated discount from cover price at which Levy was purchasing Magazines from the National Distributors in competition with the Wholesaler Plaintiff Central, stated separately for each National Distributor, is as follows: See Paragraph 9 in Appendix A above.

10. The location (city and state) of each of the Wholesaler Plaintiff Central's offices and distribution centers at any time during the Covered Period are as follows: Akron OH and Cleveland OH.

[End of Appendices A-E

Note: Exhibits A and B are not included

A:\u1_comp2.Chp C:\&Style\AD7_41.Sty

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------------------x

UNITED MAGAZINE COMPANY, INC., et al., 00 Civ. 3367 (AGS)

Plaintiffs, PROOF OF SERVICE

-against-

MURDOCH MAGAZINES DISTRIBUTION, INC.,
TV GUIDE DISTRIBUTION, INC., et al.,

Defendants.

--------------------------------------------------x

I, Carl E. Person, an attorney duly authorized to practice in the State of New York, do hereby affirm that the following is true under the penalty of perjury pursuant to CPLR 2106:

I am not a party to this action, am over 18 years of age, and on June 21, 2001, I served a true copy of the foregoing 2nd Amended Complaint dated June 21, 2001 (the "Document") on the attorneys for the respective defendants by mailing the same in a sealed envelope, with postage prepaid thereon, in a post-office or official depository of the U.S. Postal Service within the State of New York, addressed to the last-known address of said attorneys, as follows: (i) Philip G. Barber, Yang Chen1, Esq., Constantine & Partners, P.C., 477 Madison Avenue - 11th Flr., New York NY 10022 (Attorneys for the Murdoch Defendants); (ii) Irving Scher, Esq., Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York NY 10153 (Attorney for Defendants Time Distribution Services, Inc. and Warner Publisher Services, Inc.); ÿ(iii) I. Michael Bayda, Esq., Jacobs Persinger & Parker, 77 Water Street, New York NY 10005 (Attorneys for Defendant Kable News Company, Inc.); (iv) Dechert Price & Rhoads, 30 Rockefeller Plaza, New York NY 10012 (Attorneys for Defendant Curtis Circulation Company); (v) McDermott Will & Emery, 50 Rockefeller Plaza, New York NY 10020 (Attorneys for Defendants Hearst Distribution Group, Inc. and Comag Marketing Group, LLC); (vi) Louis C. Keiler, Esq., Richard Fenton, Esq., Sonnenschein Nath & Rosenthal, 8000 Sears Tower, 233 South Wacker Drive, Chicago IL 60606-6404 (Attorneys for Defendant Chas. Levy Circulating Co.); andÿ(vii) Edward J. Reich, Esq., Sonnenschein Nath & Rosenthal, 1221 Avenue of the Americas, New York NY 10020 (Attorneys for Chas. Levy Circulating Co.).

Dated: June 21, 2001
____________________________________
Carl E. Person

End of Document - Exhibits A and B not included