While you weren't looking, Rupert and James Murdoch filed a motion to dismiss charges brought before them in a class action lawsuit over the epic News International phone hacking scandal. They're not exactly saying News Corp. didn't do anything wrong or even break the law, when its journalists were hacking the phones of celebrities and dead children. The pair of billionaires just want to let the judge know that they didn't break the specific law that the shareholder lawsuit says they did: the Securities Exchange Act of 1934. Filed last Friday, the motion stayed under the media's radar until Deadline dug it up on Monday night.
The motion feels like a last ditch effort to get out of paying their shareholders back for the damage caused by the phone hacking scandal -- and the damage is significant. However, if the Murdochs and co-defendants Les Hinton and Rebekah Brooks can prove to the judge that they truly didn't know that the phone hacking happening, they might have a case. "Even if plaintiffs disagree about how the misconduct at News of the World was handled, their claims sound in mismanagement, which does not as a matter of law state a securities fraud claim," the motion says. "It is well-settled that a plaintiff cannot bootstrap mismanagement claims into a federal securities law action." The lawsuit maintains that News Corp. management in fact hid the "existence and extent of illegal and unethical newsgathering practices" from shareholders, thereby violating the 1934 law.
This latest development gets more interesting if you've been paying attention to what News Corp has been up to over the past week. As the final draft of the Levenson Inquiry was released, the company scrambled to put the final pieces of a massive reorganization into place. They brought on the former managing editor of The Wall Street Journal to run a new publishing arm, losing the chief executive of News International in the process. This was surely no skin off Rupert's back, though, since the executive's departure put another layer between the company's current management and those accused of mismanagement. Brooks and Hinton, by the way, are long gone. The company also recently finalized its purchase of a 49 percent share in the YES Network and is considering making a bid for Simon & Schuster.
In other words, it's very much business as usual at News Corp -- almost like that annoying phone hacking scandal, the one that some feared would bring down the Murdoch empire for good, never happened. Because as we all know, when you do something wrong, it's best to just forget that it ever happened.
This article is from the archive of our partner The Wire.
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