July 23 (Bloomberg) -- News Corp.’s News America Unit was ordered by a Detroit jury today to pay $300 million to Valassis Communications Inc. in a lawsuit claiming unfair competition, boosting Valassis shares as much as 64 percent.

Valassis, a distributor of advertisements through newspaper inserts and mailings, sued News America in state and federal courts, alleging the company tried to use “its power in in- store advertising and promotions to gain market share in the free-standing insert market,” said plaintiff’s attorney Greg Curtner. Valassis and News America dominate the market for free- standing inserts, the coupon books distributed by newspapers, Curtner said.

“News America went to companies and said, if you give us all your FSI business, we’ll give you favorable prices on your in-store promotions,” Curtner said in a phone interview.

The state court jury in Detroit today found News America liable for tortious interference and unfair competition. The verdict is the fifth-largest jury award in the U.S. so far in 2009, according to data compiled by Bloomberg. Livonia, Michigan-based Valassis said its antitrust lawsuits against News Corp. remain pending in courts in Michigan and California.

News Corp., the second-largest U.S. media company, will appeal, spokesman Chris Mixson said in an e-mailed statement.

‘Hampered’ by Decision

Today’s verdict “rewards a company that turned to litigation as its business strategy rather than compete,” Mixson said. The jury was “hampered by the court’s decision not to allow a key piece of information to be introduced,” namely, a legal analysis by the Federal Trade Commission, he said.

“This information would have shown that this lawsuit was merely part of a larger strategy to get News America Marketing to raise its prices,” Mixson said. This “would have affected both our clients and their consumers by reducing the number of coupons available -- a consequence that would be extremely unfortunate in this economy.”

Valassis rose $1.60, or 23 percent, to $8.63 at 4:02 p.m. in New York Stock Exchange composite trading, after reaching a high of $11.54 at 11:57 a.m. after the company announced the verdict. The shares fell 40 percent in the past year before today.

No trial dates have been set in the federal case in Michigan or in the antitrust and unfair competition case in state court in Los Angeles, Curtner said. The judges were waiting for the result of the Michigan state court trial, he said.

Triple Damages

“We look forward to moving ahead with our other two cases, including the antitrust case in the Eastern District of Michigan where any compensatory damages will be trebled,” Valassis Chairman and Chief Executive Officer Alan F. Schultz said in a statement.

News America began tying in-store promotions into free- standing inserts in 2000, Schultz said in an interview today. “This escalated over time,” he said.

“Their strategy was to use that to drive down our pricing and drive profitability out of the market,” he said. Valassis claimed News America cost the company $915 million in lost past and future profits, Schultz said.

The case is Valassis Communications v. News America Inc.. 07 706645CZ, Circuit Court, Wayne County, Michigan (Detroit).

To contact the reporter on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net.

Last Updated: July 23, 2009 16:06 EDT