News Corp could Lose Spying Trial over Murdoch, ABC Reports

May 6, 2008

LOS ANGELES (Reuters) - A federal judge presiding over a corporate spying suit against News Corp said the company could lose the case worth hundreds of millions of dollars if Chairman and Chief Executive Rupert Murdoch does not testify about what he knew, ABC News reported on Monday.

The network reported that it obtained a transcript of an in-chambers hearing during which U.S. District Judge David Carter said, "There is a real risk" of losing the jury trial if Murdoch does not take the stand and "briefly say, 'I didn't do it,' and 'I didn't know about it."'

News Corp unit NDS Group PLC is being sued in Los Angeles federal court, accused of hiring hackers to steal and post data that allowed free access to DISH Network Corp's satellite television service. News Corp owns rival satellite provider DirecTV.

News Corp has denied wrongdoing and that Murdoch knew about the allegation of hacking that took place in the 1990s.

Closing arguments are expected this week.

The lawsuit was brought by EchoStar Communications, which later split into EchoStar Corp and DISH, against NDS and NDS America, which provide security technology to a global satellite network that includes satellite TV service DirecTV.

Carter said previously that the case could bring an award of "hundreds of millions or perhaps billions" in damages based on claims of lost revenue and the cost of fixing the compromised system.

ABC reported on Monday that Judge Carter said during the in-chambers meeting, "If you get to the punitive phase, and any one of these jurors assume that the top of the organization had any information concerning this or had information and didn't act upon it, that could be hundreds of millions of dollars."

Murdoch "absolutely" denied to ABC that the News Corp unit was involved in hacking. "We always have ethical business practices," he told ABC News.

(Reporting by Gina Keating, Editing by Toni Reinhold)

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