James Durbin's 'Memories of the Beautiful Disaster': Track-By-Track (Exclusive)

Jin Lee/Bloomberg/Getty Images A federal judge in California has ignored a category action against Netflix that alleged the internet movie store hadstruck an illegal"market allocation" agreement with Walmart. On Tuesday, U.S. District Judge Phyllis Hamilton handed Netflix a victory on summary judgment, discovering that the litigants couldn't show any collusive agreement.our editor recommendsNetflix Ex-CFO Works best for Venture Firm Involved with Company's Debt DealNetflix's Stock Drops as Company Alerts of Loss for 2012Netflix Stock Drops Below Year Low After Company Sells $200 Million in Bonds Accusations of Illegal Netflix-Walmart Agreement Result In Both Funds And Coming TrialNetflix Makes Lionsgate U.K. Streaming Deal Official Experts: CW-Hulu Deal Will Further Strengthen Network's Main Point Here After Recent Netflix Agreement The dismissal cuts short an effort which was tentatively scheduled for The month of january. The litigants introduced their states federal court last year, pointing for an agreement made between Netflix and Walmart 4 years earlier. PHOTOS: Netflix's 10 Most Leased Movies ever At that time, Blockbuster had just joined the DVD online rental market and gossips circulated that Amazon . com would soon perform the same. Netflix contacted Walmart inside a purported effort to push away the perceived Amazon . com threat. In the beginning, the talks went nowhere, however Walmart made the decision to exit the DVD rental business. In 2005, the 2 companies arrived at an offer on the so-known as "Promotion Agreement," whereby existing Walmart DVD rental clients could be moved forward to Netflix. Amazon . com didn't jump in to the DVD business, and Blockbuster later flopped, leading eight people to guide a category action suit that alleged that antitrust behavior between Netflix and Walmart had brought to greater prices. The litigants believed that damages might be up to $654 million. However, Judge Hamilton has limited an effort which was scheduled to featureNetflix CEOReed Hastingsas well as former top media professionals from Amazon . com, Walmart and Blockbuster. She ruled the litigants simply couldn't reveal that the "Promotion Agreement" was illegal. Based on the decision: "The Promotion Agreement on its face unveils a contract by both sides to attempt mix-marketing efforts regarding one another's complementary online DVD rental and purchasers services, considering Walmart's independent decision to exit the DVD rental market. Besides the agreement specifically acknowledge the 'independent character of Walmart's decision to exit the trade, however it in addition specifically states that Walmart is free of charge to re-go into the same market. Under these conditions, a legal court cannot agree the agreement on its face reflects a blatant agreement to get rid of Walmart in the online DVD rental market as a kind of market allocation." The category litigants have the freedom to appeal your decision, but meanwhile, they won't leave empty-handed. Walmart made a completely independent decision about last year to stay rather than investing cash on lawyers. Looking back, because of the judge's decision yesterday, Walmart appears to possess designed a $27.25 million error. That's the total amount that Walmart agreed to spend to be able to avoid these kinds action fight. The retail giant can't even claim that they can have saved much in legal costs. Walmart first arrived at a really complicated settlement using the litigants in December 2010that incorporated a pay-out range (between $29 million and $40 million with respect to the quantity of claims), that incorporated a sub-class of clients who leased Dvd disks online from Blockbuster, along with a provision where Wal-Mart had the authority to "blow-out" the whole settlement if your substantial part of potential class people elected-from the deal. The judge didn't such as this deal greatly, and Netflix objected too, resulting in seven several weeks of ongoing revisions before your final settlement was arrived at.Most significantly, the pay-out grew to become fixed and Blockbuster class people were removed. In September, a judge fortunate the settlement, resulting in an e-mail from litigants' lawyers about the other day to a lot of Netflix customers, telling them from the settlement. Per the agreement,all thosewho leased Dvd disks from Netflix anytime between May 19, 2005 and September 2, 2011 possess the chance to assert a bit of the $27.25 million pot as gift certificates or cash. Initially, Walmart's settlement was belittled by clients who worried these were only getting pennies around the dollar of potential damages. The aggrieved people noted the class action lawsuit lawyers would collect a quarter of the settlement fund, or nearly $7 million, as well as be refunded as much as $1.7 million in legal costs. Now, that remaining money looks an improvement on nothing. E-mail: eriqgardner@yahoo.com Twitter: @eriqgardner Netflix