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Coulter-Owens v. Time, Inc.

United States District Court, E.D. Michigan, Southern Division

July 27, 2015

ROSE COULTER-OWENS, individually and on behalf of all others similarly situated, Plaintiff,
v.
TIME, INC., a Delaware Corporation, Defendant.

OPINION AND ORDER GRANTING PLAINTIFF'S MOTION TO CERTIFY CLASS (DOCS. #82, 83)

GEORGE CARAM STEEH, District Judge.

This matter is before the court on plaintiff's motion for class certification (Docs. #82, 83). Plaintiff brings this putative class action under Michigan's Video Rental Privacy Act ("VRPA"), Mich. Comp. Laws §§ 445.1711, et seq., alleging that defendant improperly disclosed the private information of people who subscribed to TIME, Fortune, and Real Simple magazines through third-party websites.[1] For the reasons that follow, plaintiff's motion for class certification will be granted.

I. BACKGROUND

Plaintiff Rose Coulter-Owens, on behalf of herself and a putative class, brought this action against defendant Time, Inc., the publisher of the magazines TIME, Fortune and Real Simple, among others. Plaintiff alleges that Michigan consumers who purchased these three magazines through defendant's third-party agents on the Internet, such as www.magazines.com (as opposed to having purchased the magazines directly through defendant), had their "record or information concerning the purchase" unlawfully disclosed to two marketing companies defendant does business with, in violation of the VRPA. Plaintiff "subscribed to Time magazine through a BizRate promotion process which allowed her to purchase a subscription to Time magazine at a discounted rate... Additionally, Plaintiff subscribed to other Time magazines, including Fortune and Real Simple through similar BizRate promotions." (Def's. Resp. to First Set of Interrogs. No. 4).

The VRPA directs:

Except as provided in section 3 or as otherwise provided by law, a person, or an employee or agent of the person, engaged in the business of selling at retail, renting, or lending books or other written materials, sound recordings, or video recordings shall not disclose to any person, other than the customer, a record or information concerning the purchase, lease, rental, or borrowing of those materials by a customer that indicates the identity of the customer.

Mich. Comp. Laws § 445.1217 (footnote omitted).

Plaintiff seeks to certify the following class:

All Michigan residents who between March 31, 2009 and November 15, 2013 purchased a subscription to TIME, Fortune, or Real Simple magazines through any website other than Time.com, Fortune.com, and RealSimple.com.

When a person orders one of defendant's magazines through a third party agent, certain information is collected for defendant, such as the subscriber's name, address and magazine choice. (Exhibit D to Scharg Decl., Disclosure List Fields). This information, through an automated process, is sent to defendant's fulfillment center to process the order. (Breininger Dep. 133:5-9). Subscriber information is later sent by defendant to multiple third parties for different reasons. (Def's. Resp. to Second Set of Interrogs. #4). Relevant here, plaintiff challenges defendant's practices in sending subscriber information to two specific companies.

First, all of defendant's subscriber information - including people who purchase a subscription from one of defendant's third party agents - is sent by defendant to Acxiom Corporation ("Acxiom"), a "marketing database vendor, " on a weekly or bi-weekly basis. (Breininger Dep. 19:8-9; 67:15-21; 180:13-21). According to defendant, Acxiom "has some limited access to subscriber information for the purposes of managing and performing technical troubleshooting related to the subscriber database, to assist Time in fulling list rental orders, and to append data to assist in marketing to customers." (Def's. Resp. to First Set of Interrogs. No. 3). Essentially, "when someone's order comes [in], the information that's sent to [defendant's] fulfillment center about [the order] then is sent to Acxiom." (Breininger Dep. 19:17-20). Acxiom then appends the lists it receives from defendant with additional information, such as the subscriber's age, income level, ethnicity, marital status and health status, among other information. ( Id. 235:8-236:8). This information is allegedly rented to companies who want to target specific audiences. For example, in 2012, millions of defendant's subscribers received a "Mitt Romney For President" mailer, while others received a mailer from "AARP." See (Doc. #85-6).

Second, defendant also discloses certain subscriber information for the magazines TIME, Fortune and Real Simple - customer names, addresses and magazine titles ordered - to a third-party database cooperative, Wiland Direct ("Wiland"), on a quarterly basis. (Breininger Dep. 72:16-18; 76:8-18; 86:15-19). Defendant began disclosing subscriber information of Time in 2007 (Scharg Declr. Ex. M), Fortune in 2009 ( id. ), and Real Simple in 2010 ( Id. ). Wiland "offers a variety of services to magazine publishers, including assisting with subscriber acquisition and reactivating expired subscribers." (Pl's. Mot. at 8; Doc. #83 at 16). Defendant's disclosure of customer information to Wiland allows it to be part of the cooperative and access information contributed by other companies to Wiland. (Breininger Dep. 88:20-24); see also (Scharg Declr. Ex. K, Wiland Direct Cooperative Database Agreement for Publishers). In other words, defendant contributes to the Wiland database so that it can take advantage of the information contributed to the database by other companies. The origin of a subscriber's information is anonymous to other users of the cooperative. (Breininger Dep. 21:9-24). Time benefitted to the tune of millions of dollars from its subscriber list revenue business from 2008 through 2013. (Def's. Resp. to First Set of Interrogs. No. 10).

Defendant's third-party rental customers use the subscription information to send mailers, fundraising and nonprofit offers to the subscriber, among other things. Each of the three magazines at issue provided notice to subscribers to opt-out somewhere inside the magazines, and defendant provides notice of the ability to opt out on its website, bills and renewal notices. For example, inside of defendant's magazines, subscribers are notified that "[w]e [defendant] make a portion of our mailing list available to reputable firms." See (Landis Declr. Ex. T, Fortune Magazine Notice). On invoices, customers are informed that, "[o]ccasionally we [defendant] make a portion of our mailing list available to carefully selected firms whose products might be of interest to you. If you would prefer not to receive mailings or e-mails from these companies, please initial in the space provided." See (Landis Declr. Ex. Z, Time Magazine Invoice).

Plaintiff contends that defendant's disclosure of customer information to Acxiom and Wiland violates the VRPA because the information is disclosed without a customer's written consent and the disclosures are not made for the "exclusive purpose of marketing goods and services directly to the consumer."

The VRPA allows for disclosure of a customer's information in only limited circumstances:

A record or information described in section 2 may be disclosed only in 1 or more of the following circumstances:
(a) With the written permission of the customer.
(b) Pursuant to a court order.
(c) To the extent reasonably necessary to collect payment for the materials or the rental of the materials, if the customer has received written notice that the payment is due and has failed to pay or arrange for payment within a reasonable time after notice.
(d) If the disclosure is for the exclusive purpose of marketing goods and services directly to the consumer. The person disclosing the information shall inform the customer by written notice that the customer may remove his or her name at any time by written notice to the person disclosing the information.
(e) Pursuant to a search warrant issued by a state or federal court or grand jury subpoena.

Mich. Comp. Laws § 445.1713.

Plaintiff's putative class action complaint is in three counts: Count One- Violation of the Video Rental Privacy Act, Mich. Comp. Laws § 445.1712; Count Two- Breach of Contract; and Count Three-Unjust Enrichment. Plaintiff, however, seeks class certification only on the VRPA claim. See (June 2, 2015 Hearing Tr. 43:19-23, Doc. #115).

Defendant argues that the court should decline to certify the proposed class. First, defendant argues that the proposed class is not ascertainable. Second, defendant argues that the court should decline to certify the proposed class because the factors required pursuant to Rule 23(a) and (b) of the Federal Rules of Civil Procedure have not been satisfied.

The motion to certify has been fully briefed. The court held a hearing to address the motion on June 2, 2015, ultimately taking the motion under advisement. This opinion and order constitutes the court's decision on the motion.

II. LEGAL STANDARD

In order to determine whether to grant class certification, the court is required to engage in a "rigorous analysis" which may require analysis behind the pleadings. Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551 (2011); Gooch v. Life Investors Ins. Co., 672 F.3d 402, 417-18 (6th Cir. 2012). "The class-action device is an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only." Comcast Corp. v. Behrand, 133 S.Ct. 1426, 1432 (2013) (internal quotations and citations omitted). Class relief is "peculiarly appropriate" when the "issues involved are common to the class as a whole" and when they "turn on questions of law applicable in the same manner to each member of the class." Califano v. Yamasaki, 442 U.S. 682, 701 (1979). For in such cases, "the class-action device saves the resources of both the courts and the parties by permitting an issue potentially affecting every [class member] to be litigated in an economical fashion under Rule 23." Gen. Tel. Co. of S.W. v. Falcon, 457 U.S. 147, 155 (1982) (internal quotation marks and citations omitted). District courts have broad discretion in certifying class actions, and their decisions on whether to certify a class will only be set aside under the abuse of discretion standard. Califano, 442 U.S. at 703.

In order to be classified as a class action, the four threshold requirements of Rule 23(a) must be met which requires numerosity, commonality, typicality and adequacy of representation. In addition to satisfying those prerequisites, the action must fall within one of the three categories of Rule 23(b). Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614 (1997). Here, plaintiff contends that Rule 23(b)(3) has been met. Rule 23(b)(3) requires a finding "that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed.R.Civ.P. 23(b)(3); In re Am. Med. Sys., Inc., 75 F.3d ...


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