631 F.Supp.2d 242 (E.D.N.Y. 2009), 98-CV-04265 (ILG) (JMA), Parker v. Time Warner Entertainment Co., L.P.
|Docket Nº:||98-CV-04265 (ILG)(JMA).|
|Citation:||631 F.Supp.2d 242|
|Opinion Judge:||GLASSER, Senior District Judge:|
|Party Name:||Andrew PARKER and Eric DeBrauwere, on behalf of themselves and all others similarly situated, Plaintiffs, v. TIME WARNER ENTERTAINMENT CO., L.P., and Time Warner Cable, Inc., Defendants.|
|Attorney:||Daniel Hume, Kirby McInerney LLP, New York, NY, Michael G. Lenett, Cuneo Waldman & LaDuca, LLP, Washington, DC, George W. Sampson, Hagens Berman LLP, Seattle, WA, for Plaintiffs. Jonathan D. Thier, Cahill Gordon & Reindel, LLP, New York, NY, Landis Cox Best, Cahill Gordon & Reindel LLP, New York,...|
|Case Date:||July 06, 2009|
|Court:||United States District Courts, 2nd Circuit, Eastern District of New York|
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MEMORANDUM AND ORDER
Proposed class representatives Andrew Parker and Eric DeBrauwere (the " Representative Plaintiffs" ) filed an amended class action complaint on October 30, 1998 (the " Complaint" ) against defendants Time Warner Entertainment Company, L.P. and its subsidiary, Time Warner Cable (collectively, " Time Warner" or the " defendant" ). The Complaint alleges, inter alia, that the defendant violated certain provisions of the Cable Communications Policy Act of 1984, 47 U.S.C. § 551 et seq. (the " Cable Act" ).1
The Representative Plaintiffs and the defendant move jointly for approval of a class action settlement agreement. The attorneys for the Representative Plaintiffs, Hagens Berman Sobol Shapiro LLP (the " Hagens Firm" ), Kirby McInerney LLP (the " Kirby Firm" ), Cuneo Gilbert & LaDuca LLP (the " Cuneo Firm" ) and the Law Offices of James M. Beaulaurier (the " Beaulaurier Firm" and collectively, " Class Counsel" ) move for attorneys' fees and expenses. The attorneys for objector-intervenors Rick and Sharon Lobur, Forizs & Dogali, P.L. and The Anderson Law Firm (together, the " Loburs' Counsel" ), and the attorneys for objector-intervenors Lydia Townsend and Rosalie Vitrano (together with the Loburs, the " Objectors" ), the Law Offices of Steven B. Witman (the " Witman Firm" ) each move for attorneys' fees and expenses.
For the reasons stated below, the parties' motion for approval of the settlement agreement is granted. Class Counsel's motion for attorneys' fees, expenses and plaintiff incentive awards is granted in part and denied in part. The Loburs' Counsel's motion for attorneys' fees and expenses is granted in part and denied in part. The Witman Firm's motion for attorneys' fees and expenses is denied. The Objectors' respective motions for incentive awards are denied.
This order brings to a close a case that has raised compelling questions of law arising at the intersection of consumer protection statutes that provide for minimum statutory damages and the class action mechanism. Each of these tools is intended to encourage the prosecution of cases that would otherwise be too costly for an individual plaintiff to pursue. The combination of the two threatens defendants with the multiplication of statutory damages, possibly beyond the contemplation of Congress and the limits of due process.
The settlement of this case reserves for another day the question of whether a class seeking statutory damages for each of its members, far in excess of the actual harm and ruinous to the defendant, should be certified for trial. However, the proposed
settlement itself raises interesting questions about the valuation of settlements involving large numbers of class members and benefits that are difficult to value.
The settlement, while fair, adequate and reasonable-in that it makes a minimal sum available to the purported victims of a minimal harm-is nonetheless unsatisfying because so much time and labor was expended to achieve so little.
A. Prior Decisions
This case has already been the subject of several orders. See No. 98 Civ. 4265(ERK), 1999 WL 1132463 (E.D.N.Y. Nov. 8, 1999) (Korman, J.) (the " 1999 Order " ) (denying defendant's motion to dismiss the Complaint); 198 F.R.D. 374 (E.D.N.Y.2001) (the " 2001 Order " ) (adopting the report and recommendation of Magistrate Azrack certifying a class for injunctive and declaratory relief but denying certification of a class for damages); 331 F.3d 13 (2d Cir.2003) (the " 2003 2d Cir. Decision " ) (vacating the decision of this Court on the question of class certification and remanding for further proceedings); 239 F.R.D. 318 (E.D.N.Y.2007) (the " 2007 Order " ) (denying settlement class certification under Fed.R.Civ.P. 23(b)(2) because monetary damages predominated over injunctive relief and under 23(b)(3) because of inadequate notice and procedural and substantive unfairness). This Memorandum and Order incorporates and assumes familiarity with these decisions.
The Complaint alleges that Time Warner collected detailed personal information about cable television subscribers throughout its nationwide system. (Compl. ¶ ¶ 4, 43). Time Warner maintained this information in its list sales database (" LSDB" ), which it offered for sale to third parties, including telemarketers, direct marketing services companies, and Time Warner affiliates and divisions. (Compl. ¶ ¶ 6, 9, 45-48, 60). The Complaint alleged that the database included subscribers' names and addresses, premium subscriptions, such as HBO, Disney, and Playboy, credit card information, places of employment, whether subscribers lease or own their residence, and social security and drivers' license numbers. (Compl. ¶ ¶ 11, 43). Time Warner enhanced the information that it collected directly from its subscribers with information it had obtained from third parties, including Time Warner affiliates and divisions. (Compl. ¶ ¶ 4, 7, 44, 68).
The Complaint alleges that Time Warner violated the Cable Act's substantive privacy provisions by collecting and disclosing its customers' personally identifiable information (" PII" ) and failing to give proper notice of its practices.2 Under the Cable Act, cable providers must give notice to their customers of the nature of the PII that they collect, how it is used, the nature, frequency and purpose of any PII disclosures and their retention of such information, all as provided for by 47 U.S.C. § 551(a)(1).3 The Complaint alleges that Time Warner violated the notice provisions
of § 551(a) by failing to adequately notify subscribers of its use and disclosure of their PII, including the nature of the PII collected from subscribers and third party sources, the nature and frequency of the uses and disclosures of such information, and the period during which Time Warner maintained such information. (Compl. ¶ ¶ 62-71, 80).
Subsection § 551(c) of the Cable Act prohibits the disclosure of PII without the prior consent of a subscriber with the exceptions provided for in subdivision (c)(2). This subdivision allows for the disclosure of the names and addresses of subscribers to any cable service or other service, provided that customers are given the opportunity to opt out of such disclosure and so long as the disclosure does not give additional detail pertaining to customer viewing habits.4 The Complaint alleges that Time Warner violated the disclosure provisions of § 551(c) by disclosing information other than subscribers' names and addresses without their consent. (Compl. ¶ ¶ 8, 55-60, 72-74).
The Complaint sought minimum statutory damages of at least $1,000 per violation for every subscriber, as provided for by § 551(f)5, claiming injury by the class " which is, at a minimum, hundreds of millions of dollars." (Compl. ¶ ¶ 77, 82.)
C. Procedural History
1. The Settlement Agreement
The parties first reached a proposed settlement in June 2005 (the " Prior Agreement" ). The Prior Agreement gave class members whose names appeared in the LSDB the opportunity to claim free Time Warner cable services for their own use, or to transfer that benefit to a third party. After a hearing on May 19, 2006, at which the parties and the Objectors were heard,
the Prior Agreement was ultimately rejected by the Court for reasons set forth in the 2007 Order. Chief among the reasons for its rejection was distributional unfairness to class members who were identified as being in the LSDB, but did not at the time of the settlement live in areas of the country where cable television service is provided by Time Warner. 2007 Order, 239 F.R.D. at 340. Those class members could not personally use the free cable services and could only transfer the benefit to those who did live in such areas. The Prior Agreement was also rejected because the notice provisions failed to provide " the best notice that is practicable under the circumstances," Fed.R.Civ.P. 23(c)(2)(B), to persons then identified as being in the LSDB who were no longer Time Warner Cable subscribers. 2007 Order, 239 F.R.D. at 333-36.
The Representative Plaintiffs and the defendant filed a new settlement agreement on April 2, 2008 (the " Settlement Agreement" ). This Court granted preliminary approval of the Settlement Agreement, provisionally certified the class and directed dissemination of notice to the class in an order dated May 8, 2008 (the " Preliminary Approval Order" ). The provisionally certified class (the " Class" ) consisted of: " All persons throughout the United States who were Time Warner Cable subscribers at any point in time between January 1, 1994, and December 31, 1998, [herein, the " Relevant...
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