ORENSTEIN ADVERTISING, INC. v. New York Times, Civ. A. No. 90-6339.

• Decision Date: 19 July 1991
• Docket Number: Civ. A. No. 90-6339.
• Citation: 768 F. Supp. 1133
• Parties: ORENSTEIN ADVERTISING, INC. v. The NEW YORK TIMES.
• Court: U.S. District Court — Eastern District of Pennsylvania

768 F. Supp. 1133

ORENSTEIN ADVERTISING, INC. v. The NEW YORK TIMES.

Civ. A. No. 90-6339.

United States District Court, E.D. Pennsylvania.

July 19, 1991.

Ronald Jay Smolow, Michael H. Landis, Smolow & Landis, Philadelphia, Pa., for plaintiff.

Catherine N. Jasons, Kelley, Jasons, McGuire & Spinelli, Philadelphia, Pa., Deborah R. Linfield, The New York Times Co., Dean Ringel, Kevin N. Whitney, Adam Liptak, Cahill Gordon & Reindel, New York City, for defendant.

MEMORANDUM AND ORDER

DITTER, District Judge.

Before me is defendant's Fed.R.Civ.P. 12(b)(1) and 12(b)(6) motion to dismiss plaintiff's first amended complaint. Plaintiff's complaint seeks to certify a class of all individuals and businesses that placed classified advertising in The New York Times since January 1, 1975, and were fraudulently billed. Plaintiff asserts claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1962(a) and (c), and under state law for fraud and misrepresentation; "misrepresentation and non-disclosure," compl. at 22; negligent misrepresentation; breach of contract; and unjust enrichment. Defendant asserts plaintiff's RICO allegations are deficient and there is no actionable fraud. I will grant the motion.

BACKGROUND

Over an eight-month period in 1990, plaintiff Orenstein Advertising, Inc., placed sixteen advertisements in the help wanted portion of The New York Times's classified advertising section. Orenstein alleges the Times fraudulently overcharged for each of these advertisements.

Each year the Times publishes and provides to all advertisers the "New York Times Classified/Display Advertising Rate Card" ("rate card"). Compl. at exhibit A. In the rate card, the Times agrees to publish certain classified advertisements and displays its fees for doing so. The rate card details the types and sizes of ads it will print and the cost for special and ordinary advertisements and services. On page 14 of the rate card, the "employment-classified" rates are shown. At the top of the page, it states:

Rates Per Column Inch:

Non-Standard Units:

Standard Units

Rates Per Agate Line

Column Inch Rate

Plus 5%

The rate card also provides the "agate line rate" for "open," help-wanted ads will be $19.10 in the Sunday edition of the paper.¹ The rate card does not explain the definition of "agate line." It does, however, provide a chart demonstrating how increasing the size of the print type will increase the billing rate. Rate card at 33. See appendix, exhibit 1. The chart shows type sizes and states each line of print using the standard "Times Gothic" type will be charged as one line, larger, "10-point" type, will be charged as two lines, and even larger, "14-point" type, will be charged as three lines. Id. The rate card gives this billing information through 72-point type. The rate card's description of the "mechanical requirements" also provides: "Each line of 10 pt. type is charged as 2 lines; 14 pt. as 3 lines ... 72 pt. as 14 lines." Id. at 31. The Times permits blank lines or "white space"² to be included in an advertisement. Id. The Times counts a blank line or a "white space," regardless of its depth, as one agate line.

Along with the rate card, advertisers are given an "agate line ruler." This ruler is calibrated with fourteen agate lines per inch and can be used to measure the length of each ad in agate lines and in centimeters. Exhibit B, attached to plf.'s RICO case statement. This ruler, however, cannot account for the additional charge for larger typeface letters which are the source of the dispute here.

Orenstein claims the ruler measurement of the ad multiplied by the cost per line should equal the advertiser's total bill. It contends it is reasonable for an advertiser to conclude that the Times would use the agate line ruler because it provides the tool. Orenstein concludes the Times deceives advertisers by using a computer to calculate its total charge, does so in a way that is not explained, and thus perpetrates a fraud.

The Times does not dispute Orenstein's factual allegations. For help-wanted ads, the Times does use a computer to count lines instead of using the ruler to measure space. The Times, though, denies there is fraud. The Times asserts the rate card, specifically the type-size chart and the "mechanical requirements" section, clearly states that larger typeface size will result in an extra charge. The Times also maintains using the computer is consistent with the rate card information and is not inconsistent with distributing the ruler.

Obviously, the Orenstein and the Times methods create different charges for the same ad. Orenstein's first advertisement clearly demonstrates the point. The ad had three lines of 10-point type with the balance in standard "Times Gothic" 8-point type. Orenstein used the agate line ruler to determine the ad was forty-two agate lines in length. Compl. at exhibits B and C-1. See appendix, exhibit 2. At $19.10 an agate line, it felt the total cost should have been $802.20. Orenstein, however, did not consider the three lines of larger type, although it did measure and include the "white space."

In contrast, the Times used the type-size chart and charged for forty-three lines. The Times counted the lines with standard "Times Gothic" 8-point type (31) and the "white space" between the paragraphs and headings (6 lines). Then, it added six lines for the three lines with 10-point type. This calculation added $19.10 to Orenstein's bill. Since Orenstein placed sixteen ads, 750 actual agate lines by ruler, the alleged overcharge was $668.50. See appendix, exhibit 4.

DISCUSSION

This is a simple case made hard by the parties. The essential facts are not disputed. Both parties agree the Times' rate card³ should be the focus of this litigation and both parties agree the type-size chart and the "mechanical requirements" section include the larger-type size billing information. The essential and uncomplicated question to resolve is whether or not the chart and the "mechanical requirements" sections of the rate card permit the Times to charge more when a larger type was used in classified advertisements.

Orenstein contends the Times fraudulently overcharged because the reference to "agate line rate" on page 14 of the rate card precludes application of the "mechanical requirements" section and the chart on pages 31 and 33, respectively. Orenstein also argues the number of agate lines can only be determined using the agate line ruler and not the computer line count method. The Times maintains the rate card clearly and unambiguously informs advertisers of the additional charge for larger type and the number of agate lines will be determined by using the chart's type-size scale and the line-counting computer.

The Times is correct and there is no fraud. The rate card on its face plainly informs an advertiser that the cost of running an ad in the Times is dependent upon the number of lines of print, the number of blank lines, and the number of lines of print using larger than standard, "Times Gothic," 8-point type. The rate the Times charges per line is not difficult to find and neither are the chart and the "mechanical requirements" section. They are easily understood and unambiguous. After reading the rate card, a reasonable person could not be mislead as to how much placing his ad in the classifieds would cost him. Kehr Packaging, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1416 (3d Cir.1991) (quoting United States v. Pearlstein, 576 F.2d 531, 535 (3d Cir.1978)) (finding no fraud where the defendant's acts could not be "reasonably calculated to deceive a person of ordinary prudence and comprehension."). As a result, there is simply no basis for a fraud claim.

In order to create a cause of action, Orenstein exaggerates the importance of the term "agate line rate." Orenstein asserts an agate line is a unit of space, not a line of type. It then argues the Times must use the agate line ruler to measure the length of each ad in agate lines rather than the computer line counting method and when the Times did not do so, it committed fraud. For support of this contention, it refers me to a number of advertising...