Parker v. Time Warner Entertainment Co.

for the district court to con- REMANDED hearing on evidentiary

duct an the issue faith” exception the “bad to the

whether Younger applies.

rule of abstention

parties shall bear their own costs. PARKER; DeBrauwere,

Andrew Eric

Plaintiffs-Appellants,

TIME ENTERTAINMENT WARNER

COMPANY, L.P.; Time Warner Cable City,

of New York a Division of Time Company,

Warner Entertainment

L.P., Defendants-Appellees.

National Cable & Telecommunications

Association, Amicus Curiae.

Docket No. 01-9069. of Appeals,

United States Court

Second Circuit. Sept.

Argued: 2002.

Decided: June York, NY, Issacharoff,

Samuel New Linden, (Roger Kirby, Daniel W. Peter S. LLP, Hume, Kirby Mclnerney Squire & York, NY; Berman, George Steve W. New Berman, LLP, Sampson, Hagens Se- W. attle, WA; Cuneo, Michael G. Jonathan W. Lenett, P.C., Group, The Cuneo Law D.C.; Beaulaurier, M. Washington, James Seattle, WA, brief), plaintiffs- on the appellants. Thier, D. &

Jonathan Cahill Gordon (Landis Best, Reindel, York, C. New N.Y. Montone, & Rein- David G. Cahill Gordon Plesser, del, York, NY; Ronald L. New Cividanes, Marbury Piper Emilio Rud- W. Wolfe, LLP, D.C., Washington, & nick brief), defendants-appellees. Schooler, D.C., Washington, S. Michael for amicus curiae. PARKER,

Before: and F.I. NEWMAN UNDERHILL,* Judges; and Circuit District Judge. for further

Vacated remanded proceedings. JON O. NEWMAN separate opinion. concurs with a * by designation. sitting States Dis- Stefan R. Underhill the United Connecticut, for the District of trict Court UNDERHILL, Judge. Complaint,” District rejecting Time Warner’s con- tention that Complaint the Amended failed appeal concerning This raises issues a state cause of action under the Cable appropriateness certifying plaintiff of order, Act. In issuing that Judge Edward potentially of class of millions cable televi- R. Korman upon relied allegations of in a case seeking sion subscribers various Complaint Amended that Time War- relief, injunctive relief, including forms of (1) provide ner: failed to adequate notifica- damages, actual and tion to selling subscribers that it was infor- Policy under the Cable Communications gathered mation third-party from sources Act of 1984. from These issues arise deci- along with information it collected directly deny sion of defendants’ motion to class (2) subscribers; from improperly and dis- law, certification aas matter of which was closed programming subscribers’ selec- discovery issued affecting before issues tions without first providing a valid means class certification. For the reasons for opt subscribers to out. Prior to the follow, appealed we vacate order from issuance the written ruling its motion and remand for further proceedings. dismiss, Time changed priva- Warner its Background cy provide notice to warning regarding Eric Andrew Parker and DeBrauwere potential for disclosure of personally “Parker”) (collectively subscribe cable information, identifiable as well as a means provided by television services Time War- to opt subscribers out of releasing their Cable, ner division Time En- Warner programming parties. selections to third (“Time Warner”). tertainment Co. Parker claims that Time pro- Warner violated the Soon ruling after the on its motion to visions the Cable Communications Poli- dismiss, Time Warner moved an order (“Cable cy Act”), Act 47 U.S.C. denying class certification aas matter of § seq., 521 et and several state consumer January law. Magistrate Judge laws, protection by selling disclosing and Azrack, Joan M. to whom various discov- personally identifiable subscriber informa- ery disputes referred, had been stayed tion parties, clearly to third and failing discovery pending ruling on Time War- conspicuously and to inform the subscrib- ner’s motion to deny class certification. disclosure, ers of required by such as month, Later that Judge Senior District I. Act. Parker Cable seeks in stayed Leo Glasser determination Par- the form of damages, actual “contemplated ker’s motion for class certi- damages, punitive damages attorneys’ and discovery fication” and confirmed that re- fees, well as stayed pending mained decision of Time prevent relief to further Act Cable viola- Warner’s motion. As result of the tions. rulings, court’s no motion for class certifi-

Parker cation has been discovery commenced this action filed and no Eastern District of establishing New York on prospective June size 30, 1998, 1998. On appellants plaintiff October class alleged or the extent of the filed an Complaint. Amended Class Action violations has occurred. Parker In September Parker pleadings would, served exten- has indicated in that he sive discovery requests, Time 23(b)(3), which under Rule pursue objected in Warner October 1999. On No- class certification for a class of Time War- 8, 1999, vember the District Court issued ner cable privacy subscribers whose inter- an “Amended Memorandum and allegedly Order ests were violated the disclo- Denying Defendant’s Motion to Dismiss sure and sale subscriber information. (E.D.N.Y.2001). Co., L.P., 198 F.R.D. 374 Magistrate

On October precluded that he had and Re- noted a Recommendation Glasser Azrack issued (“R R”) filing motion certi- on Time Warner’s a motion & Parker port fication, Parker v. Time Complaint that the Amended deny certification. but Co., L.P., 2000 sought Entertainment Warner indicated that certification (E.D.N.Y.2000). In Dist. Lexis for a “pursuant U.S. to Rules R, Judge Azrack considered R & 12 million plaintiff approximately appropriate was whether class priva- whose cable subscribers 23 states 23(b)(3) 23(b)(2) and of the under Rules cy allegedly violated de- interests were Procedure, and rec- of Civil Federal Rules sale fendants’ disclosure and subscriber grant in the District Court that ommended argue Defendants that certi- information. deny class motion part Time Warner’s as a matter of fication should be denied law. a matter of certification as law Id. at 376 under both subdivisions.” that Parker assumed would Judge Azrack (citation omitted). Complaint to Amended satisfy require- the threshold able to be that, Judge explained also because Glasser certification under Rule ments class for discovery conducted con- “[n]o has been 23(a), that ultimately she concluded certifi- class,” purported Parker con- cerning 23(b)(2) damages claim under cation of the that the “motion for denial of certi- tended request Parker’s denied because should be be as a premature fication should viewed predominated over 12(b)(6) Rule motion to dismiss under Judge injunctive Azrack claim for relief. prov- carry that defendants the burden of against certification recommended ing why a class action is not warranted.” 23(b)(3) principally Rule class under rejected argu- Id. District Court a class action was not ground that “[bjefore ment, holding plaintiff adjudicating this contro- superior means certification, a moves for class defendant request versy. Concerning Parker’s may propriety ‘test the action’ relief, Judge injunctive and certification,” denial of class motion for 23(b)(2) that Rule Azrack recommended establishing the and that “the burden of that, noting granted, under certification be propriety of a action remains 23(c), a court is authorized Rule district (citations omitted). plaintiff.” Id. issues, which classes “to determine any, appropriately be certified.” should analysis his began Glasser Finally, Judge Azrack recom- Id. *8. deny Rule motion to certification under District decline to mended that the Court 23(b)(2) by recognizing that certification jurisdiction supplemental exercise over only appropriate that rule under “is claims, pendent law which arose un- state sought the relief class actions where practices deceptive der the statutes of exclusively predominantly declaratory twenty-three states. injunctive.” at 377. He cited the Id. Citgo Fifth decision in Allison v. Circuit’s R, objected to R & and on

Parker (5th Corporation, 151 F.3d 402 Petroleum January entered an Glasser Cir.1998), proposition for the adopting order recommendations 23(b)(2)’s predominance Rule “purpose of limit under Rule class certification requirement degree is to of cohe- ensure declaratory and to Parker’s easily claims, otherwise siveness be deny class certification under mon- 23(b)(3), supplemental disrupted plaintiff when class seeks and to decline remedies, jurisdiction etary law since remedies over state claims. to the directly ‘are more often related Parker v. Time Warner Entertainment disparate merits individual claims.’” neither commonality requirement nor Allison, (quoting superiority requirement Id. at 378 F.3d at of Rule “ 413). ‘Ideally, incidental should could be met in this case. The only those which class members au- District Court cited Wilson v. American tomatically would be entitled once Cablevision Kansas City, F.R.D. (or subclass) (W.D.Mo.1990), to the as a whole is as the case to ” (quoting Id. at established.’ Alli- consider whether a class supe- action is the 415). son, 151 F.3d at rior litigating vehicle for a violation of 551(f) section of the Cable Focusing Act. determining whether the instant case on the “disproportionality a damages predominance conformed to the standard award that little has relation to the harm 23(b)(2), Judge recognized of Rule Glasser suffered,” actually Judge Glasser followed that, the court in although Arnold Unit- the Wilson rationale that Circuit, ed Artists Theatre suit was not intended “to turn what (N.D.Cal.1994), suggested F.R.D. 439 fundamentally protection consumer 23(b)(2) “may appro- Rule certification be scheme for cable subscribers into a vehicle priate statutorily for mandated individual for the financial demise of a cable service awards, damages statutory damages provider that failed to comply with the aspect plaintiffs’ claim here is but one of aspects Parker, technical of that scheme.” request relief. Thus can- 198 F.R.D. at 384. not entirety plaintiffs’ be said that the damages Judge claim is to their ‘incidental’ re- also argu- Glasser considered Parker, quest Judge relief.” 198 ments that Azrack had relied too Judge adopted heavily F.R.D. at 381. on manageability Glasser class damages recommendation that Parker’s as a in determining appropriate- factor certified, 23(b)(3). noting claims not ness be of certification under Rule “fact bulk damages sought by Although that the manageability he conceded that plaintiffs injunc- not are incidental the action awas serious consideration in requested”1 tive Ar- suggests potential “case where class members to- compel states,” nold “does certification here.” tal 12 in 23 million subscribers Judge Id. Glasser concluded that other factors had been considered Judge and that argued Time in the .Warner district “im- Azrack’s recommendation had not court “certification under [Rule] properly manageability relied alone 23(b)(3) should denied as matter of denying certification.” Id. at 385. highly law because individualized na- alleged ture of privacy adopted Magistrate violations de- Glasser stroys commonality required every issues Azrack’s recommendations on 23(b)(3) issue, and allowing including supple- [Rule] because whether to decline plaintiffs proceed jurisdiction their claims mental over the state law through a unduly Complaint. class action would be claims in the Amended Ac- parties cordingly, burdensome and the court.” District Court an or- issued short, Id. In Time limiting Warner asserted that der class certification under Rule 20131, appealed paragraphs 1. Both & R and at the R the decision LEXIS *12. The cited misquote Complaint Complaint actually allege from the Amended of the Amended minimum, alleging statutory damages that the claimed of "at a hun- minimum, to "at a will amount hundreds of dreds of of dollars.” Com- millions Amended 381, 77, ¶¶ plaint, dollars." F.R.D. at 198 2000 U.S. Dist. “ deference,” 168, and is ‘traditional- request declarato- id. plaintiffs’ appellate associated with assessments ly’ certifi- denying ry injunctive relief legal conclusions.” Id. 28(b)(3). of a district court’s September On cation under Underwood, n. (quoting at 168 Pierce peti- Parker’s granted this Court 2541, 23(f) U.S. 108 S.Ct. to Rule for leave tion pursuant (1988)). L.Ed.2d 490 Parker appeal District Court’s order. much of District seeks relief so mind, principles these With certification precludes order as Court’s applicable review to class standard of for incidental claims succinctly decisions can be certification class and as denies

under Rule class summarized as follows: “We review 23(b)(3). certification under Rule rulings for abuse discre- certification de novo the district tion. We review Discussion conclusions of law that informed court’s Review Standard of deny decision to certification.” its governing review The standards Corp., 242 F.3d Turner v. Beneficial Rule 23 (11th Cir.2001) (citations decisions under Generally, omitted) a district are known. well (reviewing certi- quotations regarding class certifica court’s decision Lending in a Truth in Act fication issues case). of discretion. tion reviewed for abuse Check/MasterMoney re Antitrust Visa Denial under Rule of Certification Cir.2001). (2d An 124, 132 Litig., F.3d 23(b)(2) however, court, “noticeably appellate is an provides [the district] less ... when deferential if, in may be maintained as a class action court denied class status than when has requirements of addition to the threshold class,” v. Metro- has a Caridad certified commonality, typicality, and numerosity, R.R., 191 North F.3d Commuter adequacy representation, party op “the (2d Cir.1999) Lundquist v. Secu (quoting has or refused to act posing acted rity Corp., 993 Auto. Fin. Servs. Pacific grounds generally applicable to the on (2d Cir.1993)) (internal quota F.2d class, thereby making final in appropriate omitted). tion marks junctive corresponding relief or declarato ry respect relief to the as a with vested discre A district court Generally, monetary whole.” when relief “empow matter tion decide a certain is injunctive in requested tandem with choosing— ered to make decision—of its relief, declaratory the court must deter range permissible within a falls requested monetary mine whether the re A court or ‘ex decisions. district ‘abuses’ predominates equi over claims lief accorded to it when ceeds’ the discretion Advisory The Committee table relief. (1) law ... its decision rests on error of 23(b)(2) provides note to Rule finding, factual or clearly or erroneous in does not extend to “subdivision cases though necessarily not its decision— appropriate final relief relates which product legal clearly or a erro error exclusively predominately money finding located neous factual —cannot 23(b)(2), damages.” advisory Fed.R.Civ.P. range permissible within the decisions.” (1966). committee note York, Zervos v. Verizon New (2d Cir.2001) (footnotes F.3d At the time the District Court made the case, omitted) in (emphasis original). in In con certification decision this the Sec- trast, yet de novo without ond Circuit had established stan- review “review evaluating predominance readily dard for is attained in an individual action as 23(b)(2). a class injunction sue under Rule action. Certainly any Glasser requiring reasonably turned to the Fifth modification of the therefore defendants’ [privacy notice] could be made Citgo binding Allison v. Petro Circuit’s decision parties all (5th necessary by service 151 F.3d 402 of notice Corporation, leum Cir. pursuant 1998). to Federal Rule of Civil predominance Proce Under the Allison (citation omitted). dure 65.” Id. at *14 analysis, monetary predominates relief approved District Court the recom equitable over relief “unless it is incidental certify mendation to injunc the claims for requested injunctive declaratory re tive and declaratory any relief but not lief.” Id. 415. The Fifth char Circuit monetary the claims for damages. acterized incidental directly “that flow to the The District Court’s decision creates as a forming whole the claims somewhat Having anomalous result. injunctive or declaratory basis re adopted Magistrate Judge’s recom- (emphasis in original). lief.” Id. mendations, the District Court apparently agreed that it unnecessary was granted The District Court class certifi- injunctive relief, the claims for yet only 23(b)(2), cation under Rule cer- but limited Moreover, those claims were certified. injunctive tification Parker’s request having certified a Rule class for relief, declaratory concluding Par- relief, injunctive the Court declined cer- requested predomi- ker’s tify claims, even those notably injunctive nated over the claims for claims, damage that Parker Magistrate relief.2 claims are incidental to the re- Azrack predo- based her determination of short, lief certified. the District Court minance on the litigation,” “realities gave Parker what the Court conclud- *12, perception R & R at and on the ed Parker did not need. “plaintiffs’ impor- own words the minimize injunctive tance of relief their com- 23(b)(2) deciding When the Rule plaint.” Magistrate Judge issue, Allison, Id. The con- the District Court relied on “injunctive cluded that relief violations leading precedent for which was the on the §of 551 predominance [of the Cable could be as issue analysis Act] of at time the determination, making In alleged the District for the Cable Act violations. The apparently Court assumed that dam- damages sought fact that the bulk of ages injunctive were incidental to the claimed plaintiffs injunctive are not incidental to the relief, believed, incorrectly, but also the that suggests requested relief that Arnold [v. damages sought by actual Parker far sur- Circuit, Inc., United Artists Theatre 158 passed statutory damages sought. the ], (N.D.Cal.1994) F.R.D. 439 and the ratio certification, opposing the denial of class therein, nale for certification articulated plaintiffs attempt signifi to minimize the compel does not certification here. request damages; cance of their for actual Parker, at 198 F.R.D. 381. The Amended conjunction read in with the Amended Complaint actually sought not hundreds of however, Complaint, plain it is clear that statutory damages, dollars of but hundreds of request tiffs’ for —which statutory damages. millions of dollars of to, plaintiffs suggest will amount "at a mini Complaint sought Amended also millions of mum, (Amended hundreds of dollars” Com Thus, damages. of solely dollars actual based 77, 82) plaint, §§ tiny but —constitutes allegations Complaint, on the of the Amended plain fraction of the total —which appear would that the claimed tiffs will estimate be in the [“]millions damages far exceed the claimed actual dam- (Amended Complaint, § 48) they dollars” — ages. impose will ask court to on defendants

20 Robinson, that appear it does holding The Second Cir ruled. the District Court 23(b)(2) however, on the Rule certification cuit, ruling has since addressed his guidance pro for with the evaluating predominance issue is inconsistent for standards 23(b)(2). Moreover, appel In Robinson v. Robinson. an Rule vided purposes of R.R., is, course, apply 267 F.3d bound to Commuter late court Metro-North (2d Cir.2001), appeal. Circuit de at time of 147 Second law as it exists See predominance Taxation, Virginia the Allison 509 Harper Dep’t clined to follow v. Rule calculus, observing it foreclosed 74 that 125 L.Ed.2d U.S. S.Ct. seeking in all actions certification (1993); Whitney v. Blue & Empire Cross in- (2d “even if the class-wide Shield, actual Blue 106 F.3d Cir. 1997). the form of relief which junctive R, relief is R Dis By adopting the & the plaintiffs primarily are interested.” appears trict to have concluded Court (internal and quotation at marks Id. for relief request injunctive here omitted). Ultimately, the Robin citations a “cover for “insignificant” [Rule and that, panel considering 23](b)(2) son held when claims are certification of motion Rule certification essentially monetary recov brought injunctive relief and seeking Robinson, claim both ery.” F.3d at 164. Accord damages, “a dis non-incidental ingly, it is not clear that Glasser ‘consider[ ] trict court must evidence cer would have exercised his discretion to hearing presented at a certification injunctive tify declaratory and even counsel,’ and then arguments approach, under an ad hoe relief claims is appro assess whether him approach caused to conclude importance priate in of ‘the relative light predomi relief requested sought, given all the facts remedies equitable relief. nates over claims ” of the case.’ Id. circumstances it clear Nor is Glasser Honda Am. (quoting have discretion to exercised his Hoffman (S.D.Ohio Mfg., 191 F.R.D. injunctive relief 1999)). approach. Robin claims under ad hoc deciding, son that inci suggests, without that, an ad making Robinson holds when ordinarily be dental claims should “should, determination, a court hoc district along certified and declara minimum, satisfy at a itself follow 23(b)(2), tory claims “be under (1) possible in the of ing: even absence damages [incidental] cause entitlement to recovery, plaintiffs reasonable subjective vary does on the con based injunc the suit to obtain bring claims, siderations of each class members’ declaratory sought; tive or relief and directly a finding but of liabil ‘flow[s] injunctive declaratory sought ity injunc on the ... claims for class-wide reasonably and necessary would be both ” relief.’ at 165 declaratory tive and Id. appropriate plaintiffs to succeed were 416.). Allison, (quoting F.3d at Insignificant on the or sham re merits. injunctive pro quests for relief should not Robinson, of light District of claims vide certification cover 23(b)(2) Rule Court’s decision of the brought essentially that are be certification issue must reconsidered recovery.” Id. hoc The approach. under the ad Robinson ad a district court Although approach requires it a bit unfair to hoc seems as an about the cir- to characterize abuse have detailed information Glasser anticipate surrounding his failure to cumstances discretion indeed, issue, potentially and favors a class certifica- huge class. The Court was prior to hearing tion decision of Rule particularly a damages concerned about 23(b)(2) certification motion. Accordingly, award that would be disproportionately likely it minimal least class dis- large compared to the harm actually suf- covery pro- must be conducted in order to potential fered class members. the court with the factual information vide superior class action is “[A] not the man- necessary to decide whether or not to cer- proceeding ner of where the liability defen- 23(b)(2) tify a Rule class. grossly dant stands to incur dispropor- any tionate to actual harm sustained Because the District Court decided Time Parker, aggrieved individual.” 198 F.R.D. of a legal Warner’s motion on basis at 383. Glasser noted that there rejected by this and standard later Court process pros- are due concerns when the yet applied approach has not broader Court, pect stunningly large adopted by damages award later the decision 23(b)(2) looms as the deny Rule class certification of the result technical violations of the Act potentially claims is vacated remanded Cable that affect On proceedings. for further remand the millions subscribers. The District should further District Court conduct fact Court also noted that the case raised obvi- and utilize the ad finding Robinson hoc manageability ous concerns: “Where a approach exercising its informed discre- promises purported class to cause serious certify tion whether to a class under Rule manageability problems, surely as would 23(b)(2) and, so, any certify whether to potential case where class members aspect of along claims states, total million subscribers relief. correctly defendants point out that courts do not hesitate dismiss based on man- Denial under Rule of Certification ageability concerns alone.” Id. at 384. appropriate certification is we difficulty have with these conclu “questions law fact where common to they sions is that on assump are based predominate members the class over findings tions fact rather than on of fact. any questions affecting only individual The precluded any District Court members, superi- and that a class action is discovery filing even the a motion or to other available methods for the fair Thus, class certification. remains adjudication and efficient of the controver- unknown what class Parker would have 23(b)(3). sy.” Fed.R.Civ.P. The rule re- sought po and the numbers of factors, quires consideration of various in- proposed tential class members in that cluding “the interest members Complaint class. the Amended individually controlling prose- class in alleges that the total number of Time War actions,” cution or of separate defense ner cable subscribers number about twelve 23(b)(3)(A), Fed.R.Civ.P. as well as “the states, million in twenty-three Parker has likely difficulties to in be encountered the given actually no indication that he would management of a class action.” Fed. certify seek to a class of all twelve million 23(b)(3)(D). R.Civ.P. Indeed, subscribers. counsel Parker in a denying hearing Magistrate stated before class certification under 23(b)(3), potential Rule Azrack that the the District Court focused number on superiority litigation, the the class members could not identified class be technical nature of the on discovery claimed violations without the issue: “[T]here Act, impact simply the Cable and the no number because we’ve had no plaintiffs, people recovery for and thus gregate to number of who

discovery as defendants, injured. think it is actually been We an effect on have in terrorem have no idea of large a number. We may which induce unfair settlements. one million or million whether it’s thirteen in may sufficiently that a seri And be Transe, 1,000.” Sampson, George process might ous case the due clause be 2000). 9, at Hearing (Sept. Absent Motion invoked, certification, prevent not to but concerning the discovery com- least limited nullify ag to that effect and reduce class, the District Court had position of damage award. State Farm gregate Cf. of the re- regarding size no evidence — Campbell, Auto. Ins. Co. v. Mutual face if the covery might Time Warner —, 1513, 155 U.S. 123 S.Ct. L.Ed.2d Under the class claims were successful. (“The Due Clause of Process circumstances, the Court’s conclusion' prohibits the Fourteenth Amendment inevitably lead the size of class imposition grossly excessive or arbi Warner, of Time financial “the demise” tortfeasor.”); trary punishments a Parker, or even to F.R.D. America, Gore, BMW North Inc. problems, was significant manageability 1589, 134 U.S. 116 S.Ct. L.Ed.2d speculative. (1996) (noting “most common acknowledge legiti- Glasser’s We ly an cited indicium of unreasonable a potential dev- mate concern that punitive damages excessive award is its award, large damages out of all astatingly harm inflicted ratio to actual to the actual harm proportion reasonable case, point in plaintiff.”). At this class, plaintiff suffered members however, hypothet these concerns remain process may due issues. Those is- raise ical. There been no has combining sues from the effects of arise any pre motion filed nor actual evidence imposes minimum statutory scheme that possibility sented raises reasonable per-con- damages awards on a principles process may due restrict usually sumer order encour- basis— an ultimate damages Accordingly, award. lawsuits age filing of individual we decline to consider what limits the due of consumer private means of enforcement process impose. clause may protection the class action laws—with many aggregates mechanism that Because the District Court Time decided because there would other- claims—often sup- Warner’s motion without the factual bring wise be no incentive individual port support legal necessary to its conclu- may expand claim. a combination Such sions, deny Rule decision potential statutory damages so far be- certification is and this mat- vacated yond damages suffered that the the actual ter proceedings. is remanded for further puni- come to resemble Once it has the benefit of Parker’s motion ones that are awarded damages yet tive — the evidence relevant to that liability, as a of strict rather than matter motion, the in a District Court will be egregious typically for the conduct neces- position to its exercise informed discretion punitive sary support regarding factors affecting may aggregation that the award. It 23(b)(3) certification. large action of numbers statuto- ry damages potentially claims distorts Conclusion statutory damages and purpose of both so, The decision of the such a distortion District Court class actions. If matter potentially ag- could enormous vacated is remanded for create

23 (b)(2). cautioned, however, shall proceedings. They further Each side bear “[t]he its own costs. subdivision does not extend to cases

in which appropriate final relief relates NEWMAN, Judge, JON Circuit 0. exclusively predominantly to money concurring. damages.” advisory Id. committee’s note added). (emphasis In a case such up

A to 12 mil- complaint alleging that one, as the pending which are may lion cable television subscribers each sought in injunctive addition to and declar- $1,000 be entitled receive at to least (b)(2) relief, atory certification issue pri- statutorily protected violations of their turns largely whether the final relief vacy rights presents class action issues in relates “predominantly” money to dam- a context unusual even for modern class ages. litigation. The Court remands for further consideration District Court’s Some courts have ruled that monetary deny class I decision to certification. con- predominates relief “unless it is incidental cur in agree that decision and most of requested injunctive to or declaratory re opinion. Underhill’s I write these Citgo lief.” v. Corp., Allison Petroleum explore additional views to matters affect- (5th 402, Cir.1998); 151 F.3d see also (b)(2) (b)(3) ing aspects both the 02-8057, Corp., Barabin v. Aramark No. this case. I am somewhat doubtful about 355417, (3d Jan.24, 2003 WL at *1-*2 Cir. (b)(2) possibility that would 2003) (adopting approach the Allison include claims believe that but damages); incidental v. Ingersoll Jefferson strong arguments there favoring are (7th 894, International F.3d (b)(3) I specifically, More think a class. Cir.1999) (same). “Incidental” district court has discretion to a have been to be “that said those flow (b)(3) amount aggregate class with*the of directly substantially limited whole on the claims forming basis of application

below what a literal of the stat- relief,” injunctive or declaratory Alli ute might require. seem son, at F.3d “should least capable computation by be means of (b)(2) Issues objective dependent and not standards any significant way intangible, on the sub the Federal Rules of jective of each provides if differences class member’s Civil Procedure the thresh- circumstances,” 23(a) id. met, prerequisites old of Rule are may class action be maintained opinion recognizes, As Judge Underhill’s party opposing the class has acted or however, rejected has the Fifth this Court on grounds generally ap- refused to act (b)(2) claims Circuit’s limitation class, plicable thereby making damages, “incidental” see Robinson injunctive appropriate final relief or cor- Co., Metro-North Commuter R.R. responding declaratory with re- relief (2d Cir.2001), outlining F.3d spect to the class as a whole. instead a “ad hoc id. at approach,” broader 23(b)(2). obliges Fed.R.Civ.P. the text district court consid- making er factors in the ulti- provision ap- focuses numerous propriateness mate certification decision. Robinson ex- relief, contemplated contemplated plicitly possibility the drafters that a a(b)(2) money damages might appropriate claim for not neces- where sarily preclude class certification under is non-incidental to the specific guid- dam- have additional concerns as individual “present[ would ] 166. The risk that the Court to the District Court. Id. at ance offers age issues.” process might monetary create due that Although recognizing such certification claims by possibility (b)(2) concerns was answered not be “incidental” for certifica- need opt rights and out “affording notice correcting tion and District Court’s damages for ... absent class members statutory damages sought view that addition, Id. In phase proceedings.” non-statutory damages, less than the were damages relief obsta- held that Robinson not the District Court does disturb (b)(2) can be overcome cles statutory damages view Court’s 23(c)(4) authority of Rule by using the damages are incidental and all other are respect “with par- class action disagree prop- both non-incidental. I with 23(c)(4), issues,” spe- ticular Fed.R.Civ.P. might air it ositions and the matter since respect only with a class action cifically, the District ultimate deter- affect Court’s Robinson, 267 at 167-69. F.3d liability. monetary claims mination of whether accept obliged I am Robin predominate. Circuit, I think it the law of this son as statutory damages, I note As to (b)(2) cer inappropriate risks uses some preliminarily it is no means settled provision designed That is tification. statutory damages per that a claim for injunctive and relief. claims for Apparently se no court has incidental. class, (b)(3) opt-out protection, its explicitly indicated monetary In claims. some is available (b)(2) purposes are “incidental” for anal (b)(2) situations, might limited Allison, ysis. suggest In the Fifth Circuit appropriate notwithstanding involving (by ed citation to a case a claim claim, Robinson, but, I would have prior to statutory damages) damages that such thought to be rare. See Anso such cases incidental, see 151 F.3d at qualify as Operating Corp., 201 umna v. Gristede’s (citing v. The Arnold United Artists (S.D.N.Y.2001) 81, (observing F.R.D. Circuit, Inc., atre F.R.D. in implementing opt-out rights (N.D.Cal.1994)), not but Allison did involve class is undesir context of any claim. Although such some district able, under Rule certifying (b)(2) classes courts have certified whose instead). particular, question I see, statutory damages, claims included (b)(2) in unduly extending risk whether we e.g., Borcherding-Dittloff v. Transworld by inviting claims dis cases with 558, Systems, 185 F.R.D. 565-66 protect then judges trict to use (W.D.Wis.1999); Colorado Cross-Disabili damage with individualized claimants opt-out ty Bell 184 F.R.D. Corp., them Coalition Taco by affording amounts either rights certifying (D.Colo.1999); issue. v. GC 361-62 Gammon way as Such strike me of under devices Partnership, Services 162 F.R.D. Limited (b)(3) “a requirement that mining the (N.D.Ill.1995); Arnold v. 320-22 Unit superior to other available meth Circuit, Inc., 158 ed Artists Theatre adjudication fair efficient ods for the (N.D.Cal.1994), these F.R.D. 23(b)(3). controversy.” Fed.R.Civ.P. courts have not described such “incidental,” variety Robinson, and have considered though, light Even reaching of factors the conclusion for fur- pending case must be remanded (b)(2) certification, predominate.1 I did ther consideration proving ap- in which dam- considered some courts classes One factor

25 Glasser, case, (b)(2) In al for pending certifying reconsideration after undervaluing statutory dam class though including claim for dam- claim, accepted ages, to ages ordering seems have absent class members for statuto receive and an plaintiffs’ premise opportunity a claim notice to opt out). (b)(2) pur ry damages “incidental” for

poses adjudicated it can be with because As to non-statutory damages, out consideration of individual variations major District Court compo understood a case, among the class members. this nent of the to disgorgement claim be of the damages provides the statute for actual profits that alleged the Defendant to greater recovery with a minimum of the of by selling have made information in viola $1,000 per day or each claimant $100 tion of the statutorily-pro class members’ (2000). 551(f)(2)(A) § violation. 47 U.S.C. rights. tected privacy See Parker Time statutory damages minimum Co., L.P., Warner Entertainment 198 $1,000 can be determined without con (E.D.N.Y.2001).2 If, F.R.D. 381 members, sidering among class variations likely, as seems the Defendant sold this per day minimum the alternative $100 per information at fixed amount sub vary among violation will somewhat class scriber, it would seem that a claim to members, any damages actual suf disgorge resulting profit and distribute fered each class member will involve pro rata to the class would members plaintiffs variations. considerable involve any individual variations sort purporting represent class seek to to that would damages render these “non- by limiting the avoid such variations recov course, incidental.” all Of of these consid $1,000 ery for each class member to concerning damages erations will not mat lump they easily sum. I doubt if can so Court, remand, ter if the on District re (b)(2) sacrifice the absent class members’ claims news certify its decision to class daily damages actual dam minimum or only injunctive for the claims for and de ages, at without least notice and claratory any some relief declines (b)(2) opportunity those class members either class. $1,000 agree accept only payment 2. Issues (or sum, specified some lesser see Part infra) opt By out seeking or to of the class. collect Cf.

Arnold, (on $1,000 up 158 F.R.D. at 464-65 motion for each of to 12 million cable ages sought damages requested damages, were is the amount of maximum awarded,

which be each class member would entitled. approximately would amount to expect, might ap As one district have courts member.”). per cents peared willing injunctive more to hold that predominates where relief It is not clear whether the District Court damages received each be individual regarded disgorgement profits to be within would be See member minimal. Bor scope the actual to which the ("[T]he cherding-Dittloff, 185 F.R.D. at 566 might be entitled under the statute or to potential statutory plaintiff damages each remedy be the for a state claim. At law could recover under the act nominal. If are point, any ruling our Court need not make 50,000 members, over class has each theory, the former which has not been devel- dollars.”); would be to less ten entitled than oped appeal. theory, As to the second Coalition, Cross-Disability Colorado supple- District declined to exercise Court (finding F.R.D. at jurisdiction, although that mental interlocu- predominated part because "each class tory ruling now could reconsidered Gammon, $50”); member seeks being the class certification issue is remand- (finding recovery F.R.D. at 321 that individual be de because ed. minimis “the part compensate for actual losses that subscribers, potentially could this lawsuit quantify, they Time liabili- are are often also Warner difficult impose on Defendant part pseudo-punitive Even one in for a ty for billion. motivated $12 is a lot of largest corporations, and overall pub world’s to “address deter tention creates a of this sort money.3 A claim Blastfax, lic Texas v. American harm.” statutory provisions (W.D.Tex. tension between Inc., 1085, F.Supp.2d 121 1090 Rule 23 damages and the minimum 2000) constitutionality of (upholding statu probably actions provisions tory Telephone damages provision contemplation of those within the was not Act, § 47 227 Consumer Protection U.S.C. or the statute promulgated who either Louis, (2000)); Iron see also Saint Moun appears glance, tension rule. At first Williams, Ry. tain Co. v. 251 & Southern (1) only possibilities: to admit of two 71, L.Ed. 139 U.S. 40 S.Ct. 64 and, if granted, is motion (1919) (in statutory setting penalty, a proven, Time Warner are allegations “adjust may public its amount to the state up to damages of becomes liable for $12 private injury.”); rather than wrong cf. (2) billion, certification motion or —Farm, at —, —, State U.S. denied, Time each victim of War- and 1520-21, (“punitive 123 at 1526 dam S.Ct. remains free to alleged ner’s violations ages a [than serve broader function com (or $1,000 claim for pursue an individual pensatory damages]; they are aimed at recovery minimum or daily the alternative retribution.”). A deterrence and options Both are unsat- damages). actual process penalty may due where the violate isfactory. prescribed op is “so and penalty severe option might encounter The well pressive wholly first disproportioned as objections, somewhat analo process due obviously unreasonable.” offense Supreme Court gous to those that Williams, 66-67, 251 40 U.S. S.Ct. 71. setting constitutional recently identified of minimum aggregation Even if a massive See, damages. e.g., punitive limits on statutory damages survives constitutional Insurance Mutual Automobile State Farm scrutiny, question there ais substantial — —, Campbell, U.S. Co. Congress pay that authorized whether 1513, 1520-21, 1526, — —, —, 123 S.Ct. $1,000 for victimized sub ments cable (“The Due 155 585 Process L.Ed.2d expected 12 of them scribers million each pro Amendment Clause of the Fourteenth receive such an amount for somewhat imposition grossly excessive hibits the technical violation. arbitrary punishments on tortfea option remits each victim to The second Industries, sor.”); Cooper Inc. v. Leather lawsuit, separate needlessly clogging Inc., 424, Group, 532 U.S. 433- man Tool repetitious many courts with suits are (2001); 1678, 149 L.Ed.2d 674 121 S.Ct. filed, Gore, rewarding some law America, violators Inc. v. BMW North slight amount of total 559, 585-86, 116 S.Ct. U.S. (1996). if, likely, seems more few suits L.Ed.2d 809 Henry Today, in are v. Cash might be calculated filed.4 damages amounts Cf. eds., 1986) Margaret famously (Hugh & Miner 3. As Dirksen said in Rawson Senator Everett Dirksen). (quoting Everett budget, "A Senator billion context of the federal there, pretty a billion soon here and talking money.” you're rejecting The New 4. idea of class action about real certifica- Quotations large Dictionary aggrega- tion because of the size of International

il (certi- (1892) (“It (S.D.Tex.2000) rule, L.Ed. 226 199 F.R.D. familiar for claims under Truth in Lend- fying class thing that a bemay within the letter of the (“TILA”), §§ et ing seq. Act 15 U.S.C. statute, yet statute and not within the (2000), $1,000 finding minimum spirit, because not within its nor within the under TILA insuffi- statutory award was makers.”); intention of its Salute v. Strat bring to motivate to meri- cient individuals Apartments, Greens Garden 136 F.3d ford claims). torious (2d 293, Cir.1998) (“The plain 297 meaning I think a third is alternative warranted of may a statute not be controlling those in order to achieve to a considerable ex rare cases where application literal of a objectives of both the statute and tent will produce statute a result demonstrably the class action rule. The statute could be at odds with the intentions of its draft to an construed authorize award of sub ers.”) omitted). (quotation marks I do not $1,000 stantially less than to all but specifying $1,000 believe that a mini initially plaintiffs named who instituted the violations, payment mum for Cable Act recognize I ap class action. Congress intended to expose a cable tele proach cannot be reconciled provider vision for billions of statute, terms of the and for some that I dollars. Nor do Congress believe that insuperable an But in would be obstacle. permit intended to a violator to avoid pay others, my many view and that of statutes ment compensation of at least some applied according are not to be their numerous victims of its violations simply so doing literal terms when achieves a large because its actions affected a num manifestly legis result not intended ber Perhaps, of subscribers. as the See, e.g., lature. v. Con Oceanic Griffin opinion Court’s imply, seems to the Due tractors, 571, 564, 458 U.S. 102 S.Ct. Process Clause creates a constitutional 3245, (1982) (“[I]n 973 73 L.Ed.2d rare limit upon aggregation of cases the literal of application a statute damages. But I to rely hesitate on a novel produce a demonstrably will result at odds theory of constitutional law a when sensi drafters, with the of intentions its statute, interpretation ble those construed controlling.”); intentions must be against possible Holy Trinity background Church v. of constitu United States, 511, concerns, 143 U.S. 12 S.Ct. 36 tional is available.5 See Edward 336, statutory damages major City, tion of awards drew erce Bank 474 F.2d Kansas (10th Cir.1973); support, origin, 341-47 In re Trans Union opinion if not its 328, Privacy Litigation, Corp. 211 F.R.D. 348-51 Judge Frankel in Ratner v. Chemical Bank ( N.D.Ill.2002); v. Berkman Sinclair Oil Co., (S.D.N.Y. New York Trust 54 F.R.D. 412 602, (N.D.Ill.1973), Corp., 59 F.R.D. 608-09 I case, 1972). Frankel denied a believe this one of those rare instances motion for class certification for nodded, Horace, judicial where Homer see 130,000 consisting of credit card holders (“Homer Ars Poética 402 himself hath been claiming $100 autho nod.”), quoted observ’d in Bartlett’s Famil 1968, Lending rized the Truth in Act of 15 Quotations (13th ed.1951). iar seq. “cogent §§ U.S.C. 1601 et He found persuasive” argument defendant’s course, Congress always Of would have the recovery proposed $100 “the each for some option respond setting to the a limit 130,000 class members would a horren aggregate damage by explicitly pre- awards dous, possibly annihilating punishment ....” cluding establishing such a limit or lower or Ratner, 54 F.R.D. at 416. Ratner higher even limit of its own. See Disabled in courts, see, favorably by many Hammons, has been cited Metropolitan Action New Yorkv. Coldwell, Co., e.g., 110, ("We (2d Cir.2000) v. & Kline Banker 508 F.2d 202 F.3d 120 thus 226, (9th Cir.1974); apply 234-35 Wilcox v. Comm seek to framework best Owens-Illinois, Inc., 665 F.2d Florida Coast Williams Corp. v. J. DeBartolo Gulf Cir.1982) (“It (9th Trades Coun is within discre- Building and Construction 1392, 575, cil, 23(c)(4), S.Ct. judge, U.S. trial under tion (“[W]here an other L.Ed.2d in a class to those to limit the issues of a statute acceptable construction wise parts of lawsuit which lend themselves to prob constitutional raise serious motif.”) use the class action convenient lems, construe the statute to the Court will omitted); v. Phil- (quotation marks Simon construc problems unless such avoid such Inc., 200 F.R.D. ip Morris contrary the intent of plainly tion (E.D.N.Y.2001) dis- (discussing power of Congress.”). grant partial trict court to process concerns or possible Even if due cases). I collecting to bifurcate issues and to a bizarre avoid statutory construction process potential due concerns think that Congress might not by intended result not a Con- avoiding result not intended limiting aggre require independently gress appropriately can be considered a award, statutory such con gate damages judge determining a class district in appropriate to would seem siderations to only up will be certified some reason- customarily discretion the broad form damages. aggregate amount of When able certifi in the context of class judge district statutory provisions considering Judges have used their discretion cation. than” stat- authorizing sums of “not more scope of a appropriate the to determine máximums, Circuit ed the Ninth has class, see, e.g., Timber & Trad American aggregate that a large hesitated to rule Bank, 690 F.2d ing Co. v. First National a in a class action exceeded district award Cir.1982) (9th judicial (affirming court’s discretion and should be substan- being “within the of a subclass creation (6) See Six Mexican tially reduced. power under Fed. district court’s broad Growers, 904 Workers v. Arizona Citrus 23(d) adopt procedural to innova R.Civ.P. (9th Cir.1990).6 1301, 1309-11 Deter- F.2d management of the class to facilitate tions portion the mining what full amount action.”); v. Midwest Rubber Re Shapiro statutory to a damages will be available (8th Co., F.2d Cir. claiming than significantly class seems not different 1980) broad (holding the discretion determining what issues will be available courts in the class ac enjoyed by district adjudication. A for classwide district defining scope the to tion context “extends in- judge ought to be to exercise able class,” affirming court’s district of the certify to class entitled class), formed discretion a proposed plaintiffs limitation specified to no 23(c)(4), to receive more than some and, a pursuant to Rule see, issues, amount.7 particular e.g., aggregate class as can, Procedurally, might recognizing Congress judge accomplish always has we may proposed the by modifying word and wish revisit class in the certifi- the final scheme.”); statutory option U.S.C. cation order. Another would be for cf. (amendment 1640(a)(2)(B) caps plaintiffs, § judge de- to inform the before $500,000 ciding action TILA awards at lesser the motion for certification but after worth). net percent having subject or 1 of the creditor’s argument on received parties, aggregate amount all (b)(3) superiority which concerns (6) above the stat- 6. Six Mexican Workers concerned arise, plaintiffs permit utory damages provision of the Farm Labor Act, motion class certification to Registration amend their 7 U.S.C. Contractor aggregate damages 2050a(b) reduced before cer- seek (repealed), § now codified at 1854(c)(1) (2000). decision is rendered. § tification 29 U.S.C. permit obliged provide make sense to probably It would at least compen- some plaintiffs members, full named to recover the sation to all class and the antici- (if $1,000 specified pation in the statute amounts that result should exert de- merits) prevail on they Congress and allocate the terrent effect that I intended. aggregate urge balance of the limited amount a limitation on aggregate amount among other through members the class. of either a sensible con- Awarding less than absent members struction the statute a sensible exer- full amounts not unfair to cise of district judge’s Rule 23 discre- tion, unlikely they it is highly restricting them since rather than district courts brought any litigation would have their to the unattractive choice either evolv- (b)(3) Moreover, opt-out ing own names. a constitutional ag- limitation will opportunity gregate recovery afford them chance to rejecting else $1,000 full they entirely, thereby sue choose do class certification insulat- ing so. defendant from for some appropriate damages. amount of considering A district court whether to adjust the tension between a substantial ^[******] aggregation considerations, In light of these I concur by limiting

virtues size in the decision to remand the class certifi- (to plain- but of the awards all the named agree cation issues and of Judge most tiffs) damages ruling should make its opinion. Underhill’s of deciding the context the class certifica- issue, making prelimi- after tion least size of

nary decision the class .the

being considered for certification. Other- wise, the in terrorem threat of a massive O’BERT, Kenneth as Administrator full statutory award of the will amounts O’BERT, the ESTATE OF Richard unfairly large induce settlement once a Plaintiff-Appellee-Cross-Appellant, class has been certified. See In re Rhone- Poulenc Rorer F.3d Cir.1995) (7th pres- (discussing settlement VARGO, Sergeant, Robert J. Vermont context). imposed in sures class action It Police, Defendant-Appellant- State appropriate would be for a district court to Cross-Appellee, explore parties early stage with the at an the traditional issue of the size of Fagerholm, III, Sergeant, John G. the class but also the novel issue of an Police, Vermont State Defen appropriate ceiling aggregate statutory dant-Cross-Appellee. damages for class members. 02-7805(L), No. 02-7905. might my It approach seem that suffers Appeals, United States Court of permitting the same defect as Second Circuit. recovery potential deny size altogether: wrongdoer class action Argued: Feb. 2003. scope wrong-

benefits because of the its Decided: June However, if doing. no class is certi- fied, wrongdoer escapes liability to all

except plaintiffs, the named whereas un- my approach, wrongdoer

der

Case Details

Case Name: Parker v. Time Warner Entertainment Co.

Court Name: Court of Appeals for the Second Circuit

Date Published: Jun 27, 2003

Citation: 331 F.3d 13

Docket Number: Docket 01-9069

Court Abbreviation: 2d Cir.