MEMORANDUM & ORDER
Before the court are plaintiffs’ objections to Magistrate Judge Azracks’ recommenda
Background
Plaintiffs Andrew Parker and Eric De-Brauwere are cable television subscribers who receive their cable service from defendant Time Warner Cable, a division of defendant Time Warner Entertainment Co. Plaintiffs allege that defendants violated the subscriber privacy provisions of the Cable Communications Policy Act of 1984 (“Cable Act”), 47 U.S.C. §§ 521 et seq., as well as a host of state consumer protection laws, by disclosing and selling personally identifiable information about its subscribers to third parties and by failing to provide subscribers with clear and conspicuous notice of its disclosure of such information. Plaintiffs’ Amended Complaint seeks redress for the alleged Cable Act violations in the form of monetary relief (statutorily mandated individual damages and actual damages resulting from defendant’s unjust enrichment) and injunctive relief (a declaratory judgment and an injunction restraining defendants from further Cable Act violations).
In an Amended Memorandum & Order entered on November 8, 1999, Judge Korman of this Court, reversing his prior decision, denied defendants’ motion to dismiss the Amended Complaint on the ground that it failed to state a cause of action under the Cable Act. Judge Korman found that the Amended Complaint stated a claim in alleging that Time Warner (i) failed adequately to notify subscribers that it was selling information gathered from third party sources along with information it collected directly from subscribers,
Plaintiffs have not yet moved for class certification, as this court stayed them from filing a class certification motion pending resolution of defendant’s motion to deny certification, but indicate in their complaint that they will pursue certification pursuant to Rules 23(b)(2) and (3) for a plaintiff class of approximately 12 million cable subscribers in 23 states whose privacy interests allegedly were violated by defendants’ disclosure and sale of subscriber information. (Pls.’ Amended Class Action Complaint, UH 32-37) Defendants argue that certification should be denied as a matter of law under both subdivisions. No discovery has been conducted concerning the purported class, and plaintiffs accordingly contend that defendants’ motion for denial of certification should be viewed as a premature motion to dismiss under Rule 12(b)(6) and that defendants carry the burden of proving why a class action is not warranted.
Before a plaintiff moves for class certification, a defendant may “test the propriety of the action” by a motion for denial of class certification. Brown v. Milwaukee Spring Co.,
In an R & R issued on October 2, 2000, Magistrate Judge Azrack recommended that the court grant in part defendants’ motion to deny certification as a matter of law under both Rules 23(b)(2) and (3). The Magistrate Judge presumed that plaintiffs could satisfy the requirements of Rule 23(a), but concluded that certification of plaintiffs’ damages claim under 23(b)(2) should be denied as a matter of law because plaintiffs’ request for monetary relief predominates. (R & R, 10-11) The Magistrate rested her predominance determination on two pillars: first, plaintiffs’ own argument that, without injunctive relief, defendant would be “immunized” from liability, and second, that plaintiffs were seeking a “significant” sum of money in connection with the alleged Cable Act violations. As for plaintiffs’ efforts to obtain injunctive and declaratory relief, however, the Magistrate recommended that 23(b)(2) certification was appropriate pursuant to 23(c)(4), which permits a district court to limit the issues as to which certification is granted. (R & R, 13-14) With respect to plaintiffs’ efforts to obtain certification under Rule 23(b)(3), Magistrate Judge Azrack found that plaintiffs failed to demonstrate the superiority of a class action over individual actions and, accordingly, recommended that certification be denied. (R & R, 14-16) Finally, in view of her determinations with respect to the purported class action, the Magistrate recommended that the court decline to exercise supplemental jurisdiction over plaintiffs’ state law claims.
Class certification under 23(b)(2)
Certification under 23(b)(2) is only appropriate for class actions where the relief sought is exclusively or predominantly declaratory or injunctive. Rules Advisory Committee Notes to 1966 Amendments to Rule 23 (reprinted at
Before determining whether the Magistrate’s denial of certification under Rule 23(b)(2) of plaintiffs’ monetary damages claim was supported by the relevant law, it should be noted that a number of commentators have taken the position that determining whether one form of relief actually predominates in some quantifiable sense is a wasteful and impossible task that should be avoided.
In applying the predominance requirement of Rule 23(b)(2) to this case, it is useful to begin with a brief discussion of the concerns underlying the predominance requirement and the factors used to assess predominance. One of the most thorough discussions of the predominance requirement was provided by the Fifth Circuit in Allison v. Citgo Petroleum Corp.,
As a result, a class seeking substantial monetary remedies will more likely consist of members with divergent interests ... In contrast, because of the group nature of the harm alleged and the broad character of the relief sought, the (b)(2) class is, by its very nature, assumed to be a homogenous and cohesive group with few conflicting interests among its members .... The underlying premise of the (b)(2) class — that its members suffer from a common injury properly addressed by class-wide relief — ‘begins to break down when the class seeks to recover back pay and other forms of monetary relief to be allocated based on individual injuries.’ ... Thus, as claims for individually based money damages begin to predominate, the presumption of cohesiveness decreases while the need for enhanced procedural safeguards to protect the individual rights of class members increases, ... thereby making class certification under (b)(2) less appropriate.
Id. (internal citations omitted).
In explaining this distinction, the Allison court indicated that monetary relief “predominates” when “its presence in the litigation suggests that the procedural safeguards of notice and opt-out are necessary, that is, when the monetary relief being sought is less of a group remedy and instead depends more on the varying circumstances and merits of each potential class member’s case.” Id. Applying these assumptions to a purported plaintiff class, the court noted that monetary relief predominates:
unless it is incidental to requested injunctive or declaratory relief. By incidental, we mean damages that flow directly from liability to the class as a whole on the claims forming the basis of the injunctive or declaratory relief... Ideally, incidental damages should be only those to which class members automatically would be en*379 titled once liability to the class (or subclass) as a whole is established. That is, the recovery of incidental damages should typically be concomitant with, not merely consequential to, class-wide injunctive or declaratory relief. Moreover, such damages should at least be capable of computation by means of objective standards and not dependent in any significant way on the intangible, subjective differences of each class member’s circumstances. Liability for incidental damages should not require additional hearings to resolve the disparate merits of each individual’s case; it should neither introduce new and substantial legal or factual issues, nor entail complex individualized determinations.
Id. at 415 (internal citations omitted) (emphasis added). Assuming that a district court denies 23(b)(2) certification under these principles because monetary relief is the predominant relief sought, the court in Allison indicated that Rule 23(b)(3), with its enhanced procedural safeguards, is the appropriate means of class certification. Id. at 413.
Courts following the basic principles described in Allison have generally permitted certification under 23(b)(2) only when monetary relief is “incidental” to injunctive or declaratory relief. One case in which a request for monetary relief was found to be incidental to a request injunctive relief and therefore appropriately certified under Rule 23(b)(2) is Arnold v. United Artists Theatre Circuit, Inc.,
Analyzing the proposed class in terms of this criterion, it is clear that the claims of the class members are remarkably homogenous. As noted above ..., in this case the class members, rather than challenging individual actions taken by the defendant against each of them separately, all challenge the same actions: defendant’s failure to change certain architectural features found at its various' theaters. The challenged design features affect all class members in almost precisely the same way because of common distinguishing characteristics shared by all the class members: their status as wheelchair-using or semi-ambulatory disabled persons. This fact lends the proposed class an extraordinary degree of homogeneity, far greater than that of even the average Title VII disparate treatment suit in which plaintiffs allege that many separate actions against individuals manifest a common pattern and practice of discrimination. In view of this high degree of homogeneity, it is clear that this suit is a paradigm of the type of action for which the (b)(2) form was created.
Id. at 451-52.
In finding a sufficient degree of homogeneity in the plaintiff class, the Arnold court distinguished a line of cases cited by defendant in which certification was denied on two grounds: first, those eases did not involve civil rights cases — for which 23(b)(2) was specifically designed — but rather federal antitrust laws or other business regulatory statutes, and second, those cases all involved “damage claims in which the quantum of damages suffered involved a complicated, individual-specific calculus.” Id. at 452. The Arnold court found that the damages claim would not unduly complicate the class action because the damages sought by plaintiffs under the California Civil Code corresponded directly to the statutory minimum of $250 for each instance in which a disabled class member visited a theater owned by defendant and was subjected to legally inadequate accommodations there, or was deterred from visiting such a theater by her knowledge of inadequate accommodations at the facility. Id. at 453-54. (Plaintiffs also sought punitive damages, but the court had determined in an earlier order that punitive damages were not available under the relevant provision of California law. Id. at 453 n. 6.) Finally, the court found that the adjudication of the damages claim would be relatively simple, as it
In a case captioned In re Visa Check/Mastermoney Antitrust Litigation,
In Gelb v. American Telephone & Telegraph Co.,
Turning to this case, it appears that Magistrate Judge Axrack’s recommendation that certification be limited to plaintiffs’ equitable claims was not clearly erroneous or contrary to law.
Class certification under 23(b)(3)
Plaintiffs also argue that Magistrate Azrack erroneously denied certification pursuant to Rule 23(b)(3). That rule requires plaintiffs to demonstrate “that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” Fed.R.Civ.P. 23(b)(3). Defendants argue that certification under 23(b)(3) should be denied as a matter of law because the highly individualized nature of the alleged privacy violations destroys the commonality of issues required by 23(b)(3) and because allowing plaintiffs to proceed on their claims through a class action would be unduly burdensome to the parties and the court. Plaintiffs vigorously maintain that certification under 23(b)(3) is necessary because common issues predominate and because a class action is the superior mechanism for addressing the alleged violations, given the prohibitively high cost of litigating individual Cable Act violations and the low recovery to each aggrieved subscriber.
In the R & R, Magistrate Judge Azrack recommends that certification be denied as a matter of law under 23(b)(3) because a class action is not the superior manner of proceeding. (R & R, 14-16) The R & R specifically notes that the superiority prong is undermined by the fact that any person who is aggrieved by the alleged Cable Act violations can obtain both injunctive and monetary relief, including statutory and punitive damages, attorneys’ fees and costs, by proceeding on an individual basis. Apart from the adequacy of individual relief, the R & R also notes two additional factors that weigh against certification: first, a class action would force defendants to incur “administrative expenses largely out of proportion to the small recovery of individual members of the proposed class” and, second, permitting a class action would force the court to “expend substantial amounts of time on supervision of
Though the decisional authority on class certification in the context of alleged Cable Act violations is scant, the authority that does exist supports Magistrate Judge Azrack’s finding that a class action is not the superior method for addressing a violation of § 551 of the Cable Act, though for reasons other than those cited in the R & R. Wilson v. American Cablevision of Kansas City,
Having set forth the factors that prompted the denial of class certification in these TILA cases, the court in Wilson noted that “the factors that must be weighed in determining whether a class action should be certified in a Cable Act case are substantially the same factors...” and proceeded to apply those factors to the alleged § 551(f) violation. Wilson,
Despite, or perhaps because of, Wilson’s clear articulation of factors weighing against class certification, plaintiffs in their opposing papers both distinguish Wilson and criticize it. Plaintiffs contend that, unlike in Wilson, the damages alleged here include statutory, actual and punitive damages, as well as disgorgement of profits; that the violations they allege are not technical in nature, but willful and substantive; and, finally, that the principle adhered to in Wilson that damages should not be disproportionate to the harm actually suffered does not apply here where defendants not only have failed to issue adequate notice to customers of the information that was being collected about them but have taken the additional step of selling that information.
Plaintiffs’ arguments are insufficient to persuade the court to take a different course from that taken in Wilson. As for plaintiffs’ argument that this action, unlike Wilson, is class-worthy because it involves more than simply statutory damages, plaintiffs explicitly concede that actual damages will be of little significance when they state, in arguing the superiority of a class action, that “[plaintiffs’ notice violation claim under Section 551(a) is unlikely to involve any individual actual damages issue whatsoever!,]” (Pls.’ Mem. 22 n.19) and that “[p]laintiffs need not demonstrate that any invasion of privacy hurt [their] feelings, offended or embarrassed them, or otherwise aggrieved them.” (Id. at 25) The primacy of statutory damages is further underscored by at least one other court in a decision that subsequently was remanded, Warner v. American Cablevision of Kansas City, Inc.,
With respect to plaintiffs’ attempt to east Time Warner’s actions as something other than a technical violation, this too is unpersuasive. Wilson’s observation that it would be “difficult to find a better example of a technical violation for class certification purposes” than a privacy notice that included the text of § 551 is on point.
Finally, as for plaintiffs’ argument that Wilson is inapposite because defendants here have taken the additional step of actually marketing subscribers’ personal information, this distinction does not disturb the fundamental principle articulated in Wilson that a class action is not the superior manner of proceeding where the liability defendant stands to incur is grossly disproportionate to any actual harm sustained by an aggrieved individual. For reasons already mentioned, this principle is of particular relevance where, as here, plaintiffs essentially have conceded that no actual harm was suffered by individual subscribers. Although plaintiffs are correct when they argue that certifi
In addition to criticizing and distinguishing Wilson, plaintiffs raise a number of other arguments, none of which are sufficient to outweigh the superiority considerations discussed earlier. Plaintiffs first argue that Magistrate Judge Azrack placed too much emphasis on only one of the factors relevant to the superiority analysis under 23(b)(3)— manageability — and that she should have considered other factors relevant to the superiority analysis.
However, the court in this case need not reach so far, as consideration of the factors identified in Rule 23(b)(3) other than manageability disfavor certification. As for factor (A), “the interest of the members of the class in individually controlling the prosecution or defense of separate actions,” Magistrate Judge Azrack implicitly touches on this factor when she states that the necessity for a class action is reduced by such availability is relevant. In their Memorandum in Opposition to defendants’ Motion to Deny Certification, plaintiffs themselves acknowledge that Magistrate Judge Azrack considered the availability of individual litigation but disagree with her conclusion that its availability should be a factor. Plaintiffs contend that the availability of individual relief does not outweigh the benefits of a class action in a ease such as this one, where the practical realities of attempting to obtain individual recovery outweigh any interest in individual
As for factor (B), “the extent and nature of any litigation concerning the controversy already commenced by or against members of the class,” to the extent the R & R fails to identify other litigation pending against Time Warner for the same Cable Act violations alleged here, this factor clearly favors defendants and weighs against certification. Magistrate Judge Azrack’s failure to identify Fed.R.Civ.P. 23(b)(3)(B) therefore is not of consequence. The same thing can be said of factor (C), “the desirability or undesirability of concentrating the litigation of the claims in the particular forum.” Because there are no eases pending against Time Warner for the disclosure and notice violations alleged here, plaintiffs would not benefit from application of this factor.
Because the three factors other than manageability either weigh in Time Warner’s favor or are not pertinent to the circumstances here, it cannot be said that Magistrate Judge Azrack improperly relied on manageability alone in denying certification. To the extent plaintiffs cite district court cases within this Circuit for the proposition that manageability concerns are not sufficient to defeat superiority, see, e.g., In re Medical X-Ray Film Antitrust Litig.,
Plaintiffs finally aver that the Magistrate Judge failed to consider the predominance of common issues of law and fact. They contend that liability in this ease arises from a single course of conduct that affected all class members in the same manner. Accordingly, plaintiffs argue that certifying a class action would promote judicial economy because it would avoid a proliferation of duplicative individual actions and prevent conflicting interpretations of the Cable Act’s privacy provisions. Defendants question the commonality of the factual and legal issues presented in the Amended Complaint in view of
Supplemental Jurisdiction Over Plaintiffs’ State Law Claims
Having properly recommended that class certification under 23(b)(2) be limited to plaintiffs’ claims for equitable relief and be denied under 23(b)(3) based on superiority concerns, Magistrate Judge Azrack’s recommendation that the court decline to exercise jurisdiction over plaintiffs’ pendent state and common law claims also was consistent with the law. A district court’s power to decline to exercise pendent jurisdiction is well-recognized. “In exercising that discretion, a district court is required to ‘consider and weigh in each case, and at every stage of the litigation, the values of judicial economy, convenience, fairness, and comity in order to decide whether to exercise jurisdiction....’” Block v. First Blood Assoc.,
Conclusion
For the reasons discussed above, the Magistrate Judge’s recommendation that class certification be limited under 23(b)(2) to plaintiffs’ request for declaratory and injunctive relief and that certification under 23(b)(3) de denied are adopted.
SO ORDERED.
Notes
. Rejecting the predominance approach in favor or a more practical approach, Newberg suggests that whenever the court determines that the 23(a) prerequisites are satisfied and that declaratory or injunctive relief sought is an integral part of the relief for the class, certification pursuant to 23(b)(2) is appropriate. With this approach, Newberg notes that four options are available to a district court:
First, under Rule 23(c)(4)(A), the court could limit the Rule 23(b)(2) certification to certain issues only. Second, the court could certify the injunction claims under Rule 23(b)(2) and the damages claims under Rule 23(b)(3). Third, the court could certify the entire class initially under Rule 23(b)(2), bifurcate the trial so that the defendant's liability potentially for both forms of relief is determined initially, and reconsider the class certification category if the plaintiffs and the class are successful at the liability stage. Finally, the court could certify special claims or issues under Rule 23(b)(2) and treat all the nondesignated claims or issues as individual or incidental ones to be determined separately after liability to the class had been adjudicated.
Id., at 4-51 (citations omitted).
. The standard for reviewing a Magistrate Judge’s recommendations are familiar. When timely objection has been made to a portion or portions of a Magistrate Judge’s report, the district court must "make a de novo determination ... of any portion of the magistrate’s disposition to which specific written objection has been made.’’ Fed.R.Civ.P. Rule 72(b). See also, 28 U.S.C. § 636(b)(1). In addition, 28 U.S.C. § 636(b)(1) affords the district court broad latitude in considering a Magistrate Judge's recommendation, even if no party objects to it. Grassia v. Scully,
. The court’s consideration in Wilson was limited to 23(b)(3), as plaintiffs were not seeking declaratory relief. The court, however, did observe in dicta that if plaintiffs had sought equitable relief, "such relief could be more conveniently granted in an individual rather than a class action suit for the reason that a mandatory injunction requiring a change in the privacy notice could be made binding upon all necessary parties by the service so notice pursuant to Rule 65, Fed.R.Civ. P.” Wilson,
. Rule 23(b)(3) provides that the factors relevant to certification include: "(A) the interest of the members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.” Plaintiffs contend that Magistrate Judge Azrack should have considered, but did not, the first three aspects set forth here.