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Gary Lebowitz, andrew Newmark v. Dow Jones & Company

March 12, 2012

GARY LEBOWITZ, ANDREW NEWMARK, ALLAN NEWMARK, AND BURT FAURE, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
DOW JONES & COMPANY, INC. DEFENDANTS.



The opinion of the court was delivered by: Cedarbaum, J.

OPINION

Plaintiffs, a putative class of Wall Street Journal Online ("WSJ Online") annual subscribers sue Dow Jones & Company, Inc. for breach of contract and violation of New York General Business Law § 349(a). The complaint alleges that Dow Jones eliminated prepaid annual subscribers' access to Barron's Online ("BOL") in violation of the subscriber agreement, and that Dow Jones failed to disclose that prepaid subscribers would not retain access to both WSJ Online and BOL for the duration of their subscriptions. Plaintiffs have moved for class certification.

Dow Jones moves for summary judgment on plaintiffs' claims. For the reasons that follow, Dow Jones's motion is granted.

BACKGROUND

The following facts are undisputed, except where specifically noted.

Dow Jones owns and operates WSJ Online. Before January 8, 2006, online subscribers to WSJ Online had access to the content of both WSJ Online and BOL. On that date, Dow Jones "spun off" BOL into a separate service. Existing annual subscribers could choose to convert their subscriptions from WSJ Online to the new, freestanding BOL and lose access to WSJ Online, or they could retain their WSJ Online subscriptions and access BOL for a prorated fee, up to a maximum of $20. The $20 fee was prorated based on the remaining time in the customer's subscription. For example, a customer who subscribed to WSJ Online in February 2005 would be charged a lower amount for continued access to BOL than a customer who subscribed to WSJ Online in December 2005. Subscribers to BOL after January 8, 2006, were charged a standard annual subscription rate of $79. Before the spin-off of BOL, Dow Jones had implemented all WSJ Online price increases at the end of each subscriber's term, so that each subscriber would begin to pay the higher fee upon renewal.

From at least early 2004 through January 8, 2006, potential subscribers to WSJ Online were required to accept a "Subscriber Agreement," which provided the terms and conditions of a subscription. Each version of the Subscriber Agreement used during the proposed class period contained the following language or substantially similar language:

This Subscriber Agreement governs your use of the Wall Street Journal Online, Barron's Online, and, unless other terms and conditions expressly govern, any other electronic services from the Wall Street Journal Online and Barron's Online that may be made available from time to time (each, a "Service"). . . . . . . . Subscription fees will be billed at the beginning of your subscription or any renewal. . . .

We may change the fees and charges then in effect, or add new fees or charges, by giving you notice in advance. . . . . . . .

This Agreement contains the final and entire agreement between us regarding your use of the Services and supersedes all previous and contemporaneous oral and written agreements regarding your use of the Services. We may discontinue or change the Services, or their availability to you, at any time.

WSJ Online Subscriber Agreement, July 31, 2004, Preamble, § 3, § 8; WSJ Online Subscriber Agreement, December 19, 2005, Preamble, § 3, § 9.

Todd Larsen, the President of Consumer Electronic Publishing at Dow Jones during the proposed class period, testified at his deposition that Dow Jones discussed the spinoff of BOL as early as 2003. He further testified, however, that Dow Jones did not make the final decision to proceed with the "cold turkey" scenario -- converting all subscribers at one point in time, rather than converting subscriptions over the course of a year as they expired -- until November 21, 2005. On that date, Larsen sent an email to Richard Zannino, Chief Operating Officer of Dow Jones, and Gordon Crovitz, President of Electronic Publishing, explaining that his team had examined other options and "determined that we will need to proceed with the status quo plan on BOL -- cold turkey." Larsen testified that prior to November 2005, cold turkey had been "the sort of targeted plan, but we were still working through whether it was the best one and whether we were comfortable to go forward with that . . . ." He also declared under penalty of perjury that as the head of the relevant business unit, he was responsible for making this decision to proceed with the spin-off.*fn1

Plaintiffs emphasize that Jane Ouano, then an Assistant Director of Marketing, testified at her deposition that the decision to spin off BOL had been made by no later than March or April 2005. However, as a marketing employee, Ouano stated that she did not know who specifically made the decision to spin off BOL. Nor did she testify about the timing of the final decision to proceed with the cold turkey spin-off. Her testimony is consistent with the deposition testimony of Director of Customer Systems and Service Kathleen Collins. Collins testified that prior to November 2005, a decision had been made that Dow Jones wished to pursue a spin-off, but "specifically how and when and under what implementation[,] the plan was not finalized until November or December of '05 . . . ." Thus, Ouano's testimony creates no genuine dispute as to the timing of the final decision to proceed with the cold turkey spin-off.

The decision-making process concerning the BOL spin-off included an analysis of WSJ Online subscribers' use of BOL from June through August 2005 (the "2005 Usage Study"). According to the 2005 Usage Study, approximately 338,000 WSJ Online credit card subscribers (73%) did not access BOL at all; 117,000 WSJ Online credit card subscribers (25%) accessed both BOL and WSJ Online; and approximately 10,000 WSJ Online credit card subscribers (2%) accessed BOL content exclusively. Of all subscribers, not only credit card subscribers, 79% did not access BOL at all. Plaintiffs object to this evidence as incomplete because Dow Jones could have provided the Court with data on BOL usage for the entire length of class members' subscriptions. Nonetheless, I will ...


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