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Edwards v. Hearst Communications, Inc.

United States District Court, S.D. New York

December 18, 2017


          OPINION & ORDER

          JAMES L. COTT, United States Magistrate Judge.

         On November 24, 2015, plaintiff Josephine James Edwards brought a class action complaint against Hearst Communications, Inc., alleging unlawful disclosure of magazine subscribers' personal data in violation of a Michigan privacy law. Class-wide discovery is ongoing. Following a conference to discuss several discovery disputes, the Court ordered briefing on the issue of when Hearst's duty to preserve evidence relevant to Edwards' action arose, and on Edwards' request for discovery related to Hearst's document retention policies and practices. For the reasons set forth below, the Court concludes that Hearst's duty to preserve arose on May 21, 2015, upon the filing of the complaint in a case that was subsequently consolidated with this action. Separately, the Court finds that Hearst has responded insufficiently to Edwards' request regarding document retention, and directs that it respond anew and in conformity with this Opinion.

         I. BACKGROUND

         The Court assumes familiarity with the underlying facts in this action and will not recount them in any detail here.[1] To determine when Hearst's duty to preserve evidence arose, the Court must analyze whether (as Edwards contends) Hearst should have known that it could face future litigation after the dismissal of a prior action under Michigan's Video Rental Privacy Act ('VRPA"), or, alternatively, if (as Hearst contends) its duty to preserve ceased at the time of the dismissal of the prior case and arose again only upon the filing of a subsequent complaint alleging VRPA claims. The Court also considers whether, regardless of any duty Hearst may have had, Edwards is entitled to certain documents she seeks about document retention policies and practices at Hearst before, during, and after the pendency of the prior suit.

         A. Prior VRPA Litigation

         Michigan enacted the VRPA in 1988 to protect consumers' privacy with respect to the purchase, rental, or borrowing of certain goods. Boelter, 2017 WL 3994934, at *1. As relevant here, the statute prohibits entities that sell written materials such as magazines from disclosing information about the purchase of those materials where that information identifies the customer. VRPA, H.B. 5331, 84th Leg., Reg. Sess., P.A. No. 378, § 2 (Mich. 1988).[2] Customers whose personal information is disclosed in violation of the VRPA may bring a civil action to recover the greater of actual damages or $5, 000. Boelter, 2017 WL 3994934, at *2.

         The first VRPA action against Hearst was filed in the Eastern District of Michigan on September 24, 2012, by David Grenke. Grenke v. Hearst Communications, Inc., 12-CV-14221, Complaint, dated Sept. 24, 2012, Dkt. No. 1; Declaration of Stephen Yuhan ("Yuhan Decl."), dated Nov. 2, 2017, Dkt. No. 221-2, at ¶ 5.[3] That same day, Grenke moved to certify a proposed class of "Michigan residents who had their Personal Reading Information disclosed to third parties by Hearst . . . without consent." Grenke, Dkt. No. 2, at 2. In his motion papers, Grenke explained that he had moved for certification "simultaneously" with his complaint in order to prevent Hearst from "pick[ing] off' his individual claims, and that a more "fulsome memorandum ... in support of class certification" would follow after discovery on class-wide issues. Id. at 1 & n.l.[4] The following year, the parties stipulated to withdrawal of the motion for class certification on the condition that Hearst would not attempt to "pick off claims without the consent of Grenke's counsel. Id., dated August 20, 2013, Dkt. No. 39, at 4. Wtule a renewed motion for class certification was scheduled for February 2015, id. at Dkt. No. 52, such a motion was never made.

         Instead, after it came out during discovery that Grenke had never subscribed to the Hearst magazine that formed the basis of his complaint, Hearst moved to dismiss for lack of standing in October of 2014. Id., Dkt. No. 70. Four months later, the parties jointly moved for dismissal with prejudice and the vacatur of all prior orders. Id., Dkt. No. 94. The district court granted the parties' motion on February 23, 2015. Id., Dkt. No. 95. The dismissal was not pursuant to a settlement and Hearst did not pay Grenke anthing. Yuhan Decl. ¶ 7.

         According to its counsel, Hearst was not subject to any lawsuits alleging violations of the VRPA prior to the Grenke litigation, and faced no additional VRPA suits during the pendency of that action. Id. at ¶ 5. Hearst's counsel is also unaware of any pre-suit letters or inquiries about the VHP A, either before or during Grenke. Id. After the dismissal of Grenke on February 23, 2015, Hearst was unaware of any complaints, pre-suit letters, or inquiries regarding alleged violations of the VRPA until May 21, 2015, when the Boelter lawsuit was filed in this District. Id. at ¶ 7; Boelter, No. 15-CV-3934, Dkt. No. 1.

         Hearst's counsel also believes that, at the time the suit was dismissed, the law firm that had brought Grenke was the only law firm actively filing any lawsuits under the VRPA. Yuhan Decl. ¶ 6. According to Hearst's counsel, an attorney who signed the stipulation of dismissal on Grenke's behalf stated that his law firm did not intend to bring another suit against Hearst for violations of the VRPA. Yuhan Decl. ¶ 6.

         B. The Instant Litigation

         On May 21, 2015, Suzanne Boelter filed suit in this District against Hearst under the VRPA, seeking to represent "all Michigan residents who had their Personal Reading Information disclosed to third parties by Hearst without consent." Boelter, Dkt. No. 1, at ¶¶ 46, 52. Edwards initiated this class action against Hearst for violations of the VRPA on November 24, 2015. Dkt. No. 1, at ¶¶ 42-57. Edwards' complaint was subsequently consolidated with Boelter's, Dkt. No. 13 (although Boelter and Hearst later stipulated to the dismissal of Boelter's claims, Boelter, Dkt. No. 125).

         Discovery in this case is being conducted in two phases, and is currently in "Phase II." See Case Management Plan, dated Aug. 18, 2016, Dkt. No. 40, at 2. The first phase was limited to claims of the individually named plaintiff, id., following which both parties moved for summary judgment and Hearst moved to dismiss. Dkt, Nos. 132, 140. On September 7, 2017, Judge Torres denied Hearst's motion to dismiss and granted in part and denied in part both parties' motions for summary judgment, Boelter, 2017 WL 3994934, at *26. The second phase of discovery, which concerns the claims of the putative class, is now in process. Dkt. No. 190. Judge Torres directed the parties to address all Phase II discovery disputes to me. Id.

         On October 26, 2017, the Court held a conference to address several discovery disputes, including Edwards' requests that the Court set a briefing schedule for her anticipated motion for spoliation sanctions and order Hearst to produce documents responsive to her Request for Production No. 34, regarding document retention policies and practices from late 2009 through mid-2016. See Letter-motion ("Oct. 19 letter"), dated Oct, 19, 2017, Dkt No. 203.

         Following the conference, the Court ordered further briefing as to whether Hearst had a duty to preserve evidence after the dismissal of Grenke but before the filing of Boelter, and as to Edwards' ...

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