Source: https://openjurist.org/331/f3d/13
Timestamp: 2017-09-26 15:01:20
Document Index: 154532147

Matched Legal Cases: ['§ 77', '§ 48', '§ 1601', '§ 1640', '§ 2050', '§ 1854']

331 F3d 13 Parker | OpenJurist
331 F. 3d 13 - Parker
331 F3d 13 Parker
331 F.3d 13
Andrew PARKER; Eric DeBrauwere, Plaintiffs-Appellants,
TIME WARNER ENTERTAINMENT COMPANY, L.P.; Time Warner Cable of New York City, a Division of Time Warner Entertainment Company, L.P., Defendants-Appellees.
National Cable & Telecommunications Association, Amicus Curiae.
Docket No. 01-9069.
Decided: June 2, 2003.
A district court vested with discretion to decide a certain matter is "empowered to make a decision — of its choosing — that falls within a range of permissible decisions. A district court `abuses' or `exceeds' the discretion accorded to it when (1) its decision rests on an error of law ... or a clearly erroneous factual finding, or (2) its decision — though not necessarily the product of a legal error or a clearly erroneous factual finding — cannot be located within the range of permissible decisions." Zervos v. Verizon New York, Inc., 252 F.3d 163, 168-69 (2d Cir.2001) (footnotes omitted) (emphasis in original). In contrast, de novo review is "review without deference," id. at 168, and is "`traditionally' associated with appellate assessments of a district court's legal conclusions." Id. at 168 n. 3 (quoting Pierce v. Underwood, 487 U.S. 552, 558, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988)).
We acknowledge Judge Glasser's legitimate concern that the potential for a devastatingly large damages award, out of all reasonable proportion to the actual harm suffered by members of the plaintiff class, may raise due process issues. Those issues arise from the effects of combining a statutory scheme that imposes minimum statutory damages awards on a per-consumer basis — usually in order to encourage the filing of individual lawsuits as a means of private enforcement of consumer protection laws — with the class action mechanism that aggregates many claims — often because there would otherwise be no incentive to bring an individual claim. Such a combination may expand the potential statutory damages so far beyond the actual damages suffered that the statutory damages come to resemble punitive damages — yet ones that are awarded as a matter of strict liability, rather than for the egregious conduct typically necessary to support a punitive damages award. It may be that the aggregation in a class action of large numbers of statutory damages claims potentially distorts the purpose of both statutory damages and class actions. If so, such a distortion could create a potentially enormous aggregate recovery for plaintiffs, and thus an in terrorem effect on defendants, which may induce unfair settlements. And it may be that in a sufficiently serious case the due process clause might be invoked, not to prevent certification, but to nullify that effect and reduce the aggregate damage award. Cf. State Farm Mutual Auto. Ins. Co. v. Campbell, ___ U.S. ___, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) ("The Due Process Clause of the Fourteenth Amendment prohibits the imposition of grossly excessive or arbitrary punishments on a tortfeasor."); BMW of North America, Inc. v. Gore, 517 U.S. 559, 580, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996) (noting that the "most commonly cited indicium of an unreasonable or excessive punitive damages award is its ratio to the actual harm inflicted on the plaintiff."). At this point in this case, however, these concerns remain hypothetical. There has been no class certification motion filed nor any actual evidence presented that raises a reasonable possibility that principles of due process may restrict an ultimate damages award. Accordingly, we decline to consider what limits the due process clause may impose.
Stefan R. Underhill of the United States District Court for the District of Connecticut, sitting by designation
Both the R & R and the decision appealed from misquote the Amended Complaint as alleging that the claimed statutory damages will amount to "at a minimum, hundreds of dollars." 198 F.R.D. at 381, 2000 U.S. Dist. LEXIS 20131, at *12. The cited paragraphs of the Amended Complaint actually allege statutory damages of "at a minimum, hundreds of millions of dollars." Amended Complaint, ¶¶ 77, 82
In making this determination, the District Court apparently assumed that statutory damages were incidental to the claimed injunctive relief, but also believed, incorrectly, that the actual damages sought by Parker far surpassed the statutory damages sought
In opposing the denial of class certification, plaintiffs attempt to minimize the significance of their request for actual damages; read in conjunction with the Amended Complaint, however, it is clear that plaintiffs' request for statutory damages — which plaintiffs suggest will amount to, "at a minimum, hundreds of dollars" (Amended Complaint, §§ 77, 82) — constitutes but a tiny fraction of the total liability — which plaintiffs estimate will be in the ["]millions of dollars" (Amended Complaint, § 48) — they will ask the court to impose on defendants for the alleged Cable Act violations. The fact that the bulk of damages sought by plaintiffs are not incidental to the injunctive relief requested suggests that Arnold [v. United Artists Theatre Circuit, Inc., 158 F.R.D. 439 (N.D.Cal. 1994)], and the rationale for certification articulated therein, does not compel certification here.
1. (b)(2) Issues
2. (b)(3) Issues
One factor considered by some courts approving (b)(2) classes in which statutory damages were sought is the amount of damages to which each class member would be entitled. As one might expect, district courts have appeared more willing to hold that injunctive or declaratory relief predominates where the damages to be received by each individual class member would be minimalSee Borcherding-Dittloff, 185 F.R.D. at 566 ("[T]he potential statutory damages each plaintiff could recover under the act are nominal. If the class has over 50,000 members, each would be entitled to less than ten dollars."); Colorado Cross-Disability Coalition, 184 F.R.D. at 361 (finding that injunctive relief predominated in part because "each class member seeks only $50"); Gammon, 162 F.R.D. at 321 (finding that individual recovery of damages would be de minimis because "the requested maximum statutory damages, if awarded, would amount to approximately 13 cents per class member.").
It is not clear whether the District Court regarded disgorgement of profits to be within the scope of the actual damages to which the class might be entitled under the statute or to be the remedy for a state law claim. At this point, our Court need not make any ruling on the former theory, which has not been developed on appeal. As to the second theory, the District Court declined to exercise supplemental jurisdiction, although that interlocutory ruling could be reconsidered now that the class certification issue is being remanded
As Senator Everett Dirksen famously said in the context of the federal budget, "A billion here and a billion there, and pretty soon you're talking about real money." The New International Dictionary of Quotations 184 (Hugh Rawson & Margaret Miner eds., 1986) (quoting Senator Everett Dirksen)
The idea of rejecting class action certification because of the large size of an aggregation of statutory damages awards drew major support, if not its origin, from the opinion of Judge Frankel inRatner v. Chemical Bank New York Trust Co., 54 F.R.D. 412 (S.D.N.Y. 1972). In that case, Judge Frankel denied a motion for (b)(3) class certification for a class consisting of 130,000 credit card holders claiming the $100 statutory damages authorized by the Truth in Lending Act of 1968, 15 U.S.C. §§ 1601 et seq. He found "cogent and persuasive" the defendant's argument that "the proposed recovery of $100 each for some 130,000 class members would be a horrendous, possibly annihilating punishment ...." Ratner, 54 F.R.D. at 416. Although Ratner has been cited favorably by many courts, see, e.g., Kline v. Coldwell, Banker & Co., 508 F.2d 226, 234-35 (9th Cir.1974); Wilcox v. Commerce Bank of Kansas City, 474 F.2d 336, 341-47 (10th Cir.1973); In re Trans Union Corp. Privacy Litigation, 211 F.R.D. 328, 348-51 (N.D.Ill.2002); Berkman v. Sinclair Oil Corp., 59 F.R.D. 602, 608-09 (N.D.Ill.1973), I believe this is one of those rare instances where a judicial Homer nodded, see Horace, Ars Poetica 402 ("Homer himself hath been observ'd to nod."), quoted in Bartlett's Familiar Quotations (13th ed. 1951).
Of course, Congress would always have the option to respond to the setting of a limit on aggregate damage awards by explicitly precluding such a limit or establishing a lower or even higher limit of its ownSee Disabled in Action of Metropolitan New York v. Hammons, 202 F.3d 110, 120 (2d Cir.2000) ("We thus seek to apply the statutory framework as best we can, recognizing always that Congress has the final word and may wish to revisit the statutory scheme."); cf. 15 U.S.C. § 1640(a)(2)(B) (amendment that caps class action TILA awards at the lesser of $500,000 or 1 percent of the creditor's net worth).
Six (6) Mexican Workers concerned the statutory damages provision of the Farm Labor Contractor Registration Act, 7 U.S.C. § 2050a(b) (1988) (repealed), now codified at 29 U.S.C. § 1854(c)(1) (2000).
Procedurally, a judge might accomplish this by modifying the proposed class in the certification order. Another option would be for the judge to inform the plaintiffs, before deciding on the motion for certification but after having received argument on the subject from all parties, of the aggregate statutory amount above which (b)(3) superiority concerns would arise, and to permit the plaintiffs to amend their motion for class certification to seek reduced aggregate damages before a certification decision is rendered