At the end of May, after “extensive negotiations,” CBS News & Stations parent Paramount Global; FOX Corporation; and Cox Media Group each agreed to terms with settlement agreements that resolve advertising price-fixing claims against the three television station ownership groups.
However, not every broadcast TV station ownership group involved in the litigation agreed to a settlement. Now, TEGNA — along with the current owners of stations formerly owned by Raycom and Meredith Corp. — has asked the court to reconsider the settlement agreement reached in May.
The key reason? They do not want to give up their confidential client rosters.
The matter is tied to a purported scheme that artificially inflated prices for such advertisers as One Source Heating & Cooling, ThoughtWorx Inc. (doing business as Minnesota-based ad shop MCM Services Group), Minneapolis-based creative shop Hunt Adkins and Cleveland-area retailer Fish Furniture, plaintiffs in the case being heard in front of Judge Virginia M. Kendall in the Northern Illinois Federal District Court.
With the May settlement approved by Kendall, CMG, controlled by Apollo Global Management, is on the hook for $37 million of a total $48 million payout to the plaintiffs.
The alleged activity, the plaintiffs argued, involved the broadcast TV station owners engaging in “a unitary scheme” to raise the prices of broadcast television spot advertisements to “supra-competitive levels” by agreeing to fix prices and exchange competitively sensitive information, including pacing data. This is a violation of Section 1 of the Sherman Act and various state unfair competition laws.
CBS agreed to a $5 million payment while providing “valuable cooperation” to the plaintiffs. Meanwhile, “hard fought and arms-length negotiations” with Fox led to a $6 million payment agreement.
As the plaintiffs see it, “the proposed settlements are fair, reasonable and adequate.”
TEGNA, along with co-defendants Gray Television and Meredith, disagree. On Wednesday, the companies asked the court to reconsider and vacate a portion of its Order Appointing Settlement Administrator, Approving Settlement Notice Program, and Compelling Production of Customer Contact Information (ECF No. 994).
This order compels TEGNA and the successors to Raycom and Meredith stations, to turn over their customer contact information to Plaintiffs’ counsel, without any restriction or limitation on its use.
In the request, they state that they did not have an opportunity to respond to the plaintiffs’ request regarding customer contact information as part of their motion prior to the
court’s order, and that the plaintiffs’ request for the customer contact information “is overbroad,” as well as “premature” before the plaintiff’s motion for class certification and “unwarranted” as a matter of law.
Further, the TV groups state, “at this stage of the litigation, this information should at most be provided only to the prospective settlement administrator, and it should be shielded from plaintiffs through appropriate confidentiality protocols.”
The battle over handing over the customer contact information is tied to “Discovery Motion No. 16.” The plaintiffs argue that these details were “ostensibly necessary to establish classwide impact for purposes of satisfying the predominance requirement for class certification.”
In their opposition brief, TEGNA, Raycom and Meredith pointed out that, to the contrary, “before a class has been certified,” such information is not relevant or proportional to the needs of the case when the plaintiffs are merely “looking for information to support [their] anticipated motion for class certification.”
TEGNA, Raycom, and Meredith also showed why the cost and burden of retrieving and producing this information was not proportionate to the needs of the case and implicated the privacy interests of their customers.
Fast-forward from March 17, 2023 to June 9. “Tucked in the very last two paragraphs” of a motion filed on that date by the plaintiffs was a second motion to compel arguing that TEGNA, Raycom and Meredith’s customer contact information was necessary for purposes of settlement notice.
This is the focus of the request from TEGNA and the other licensees to the Illinois federal court.
“Plaintiffs did not limit or constrain in any way the access or use of the requested customer information,” TEGNA and the other TV station owners note. “Indeed, they proposed that the information be turned over directly to them rather than to the proposed settlement administrator, without restrictions. Plaintiffs have no reason to treat this customer data request this way unless they intend to interfere with or put at risk TEGNA, Raycom,
and Meredith’s customer relationships.”
The Notice Motion was successful. As such, TEGNA, and the current owner of the Raycom and Meredith stations, say the plaintiffs evaded the adversarial process.
Serving as counsel for the defendants are Ross Bricker of Jenner & Block, for TEGNA; and for Gray David Mills of Cooley LLP.
