On The Case

Latest mass arbitration wrinkle: Plaintiffs' lawyers want court permission to contact DirecTV customers

(Reuters) - One of the big disincentives for plaintiffs’ lawyers contemplating mass consumer arbitration has always been the cost of finding clients. It’s an economics thing. You don’t want to spend a lot of money to attract and vet claims worth only a few hundred bucks.

But when you already have names and contact information for 9,100 prospective claimants – straight from the prospective defendant, no less – that’s a whole different story.

Want more On the Case? Listen to the On the Case podcast.

Such is the case for three plaintiffs’ firms – Lieff Cabraser Heimann & Bernstein, Meyer Wilson and Wade Grunberg & Wilson – that filed a Telephone Consumer Protection Act class action against DirecTV way back in 2015. In the unbelievably circuitous course of the litigation, as I’ll explain, DirecTV shared confidential information from about 9,100 customers with an expert witness the company brought in to oppose certification of the TCPA class.

Plaintiffs’ lawyers contended that the data-sharing was a violation of customers’ privacy rights under the Satellite Television Extension and Localism Act (STELA). They tried to add a STELA claim to the TCPA class action, but DirecTV persuaded the 11th U.S. Circuit Court of Appeals (801 Fed.Appx. 723) that its subscriber agreements mandate arbitration.

So now Lieff and the other plaintiffs' firms want U.S. District Judge Mark Cohen of Atlanta to authorize them to reach out to those 9,100 or so DirecTV customers to ask if they’d like to bring individual arbitration demands for the alleged STELA violations. The plaintiffs' lawyers already have the data that DirecTV shared with its expert, which DirecTV produced after a previous order from Judge Cohen. But because the information is covered by a confidentiality order, they filed a motion Thursday asking Judge Cohen to clarify or amend the protective order to allow them (or the court) to notify DirecTV’s customers of their prospective arbitration claim.

Otherwise, the plaintiffs’ brief said, those customers will never know that the company may have breached their privacy rights because DirecTV has averted a class action. “The rights of each one of those persons will never be vindicated, nor will DirecTV’s allegedly illegal behavior be challenged,” the brief said. “Surely, DirecTV should not be rewarded for its misconduct with a ‘get out of jail free’ card.”

DirecTV counsel Andrew Pincus and Hans Germann of Mayer Brown forwarded my query on the motion to DirecTV parent AT&T, which sent an email statement: “We oppose this attempt to get our customers’ private information to pursue additional baseless claims against us, and we will fight it in court.”

The underlying TCPA class action was brought on behalf of a plaintiff who received telemarketing calls from a DirecTV contractor even though he was on the national do-not-call registry and had specifically asked not to receive calls from DirecTV. (The named plaintiff was not a DirecTV customer so the company could not compel arbitration of his claim.)

To assist its expert witness opposing class certification, DirecTV prepared a data file comparing the phone numbers dialed by its marketing contractor and phone numbers associated with its customers. (The TCPA permits marketing calls to people with whom companies have an established business relationship.) The data file, according to Judge Cohen’s 2017 class certification decision (320 F.R.D. 582) contained names, phone numbers and account information for more than 9,100 DirecTV customers.

STELA prohibits the disclosure of satellite company customers’ personal identifying information without their prior consent. DirecTV cited the law when plaintiffs’ lawyers first demanded to see the data underlying the report by the company’s expert. Plaintiffs countered that the company had already violated STELA by sharing the data with its expert.

Judge Cohen agreed in his class certification ruling that by giving customer information to the expert, DirecTV appeared to have provoked the issue of STELA’s “consent to disclose” provisions. Judge Cohen ordered DirecTV to give the data to plaintiffs lawyers. (The 11th Circuit subsequently vacated part of Judge Cohen’s class certification decision in a 2019 ruling that did not address the STELA allegations.)

Plaintiffs amended their TCPA complaint to add a new plaintiff - one of the DirecTV customers whose data was disclosed - and a new STELA claim. Judge Cohen denied the company’s motion to compel arbitration, but the 11th Circuit overturned that decision in February, citing the new plaintiff’s subscriber agreement with DirecTV (801 Fed.Appx. 723).

In Thursday’s motion requesting permission to contact the other 9,100 DirecTV customers whose data was in the file shared with the company’s expert, plaintiffs’ lawyers said the protective order already permits them to send notice to the company’s subscribers because their potential STELA claims arise from the TCPA litigation. Alternatively, the motion said, Judge Cohen should amend the confidentiality order in the interest of justice because the customer will not otherwise know about claims that could be worth more than $1,000 in statutory damages and attorneys’ fees.

“All we want to do is inform these folks that they have these claims so they can pursue them and hold DTV to its promises,” said Jonathan Selbin of Lieff Cabraser in an email. “Having secretly violated these consumers’ statutory privacy rights and successfully forced them to arbitrate those claims, DirecTV now wants to ensure they never even learn they have such claims so they cannot even arbitrate them. It’s like a football team choosing the playing field, the rules, and the refs, and then not even telling the other team there’s even a game.”