NEW YORK (Reuters) - Hearst Communications Inc on Thursday reached a $50 million settlement of a lawsuit claiming it violated Michigan privacy law by selling its magazine subscribers’ personal information to third parties without consent.
Lawyers for the subscribers called the proposed class-action settlement the largest of its kind, triple the $16.375 million accord reached in April by Consumers Union, which publishes Consumer Reports.
Hearst’s preliminary settlement was filed with the U.S. District Court in Manhattan, and requires a judge’s approval.
Magazines covered include Cosmopolitan, Country Living, Elle, Esquire, Food Network Magazine, Good Housekeeping, Harper’s Bazaar, O: The Oprah Magazine, Redbook and Seventeen, among others.
Lawyers for Hearst did not immediately respond to requests for comment.
The company, based in Manhattan, denied wrongdoing but settled to avoid the uncertainty and risk of further litigation, settlement papers show. Insurers may cover some of the payout.
Hearst was accused of violating the Michigan Video Rental Privacy Act by selling readers’ magazine subscription histories and reading habits to data mining companies, and then selling “enhanced” customer profiles containing data from those companies to third parties.
Data that was allegedly shared included age, race, religion, income levels, charitable donations, medical conditions, political affiliations and shopping habits, court papers show.
Michigan residents who subscribed to a Hearst publication on or before July 30, 2016 and eligible for the settlement. Their average cash payout is estimated at $155.
The lead plaintiffs are Suzanne Boelter and Josephine James Edwards, who said they received “harassing” junk mail and phone solicitations after subscribing to Country Living and Good Housekeeping, respectively, because of Hearst’s conduct.
Lawyers for the plaintiffs may seek up to $16.67 million for legal fees, court papers show.
The case is Edwards et al v. Hearst Communications Inc, U.S. District Court, Southern District of New York, No. 15-09279.
Reporting by Jonathan Stempel in New York; Editing by Marguerita Choy