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In re Online DVD Rental Antitrust Litigation

United States District Court, N.D. California

May 25, 2018




         Class member Theodore Frank's motions to intervene and for disclosure came on for hearing before this court on April 25, 2018. Frank appeared on his own behalf. Todd Seaver appeared on behalf of the plaintiff class. Defendant Wal-Mart Stores, Inc. (“Wal-Mart”) appeared through its counsel, Paula Render. Having read the papers filed by the parties and carefully considered their arguments and the relevant legal authority, and good cause appearing, the court hereby rules as follows.


         Frank's motions concern an antitrust action filed in 2009 in which the plaintiff class alleged that Netflix and Wal-Mart violated antitrust laws by entering into an illegal agreement in the online DVD rental market. Dkt. 22. On July 1, 2011, the plaintiff class and Wal-Mart entered into a settlement agreement that allowed class members to choose between a Wal-Mart gift card with no expiration date or cash (of equal amount). `Dkt. 454-1, Ex. B. Frank now seeks to intervene in the action in order to request that the court order Wal-Mart to compile and disclose statistics about how many class members have used their gift cards.[1]

         Frank is the founder and director of the Competitive Enterprise Institute's Center for Class Action Fairness, which litigates against what it sees as unfair class-action procedures and settlements. Frank is also a member of the settling class, and on February 14, 2012, he objected to the settlement. Dkt. 581. Frank argued then that the settlement was a coupon settlement subject to the heightened judicial scrutiny and fee limitations of the Class Action Fairness Act and that the attorneys' fees were based on an inflated settlement fund that did not consider the number of e-gift cards redeemed. Id.

         On March 29, 2012, this court approved the settlement (Dkt. 609), and on February 27, 2015, the Ninth Circuit affirmed the court's approval of the settlement and attorneys' fee award as fair, reasonable, and adequate. In re Online DVD Rental Antitrust Litig., 779 F.3d 934 (9th Cir. 2015). In its final approval order, this court “retain[ed] jurisdiction over (a) implementation of the Settlement and the terms of the Agreement; (b) distribution of the Class Settlement Amount, the Class Representative Incentive Payments, the Attorneys' Fees and Costs Amount; and (c) all other proceedings related to the implementation, interpretation, administration, consummation, and enforcement of the terms of the Agreement and the Settlement, and the administration of Claims submitted by Class Members.” Dkt. 609 ¶ 15.

         Frank states that on November 5, 2015, all e-gift cards were issued to class members by email. Dkt. 671 at 5; Dkt. 672 at 3. Class members could submit a request for the claims administrator to reissue a check or e-gift card until February 3, 2016. Id. Of the 439, 398 class members that requested the cash option of the settlement, 119, 581 class members failed to cash checks worth a total of $1, 473, 237.92 by the March 31, 2016 check expiration date. Dkt. 659 at 3. In addition, the settlement administrator was unable to distribute 76, 008 e-gift cards with a face value of $936, 418.56. Id. On August 31, 2016, the court ordered a second round of distribution of e-gift cards of $3.62 each to account for most of the undistributed funds. Dkt. 668; Dkt. 669. That order was later modified to require gift cards of $3.66 each to issue to fewer class members, because fewer class members had valid email addresses than originally anticipated. Dkt. 670. Any remaining amounts available after that distribution were to be distributed to two cy pres recipients, the Corporation For Public Broadcasting and the International Center for Law and Economics. Dkt. 668; Dkt. 670.

         On December 14, 2017, Frank requested the current e-gift card redemption rate from Wal-Mart. Wal-Mart declined to provide the requested information, maintaining that it would be meaningless and incomplete, and stated that Wal-Mart has never itself inquired into the redemption rate. The parties met and conferred, and Wal-Mart refused to provide Frank with the information he seeks.

         Frank now moves for leave to intervene and moves the court to require Wal-Mart to compile and disclose the redemption rate for the Wal-Mart e-gift cards, i.e., how many, and what percentage, of the e-gift cards distributed to class members under the settlement agreement have been used by class members, and whether Wal-Mart has realized any income from unredeemed e-gift cards.


         A. Legal Standard

         “Article III of the United States Constitution limits the power of the courts to the resolution of actual ‘Cases' and ‘Controversies.'” Ass'n of Pub. Agency Customers v. Bonneville Power Admin., 733 F.3d 939, 969 (9th Cir. 2013) (quoting U.S. Const., art. III, § 2). The “irreducible constitutional minimum of standing contains three elements. First, the plaintiff must have suffered an injury in fact-an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of-the injury has to be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court. Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992) (citations and internal quotation marks omitted).

         “[A] plaintiff must demonstrate standing for each claim he seeks to press” and “‘for each form of relief'” that is sought. Davis v. Fed. Election Comm'n, 554 U.S. 724, 734 (2008) (quoting DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006)); accord Washington Envtl. Council v. Bellon, 732 F.3d 1131, 1139 (9th Cir. 2013); Town of Chester, N.Y. v. Laroe Estates, Inc., 137 S.Ct. 1645, 1651 (2017) (“The same principle applies when there are multiple plaintiffs”: intervenor or plaintiff “must demonstrate Article III standing when it seeks additional relief beyond that which the plaintiff requests”); Oregon Prescription Drug Monitoring Program v. U.S. Drug Enf't Admin., 860 F.3d 1228, 1234 (9th Cir. 2017) (same). “Most standing cases consider whether a plaintiff has satisfied the requirement when filing suit, but Article III demands that an ‘actual controversy' persist throughout all stages of litigation.” Hollingsworth v. Perry, 570 U.S. 693, 705 (2013). For example, a party must have Article III standing both to initiate an action and to seek review on appeal. Arizonans for Official English v. Arizona, 520 U.S. 43, 64 (1997).

         B. ...

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