MIKE HARRIS and JEFF DUNSTAN, INDIVIDUALLY and on BEHALF of a CLASS of SIMILARLY SITUATED INDIVIDUALS., Plaintiffs-Respondents, V
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No. ___ UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT MIKE HARRIS AND JEFF DUNSTAN, INDIVIDUALLY AND ON BEHALF OF A CLASS OF SIMILARLY SITUATED INDIVIDUALS., Plaintiffs-Respondents, v. COMSORE, INC., Defendant-Petitioner, On Appeal from the United States District Court for the Northern District of Illinois COMSCORE’S PETITION FOR LEAVE TO APPEAL CLASS CERTIFICATION ORDER PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 23(f) Paul F. Stack Andrew H. Schapiro STACK AND O’CONNOR CHARTERED Stephen A. Swedlow 140 South Dearborn Street, Suite 411 QUINN EMANUEL URQUHART Chicago, Illinois 60603 & SULLIVAN LLP (312) 462-0326 500 West Madison Street, Suite 2450 Chicago, Illinois 60661 (312) 705-7400 Counsel for Defendant comScore, Inc. April 16, 2013 CORPORATE DISCLOSURE STATEMENT Defendant-Petitioner comScore, Inc. has no parent corporation, and no publicly held corporation owns 10% or more of its stock. i TABLE OF CONTENTS INTRODUCTION ...........................................................................................................................1 QUESTIONS PRESENTED ............................................................................................................2 RELIEF SOUGHT ...........................................................................................................................2 FACTUAL BACKGROUND ..........................................................................................................2 ARGUMENT ...................................................................................................................................8 I. Review Is Warranted Because The Certification Decision Is Manifestly Erroneous With Regard To Fundamental Issues Of Class Action Law ...................8 II. Review Is Warranted Because The Certification Decision Has Transformed This Litigation Into A Single High-Stakes Roll Of The Dice ..........18 CONCLUSION ..............................................................................................................................20 ii TABLE OF AUTHORITIES Cases Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997). ............................................................... 17 American Honda Motor Co., Inc. v. Allen, 600 F.3d 813 (7th Cir. 2010). ..................................... 9 Blair v. Equifax Check Servs, Inc., 181 F.3d 832 (7th Cir. 1999). ............................................... 19 Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331 (4th Cir. 1998). ................... 12 CE Design Ltd. v. King Architectural Metals, Inc., 637 F.3d 721 (7th Cir. 2011). ...................... 12 Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013). .............................................................. 17, 18 Damasco v. Clearwire Corp., 662 F.3d 891 (7th Cir. 2011). ......................................................... 8 General Tel. Co. v. Falcon, 457 U.S. 147 (1982). .......................................................................... 8 In re Bridgestone/Firestone, Inc., 288 F.3d 1012 (7th Cir. 2002). ............................................... 19 In re Schering Plough Corp. ERISA Litig., 589 F.3d 585 (3d Cir. 2009). .................................... 12 Isaacs v. Sprint Corp., 261 F.3d 679 (7th Cir. 2001). ............................................................ 10, 11 Kohen v. Pacific Inv. Mgmt. Co. LLC, 571 F.3d 672 (7th Cir. 2009). .......................................... 19 Lieschke v. RealNetworks, Inc., Nos. 99C7274, 99C7380, 2000 WL 198424 (N.D. Ill. Feb. 11, 2000). .......................................................................................................................................... 9 Marcus v. BMW of N. Am., LLC, 687 F.3d 583 (3d Cir. 2012). ................................................... 13 McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 672 F.3d 482 (7th Cir. 2012). ...... 19 Messner v. Northshore Univ. Healthsystem, 669 F.3d 802 (7th Cir. 2012). .......................... passim ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996). ............................................................. 3 Reliable Money Order, Inc. v. McKnight Sales Co., 704 F.3d 489 (7th Cir. 2013). ................ 8, 19 Sadler v. Midland Credit Mgmt., Inc., No. 06 C 5045, 2008 WL 2692274 (N.D. Ill. July 3, 2008). ................................................................................................................................................... 13 Sherman v. AT&T, Inc., No. 11 C 5857, 2012 WL 1021823 (N.D. Ill. Mar. 26, 2012). ................ 3 Spano v. Boeing Co., 633 F.3d 574, (7th Cir. 2011). ...................................................................... 8 iii Sprague v. Gen. Motors Corp., 133 F.3d 388 (6th Cir. 1998). .................................................... 12 Szabo v. Bridgeport Machines, Inc., 249 F.3d 672 (7th Cir. 2001). .......................................... 8, 14 Wal–Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011)........................................................... 8, 17 West v. Prudential Sec., Inc., 282 F.3d 935 (7th Cir. 2002). ........................................................ 19 Wu v. MAMSI Life & Health Ins. Co., 269 F.R.D. 554 (D. Md. 2010). ....................................... 12 Other Authorities Massive Class Certified in ComScore User Privacy Suit,” Law360, available at http://www.law360.com/privacy/articles/430164?nl_pk=2c8217c0-1547-4284-8fd8- 7f5d488dc2bf&utm_source=newsletter&utm_medium=email&utm_campaign =privacy ...... 19 Rules Fed. R. Civ. P. 23(f). ....................................................................................................................... 1 iv INTRODUCTION In this high-stakes case, the district court has certified a worldwide class—tens of millions of people—consisting of everyone who has downloaded defendant comScore’s software through a third party since 2005. Each is theoretically eligible to recover significant statutory damages. No privacy case of anything approaching this size has ever been certified, for the simple reason that the individualized issues inherent in cases of this type make them particularly unsuited to class treatment. Indeed, the two class representatives’ cases themselves suffer from failures of proof on the threshold issue of whether they even downloaded comScore’s software, a prerequisite to membership in the class. Both the Supreme Court and this court have repeatedly admonished district courts to conduct a “rigorous” examination of all disputed facts relevant to class certification before granting certification. Instead of following this admonition, the district court effectively shifted the burden to comScore to show that a class should not be certified. In so doing, the district court delayed rulings on key threshold questions such as whether classwide injuries exist, whether comScore’s broad disclosures are legally adequate, and even whether it is possible to identify who is actually in the class, suggesting that such rulings can be handled later. The district court’s erroneous construction of the law has the potential to change the course of class action practice in data privacy cases like this one. It also calls into question the adequacy of the terms of use employed by almost any Internet company. Unless this Court accepts this appeal, however, the district court’s decision might well evade review. Class certification has suddenly turned these two plaintiffs’ dubious lawsuits into a single case with enormous potential damages. The district judge stated on the record from the outset that he wants the parties to settle the case, and for comScore, a publicly traded company, the risks of proceeding against a gigantic class—no matter how specious the asserted claims might be— cannot be ignored. This is precisely the type of situation for which Fed. R. Civ. P. 23(f) was designed. 1 QUESTIONS PRESENTED 1. Whether a district court can certify a class while leaving open key questions about whether the class does in fact satisfy Rule 23’s commonality, typicality, ascertainability, and predominance requirements. 2. Whether the district court erred in certifying this class action when the class representatives are subject to dispositive defenses inapplicable to the rest of the class. 3. Whether Rule 23 and the due process clause permit certification of a class whose membership cannot be corroborated by any objective criteria. 4. Whether, after the Supreme Court’s decision in Comcast v. Behrend, class certification requires a showing that damages are capable of measurement on a classwide basis. 5. Whether this case should be dismissed in favor of arbitration, in light of the district court’s new ruling—reversing its previous position—that the class agreed to terms of use that include an arbitration clause. RELIEF SOUGHT This Court should accept review of the district court’s order granting class certification and, following briefing on the merits, reverse or vacate that order. In the alternative, the Court should remand with instructions that the case be dismissed in favor of arbitration in Virginia. FACTUAL BACKGROUND1 comScore. comScore, a publicly traded, leading Internet company, measures consumers’ online behavior. Its data is used by thousands of companies to inform their advertising and marketing decisions, from where to spend their ad dollars to how to design their sites. The primary way that comScore gathers data is via individuals (“panelists”) who—somewhat like families who have their TV-watching habits tracked by ratings