Martha Stewart Co. Crafts Customer Class Privacy Claim Victory

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By Jimmy H. Koo

Martha Stewart Living Omnimedia Inc. shook off class claims that it violated Michigan’s privacy statute by disclosing without consent consumers’ reading information to data mining companies ( Raden v. Martha Stewart Living Omnimedia, Inc. , 2017 BL 251660, E.D. Mich., No. 16-12808, partial dismissal 7/20/17 ).

However, the media and merchandising company, which is owned by Sequential Brands Group Inc., and co-defendant Meredith Corp. must face tort allegations that they unjustly profited from disclosing consumers’ personal data. Sequential Brands has a market capitalization of $190 million and Meredith Corp. has a market capitalization of $2.7 billion, according to Bloomberg data.

Publishing has historically been the largest business segment for Sequential Brands, accounting for almost 60 percent of its revenue during fiscal 2014, according to Bloomberg data. Sequential Brands acquired 100 percent of Martha Stewart Living Omnimedia’s standing shares in 2015. Meredith Corp. is a diversified media company, with 66 percent of its sales consisting of magazine publishing, interactive media, database-related activities, and other operations, according to Bloomberg data.

The plaintiffs’ class complaint filed in U.S. District Court for the Eastern District of Michigan alleged that defendants Martha Stewart Living Omnimedia and Meredith Corp. “supplement their sales and advertising revenues by secretly selling” subscribers’ information to data miners and other third-party companies without their consent. Meredith Corp. helped publish “Martha Stewart Living” magazine.

The defendants moved to dismiss the class suit.

Dismissing the plaintiffs’ Michigan Personal Privacy Protection Act claim, Judge Linda V. Parker said July 21 that the state statute requires actual damages to sustain a claim for monetary damages. The plaintiffs failed to demonstrate evidence of any actual damages from the alleged disclosure of their information, the court concluded.

The court rejected the plaintiff’s argument that a prior version of the statute which didn’t require a showing of actual damages should apply. The court said that the plaintiffs filed their complaint July 31, 2016—the date the amended law requiring actual damages took effect.

The court, however, declined to dismiss the plaintiffs’ unjust enrichment claim, finding that the alleged disclosure of plaintiffs’ information “led to a benefit for Defendants—monetary gain from selling the information to third parties.”

Edelson PC represents the plaintiffs. Kitch, Drutchas, Wagner, Valitutti & Sherbrook represents Martha Stewart Living Omnimedia. Sqillgen PLLC and Honigman Miller Schwartz and Cohn LLP represent Meredith Corp.

To contact the reporter on this story: Jimmy H. Koo in Washington at jkoo@bna.com

To contact the editor responsible for this story: Donald Aplin at daplin@bna.com

For More Information

Full text of the court's opinion is available at http://src.bna.com/qZp

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