Newspaper and magazine publishers are increasingly producing “premium” or “special” editions as an additional revenue source on top of, or in conjunction with, standard subscriptions. Before preparing such promotions, publishers are increasingly reviewing how “premium” or “special” editions are priced, their impacts on the length of a subscription, and most importantly, how these considerations are communicated to the subscriber.
Over the past several years, some publishers have faced class action lawsuits alleging breaches of subscription agreements as well as violations of state and federal laws meant to curb deceptive practices. Last year, such a suit was filed against a major publisher. There, the plaintiffs were subscribers to various publications who were allegedly billed surcharges for certain “Premium Edition” publications even though plaintiffs alleged they did not enter into an agreement to receive “premium” issues. Specifically, plaintiffs alleged they purchased 1-year and 26-week subscriptions to particular publications of this publisher, but were sent a “premium” monthly magazine that plaintiffs claimed was “filled almost exclusively with advertisements and other puff articles” and did not relate to the publications they subscribed to. Plaintiffs further claimed they were not provided the opportunity to opt-out of receiving the monthly “premium” magazine. As such, their subscriptions were charged $2 per issue, with the effect being that their subscription was shortened. A 1-year subscriber to a publication, the plaintiffs alleged, would only receive around 30 weeks of the publication due to the charges for “premium” issues.
The case was settled before the plaintiffs’ allegations were litigated on the merits. Could these litigation risks be avoided with clear subscriber notifications of charges associated with “premium editions?”
Court decisions in suits with similar allegations indicate that clear communication regarding the issuance of “premium” or “special” editions can aid in avoiding liability. For instance, another newspaper publisher faced a similar suit in 2013. There, the plaintiffs alleged violations of Missouri law claiming breach of the subscription contract and violations of state protections against deceptive practices because the publisher “double-billed” subscribers by issuing “premium editions” and invoicing the additional charges such that the subscription renewal date was accelerated.
The Court dismissed the case on summary judgment, citing written undisputed evidence and documents that showed that subscribers were notified in advance of additional charges and were reminded of the policy each time the customer received an invoice. Of note was the fact that every subscription invoice informed subscribers of the charges associated with “Special Editions,” further explained that the expiration date for their subscription “will change when charges for any Special Editions apply,” and directed the subscriber to review the details of this policy listed on the back of each subscription invoice.
The publisher did not exclusively rely on information in customer invoices. Instead it also repeated these disclosures in the newspaper’s “Publisher’s Notice” and in advertisements run in the newspaper in the days and weeks leading up to each publication of a “Special Edition.” Thus, despite the Court’s comments that the publication’s “billing practice of changing customers’ paid-through date to account for Premium Edition charges could have been more transparent from the beginning,” the Court found no violation of Missouri statutory or common law because subscribers had been sufficiently informed.
Publishers have also effectively avoided prolonged litigation by drafting subscription agreements that made clear at the outset how the subscriber would be charged for “special issues.”
Indeed, the Ninth Circuit reached a similar conclusion in a case concerning overcharges for “double or special issues.” There, the plaintiffs argued that a publisher breached its subscription contract and violated California’s unfair competition law and California’s false advertising law by charging double for so-called “double or special issues” of a publication that were not in actuality “double the number of pages or content contained in a ‘single issue.’” Even though the subscription agreement did not define “double or special issue,” the Court nonetheless held that the subscription agreement “plainly” disclosed what the subscriber would receive for their subscription, namely that the double or special issues were counted as two issues. Again, even though some detail was lacking, the agreement sufficiently informed the subscriber at the outset by specifying how their subscription would be impacted by each “special issue.”
With these cases in mind, publishers should consider the language provided to subscribers regarding the issuance of their “premium editions.” However, because the definition of deceptive and unfair practices varies by jurisdiction, publishers should tailor promotions to the particularities of local law. Nonetheless, clarity, notification (in agreements and advertisements), and reminders can go a long way in preventing claims of alleged deception.
Andrew R. Cockroft is an associate in the Labor & Employment Practice Group of Seyfarth Shaw LLP in Chicago. He focuses on defending employers in a variety of matters from class and collective actions, wage and hour litigation, ERISA litigation, single-plaintiff discrimination claims, and labor relations matters including unfair labor practices charges and grievance arbitration.