Charles McNair v. Synapse Grp Inc

672 F.3d 213, 2012 WL 695655, 2012 U.S. App. LEXIS 4593
CourtCourt of Appeals for the Third Circuit
DecidedMarch 6, 2012
Docket11-1743
StatusPublished
Cited by157 cases

This text of 672 F.3d 213 (Charles McNair v. Synapse Grp Inc) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Charles McNair v. Synapse Grp Inc, 672 F.3d 213, 2012 WL 695655, 2012 U.S. App. LEXIS 4593 (3d Cir. 2012).

Opinion

OPINION OF THE COURT

JORDAN, Circuit Judge.

A group of former customers (collectively, “Appellants” or “the named plaintiffs”) of Synapse Group Inc. (“Synapse”) successfully petitioned under Federal Rule of Civil Procedure 23(f) 1 for interlocutory review of an order denying class certification. More specifically, Appellants challenge the decision of the United States District Court for the District of New Jersey to deny certification of a Rule 23(b)(2) injunctive relief class consisting of Synapse customers who received automatic renewal notifications in connection with magazine subscriptions obtained through Synapse. Because we conclude that Appellants, none of whom are current Synapse customers, lack standing to seek the remedy they are pursuing on behalf of the class, we will affirm the District Court’s order denying class certification. 2

I. Background

A. Synapse’s Magazine Sales

Synapse, a wholly-owned subsidiary of Time Inc. (“Time”), is the largest market *216 er of magazine subscriptions in the United States. It conducts its business operations under several other names, including Magazine Direct, New Sub Magazine Services, SynapseConnect, Synapse Solutions, and CAP Systems. Aiming to “bring magazine publishers and potential subscribers together by promoting trial offers that might evolve into long-term subscriptions,” Synapse markets over 800 magazines to consumers through “credit card issuers, catalogers, retailers, airlines, and internet companies.” (App. at 643.)

The majority of Synapse’s magazine subscriptions are offered under what is known as a “continuous service plan” whereby a customer’s subscription does not expire unless and until the customer opts to cancel it. To secure subscribers to those plans, Synapse offers introductory promotional offers under which customers can receive magazine subscriptions for free or at greatly reduced rates. Although the offers are varied, all customers provide a credit or debit card number upon signing up and are informed that, once the promotional rate expires, their card will be charged at the regular subscription rate, unless the subscription is cancelled.

1. Synapse’s Advance Notification of Future Charges

Prior to processing charges for the promised rate increase, however, Synapse provides its customers with advance notice. That notice, made in accordance with the terms of Synapse’s initial offer, explains the impending charge for continued services and provides a toll-free telephone number for the customer to call to cancel his or her magazine subscriptions. Before 2009, Synapse provided the majority of those notifications by sending its customers a sealed double postcard with a visible exterior and a concealed interior (the “Standard Postcard”). The front of the Standard Postcard’s exterior was addressed to the customer and contained no other text besides a return address. The back of the Standard Postcard’s exterior appeared as follows:

*217 [[Image here]]

(App. at 507.) The Standard Postcard’s interior, which, again, was only visible if opened, stated the names of the magazines subscribed to, the number of issues ordered, the cost of the automatic renewal, and a toll-free number for customers to call to cancel their magazine subscriptions, if they so desired.

Synapse’s market testing demonstrated that an explicit statement on the exterior of the Standard Postcard that it was an “automatic renewal notice” or an “automatic magazine renewal” would increase the number of pre-billing cancellations. For example, adding the words “Your Automatic Magazine Renewal Notice” to the front of the Standard Postcard’s exterior resulted in an increase of several percentage points in pre-billing cancellations. An expert retained by Appellants took that into account in opining that the Standard Postcard was “intentionally designed to avoid giving customers notice of renewal.” (App. at 1098.)

Beginning in February 2009, Synapse voluntarily began using a new, non-folded, postcard to provide its advance notifications to customers (the “Single Postcard”). Unlike the Standard Postcard, the Single Postcard contains no interior. The back of the Single Postcard has a picture of magazines in a mailbox and states that magazine subscriptions are available for up to 40% off newsstand prices. The front of the Single Postcard contains two panels. On the left side, it states in large print: “The low rate for your next year of issues is guaranteed!” (App. at 1483.) And then, in smaller print, it says:

We guarantee a hassle-free subscription. You’ll never miss an issue. No bills, reminders, publisher renewal notices and no telemarketing calls. We do the work for you by automatically ex *218 tending your subscription each year for as long as you want your selections. Your service includes convenient home delivery and huge savings off the newsstand price.
We guarantee to send you advance notice every year about your next subscription period and rates. We will send you notice that spells out: your guaranteed low rate, your number of issues and when your credit card will be charged. If you don’t wish to continue, you can simply cancel before your new term begins.
We guarantee you outstanding savings. As a Valued Subscriber, enjoy substantial savings off cover price. For more great deals, visit www. magazineoutlet.com.

(Id.) On the right side, the following appears:

Thank you for being a valued customer. We hope you have been enjoying your service, as your complete satisfaction is our ultimate goal.
For your convenience, we will continue to ensure that you don’t receive extra unwanted mail — the multiple renewal notices and bills that normally come with a subscription. For the next term of issues the credit card you previously provided for your selections and will be charged for [magazine title], at $ [price].... If you do not wish to continue, call 800 927 9351 by [date] and no charge will appear. As long as you are satisfied, your selections will continue through our open-ended, customer-friendly subscription method — continuous service. Of course, we will always send you a courtesy reminder before you are ever billed to ensure your satisfaction. Remember, you can always look for the expiration date on your magazine label. You may cancel anytime and receive a refund of unserved issues. If a title ceases, it will be replaced with one of equal or greater value. We hope you enjoy your selections and look forward to serving you in the future. Please keep this notice for your records.

(Id.)

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Bluebook (online)
672 F.3d 213, 2012 WL 695655, 2012 U.S. App. LEXIS 4593, Counsel Stack Legal Research, https://law.counselstack.com/opinion/charles-mcnair-v-synapse-grp-inc-ca3-2012.