SI Communications, Inc. v. Nielsen Media Research

181 F. Supp. 2d 404, 2002 U.S. Dist. LEXIS 1127, 2002 WL 109536
CourtDistrict Court, S.D. New York
DecidedJanuary 28, 2002
Docket96 Civ. 2608(DAB)
StatusPublished
Cited by1 cases

This text of 181 F. Supp. 2d 404 (SI Communications, Inc. v. Nielsen Media Research) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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SI Communications, Inc. v. Nielsen Media Research, 181 F. Supp. 2d 404, 2002 U.S. Dist. LEXIS 1127, 2002 WL 109536 (S.D.N.Y. 2002).

Opinion

*406 MEMORANDUM OPINION

BATTS, District Judge.

Plaintiff SI Communications Inc.’s (hereinafter “SI”) brings this action alleging breach of an implied covenant of good faith and fair dealing in its contract with Defendant Nielsen Media Research (hereinafter “Nielsen”). Defendant Nielsen now moves for summary judgment dismissing Plaintiff SI Communications Inc.’s (hereinafter “SI”) claims and granting Nielsen’s counterclaims pursuant to Federal Rule of Civil Procedure 56.

For the reasons stated below, Defendant’s Motion for Summary Judgment is hereby granted.

I. BACKGROUND 1

SI is a California corporation in the business of producing syndicated television programming to be distributed to various television stations and cable networks across the country. Specifically, SI is in the “barter syndication” business, in which television program broadcast rights are provided to stations and/or cable networks at little or no charge, in exchange for some advertising time which the barter syndicator keeps for itself to sell to national advertisers directly or through advertising agencies. (Def.’s 56.1 Stmt. ¶ 4; Hudak Aff. ¶2.) Defendant Nielsen, a Delaware corporation with its principal place of business in Illinois, is a media research firm that provides “ratings” estimates for a variety of clients, including television stations, broadcast and cable networks, barter syndicators, advertisers, advertising agencies, and producers. (Def.’s 56.1 Stmt. ¶ 6; Dockery Dep. Ex. N-4 at 99.)

In 1992, SI entered into a five-year Nielsen Syndication Sendee Agreement (“Agreement”) with Nielsen, under which Nielsen provided SI with television ratings estimates of African-American viewers. (Def.’s 56.1 Stmt. ¶¶ 1, 33, 36; Dockery Dep. at 107-08.) Pursuant to the Agreement, Nielsen provided SI with television ratings estimates during Si’s programs, which SI and its sales representatives used in order to sell national advertising time through barter syndication. (Def.’s 56.1 Stmt. ¶¶ 5, 24, 25; Compl. ¶ 3; Dockery Dep. at 34-39.) Nielsen has supplied the data, but SI has not paid for them since at least 1996. (Id.; Dockery Dep. at 143-44.)

In order to prepare its national ratings estimates, Nielsen uses a “national people-meter sample” to derive audience estimates for national broadcast networks, national cable television networks, and programs distributed nationally by barter syndicators. (Def.’s 56.1 Stmt. ¶ 8; Dock-ery Dep. Ex. N-4 at 1-12.) Nielsen collects viewing information directly from a “people-meter,” an electronic keypad on each television in members’ households that they use in order to enter their viewing status. (Def.’s 56.1 Stmt. ¶ 9; Dock-ery Dep. Ex N-4 at 7.) National Audience Demographic (“NAD”) ratings estimates, which Nielsen then provides to its customers, are based on data extrapolated from the national people-meter sample, and provide viewing information such as age/sex, arranged by various market breaks such as race, household size, and income. (Def.’s 56.1 Stmt. ¶ 11; Dockery Dep. Ex N-4 at 7-14.)

SI aims its programs at predominantly African-American audiences. (Def.’s 56.1 Stmt. ¶ 3; Compl. ¶ 2.) A rating for a narrow demographic segment is based on data from a small subset of the persons whose households are included in the national people-meter sample. (Def.’s 56.1 *407 Stmt. ¶ 38; Dockery Dep. at 38-39.) The fact that African-American household demographic ratings were available in the NAD reports was publicly known since 1991, one year prior to the date of the Agreement between Nielsen and SI. (Def.’s 56.1 Stmt. ¶ 13.) Furthermore, the actual size of the national people-meter sample is stated in Nielsen’s National Reference Supplement, which is incorporated into every Nielsen Syndication Service Agreement, including the Agreement between Nielsen and SI. (Def.’s 56.1 Stmt. ¶ 15; Dockery Dep. at 111; Hudak Aff. Ex. N-4 at 1; Hudak Aff. ¶ 8.)

In particular, Nielsen’s Reference Supplement states that “[s]ince the audience estimates in national reports are based on a sample, they are subject to sampling error,” which is defined as the difference between the results obtained by measuring a sample versus measuring the entire population. 2 (Def.’s 56.1 Stmt. ¶ 18; Dockery Dep. Ex. N-4 at 32; Def.’s Mem. in support of its 56.1 Stmt, at 4; Hoynoski Aff. ¶ 4.) Inaccuracies in reporting by individuals or households are called “non-sampling errors,” to which ratings estimates are also subject. (Def.’s 56.1 Stmt. ¶ 20; Dockery Dep. Ex. N-4 at 35.) The National Reference Supplement fully discloses the types of errors to which Nielsen’s ratings estimates are subject. (Def.’s 56.1 Stmt. ¶ 21; Dockery Dep. Ex. N-4 at 32; Dockery Dep. at 123.)

In the Agreement’s “Limitation of Liability” provision, it specifically provides that

NIELSEN MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO ANY SERVICES, ANALYSES OR DATA OR ANY SOFTWARE PROVIDED HEREUNDER AND ALL OF SUCH WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED BY NIELSEN AND WAIVED BY CLIENT.

(Def.’s 56.1 Stmt. ¶ 28; Dockery Dep. Ex. N-3 ¶ 5(d)). Moreover, the Agreement states:

Nielsen shall not be liable in breach of contract or otherwise, and [SI] expressly waives any claims against Nielsen, for any loss, injury or damage of any kind directly or indirectly resulting from any errors or inaccuracies in any NSS ... report or data or other information furnished hereunder or failure to furnish the same ... or from any actions, whether or not negligent of Nielsen or any officer, agent or employee of Nielsen, in compiling or publishing any NSS ... report or data or other information.

(Def.’s 56.1 Stmt. ¶ 29; Dockery Dep. Ex. N-3 ¶ 5(d)).

Further, over a two-year period starting in 1994, Nielsen increased the size of the national people-meter sample from approximately 4,000 to 5,000 households. 3 (Def.’s *408 56.1 Stmt. ¶ 16; Dockery Dep. at 52-57; Hudak Aff. ¶ 6.) This increase had the effect of reducing the sampling error for ratings estimates that were derived from that sample. (Def.’s 56.1 Stmt. ¶ 17; Dockery Dep. Ex. N-4 at 32.)

In the instant matter, SI asserts that its advertisers expected the error factors to reflect the industry customer standard of plus or minus 4 percent. (Dockery Dep. at 39.). However, because African-American viewers comprised only 10 percent of all of the households that Nielsen surveyed, reflecting more or less their percentage in the general population, the sampling error was sometimes 50 percent or higher. (Dockery Dep. at 37.) Therefore, SI claims that Nielsen should compensate it for its consequential loss of advertising revenue, loss of other revenues, and unnecessary expended sums due to the percentage “error factor” that were caused by Nielsen’s inaccurate demographic ratings. 4 (Def.’s 56.1 Stmt. ¶¶ 34, 35; Compl.

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181 F. Supp. 2d 404, 2002 U.S. Dist. LEXIS 1127, 2002 WL 109536, Counsel Stack Legal Research, https://law.counselstack.com/opinion/si-communications-inc-v-nielsen-media-research-nysd-2002.