NYT Dropped From Class Action Over Alleged Billing Scam

NYT Dropped From Class Action Over Alleged Billing Scam Photo: Rick Kopstein/ALM New York Times Building.

The New York Times Co. has been dropped from a proposed federal class action alleging the company, Dow Jones & Co. and Forbes Inc. turned a blind eye to ripoffs perpetrated on their publications’ subscribers in a billing scam.

A stipulation filed August 18 in U.S. District Court for the Southern District of New York showed putative class action plaintiff Stephen Rabin agreed to voluntarily dismiss, with prejudice, The New York Times from Rabin v. The New York Times. There was no elaboration in court documents beyond the brief stipulation.

Rabin’s complaint, filed June 23, alleged the companies sold or provided subscription lists to a company called Circulation Billing Systems, which handled billing for renewals to the Times and Wall Street Journal newspapers, and Forbes magazine and Barron’s magazine, owned by Dow Jones.

Armed with the lists, Circulation Billing Systems, or CBS, allegedly sent out official-looking “renewal notices” that would quote prices higher than the real rate. CBS would then pay the publishing companies the correct rate and pocket the difference, according to the complaint. Sometimes, the complaint alleges, the billing company would keep all the money sent in.

In a July 24 joint motion to dismiss the complaint, the publishers attacked New York consumer Stephen Rabin’s complaint accusing them of conspiracy, fraud and negligence, calling the action entirely without substance, lacking “a single allegation of fact,” and based on conclusory assumptions about the defendants as a group without pleading specific alleged acts.”

Dropping the New York Times in an August 14 motion to dismiss, Dow Jones and Forbes reiterated their contention that Rabin’s complaint lacks specificity and is constructed on baseless legal claims.

Defendants’ counsel are Clifford Thau and Hilary Preston, of Vinson & Elkins LLP; and Robert D. Balin, of Davis Wright Tremain LLP. Plaintiffs’ attorney is Raymond Bragar, of Bragar Eagel & Squire PC.

Lisa Hoffman contributes to law.com.

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