Brunson Communications, Inc. v. Arbitron, Inc.
2003 WL 21321345, 2003 U.S. Dist. LEXIS 17636, 266 F. Supp. 2d 377 (2003)
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Rule of Law:
Under Pennsylvania's economic loss doctrine, a plaintiff cannot recover in a negligence action for purely economic damages. Additionally, a claim for commercial disparagement must plead special damages with particularity, specifying the pecuniary loss suffered.
Facts:
- Brunson Communications, Inc. (Brunson) owned and operated WGTW-TV, a television station serving the Philadelphia area.
- Arbitron, Inc. (Arbitron) is a company that develops and operates systems to measure television viewership for the advertising industry.
- In the fourth quarter of 2001, Arbitron launched a test of its new Personal People Meter (PPM) technology in the Philadelphia market.
- Arbitron did not include Brunson's station, WGTW-TV, in this test survey, allegedly because it did not have enough equipment to measure all stations.
- Arbitron published the resulting survey data and publicly represented that the survey would 'accurately and creditably measure the performance of the entire market.'
- An Arbitron Senior Vice President, Kevin Smith, later stated at an industry meeting that the survey was 'fair, accurate and complete,' despite knowing WGTW-TV was excluded.
- Brunson alleged that being omitted from a survey described as complete and accurate impaired its ability to sell advertising time, as it suggested WGTW-TV had no measurable viewership.
- Even after a PPM signal was eventually embedded in WGTW's transmitter in April 2002, the equipment allegedly failed to properly encode the signal, resulting in continued omission from surveys until at least June 2002.
Procedural Posture:
- Brunson Communications, Inc. filed a complaint against Arbitron, Inc. in the U.S. District Court for the Eastern District of Pennsylvania.
- After Arbitron moved to dismiss, Brunson filed an Amended Complaint asserting seven causes of action.
- The District Court granted Arbitron's motion to dismiss the Amended Complaint, dismissing five claims with prejudice and dismissing the disparagement and negligence claims without prejudice.
- Brunson's motion for reconsideration was denied by the court.
- Brunson then filed a Second Amended Complaint, reasserting only the claims for commercial disparagement and negligence.
- Arbitron filed a motion to dismiss the Second Amended Complaint for failure to state a claim.
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Issue:
Does the economic loss doctrine bar a negligence claim brought by a television station against a media measurement company for purely economic damages resulting from the station's exclusion from viewership surveys?
Opinions:
Majority - Baylson, District Judge
No. The economic loss doctrine bars a negligence claim seeking recovery for purely economic damages. Pennsylvania law establishes that a plaintiff cannot recover on a negligence theory for purely economic losses, such as lost profits from declining sales of advertising time. The court reasoned that allowing such a cause of action would create an undue burden on commercial activity and lead to limitless liability for every person in the economic chain of a negligent actor. Because any damages Brunson could plausibly allege would be economic in nature, Arbitron owed no legal duty of care to Brunson, and the negligence claim must be dismissed with prejudice. Regarding the separate commercial disparagement claim, the court found that while Brunson adequately alleged a false statement, the claim was deficient because it failed to plead special damages with the particularity required by Federal Rule of Civil Procedure 9(g). A general assertion of loss is insufficient; therefore, the claim was dismissed without prejudice, granting Brunson leave to amend its complaint to specifically allege its pecuniary losses.
Analysis:
This decision strongly reinforces the application of the economic loss doctrine in Pennsylvania as a complete bar to negligence claims where the only alleged harm is financial. It clarifies the boundary between tort law, which primarily addresses physical harm to persons or property, and the law governing commercial expectations. By dismissing the negligence claim with prejudice, the court signals that foreseeability of economic harm alone is insufficient to create a legal duty of care in a commercial context. The opinion also provides a practical lesson on civil procedure, emphasizing the stringent pleading standards for special damages in torts like commercial disparagement, requiring plaintiffs to move beyond general allegations and specify the nature and amount of their financial losses at the outset of litigation.
