WarnerMedia resolves case against law firm in fight over mass arbitration

By David Thomas

Dec 16 (Reuters) - Warner Bros Discovery WBD.O's WarnerMedia has resolved a lawsuit that accused law firm Zimmerman Reed of engaging in ethical misconduct and lodging thousands of baseless arbitration claims in order to force a settlement payout.

The two sides said in a New York County Supreme Court filing on Friday that they were discontinuing the case with prejudice, which means it cannot be refiled.

Lawyers for WarnerMedia and partners at Minneapolis, Minnesota-based Zimmerman Reed did not immediately respond to requests for comment on the filing, which did not disclose the terms of any settlement.

WarnerMedia sued Zimmerman Reed in May, after the law firm told the company and its affiliate Discovery Digital that it was representing thousands of purported arbitration clients alleging that the Discovery video streaming platform illicitly disclosed their viewing history to Meta META.O.

The lawsuit, which sought to disqualify Zimmerman Reed from proceeding with the privacy claims, accused the firm of trying to extract a massive settlement by leveraging the threat of huge administrative fees associated with large-scale individual arbitrations.

WarnerMedia and Discovery alleged that one of Zimmerman Reed's managing partners and other professionals at the firm had posed as claimants in privacy arbitrations brought by other law firms in order to "surreptitiously gain access to information" to use in their own mass arbitration campaign.

Zimmerman Reed countered in a June court filing that WarnerMedia's disqualification petition was "frivolous on its face."

The case is the latest in which companies facing mass arbitrations have taken the offensive against law firms bringing such claims.

French skin care company L'Occitane in February accused Zimmerman Reed of "manufacturing" mass arbitration claims under a California wiretapping law. The lawsuit and arbitration claims were dismissed by a federal judge in April. Zimmerman Reed denied wrongdoing.

Another plaintiffs law firm, Keller Postman, has been engaged in an escalating legal battle with streaming platform Tubi and its lawyers at Jenner & Block. Fox Corp-owned Tubi accused Keller Postman in June of filing thousands of "cookie-cutter" arbitration claims over allegedly discriminatory targeted ads without investigating the facts.

Keller Postman has since asked a judge to disqualify Jenner from representing Tubi, and is also seeking a court order in Los Angeles that would block Tubi and Jenner from using any materials they obtained from a private investigator. Both sides have denied any wrongdoing.

The case is WarnerMedia v. Zimmerman Reed, New York County Supreme Court, No. 652500/2024

For WarnerMedia: Jay Musoff and Evan Farber of Loeb & Loeb

For Zimmerman Reed: David Wilck and Carol Lastorino of Rivkin Radler