Back To The Future: How A 30-Year-Old Statute From A Time When Video Rentals Were A Thing Is Driving A New Wave Of Class Action Lawsuits - Class Actions - United States

[Gunnar Larson]

https://www.mondaq.com/unitedstates/class-actions/1274274/back-to-the-future-how-a-30-year-old-statute-from-a-time-when-video-rentals-were-a-thing-is-driving-a-new-wave-of-class-action-lawsuits


Perhaps you are old enough to recall when consumers used to have to go to
video stores like Blockbuster Video to rent a movie. And perhaps you recall
the excitement of scoring a copy of the always limited "new release." It
was during these "archaic" times that Congress passed the federal Video
Privacy Protection Act (VPPA) in response to a newspaper publishing Robert
Bork's video rental history during his U.S. Supreme Court nomination.

Fast forward to today, and you might be surprised to learn that some
consumers are now using the VPPA, a 1988 law designed to prevent the
"wrongful disclosure" of video tape sale and rental records, as fuel for a
new wave of class action lawsuits against companies that offer video
content on their websites. Plaintiffs in these new lawsuits seek to stretch
the VPPA beyond just the VHS and Betamax tapes it was originally intended
for, and apply the law to any videos on websites that are embedded with the
code for Google Analytics and/or Meta Platforms Inc.'s Pixel tracking
tool.1 In short, the lawsuits allege that companies using these tracking
tools violate the VPPA because their websites track the videos that
visitors watch and share this viewing data with third parties, namely,
Google and Facebook.

The Video Privacy Protection Act
The VPPA prohibits a "video tape service provider" from "knowingly
disclos[ing], to any person, personally identifiable information concerning
any consumer of such provider." 18 U.S.C. § 2710(b)(1). Under the Act,
"personally identifiable information" is "information which identifies a
person as having requested or obtained specific video materials or services
from a video tape service provider." 18 U.S.C. § 2710(a)(3). A "video tape
service provider" is "any person, engaged in business, or affecting
interstate or foreign commerce, of rental, sale, or delivery of prerecorded
video cassette tapes or similar audio-visual materials." 18 U.S.C. §
2710(a)(4). Courts construe "similar audio-visual materials" broadly,
generally concluding that its definition encompasses streaming video
delivered electronically. See, e.g., In re Hulu Priv. Litig., No. C
11-03764 LB, 2012 WL 3282960, at *5-6 (N.D. Cal. Aug. 10, 2012).

A 2013 amendment to the VPPA permits the disclosure of personally
identifiable information if the consumer provides "informed, written
consent (including through an electronic means using the internet)." 18
U.S.C. § 2710(b)(2)(B). This consent must be obtained "in a form distinct
and separate from any form setting forth other legal or financial
obligations of the consumer." Id. The consumer must also be given the
opportunity to withdraw from the ongoing disclosures. Id.

Recent Rulings on Defendants' Motions to Dismiss
Defendants targeted by this VPPA class action wave have been filing motions
to dismiss. These motions typically assert the following four arguments in
favor of dismissal:

The plaintiff cannot show that defendant is a "video tape service provider"
under the Act;
The plaintiff failed to plausibly allege that the defendant's disclosures
included personally identifiable information;
The plaintiff failed to plausibly allege that the defendant "disclosed"
personally identifiable information; and
The plaintiff failed to plausibly allege that the defendant "knowingly"
disclosed personally identifiable information.
In the past year, courts considering these arguments have reached split
decisions. Courts denying motions to dismiss have held that the plaintiffs
plausibly alleged that defendants-such as the Epoch Times, WebMD and Boston
Globe Media Partners-qualified as video tape service providers under the
Act and knowingly disclosed to third parties personally identifiable
information about visitors consuming the videos on their websites.2

However, at least one court granting a motion to dismiss agreed that the
plaintiff had failed to plausibly allege that the information the defendant
company disclosed to third parties was personally identifiable information.
In Wilson v. Triller, Inc., the district court concluded the plaintiff
failed to allege that the transferred information constituted personally
identifiable information because the complaint did not set forth any facts
capable of establishing that Facebook could link the transferred
information to an individual user.

Two other courts granting motions to dismiss VPPA claims agreed that the
plaintiff had failed to plausibly allege that the defendant company was a
video tape service provider. In Stark v. Patreon, Inc., the District Court
for the Northern District of California concluded that live broadcasts do
not fall within the definition of "similar audio-visual materials" and
dismissed the plaintiff's VPPA claim because the plaintiffs did not specify
whether the video content they consumed on Patreon-a subscription-based
platform that hosts a variety of content posted by individual content
creators-was broadcast live or prerecorded. 2022 WL 7652166, at *6 (N.D.
Cal. Oct. 13, 2022). In Louth v. NFL Enterprises LCC, the U.S. District
Court for the District of Rhode Island reached the same conclusion, holding
that "NFL Enterprises' Motion to Dismiss the plaintiff's VPPA claims is
granted to the extent they rely upon the consumption of live content . . .
." 2022 WL 4130866, at *4 (D.R.I. Sept. 12, 2022).

Significant Risks Posed by the Lawsuits
The VPPA class action wave threatens to subject businesses to substantial
damage awards. Any person injured by conduct violating the Act can bring
suit and seek actual damages not less than liquidated damages in the amount
of $2,500, punitive damages, and reasonable attorneys' fees and other
litigation costs. 18 U.S.C. § 2710(c). Given that plaintiffs are alleging
that companies are violating the VPPA every time a user watches a video on
their website, the class of plaintiffs in a given action could conceivably
consist of thousands of consumers.

A company hit with a class action lawsuit alleging VPPA violations should
seek legal counsel to consider what defenses are available to it. The case
law in this area is still developing, and the facts specific to each
defendant-that is, what kind of business they do, what content their
website provides, and what identifying information the plaintiff alleges
they convey to a third party-offer distinct opportunities for formulating
defenses to an alleged VPPA violation.

Legal counsel could also be useful to companies seeking to implement
proactive measures to protect them from exposure to a VPPA class action
lawsuit.

For More Information
If you have any questions about this Alert, please contact J. Colin
Knisely, Michael S. Zullo, Courtney L. Baird, any of theattorneysin our
Trial Practice Groupor the attorney in the firm with whom you are regularly
in contact.

Footnotes

1 Meta Platforms, Inc., formerly named Facebook, Inc., owns Facebook,
Instagram, and other related products and services.

2 Czarnionka v. Epoch Times Ass'n, Inc., 2022 WL 17069810 (S.D.N.Y. Nov.
17, 2022); Lebakken v. WebMD, LLC, 2022 WL 16716151 (N.D. Ga. Nov. 4,
2022); Ambrose v. Boston Globe Media Partners LLC, 2022 WL 4329373 (D.
Mass. Sept. 19, 2022).
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