Federal Court Holds in ADA Suit that Netflix Web Streaming Can Be “Place of Public Accommodation”

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[authors: Ronald G. London, Maria T. Browne, Bradley W. Guyton]

A federal district court in Massachusetts has rejected arguments by Netflix that its “Watch Instantly” streaming website is not a “place of public accommodation” under the Americans with Disabilities Act (“ADA”), and accordingly refused to dismiss the complaint in National Association of the Deaf v. Netflix seeking declaratory and injunctive relief to require closed captioning of videos at the site. The court also determined that the Communications Video Accessibility Act (“CVAA”) and implementing regulations recently adopted by the Federal Communications Commission (“FCC”) were intended to complement, not displace, the ADA, and consequently did not bar NAD’s suit. Thus, rather than disposing of the case at the relatively early motion-to-dismiss phase, the court appears to contemplate having the parties engage in discovery and summary judgment briefing, including exploration of whether, even though Netflix owns the Watch Instantly site, it lacks the ability to provide the captioning sought, due to copyright issues or for other reasons.

NAD and other co-plaintiff advocates for the hearing impaired filed suit under Title III of the ADA seeking an injunction requiring Netflix to provide closed captioning for all content on its Watch Instantly service, consisting primarily of movies and television programming, on grounds that lack of captioning constitutes discrimination in the provision of services at a “place of public accommodation” under the ADA. Netflix moved to dismiss, arguing the ADA does not apply because the Watch Instantly website is not a “place of public accommodation,” and because Netflix does not have enough control over the video content at issue to ensure it is properly captioned.

However, the court found “places of public accommodation” are not limited to physical, “brick and mortar” structures, and held the Watch Instantly website falls within one or more of the ADA’s statutory categories of public accommodations, such as by being a “service establishment” that allows customers to stream programming, a “place of exhibition or entertainment” that displays movies, etc., and/or a “rental establishment” that engages customers to pay to rent videos. The court also rejected Netflix’s argument that its website should not be considered a “place of public accommodation” because it is accessed in private residences, noting the statute applies to the services of a place of public accommodation, not services at or in a place of public accommodation. Otherwise, companies such as plumbers, or pizza-delivery or moving services would also fall outside the ADA, which the Court held the statute did not contemplate.

Regarding Netflix’s assertions that it lacks the requisite control of the video content to be responsible for its captioning, the court held that Netflix’s ownership and operation of the Watch Instantly site was sufficient at this stage of the case to withstand a motion to dismiss. Rather, such issues raised by Netflix regarding the need for copyright owners’ permission to caption content, the court held, may be addressed later in the litigation, after discovery and if pursued by the parties, through summary judgment.

Netflix also argued NAD’s ADA claim was precluded by the more recent CVAA, enacted in 2010, and the FCC’s implementing regulations, issued earlier this year. Specifically, Netflix asserted there was a conflict between the two statutes (and the FCC regulations) regarding the captioning of streaming video. Netflix argued the ADA claim was at odds with CVAA requirements and the specifics of the FCC’s regulations. The court disagreed, stating that ADA compliance is not necessarily inconsistent with compliance with the CVAA, even though, as Netflix argued, the FCC regulations impose responsibility for captioning on content owners, not distributors like Netflix, and establish compliance deadlines largely in the future, as opposed to requiring immediate captioning, as NAD’s suit seeks. The court also rejected Netflix’s arguments that the ADA and CVAA/FCC regulations conflict because the CVAA prohibits private rights of action and provides allowances for economically burdensome captioning and de minimis failures to caption, which ADA injunctive relief might not necessarily provide.

The court agreed with NAD that its claim did not fall exclusively under the CVAA and/or its prohibition on private rights of action, as that statute covers only a subset of the video programming at issue. It rejected Netflix’s argument that the CVAA covers all video programming streamed over the Internet, regardless of whether it was shown on television, or when or where it was so published. Rather, deferring to the FCC’s interpretation of the statute, the court found the CVAA and FCC regulations cover only programming shown on television with captions in the U.S. after the regulations became effective April 30, 2012. Because much of the Watch Instantly content may not fit these criteria, the court ruled plaintiffs would be left without a remedy if only the CVAA, and not the ADA, applied to their claims.

NAD v. Netflix is significant because previous ADA cases had largely rejected the proposition that websites could be “places of public accommodation” where measures like closed captioning (or video description) could be required. Even the leading case that initially went farthest (before being settled), NFB v. Target, held the retailer’s website was covered by the ADA only insofar as it served as an instrument that enabled shoppers to better use the company’s brick-and-mortar stores. Obviously, in Netflix’s case, no such connection to a physical presence exists. NAD v. Netflix thus is an important case to watch in that, if it stands, it could serve as precedent for bringing services provided entirely online under the ADA, a topic also currently being considered in a Department of Justice rulemaking.