I Know What You Watched Last Summer

by Pillsbury Winthrop Shaw Pittman LLP
Contact

[Authors: Christine A. Scheuneman, Catherine D. Meyer, Lauren Lynch Flick, Amy L. Pierce, Jennifer So]

The Northern District of California continues the series begun by the Seventh Circuit in Sterk v. Redbox Automated Retail LLC, against class actions brought under the federal Video Privacy Protection Act and seeking lucrative liquidated damages simply because a "video tape service provider" retains records of customers' video purchases and rentals past the one-year cut-off.

The federal Video Privacy Protection Act, 18 U.S.C. § 2710 (the "VPPA"), requires, among other things, that a "video tape service provider" destroy customers' video material and services purchases and rental information as soon as practicable, but no later than one year from the date that the information is no longer necessary for the purpose for which it was collected. It also requires that the records not be disclosed without the customers' informed consent and an opportunity to opt out.

The law was passed by Congress in 1988 following concerns raised by the release of then-Supreme Court nominee Robert Bork's video rental records during his confirmation hearings. It has generated numerous putative class actions of late, each identifying a large class of individuals who purportedly are entitled to recover "actual damages but not less than liquidated damages in an amount of $2,500," as well as punitive damages, attorney's fees, costs and injunctive relief, all provided for under the VPPA. Sony Computer Entertainment America LLC ("SCEA") and Sony Network Entertainment International LLC ("SNEI") (collec¬tively referred to as "Sony"), Best Buy Co., Inc., Netflix, Inc., and Redbox Automated Retail, Inc. are among those recently named as defendants in putative class actions premised on alleged violations of the VPPA.

Sony Prevails in Rodriguez v. Sony Computer Entertainment America LLC
In this latest case, plaintiff Daniel Rodriguez brought a putative class action against Sony claiming that Sony had wrongfully retained and disclosed consumers' personally identifiable information ("PII")—"information which identifies a person as having requested or obtained specific video materials or services from a video tape service provider." Specifically, the plaintiff claimed that SCEA unlawfully disclosed its customers' PII to SNEI when SNEI took over the PlayStation Network, and that SNEI then unlawfully disclosed this PII to John Doe defendants for marketing and advertising purposes without the customers' consent and without giving them an opportunity to opt out. Further, the complaint alleged that Sony retains and stores their customers' movie and video game purchase and rental histories, collected in connection with sales and rentals of movies and video games through the PlayStation Network, for an indefinite period of time in violation of the VPPA. On April 20, U.S. District Judge Phyllis J. Hamilton of California's Northern District Court granted Sony's motion to dismiss the class claims, but granted the plaintiff leave to amend his claim against the Doe defendants.

The VPPA Permits the Disclosure of PII in Connection With a Transfer of Ownership
The court dismissed plaintiff's disclosure claim, relying on Subsection 2710(b)(2)(E) of the VPPA. This subsection permits the disclosure of PII "if the disclosure is incident to the ordinary course of business of the video tape service provider," which included the "transfer of ownership" of SCEA's assets to SNEI. She further concluded that the amended complaint failed "to state that a disclosure has affirmatively taken place, identify with particularity the person(s) or entity to whom such disclosure was made, or state that any such disclosure falls outside the scope of disclosures permitted under the VPPA."

The VPPA Does Not Provide a Private Right of Action Based Solely on an Allegedly Wrongful Retention of Sales and Rental Records
The court further dismissed plaintiff's retention claim, relying on the March 6, 2012 ruling in Sterk v. Redbox Automated Retail LLC, 672 F.3d 535 (7th Cir. 2012) that the VPPA does not provide a private cause of action based solely on a video rental service provider's wrongful retention of records. She noted that the Seventh Circuit in Redbox had held that a "plaintiff may only sue for damages under the VPPA for unlawful ‘disclosure' of PII, not for the purportedly unlawful ‘retention' of PII."

Takeaway
The VPPA's damages provisions provide considerable incentive for class action plaintiffs to find an excuse to sue "any person, engaged in the business, in or affecting interstate or foreign commerce, of rental, sale, or delivery of prerecorded video cassette tapes or similar audio visual materials" holding sales or rental information. While defendants have been successful in defeating claims brought on the basis of retention of consumers' PII alone, these cases are a reminder for potential defendants to review their record retention policy, including to identify their practices and the point in time when such data is no longer needed, and to then delete records in accordance with their retention policy. Such companies should also put in place safeguards for the handling consumers' PII for their internal business needs and take care that inadvertent sharing of the data with third parties does not occur.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Pillsbury Winthrop Shaw Pittman LLP | Attorney Advertising

Written by:

Pillsbury Winthrop Shaw Pittman LLP
Contact
more
less

Pillsbury Winthrop Shaw Pittman LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.