Michigan Court Holds That Pandora Users Are Not Customers Under State Law, Further Narrowing Streaming Privacy Laws

by King & Spalding
Contact

On July 6, 2016, the Michigan Supreme Court held that a Pandora user was not a “customer” allowed to bring a class action under the Video Rental Privacy Act (“VRPA”) in Michigan. 

Plaintiff Peter Deacon brought a class action in the United States District Court for the Northern District of California against Pandora, claiming that the music-streaming company violated Michigan’s video privacy law by posting his music preferences on Facebook and making his preferences available via an internet search. The federal district court ruled in favor of Pandora, and on appeal, the U.S. Court of Appeals for the Ninth Circuit certified the following question to the Michigan Supreme Court:

“Has Deacon stated a claim against Pandora for violation of the VRPA by adequately alleging that Pandora is [in] the business of “renting” or “lending” sound recordings, and that he is a “customer” of Pandora because he “rents” or “borrows” sound recordings from Pandora?”

In a unanimous decision, the seven members of the Michigan court held that Deacon was not a “customer” under the VRPA because he neither rented nor borrowed anything from Pandora. The act is “intended to preserve personal privacy with respect to the purchase, rental, or borrowing of certain materials,” and prohibits the release of any information that indicates the identity of a customer. Accordingly, only customers can sue under the act. A customer is “a person who purchases, rents, or borrows a book or other written material, or a sound recording, or a video recording.”

Relying on a modern dictionary, the court held that Deacon failed to show that he met the requirement that renters contemplate some form of payment for services or goods rendered because he used the free Pandora streaming subscription. The court also held that he was not a borrower because he never intended to, nor actually returned, anything.

The court’s holding was narrow in that it did not address whether individuals who pay for subscriptions to Pandora’s commercial-free service are customers. The court also did not decide whether Pandora itself engages in the business of renting or lending music under the state law. As such, the court did not establish whether streaming is or should be considered “lending.” At oral arguments before the Ninth Circuit in February 2015, the plaintiff claimed that Pandora should be defined as a lender because users listen to songs on Pandora, but do not keep them permanently. In response, Pandora urged the Ninth Circuit to instead think of Pandora as a disc jockey who plays music for party-goers but does not lend them music.

The Michigan court’s holding is in line with those of the Third and Eleventh Circuits  (see Ellis v. Cartoon Network, Inc., 803 F.3d 1251 (11th Cir. 2015); In re Nickelodeon Consumer Privacy Litig., No. 15-1441, 2016 WL 3513782 (3d Cir. June 27, 2016)) on analogous state laws, limiting the expansion of decades-old privacy laws from only covering entities like Blockbuster to a wider range of emerging streaming services. But at least one other court has been more receptive to efforts to broaden privacy laws. The U.S. Court of Appeals for the First Circuit, for example, held in April 2016 that a USA Today app user whose information was disclosed was a “subscriber,” unlike a web user, and could bring a putative class action under the federal Video Privacy Protection Act against the newspaper’s parent company. The court defined a subscription as “[a]n agreement to receive or be given access to electronic texts or services,” and reasoned that the user subscribed by accepting the paper’s offer to download its app and directly receive texts and videos on the app, even though the user never paid for the app.

The Pandora case will now return to the Ninth Circuit, which will accept or reject the Michigan court’s interpretation.

The Michigan case is In Re Certified Question from the United States Court of Appeals for the Ninth Circuit (Deacon v. Pandora Media, Inc.), docket number 151104. The First Circuit case is Yershov v. Gannett Satellite Information Network, case number 15-1719.

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.

© King & Spalding | Attorney Advertising

Written by:

King & Spalding
Contact
more
less

King & Spalding 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.
Feedback? Tell us what you think of the new jdsupra.com!