In a case that is a good reminder of the potential reach of sometimes overlooked state legislation to national practices, the U.S. District Court for the Eastern District of Michigan has sustained the core of several complaints for violation of Michigan's Video Rental Privacy Act. Among other arguments, defendants in the cases asserted that the plaintiffs' lacked Article III standing for failure to allege actual injury.
The cases involve the defendants' apparently conceded sale of magazine subscription lists that included the plaintiffs names. What does that have to do with Michigan's video rental privacy law? The act (which is officially captioned Preservation of Personal Privacy) reaches farther than most prohibiting one "engaged in the business of selling at retail, renting, or lending books or other written materials, sound recordings, or video recordings" from disclosing to "any person, other than the customer, a record or information concerning the purchase, lease, rental, or borrowing of those materials by a customer that indicates the identity of the customer." The act provides both for the greater of actual or statutory damages.
The court refused to grant Defendants' motions to dismiss. As to the Article III defense, after considering a number of cases, the court ultimately found a Sixth Circuit FCRA case conclusive. There the plaintiff claimed that the defendant's failure to follow reasonable procedures to ensure damages entitled her to statutory damages. The Sixth Circuit found Article III standing because FCRA created an individual right not to have unlawful practices occur.
Defendants other arguments included an assertion that the Michigan law did not reach beyond books to magazines and that plaintiffs had been afforded notice and an opportunity to opt out of the use of their names. Again, the court was not persuaded finding that "other written materials" expansive in scope and defendants' written privacy policies (which disclosed the use and a means to opt out) insufficient to meet the exceptions in the act--which could have been met with "written permission" or use of the information for marketing to the individual whose information was being used.
While the court signaled that the arguments concerning notice and consent might be successful at a later stage in the litigation, for now the plaintiffs carry on. "[T]hey have alleged the unlawful disclosure of personal reading information without notice or consent. The court finds nothing more required at this juncture ... ."