269 F. Supp. 3d 172
S.D.N.Y.2017Background
- Plaintiff Josephine James Edwards, a Michigan magazine subscriber, sued Hearst under the Michigan Video Rental Privacy Act (VRPA) and for unjust enrichment, alleging Hearst disclosed her name, address, and magazine titles to third parties without consent.
- The VRPA (pre‑2016 version applicable here) prohibits disclosure of records "concerning the purchase" of written materials that identify the customer, subject to limited exceptions (written consent, court order, collection, marketing with opt‑out, search warrant/subpoena).
- Hearst maintained a subscriber database (hosted by Acxiom) and disclosed subscriber data to multiple third parties (Acxiom, Experian, Company 1, Company 2, Dunn Data, Company 3) pursuant to contracts and data‑cooperative arrangements.
- Plaintiff testified she would not have subscribed had she known Hearst shared her information; she also points to specific transmissions (notably to Experian and Company 3 in 2014–2015) within the limitations period after tolling calculations.
- Court previously held the 2016 amendment to VRPA nonretroactive; this opinion resolves motions to dismiss and cross‑motions for summary judgment after Phase I discovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing (Article III injury) | VRPA violation is a concrete, particularized injury; also alleges economic loss (would not have purchased) | VRPA violation is a bare procedural or technical violation insufficient for Article III | VRPA violation is a concrete injury; plaintiff has standing (statutory privacy right + economic testimony credited) |
| Statute of limitations / tolling | Claims tolled by prior putative class actions (Grenke, Boelter) under M.C.R. 3.501(F) | Tolling not available (Grenke dismissal with prejudice or rule limited to state court) | Tolling applied; claims timely for disclosures after Dec. 20, 2009; summary judgment on limitations denied |
| Scope of VRPA: what constitutes "disclose" and "concerning the purchase" | "Disclose" includes nonpublic transfers to any person; "concerning the purchase" construed broadly to include records related to subscriptions (title, order date, paid status) | "Disclose" should mean public disclosure; "purchase" should require identification as purchaser (narrower) | "Disclose" need not be public; "concerning the purchase" read broadly; but disclosures to bona fide employees/agents are exempt |
| Employee/agent exception (and test) | Narrow application; defendant must prove agency under facts | Broad: many paid vendors are employees/agents; contracts disclaim agency | Court adopts Michigan "economic reality" factors for employee and common‑law/contract and conduct evidence for agent; held Acxiom was Hearst's agent (exempt), Experian and Company 3 were not (actionable) |
| First Amendment | VRPA regulates noncommercial/private information disclosure and survives intermediate scrutiny | Statute restricts publishers’ commercial speech and outsourcing; underinclusive and overbroad | VRPA is a content‑based regulation of commercial speech but survives Central Hudson intermediate scrutiny as applied; First Amendment challenge denied |
| Unjust enrichment | VRPA does not preclude common‑law unjust enrichment; Hearst was enriched by using/subselling data | VRPA preempts or is sole remedy; no proof Hearst was unjustly enriched | VRPA does not preclude unjust enrichment; factual issues remain (denied summary judgment) |
| Application to specific recipients | Seeks summary judgment that specified transfers violated VRPA | Seeks summary judgment that many transfers were nonactionable or exempt | Summary judgment granted for Plaintiff as to Experian and Company 3; granted for Hearst as to Acxiom, Company 1, Company 2; Dunn Data disputed and left for trial |
Key Cases Cited
- Boelter v. Hearst Commc'ns, Inc., 192 F. Supp. 3d 427 (S.D.N.Y. 2016) (prior VRPA standing and statutory‑construction analysis)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (Article III concrete‑injury framework for statutory violations)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing elements)
- Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N.Y., 447 U.S. 557 (1980) (four‑part commercial‑speech test)
- Deacon v. Pandora Media, Inc., 499 Mich. 477 (Mich. 2016) (interpretation of payment/rental terms under VRPA context)
- Condé Nast v. ... (S.D.N.Y.), 210 F. Supp. 3d 579 (S.D.N.Y. 2016) (VRPA analysis applying Spokeo and rejecting bare‑procedural framing)
- Casey v. Merck & Co., 653 F.3d 95 (2d Cir. 2011) (federal courts look to state law for tolling of state‑law claims)
- 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484 (1996) (commercial‑speech intermediate scrutiny principles)