981 F. Supp. 2d 674
E.D. Mich.2013Background
- Plaintiffs Michelle Cain and Radha Sampat sued Redbox in a putative class action alleging Redbox disclosed customers’ personally identifying "Personal Viewing Information" (names, emails, rental/purchase history, billing ZIP, payment info) to third-party vendors for "service support," analytics, and promotions without customers’ consent, in violation of Michigan’s Video Rental Privacy Act (VRPA), and asserted breach of contract and unjust enrichment claims.
- Redbox moves to dismiss under Fed. R. Civ. P. 12(b)(1) and 12(b)(6), arguing lack of Article III and statutory standing, that disclosures were not public or were permitted by law (pointing to the federal VPPA “ordinary course of business” exception), and that Plaintiffs consented via Redbox’s kiosk Terms of Use (and that a one‑year limitations clause bars suit).
- The VRPA prohibits disclosure of customer records identifying the customer, allows limited exceptions (e.g., written permission; marketing with opt‑out notice), and provides alternative recovery: actual damages (including emotional distress) or $5,000 statutory damages plus costs and fees.
- Plaintiffs allege they never consented, that the kiosk Terms were not presented or accepted during their transactions, and that they suffered privacy and economic injuries (including loss of the full value of paid rentals).
- The Court treated factual challenges to jurisdiction, reviewed applicable standards for 12(b)(1) and 12(b)(6), and denied Redbox’s motion to dismiss, holding Plaintiffs have Article III and statutory standing and that the disputed statutory and factual defenses (public disclosure, VPPA incorporation, consent/limitations) raise factual questions for discovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing | VRPA violation alone suffices as concrete, particularized injury; statutory damages available | Plaintiffs lack injury‑in‑fact absent actual damages | Court: VRPA statutory violation suffices for Article III standing (following Beaudry line) |
| Statutory standing (VRPA) | VRPA permits statutory damages; statute does not require proof of actual loss | VRPA requires showing "damaged" customer; no recovery without actual damages | Court: VRPA’s statutory‑damages scheme supports suit without separate actual‑loss proof |
| Whether disclosures were "public" or barred only when public | Alleged disclosures to unrelated third‑party vendors fall outside any permissible intra‑business sharing or fall within VRPA prohibition | Disclosures to service vendors are internal/agent communications and thus not prohibited | Court: Agency/relationship is factual; allegations that vendors are unrelated must be taken as true — issue for discovery |
| Whether VPPA’s "ordinary course of business" exception applies via VRPA’s "otherwise provided by law" clause | VRPA is broader than VPPA and lacks the ordinary‑course exception; Plaintiffs’ allegations (analytics/promotions/service support) do not fit VPPA categories | VRPA exception incorporates VPPA; use of vendors for customer service is ordinary course and permitted | Court: Whether VPPA exception applies is a factual/interpretive issue; on pleading, Plaintiffs’ allegations do not fit VPPA’s narrow categories; issue reserved for discovery |
| Consent / Terms of Use & limitations | Plaintiffs allege they never saw or agreed to Redbox kiosk Terms; thus no consent and limitations clause inapplicable | Plaintiffs accepted Terms at kiosks, which authorize vendor disclosures and impose a one‑year limitations period | Court: Defendant’s extrinsic materials contradict Plaintiffs’ allegations; materials excluded at motion‑to‑dismiss stage; consent and timeliness defenses premature |
| Breach of contract & unjust enrichment | Plaintiffs paid for rentals that included confidential handling of viewing information; lost benefit of bargain; unjust enrichment pled alternatively | Plaintiffs received the movies so no damages; express terms (if valid) preclude quasi‑contract recovery | Court: Allegations suffice to state breach and alternative unjust enrichment claims at pleading stage; nominal or inferred damages possible; unjust enrichment preserved in alternative pending resolution of contract existence |
Key Cases Cited
- Beaudry v. TeleCheck Servs., Inc., 579 F.3d 702 (6th Cir. 2009) (statutory cause of action may supply injury‑in‑fact where statute creates individual right and statutory damages alternative)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standards for Article III injury‑in‑fact)
- Raines v. Byrd, 521 U.S. 811 (1997) (Congress cannot by statute alone create Article III standing where no individualized injury exists)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard for Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (application of Twombly plausibility standard to individual liability claims)
- Daniel v. Cantrell, 375 F.3d 377 (6th Cir. 2004) (defining VPPA’s "ordinary course of business" categories)