Kevin Sterk v. Redbox Automated Retail, LLC
2014 U.S. App. LEXIS 20505
| 7th Cir. | 2014Background
- Redbox outsources customer service to Stream and gives Stream access to its customer database.
- Stream can access customer rental histories to assist callers and may use data in training exercises.
- Plaintiffs allege Redbox’s disclosure of PII to Stream violates the VPPA, which generally bans such disclosures absent exceptions.
- VPPA permits disclosures incident to the ordinary course of business, including request processing, order fulfillment, debt collection, and transfer of ownership.
- District court granted summary judgment for Redbox, holding disclosures to Stream fall within the ordinary course (request processing); discovery issues and a separate Iron Mountain backup-tape disclosure were addressed but disputed on appeal.
- Court on appeal affirmed, holding that Redbox’s disclosures to Stream were within the VPPA ordinary-course exception and that discovery issues were properly resolved in district court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs have standing to sue under VPPA | Sterk and Chung have an injury in fact from disclosure of PII | Redbox’s alleged VPPA violation is a technical violation; standing not met | Yes, standing established under VPPA injury in fact |
| Whether disclosure to Stream falls within ordinary-course exception | Disclosures to Stream are not merely request processing or order fulfillment | Disclosures to Stream are incident to ordinary course (request processing) | Disclosure to Stream falls within ordinary-course exception |
| Whether VPPA’s ‘request processing’ term is limited to specific video-material requests | Reading to restrict to kiosk-initiated requests for specific videos | ‘Request processing’ includes customer service interactions and services | Not limited to specific video-material requests; broad interpretation supported |
| Whether disclosures to Iron Mountain were raised and preserved for summary judgment | Iron Mountain backup-disclosures disputed; should be considered | Issue not properly preserved; discovery adequate | Waived for appeal; not considered on the merits |
| Whether denial of Rule 56(d) discovery was an abuse of discretion | Needed more discovery on Stream’s access scope and methods | Discovery not material to dispositive issue; sufficient record | No abuse; district court properly denied additional discovery |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (constitutional standing requirements)
- Kyles v. J.K. Guardian Sec. Servs., Inc., 222 F.3d 289 (7th Cir. 2000) (standing and injury-in-fact conceptions)
- Gracyk v. West Publ’g Co., 660 F.3d 275 (7th Cir. 2011) (DPPA-like reasoning applied to data disclosures)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burden shifting)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (material facts and prima facie summary judgment standard)
- Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (U.S. 2005) (statutory interpretation and plain meaning concerns)
- Hayes v. City of Urbana, Ill., 104 F.3d 102 (7th Cir. 1997) (standing and concrete injury requirements)