235 F. Supp. 3d 868
E.D. Mich.2017Background
- Plaintiffs Elizabeth Moeller and Nicole Brisson, Michigan magazine subscribers, allege defendants (magazine publishers American Media, Inc. and Odyssey Magazine Publishing Group, Inc.) disclosed their "personal-reading information" (subscription records) to data-mining companies and database cooperatives without consent or notice.
- Plaintiffs claim disclosures increased the market value of their data (publishers profited by selling enhanced subscriber profiles) and diminished the value of plaintiffs’ paid subscriptions.
- Plaintiffs assert violations of the Michigan Personal Privacy Protection Act (PPPA) and seek unjust enrichment recovery for defendants’ profits from selling subscriber information.
- Michigan amended the PPPA in 2016 to (1) exclude disclosures "incident to the ordinary course of business" for records created/obtained after the amendment and (2) require actual damages to bring a civil action (removing statutory damages), with an enacting clause stating the amendment is "curative and intended to clarify." The amendment took effect July 31, 2016; this suit was filed in April 2016.
- Defendants moved to dismiss for lack of standing (no concrete injury), on the ground the 2016 PPPA amendment applies retroactively (baring claims lacking actual damages), and to dismiss unjust enrichment claims (no loss of value and PPPA preemption).
- The court denied the motion to dismiss, holding plaintiffs pleaded concrete injury supporting Article III standing, the 2016 PPPA amendment does not clearly apply retroactively under Michigan law, and unjust enrichment claims were plausibly pleaded and not preempted by the PPPA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing under Article III for PPPA violations | Plaintiffs allege unlawful disclosure of protected reading records and economic loss (subscriptions are less valuable), constituting a concrete, particularized injury | No concrete injury — statutory violation alone is a bare procedural violation insufficient after Spokeo | Court: Plaintiffs alleged a concrete, traditional privacy interest and economic harm; standing satisfied |
| Retroactivity of 2016 PPPA amendment (actual-damages requirement) | Plaintiffs filed before amendment; statute should apply prospectively absent clear legislative intent | Amendment is "curative/clarifying" and thus retroactive, barring claims that lack actual damages | Court: Legislature did not clearly manifest retroactive intent; amendment applied prospectively; plaintiffs’ claims not barred |
| Unjust enrichment (common-law claim) | Plaintiffs allege defendants received benefit (profits from selling enriched subscriber data) and inequity from retention | Plaintiffs lost nothing of value; PPPA provides exclusive remedy and preempts common law | Court: Complaint sufficiently pleads benefit and inequity; PPPA does not expressly preempt common-law remedies; unjust enrichment claim survives |
| Pleading standards on motion to dismiss | Factual allegations (privacy invasion, diminished subscription value, profits retained) suffice at pleading stage | Claims are conclusory/insufficient under Twombly/Iqbal | Court: Accepting allegations as true, plaintiffs state plausible claims under Rule 12(b)(6) |
Key Cases Cited
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (statutory violation alone does not automatically satisfy Article III; intangible harms can be concrete)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing requires concrete, particularized, and actual or imminent injury)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state a plausible claim to survive dismissal)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (complaint must contain sufficient factual matter to be plausible)
- In re Nickelodeon Consumer Privacy Litig., 827 F.3d 262 (3d Cir. 2016) (disclosure of personal information can be a concrete injury)
- Moir v. Greater Cleveland Reg'l Transit Auth., 895 F.2d 266 (6th Cir. 1990) (standards for facial vs. factual Rule 12(b)(1) challenges)
- Keys v. Humana, Inc., 684 F.3d 605 (6th Cir. 2012) (Rule 12(b)(6) standard for accepting allegations as true)
- Boelter v. Hearst Commc'ns, Inc., 192 F. Supp. 3d 427 (S.D.N.Y. 2016) (economic harm from disclosure of subscriber information supports concrete injury and unjust enrichment theory)