237 F. Supp. 3d 623
E.D. Mich.2017Background
- Carolyn Perlin, a former subscriber to People magazine, sued Time Inc. alleging Time disclosed her "Personal Reading Information" to data-mining companies in violation of Michigan's Video Rental Privacy Act (VRPA) and was unjustly enriched as a result.
- The VRPA (Mich. Comp. Laws § 445.1711 et seq.) historically provided a civil cause of action with statutory damages; Michigan amended the VRPA (2016 Mich. Pub. Act No. 92, effective July 31, 2016) to eliminate the statutory-damages remedy and require actual damages for a civil action.
- Time moved to dismiss, arguing (1) the VRPA amendment should be applied retroactively to bar Perlin’s claims, (2) Perlin lacks Article III standing under the Supreme Court’s decision in Spokeo, and (3) Perlin’s unjust-enrichment claim fails (no loss and preempted by the VRPA).
- The court accepted well-pleaded allegations as true on the motion to dismiss and held a hearing; it denied Time’s motion in full.
- The court concluded (a) the 2016 VRPA amendment is not retroactive under Michigan law and therefore does not strip statutory standing for pre-amendment violations; (b) a VRPA disclosure violation is a concrete, particularized injury sufficient for Article III standing post-Spokeo; and (c) Perlin adequately pleaded unjust enrichment and that the VRPA does not preempt that common-law claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Retroactivity of 2016 VRPA amendment | Amendment should not apply retroactively; Perlin’s claim accrued pre-amendment so statutory remedy survives | Amendment is "curative/clarifying" and should be read to require actual damages even for pre-amendment conduct | Amendment not retroactive under Michigan law; plaintiff retains statutory standing for pre-amendment violations |
| Article III standing after Spokeo | VRPA creates a legislatively recognized privacy right; disclosure is a concrete, particularized injury sufficient for standing | Spokeo limits standing for statutory violations that are mere procedural errors; Perlin’s allegations insufficiently concrete | VRPA disclosure is a substantive privacy invasion (not a bare procedural violation) and satisfies concreteness and particularity under Spokeo |
| Statutory standing under VRPA | VRPA confers a private cause of action for those whose information was disclosed; no requirement to plead actual damages pre-amendment | Amendment and Spokeo together eliminate standing absent actual damages or additional harm | Court follows prior Halaburda reasoning; statutory standing exists for pre-amendment disclosures and Article III standing is satisfied |
| Unjust enrichment (loss and preemption) | Alleged benefit to Time (subscription fees and monetized reader data) and inequity from retention suffice without pleading separate monetary loss; VRPA does not expressly preempt common-law remedies | Plaintiff failed to allege a loss; VRPA statutory remedy preempts unjust-enrichment claim | Unjust-enrichment adequately pleaded (benefit + inequity); VRPA does not expressly or comprehensively preempt common-law unjust-enrichment claims |
Key Cases Cited
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (Supreme Court clarifying that a statutory violation can support Article III standing but a bare procedural violation divorced from concrete harm does not)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requires concrete and particularized injury, causation, and redressability)
- Beaudry v. Tele-Check Servs., Inc., 579 F.3d 702 (6th Cir. 2009) (statutory FCRA violation can constitute injury-in-fact for Article III standing)
- Sterk v. Redbox Automated Retail, LLC, 770 F.3d 618 (7th Cir. 2014) (VPPA disclosures are the substantive evil the statute targets; technical violations can cause cognizable harm)
- In re Certified Questions from the United States Court of Appeals for the Ninth Circuit, 499 Mich. 477 (Mich. 2016) (Michigan Supreme Court decision referenced regarding VRPA amendment and statutory interpretation)
- In re Nickelodeon Consumer Privacy Litig., 827 F.3d 262 (3d Cir. 2016) (disclosure in violation of federal VPPA found to be a concrete injury)