MICHAEL SALAZAR, individually and on behalf of all others similarly situated, v. PARAMOUNT GLOBAL d/b/a/ 247SPORTS
NO. 3:22-cv-00756
IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION
JUDGE RICHARDSON
July 18, 2023
Plaintiff, Michael Salazar, has filed a putative class action complaint against Defendant, Paramount Global d/b/a/ 247Sports, alleging a violation of the Video Privacy Protection Act (“VPPA“). (Doc. No. 1). Defendant has moved to dismiss the complaint for lack of subject-matter jurisdiction under
This case is a putative class action, in which Plaintiff2 alleges that Defendant Paramount Global, through its ownership of 247Sports.com, has violated the Video Protection Privacy Act (“VPPA“). (Doc. No. 1). Via the Motion, Defendant now moves to dismiss the complaint on the grounds that: (i) the Court lacks subject-matter jurisdiction because (according to Defendant) Plaintiff lacks Article III standing; and (ii) the complaint fails to state a claim under the VPPA.
Plaintiff‘s claim revolves around his activity on a website named “247Sports.com.” Strangely, the complaint does not explain what type of website 247Sports.com is. Defendant claims in its memorandum in support of the Motion that “247Sports.com is ‘the industry leader in recruiting content’ for college sports, delivering team-specific news through ‘online news feeds, social platforms, daily newsletters, podcasts, vibrant communities, text alerts and mobile apps.‘” (Doc. No. 17 at 53 (quoting About 247Sports, 247Sports.com, https://247sports.com/Article/About-247Sports-116092/.)).4
Defendant installed on 247Sports.com the Facebook8 tracking pixel (“Facebook pixel“), which is a code that allows Facebook to collect the data of digital subscribers to 247Sports.com
If a digital subscriber of 247Sports.com is logged into his or her Facebook account9 while watching video content on 247Sports.com, then 247Sports.com sends to Facebook (through the Facebook pixel) the video content name, its URL, and, most notably, the digital subscriber‘s Facebook ID. (Id. at 9).
Plaintiff, Michael Salazar, has been a digital subscriber of 247Sports.com from 2022 to present (which the Court infers means that Plaintiff began subscribing to 247Sports.com‘s newsletter in 2022). (Id. at 13). Plaintiff became a digital subscriber of 247Sports.com by providing, among other information, his email address and IP address, as well as any cookies associated with his device. (Id.). Plaintiff has had a Facebook account since approximately 2021. (Id.). As part of his subscription, Plaintiff receives emails and other communications from 247Sports.com. (Id.). Curiously, Plaintiff does not allege that he has in fact accessed any video content from 247Sports.com.
The complaint, filed by Plaintiff on behalf of himself and others who are similarly situated, contains a single claim for relief.10 (Id. at 15). Plaintiff alleges that Defendant violated the Video
As noted, Defendant has moved to dismiss the complaint under
LEGAL STANDARD
For purposes of a motion to dismiss under
In determining whether a complaint is sufficient under the standards of Iqbal and its predecessor and complementary case, Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), it may be appropriate to “begin [the] analysis by identifying the allegations in the complaint that are not entitled to the assumption of truth.” Iqbal, 556 U.S. at 680. This can be crucial, as no such allegations count toward the plaintiffs goal of reaching plausibility of relief. To reiterate, such allegations include “bare assertions,” formulaic recitation of the elements, and “conclusory” or
As a general rule, matters outside the pleadings may not be considered in ruling on a motion to dismiss under
On a
DISCUSSION
“The VPPA prohibits a ‘video tape service provider’ from ‘knowingly disclos[ing], to any person, personally identifiable information concerning any consumer of such provider.‘” Robinson v. Disney Online, 152 F. Supp. 3d 176, 179 (S.D.N.Y. 2015) (quoting
Under the VPPA, a “consumer” is “any renter, purchaser, or subscriber of goods or services from a video tape service provider.” See
Defendant seeks dismissal on several grounds. First, Defendant argues that the complaint should be dismissed under
Defendant‘s request for dismissal under
1. Plaintiff Has Standing for His VPPA Claim12
Defendant argues that Plaintiff does not have standing because (according to Defendant) Plaintiff has failed to adequately allege either a concrete injury in fact or the traceability of the injury to Defendant‘s conduct. “To satisfy Article III‘s standing requirements, a plaintiff must show: (1) [he] has suffered an ‘injury-in-fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Soehnlen v. Fleet Owners Insurance Fund, 844 F.3d 576, 581 (6th Cir. 2016) (internal quotation marks omitted).
Though not addressed by Defendant, there are two ways to challenge subject-matter jurisdiction: facial and factual attacks. Gentek Bldg. Products, Inc. v. Sherman-Williams Co., 491 F.3d 320, 330 (6th Cir. 2007). A facial attack questions merely the sufficiency of the pleading. When reviewing a facial attack, a district court takes the allegations in the complaint as true. Id. If those allegations establish federally-cognizable claims, jurisdiction exists. Id. A factual attack instead raises a factual controversy concerning whether subject-matter jurisdiction exists. Id.
The factual attack, however, differs greatly [from a facial attack] for here the trial court may proceed as it never could under 12(b)(6) or Fed. R. Civ. Pro. 56. Because at issue in a factual 12(b)(1) motion is the trial court‘s jurisdiction—its very power to hear the case—there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. In short, no presumptive truthfulness attaches to plaintiff‘s allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.
RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir. 1996) (quoting Mortensen v. First Fed. Sav. & Loan Ass‘n, 549 F.2d 884, 890 (3d Cir. 1977)). Notably, “the fact that the court takes evidence for the purpose of deciding the jurisdictional issue does not mean that factual findings are therefore binding in future proceedings.” United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994).
In making its decision, the district court has wide discretion to allow affidavits, documents, and even a limited evidentiary hearing to resolve jurisdictional facts. Gentek Bldg. Products, Inc., 491 F.3d at 330; see also Nichols v. Muskingum Coll., 318 F.3d 674, 677 (6th Cir. 2003) (“In reviewing a 12(b)(1) motion, the court may consider evidence outside the pleadings to resolve factual disputes concerning jurisdiction, and both parties are free to supplement the record by affidavits.“). As always, the party invoking federal jurisdiction has the burden to prove that jurisdiction. Global Technology, Inc. v. Yubei (XinXiang) Power Steering Sys. Co., 807 F.3d 806, 810 (6th Cir. 2015); Golden v. Gorno Bros., 410 F.3d 879, 881 (6th Cir. 2005).
A. Concrete-Injury Requirement
Defendant argues that the alleged disclosure of Plaintiff‘s information to Facebook does not constitute a concrete injury. (Doc. No. 17 at 20). As Defendant points out, an intangible harm can suffice as a concrete injury for standing purposes if it has a “close relationship to harms traditionally recognized as providing a basis for lawsuits in American courts.” See Transunion LLC v. Ramirez, 141 S. Ct. 2190, 2204 (2021). Defendant‘s argument that disclosure of information does not meet this standard misses the mark. The issue is not whether mere disclosure of information constitutes a concrete injury, but instead whether disclosure of personally identifying information to a third-party constitutes a concrete injury.
The court in Austin-Spearman v. AMC Network Entertainment LLC, 98 F. Supp. 3d 662 (S.D.N.Y. 2015), confronted an argument as to standing under the VPPA that was similar to the one now posed by Defendant. In Austin-Spearman, the defendant argued that the plaintiff lacked standing because he alleged only a violation of the VPPA as his injury and did not otherwise plead a “harm resulting from disclosure. . ..” See id. at 666. The court was unpersuaded by this argument. As the court explained, Congress, via the VPPA, created “a right to privacy of one‘s video-watching history, the deprivation of which—through wrongful disclosure, or statutory violation,
The reasoning of the court in Austin-Spearman is persuasive. The right created by the VPPA is not merely a right to not have information transmitted to third parties, as Defendant contends. It is instead a statutory right to have personally identifiable information remain private by proscribing disclosure of that information to third parties. See id. 666. Indeed, as the court in Carter v. Scripps Networks, LLC, 22-cv-2031, 2023 WL 3061858, at *3 (S.D.N.Y. Apr. 24, 2023), recently explained, “disclosure of private information is a harm that courts have traditionally considered to be redressable.” Id. at *3. And as the Third Circuit noted in a case in which the
[T]he VPPA identifies a substantive right to privacy that suffers any time a video service provider discloses otherwise private information. As a result, every
18 U.S.C. § 2710(b)(1) violation “present[s] the precise harm and infringe[s] the same privacy interests Congress sought to protect” by enacting the VPPA. Van Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037, 1043 (9th Cir. 2017) (so holding with respect to the Telephone Consumer Protection Act of 1991). Accordingly, Spokeo I and Spokeo II are distinguishable from this VPPA claim, and Plaintiff need not allege any further harm to have standing. Id. We therefore join the two other circuits that, after Spokeo I, have found Article III standing in similar cases arising under the VPPA. Perry v. Cable News Network, Inc., 854 F.3d 1336, 1341 (11th Cir. 2017); In re Nickelodeon Consumer Privacy Litig., 827 F.3d [at 274].
Eichenberger v. ESPN, Inc., 876 F.3d 979, 983-84 (9th Cir. 2017) (italics and footnote omitted).14 The instant case is of the same ilk.
Although Defendant attempts to make hay out of the Supreme Court‘s decision in Transunion and the applicability of it to this case, Defendant somehow fails to reckon with the fact that in TransUnion, the “Supreme Court concluded that plaintiffs whose information was disclosed to a third party suffered a concrete harm, but plaintiffs whose negative information was never disclosed to a third party did not suffer a concrete harm and therefore lacked standing.” See id. (citing TransUnion, 141 S. Ct. at 2209-13). The Court‘s finding in Transunion is therefore plainly supportive of Plaintiffs argument that he suffered a concrete harm when his personally identifiable information was disclosed to Facebook. Defendant‘s arguments that Plaintiff has not asserted a
B. Fairly Traceable Requirement
Next, Defendant argues that Plaintiff does not have standing under Article III because (again, according to Defendant) his injury is not fairly traceable to Defendant‘s conduct. (Doc. No. 17 at 23). “At the pleading stage, the plaintiff‘s burden of alleging that [its] injury is fairly traceable to the defendant‘s challenged conduct is relatively modest[.]” Buchholz v. Meyer Njus Tanick, PA, 946 F.3d 855, 866 (6th Cir. 2020) (internal quotation marks omitted). “Thus, harms that flow indirectly from the action in question can be said to be fairly traceable to that action for standing purposes.” Id. (internal quotation marks omitted).
Defendant asserts that the complaint specifically identifies only the “c_user cookie” in alleging that [Plaintiff‘s] FID was disclosed to Facebook.16 (Doc. Nos. 17 at 23, 26 at 12). Defendant explains that Facebook places this cookie on a digital subscriber‘s browser when he or she is logged in to his or her Facebook account. (Doc. No. 26 at 12). Defendant therefore argues that if Plaintiff had simply logged out of Facebook, the “c_user cookie” would not have transmitted
Though Defendant does not characterize its argument on traceability as either “facial” or “factual,” the Court construes the argument as “factual attack” on subject-matter jurisdiction. After all, Defendant does not argue that the allegations in the complaint are insufficient to meet the traceability requirement of Article III standing. Instead, Defendant challenges the truth (the factual veracity) of particular allegations in the complaint supporting the notion that Defendant‘s actions caused the alleged disclosure of Plaintiff‘s personally identifiable information to Facebook, which in turn could affect the Court‘s analysis of the traceability requirement.17 It is true that a court, in assessing a factual attack, may “consider extrinsic evidence and, if disputed, weigh the evidence to determine whether the facts support subject matter jurisdiction without converting the motion to dismiss into a motion for summary judgment.” See Marquez v. ARCP UO Portfolio IV, LP, cv-19-03851, 2019 WL 8105334 (C.D. Cal. July 18, 2019). But Defendant has provided no extrinsic evidence in support of its factual claim in its Motion regarding the “c_user cookie.” See Jaiyeola v. Toyota Motor Corp., 1-17-cv-562, 2019 WL 8351525, at * 2 (W.D. Mich. Dec. 6, 2019) (“[S]tatements in a party‘s brief are not evidence.“) (citing Duha v. Agrium, Inc., 448 F.3d 867, 879 (6th Cir. 2006)). In failing to either attack the sufficiency of the allegations in the complaint without resort to extrinsic evidence (i.e., launching a facial attack) or providing a scintilla of extrinsic evidence in order to raise a factual controversy regarding an allegation in the complaint
Perhaps the Court could end its standing analysis here. But given that Defendant has drawn the Court‘s attention to a potential traceability problem, the Court feels compelled to satisfy itself that Plaintiff has alleged factual matter plausibly suggesting that his injury is fairly traceable to Defendant‘s conduct. See Hertz Corp. v. Friend, 559 U.S. 77, 94 (2010) (“Courts have an independent obligation to determine whether subject-matter jurisdiction exists, even when no party challenges it.“). The complaint alleges that Defendant installed the Facebook pixel on 247Sports.com, which allowed the pixel to collect digital subscribers’ data and transmit it to Facebook. (Doc. No. 1 at 2). This allegation is neither novel nor implausible. See Czarnionka v. Epoch Times Assoc., Inc., 22 Civ. 6348, 2022 WL 17069810, at *3 (S.D.N.Y. Nov. 17, 2022) (“By installing the Pixel, Defendant opened a digital door and invited Facebook to enter that door and extract information from within.“). The complaint further states that “[t]his transmission is not the digital subscribers [sic] decision, but results from Defendant‘s purposeful use of its Facebook tracking pixel by incorporation of that pixel and code into 247Sports.com‘s website or App.” (Doc. No. 1 at 9). The Court finds that these allegations are sufficient to fulfill the standing requirement that Plaintiff‘s injury be fairly traceable to Defendant‘s conduct.
2. Plaintiff Has Failed to State a Claim under the VPPA Because He is Not a “subscriber of goods or services from a video tape service provider”19
As explained above, Defendant asserts several grounds as to why Plaintiff has not stated a claim under the VPPA. The second is grounded in the fact that Plaintiff has no claim under the VPPA unless he is a “consumer,” meaning “any renter, purchaser, or subscriber of goods or services from a video tape service provider.” See
The court in Carter v. Scripps Networks, LLC recently resolved a motion to dismiss involving (alleged) facts materially indistinguishable from those presently before the Court. 2023 WL 3061858. In Carter, the plaintiffs filed a putative class action against HGTV for an alleged violation of the VPPA. Id. at *1. HGTV owned hgtv.com, which is a website that “hosts hundreds of videos featuring home and lifestyle content.” See id. The plaintiffs each subscribed to hgtv.com‘s newsletter, and each plaintiff also had a Facebook account. See id. The complaint did not allege that the video content of hgtv.com was available only through subscription to the newsletter. See id. The plaintiffs alleged that HGTV transmitted personally identifiable information to Facebook through the Facebook pixel and the “c_user cookie.” See id. The defendant moved to dismiss the complaint on the grounds that the plaintiffs lacked standing, and in the alternative, that they failed to state a claim. See id. at 2.
After finding that the plaintiffs had standing, the court turned to the issue of whether plaintiffs were “subscribers of goods or services from a video tape service provider” under the
The court began by recognizing that the VPPA does not define “subscriber,” but that dictionary definitions indicate that “subscriber” is a person who “imparts money and/or personal information in order to receive a future and recurrent benefit. . . .” See id. at *4 (internal quotation marks omitted). Although the plaintiffs contended that their subscriptions to hgtv.com‘s newsletter rendered them “subscribers,” the court found that this “broad interpretation” was only plausible if the definition of “consumer” was read in isolation (contrary to canons of statutory interpretation). See id. at *5. The court went on to explain:
In the statute‘s full context, a reasonable reader would understand the definition of “consumer” to apply to a renter, purchaser or subscriber of audio-visual goods or services, and not goods or services writ large. The VPPA makes it unlawful for a “video tape service provider” to “knowingly disclose[ ], to any person, personally identifiable information concerning any consumer of such provider. . ..”
18 U.S.C. § 2710(b)(1) (emphasis added). A “video tape service provider” is defined as a person “engaged in the business . . . of rental, sale or delivery of prerecorded video cassette tapes or similar audio visual materials. . . .” Id.§ 2710(a)(4) . Thus, subsection (b)(1) provides a right of action to a “consumer” (e.g., “renter, purchaser, or subscriber“) of “such provider” (e.g., one engaged in “the business . . . of rental, sale or delivery
of . . . audio visual materials“). The definitions of “consumer” and “video tape service provider” are paired to some degree: renter with rental, purchaser with sale, and subscriber with delivery, all of which subsection (a)(4) applies to audio visual materials. Thus, the scope of a “consumer,” when read with sections 2710(b)(1) and (a)(4), is cabined by the definition of “video tape service provider,” with its focus on the rental, sale or delivery of audio visual materials. Section 2710(b)(1) provides for an action by a renter, purchaser of subscriber of audio visual materials, and not a broader category of consumers.
See id. at *6. The court further noted that the legislative history of the VPPA supported this conclusion. See id. Specifically, the court noted that
The 1988 Senate Report notes that the definition of PII at section 2710(a)(3) is drafted “to make clear that simply because a business is engaged in the sale or rental of video materials or services does not mean that all of its products or services are within the scope of the bill. For example, a department store that sells video tapes would be required to extend privacy protection to only those transactions involving the purchase of video tapes and not other products.” Senate Report 100-599, at 12.
See id. Based on its reading of the statutory text, which was bolstered by the legislative history, the court found that the plaintiffs were not “subscribers of goods or services of a video tape service provider” under the VPPA, because subscription to the newsletter was not sufficient to establish that the plaintiffs had subscribed to audio visual materials. See id. As explained by the court, the complaint did not “include facts that plausibly allege[d] that [the plaintiffs‘] status as newsletter subscribers was a condition to accessing the site‘s videos, or that it enhanced or in any way affected their viewing experience. They were subscribers to newsletters, not subscribers to audio visual materials.” See id.
The Court agrees with and incorporates the statutory interpretation of the court in Carter. Not only does the
The court in Carter provided a similar and hypothetical scenario whereby application of the VPPA would be nonsensical and yet required by interpretations of the VPPA like the one offered by Plaintiff herein. In Carter, the court explained that hgtv.com also had an online shop that recommended “links to third-party-home-and-garden products,” and that the hgtv.com disclosed on the website that it made money from the affiliate links. See id. at *5. Because a “consumer” includes a “purchaser” of “goods or services from a video tape service provider,” under the plaintiff‘s reading of the VPPA, a plaintiff could file a claim under the VPPA based on a purchase made through an affiliate link. See id. The court found that this was an unreasonable interpretation.
As did the plaintiffs in Carter, Plaintiff contends that he is a “subscriber” under the VPPA because he signed up for an online newsletter. As with respect the complaint‘s allegations in Carter regarding accessing hgtv.com, the complaint in this case does not allege that an individual can only access the video content from 247Sports.com through signing up for the newsletter. Instead,
In light of the Court‘s finding that an individual is a “subscriber” under the VPPA only when he or she subscribes to audio visual materials, Plaintiffs allegation that his subscription to the newsletter renders him a “subscriber” is unavailing. As noted, there is no allegation in the complaint that Plaintiff accessed audio visual content through the newsletter (or at all, for that matter). The newsletter is therefore not audio visual content, which necessarily means that Plaintiff is not a “subscriber” under the VPPA.
In response to Defendant‘s argument that Plaintiff is not a “subscriber” of the kind falling within the protection of the VPPA, Plaintiff relies on Lebakken v. WebMD, LLC, 1-22-cv-644, 2022 WL 16716151 (N.D. Ga. Nov. 4, 2022). In WebMD, the court, without conducting any statutory interpretation, concluded that WebMD.com‘s newsletter fell within the “good or services” described in the VPPA. See id. at *3. The defendant argued that the newsletter did not fall under the VPPA because it was “too attenuated from [the plaintiffs] viewing of any WebMD videos to state a claim under the VPPA.” See id. In rejecting this argument, the court reasoned that “goods or services” should be construed broadly to “encompass all parts of the economic output of society.” See id. (internal quotations omitted).
The WebMD decision is admittedly favorable to Plaintiff in this case. Of course, WebMD is not binding authority, and in light of the analysis provided by the court in Carter (which, concededly, is also not binding), the Court finds the analysis in WebMD unpersuasive. Unlike the court in Carter, the court in WebMD did not engage in any meaningful statutory interpretation of
In summary, based on the Court‘s interpretation of “subscriber” in the VPPA, Plaintiff fails to state a claim under the VPPA because Plaintiff is not a “subscriber of goods or services of a video tape service provider” (and therefore is not a “consumer“) by virtue of registering or signing up for the 247Sports.com‘s newsletter. The complaint therefore fails to state a claim under the VPPA.
CONCLUSION
For the reasons stated herein, Defendant‘s motion to dismiss at Doc. No. 16 is GRANTED in part and DENIED in part. Specifically, Defendant‘s Motion is denied insofar as it requests dismissal based on lack of standing. The Motion is GRANTED insofar as it requests dismissal for failure to state a claim upon which relief can be granted. This is the final order in the case. All relief being denied, the Clerk shall enter judgment. See
IT IS SO ORDERED.
Eli Richardson
ELI RICHARDSON
UNITED STATES DISTRICT JUDGE
Notes
Id. at 341. Cases like Austin-Spearman are not saying that a plaintiff has standing merely by virtue of having alleged a violation of a statutory right created by Congress in a statute (here, the VPPA). They are saying that the violation of that statutory right entails the kind of injury that is sufficient to confer standing under Article III. So they are not inconsistent with Spokeo I. The Court notes additionally that the majority opinion in Spokeo observed that “we have confirmed in many of our previous cases that intangible injuries can nevertheless be concrete.” Spokeo I, 578 U.S. 330 at 340Congress’ role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right. Article III standing requires a concrete injury even in the context of a statutory violation. For that reason, Robins could not, for example, allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.