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Inside Privacy Updates on Developments in Global Privacy & Data Security from Covington & Burling LLP

Court Dismisses Privacy Lawsuit Against Pandora

Posted in Litigation, United States

Last week, Judge Armstrong of the Northern District of California dismissed a putative class action against Pandora alleging the Internet radio service had violated two Michigan state statutes by disclosing to third parties information about the plaintiff’s listening activity.  The plaintiff in Deacon v. Pandora Media, Inc. alleged that by (1) making publicly available his Pandora profile information and (2) posting his listening activity on Facebook, Pandora violated Michigan’s Video Rental Privacy Act (“VRPA”), Mich. Comp. Laws § 445.1711-1715, and its Consumer Protection Act (“CPA”), Mich. Comp. Laws § 445.903. 

The VRPA is among more than a dozen state analogues to the federal Video Privacy Protection Act (“VPPA”), 18 U.S.C. § 2710, which limits the ability of “video tape service providers’” to disclose information about specific video materials their customers have requested or obtained.  Although the VRPA similarly limits the ability of such entities to disclose information about their customers, the statute also applies to a broader class of entities and media.  Specifically, the VRPA provides that, absent a statutory exception:

“a person, or an employee or agent of the person, engaged in the business of selling at retail, renting, or lending books or other written materials, sound recordings, or video recordings shall not disclose to any person, other than the customer, a record or information concerning the purchase, lease, rental, or borrowing of those materials by a customer that indicates the identity of the customer.”

The plaintiff in Deacon asserted that by sharing information about his listening activities with third parties, Pandora ran afoul of this provision’s prohibition against disclosure of information about a customer’s having obtained “sound recordings.” 

The court disagreed.  By its terms, the VRPA only applies to “the business of selling at retail, renting, or lending . . . sound recordings[.]”  Mich. Comp. Laws § 445.1712.  Referring to the dictionary definitions of “sell,” “rent,” and “lend,” the court held that the plaintiff had not sufficiently alleged that the statute covers Pandora’s activities.  Accordingly, the court dismissed the VRPA claim.

The CPA (Michigan’s mini-FTC Act) prohibits “unfair, unconscionable, or deceptive methods, acts or practices in the conduct of trade or commerce.”  Mich. Comp. Laws § 445.903.  The plaintiff alleged that Pandora violated the CPA by failing to disclose that its subscribers’ information could be shared on Facebook and by stating that subscribers’ profiles would only be viewable by other Pandora users when, in fact, they were viewable (and searchable) by anyone. 

The court dismissed the CPA claim based on a provision in the statute stating that only “a person who suffers loss . . . may bring a class action” under the CPA.  The court read “loss” in this provision to mean actual damages, which the plaintiff had not pled.