United States: Federal Court Dismisses Privacy Claims Brought Against Website Operator, Finding Online Subscriptions For Electronic Newsletter Insufficient To Impose Liability Under Federal Video Privacy Protection Act

This week a federal court in the Southern District of New York dismissed a privacy litigation brought against a website operator for claims under the federal Video Privacy Protection Act ("VPPA"), holding the allegation that plaintiffs had electronically subscribed to defendant's newsletter was not sufficient for them to qualify as "subscribers" under the VPPA. Carter v. Scripps Network LLC, Case No. 1:22-cv-02031 (S.D.N.Y.)

As Privacy World has previously covered, dozens of website operators have been named as defendants recently in putative class actions, with claims also being filed in arbitration, for alleged violation of the VPPA. In many circumstances, plaintiff in such cases allege that the defendant improperly disclosed their video viewing history to social media companies for advertising purposes. Because this ruling limits the scope of claims that can be brought under the VPPA and is persuasive authority in other pending cases, it will likely be relied upon by defendants going forward.

VPPA Background

The VPPA prohibits [1] a "video tape service provider" from [2] knowingly [3] disclosing [4] "personally identifiable information" of [5] a "consumer" unless certain enumerated exceptions apply. 18 U.S.C. § 2710(b)(1). It defines "consumer" as "any renter, purchaser, or subscriber of goods or services from a video tape service provider . . . ." Id. § 2710(a)(1).Aggrieved plaintiffs under VPPA have a private right of action in federal court. § 2710(c)(1). A court may award "actual damages but not less than liquidated damages in an amount of $2,500," as well as punitive damages and attorneys' fees. § 2710(c)(2). For claims brought on behalf of a putative class, damages would be assessed on a per class member, per violation basis.

Plaintiffs' Allegations

In this case, Plaintiffs alleged that Defendant owns and operates hgtv.com, a home and lifestyle website that offers videos and other content. Website visitors can subscribe to newsletters through hgtv.com by providing an email address and choosing from themes such as "HGTV Weekend Projects" and "HGTV Inspiration."

As Plaintiffs alleged in the Complaint, "[t]he principal purpose of the newsletter is to drive traffic to HGTV's website," as "[t]he overwhelming amount of content featured in the newsletter links back to articles and videos on hgtv.com." Each of the three named alleged that they subscribed to at least one hgtv.com newsletter.

Besides subscribing to an hgtv.com newsletter, Plaintiffs also alleged that they had accounts on popular social media networks. According to the Complaint, HGTV transmitted to a social media company information that allowed the social media company to identify which videos each plaintiff had viewed on hgtv.com. This allegedly involved tracking Plaintiff's viewing activity through a string of code embedded on hgtv.com that collected information, including the visitor's IP address and information about the web browser, among other conduct.

Plaintiffs also alleged that HGTV enables "Automatic Advanced Matching," which permits the embedded code to scan the website for a "recognizable form field" where a user has entered information like first name, last name and email. According to Plaintiffs, the code disclosed information to the social media company was sufficient for an ordinary person to identify a specific individual's video-viewing activities, including the videos watched. Plaintiffs alleged that these practices violated the VPPA and asserted claims on behalf of themself and a putative class.

The Court Dismisses Plaintiffs' Claims, Finding They Were Not "Subscribers" Under the VPPA

The Court, however, disagreed with Plaintiffs' legal theory, dismissing Plaintiff's Complaint for failure to plead a cognizable claim under the VPPA. At the bottom, the Court rejected Plaintiff's characterization of themselves as being "subscribers" for purposes of the VPPA upon considering precedent from both the Eleventh and First Circuits in addressing this issue (which had reached opposite conclusions in earlier litigations).

According to Defendant, the Complaint's allegations because "[t]here is no suggestion that plaintiffs purchased or rented a covered good or service from HGTV. Plaintiffs' claim turns on whether their subscriptions to HGTV newsletters make them "subscribers" of a good or service covered by the VPPA. HGTV argues that the newsletters were distinct from plaintiffs' video-streaming activities, and that, for the purposes of the VPPA, plaintiffs do not plausibly allege that they were subscribers." (emphasis supplied).

Because the VPPA itself does not define the term "subscriber," the Court consulted the term's dictionary definition for purposes of interpreting the statute. The Court concluded that "[c]onventionally, 'subscription' entails an exchange between subscriber and provider whereby the subscriber imparts money and/or personal information in order to receive a future and recurrent benefit, whether that benefit comprises, for instance, periodical magazines, club membership, cable services, or email updates."

The Court took judicial notice that hgtv.com "includes an online shop that recommends and links to third-party home-and-garden products, and discloses that 'we may make money from these affiliate links.'" As such, Plaintiff's position, if adopted by the Court and taken to its logical conclusion, "likely would entitle a visitor who purchases a 'Tulip Tile Trinket Box' using an hgtv.com affiliate link to video-streaming privacy protections not extended to otherwise-similar site visitors." Such a result, the Court explained, was to be avoided.

The Court ruled that a rejection of Plaintiff's broad interpretation of the VPPA was consistent with the statute's plain language. This was because:

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.

As such, the Court dismissed Plaintiff's Complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).

This decision is a welcome ruling for the defense bar, as in the past few months, website operators across industries have been hit with dozens of claims under the VPPA for similar practices. The Court's limitation of the VPPA as a vehicle for consumer privacy claims more broadly is persuasive authority to other similarly situated defendants. For more, stay tuned. Privacy World will be there to keep you in the loop.

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