March 17, 2017
Last month, a federal district court held that alleged violators of Michigan’s Video Rental Privacy Act (the “VRPA”) cannot seek shelter under the United States Supreme Court’s Spokeo, Inc. v. Robins ruling. The Court also ruled that certain customers are still entitled to recover substantial statutory damages for VRPA violations, despite legislative amendments to the contrary.
What should magazine sellers know about the VRPA?
In 1988, the Michigan State Legislature enacted the VRPA as a consumer privacy protection after Reagan Supreme Court nominee Robert Bork’s video rental history was leaked publicly. Generally, the VRPA prohibits the disclosure of information identifying customers who purchase or rent videos, books and other written materials and establishes a private right of action against such sellers.
In 2014, a federal district court in Michigan ruled that the VRPA’s regulations are applicable to the sale of magazine subscriptions. Since that time, the VRPA has become a springboard for an increasing number of putative class action lawsuits targeting magazine publishers and sellers.
2016 VRPA Amendments
We previously reported on the U.S. Supreme Court’s May 2016 ruling in Spokeo, Inc. v. Robins, which has far-reaching implications for consumer protection laws that allow plaintiffs to recover statutory damages. Spokeo confirmed that allegations of “bare procedural violations” are not enough to establish legal standing in the absence of allegations of actual harm.
Previously, the VRPA allowed each plaintiff to seek $5,000 in statutory damages. However, two months after the Spokeo decision, the Michigan State Legislature amended the VRPA to:
- remove its $5,000 statutory damages provision; and
- require that each plaintiff suffer actual damages in order to bring a VRPA claim.
On February 15, 2017, in Perlin v. Time Inc. (Case No. 16-cv-10635), the U.S. District Court for the Eastern District of Michigan held that a violation of the VRPA’s disclosure prohibition results in a concrete injury and, therefore, that alleged VRPA violations meet the standing requirement set forth in Spokeo. The court reasoned that the unpermitted disclosure of customers’ identifying information violates the VRPA’s “substantive core” and “can hardly be deemed merely procedural.”
Further, the court ruled that the Michigan State Legislature’s 2016 VRPA amendments do not apply retroactively, leaving the door open to statutory damages claims of $5,000 per class member for alleged VRPA violations occurring before July 31, 2016. The recent ruling will undoubtedly fuel the recent uptick in VRPA class action lawsuits against magazine publishers and sellers.
How Can Magazine Sellers Protect Themselves from VRPA Liability?
Many consumer protection-related legal risks facing sellers and marketers can be minimized or eliminated entirely by working with experienced marketing counsel before issues arise. A well-planned legal strategy can help protect magazine publishers and sellers from substantial liability. For example, a VRPA lawyer can help to draft appropriate opt-in language and disclosures to minimize the risk of unwelcome legal surprises down the road.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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