On December 20, 2013, the U.S. District Court for the Northern District of California issued an order in In re: Hulu Privacy Litigation that solely addressed the issue of whether the Video Privacy Protection Act (the “VPPA”) requires plaintiffs to show actual injury that is separate from a statutory violation to recover actual or liquidated damages. This is the second setback for Hulu. The court denied Hulu’s Motion to Dismiss more than a year ago, holding that online streaming video content is covered by the VPPA, despite the statute’s emphasis on prerecorded video cassette tapes and “similar audio visual materials.” The Court also found that any user of Hulu’s streaming service was a protected “consumer” under the statute, whether or not the user paid for the service.
In its first Motion for Summary Judgment, Hulu argued that in order for a person to be “aggrieved” under the VPPA, the plaintiff must suffer an actual injury beyond the statutory injury. However, parts of the opinion suggest that Hulu had not briefed the issues optimally, confusing whether injury was necessary to confer Article III standing requirements, recover liquidated damages, or both. In any event, Magistrate Judge Beeler addressed both arguments.
The order adds to the split of authority on this issue, holding that although the VPPA provides a remedy to “aggrieved” persons, no showing of actual injury is required, only a wrongful disclosure. This is consistent with the decision in In re Google Inc. Gmail Litigation, where Judge Koh held that allegations of a statute alone, without showing actual damages, is sufficient to establish standing.
Relying on Sterk v. Best Buy Stores, L.P., Hulu argued that actual injury is a prerequisite to recovering statutory damages. In Sterk, the Northern District of Illinois held that a plaintiff must plead an injury beyond a statutory violation to meet the standing requirement of Article III. Contrary to the Northern District of Illinois and the Seventh Circuit, the Ninth Circuit recognizes that a plaintiff satisfies Article III’s injury-in-fact requirement by simply alleging a violation of a statutorily-created right. Moreover, Magistrate Judge Beeler differentiated the cases through the apparent disclosures. In Sterk v. Best Buy, the Plaintiff’s information had been transferred by a wholly-owned subsidiary to a parent company, whereas in the case at hand, Plaintiff’s personally identifiable information had allegedly been disclosed to unaffiliated third parties.
The court similarly reconciled her opinion with the Seventh Circuit’s decision in Sterk v. Redbox Automated Retail, where Sterk alleged that he was entitled to the VPPA’s statutory damages when Redbox failed to destroy his records within one year, as required by the statute. In that case, Judge Posner dismissed the case, finding that the Plaintiff could not recover statutory damages without a disclosure of the records, as required in subsection (b)(1) of the statute.
Hulu’s second Motion for Summary Judgment is still pending and addresses the argument that it did not “knowingly” transmit “personally identifiable information” to comScore and Facebook in violation of the VPPA; in addition to an individual being aggrieved, under the VPPA the provider must have knowingly disclosed PII for a cause of action to arise. This motion and Plaintiff’s motion for class certification are set for hearing February 6, 2014. Maybe the third time will be a charm.