No Privacy Claim Against Netflix for Disclosing Viewing Histories and Instant Queue Titles Through Netflix-Enabled Devices — Mollett v. Netflix

[Post by Venkat Balasubramani]

Mollett v. Netflix, 11-CV-01629 (N.D. Cal.; Aug 17, 2012)

This is a putative class action under the Video Privacy Protection Act alleging Netflix violated the VPPA (and Cal. Civ. Code 1799.3) by .. get this .. freely displaying, to a subscriber’s family members, a subscriber’s “recently watched” and “instant queue titles” on the subscriber’s Netflix-Enabled Device. I’m surprised the court didn’t just enter a three word order (“WTF”) dismissing the claim.

Netflix allows you to register devices that can access your Netflix account. Once you enter your password, you need not keep entering it in again. Plaintiffs alleged that this was a problem because a subscriber’s family members could then access the device and see a subscriber’s “recently watched” and “instant queue” titles without entering a password.

Netflix did not contest that the VPPA applies to streaming video providers. As cited by the court, a different judge in the Northern District of California recently concluded that Hulu was subject to the VPPA regardless of the fact that it offers streaming services and doesn’t charge its customers for some of its services. (See “Court Declines to Dismiss Video Privacy Protection Act Claims against Hulu.”)

Nevertheless, the court says that plaintiffs cannot state a claim because the disclosures in question were made to the customers themselves (i.e., through their devices). Although not determinative, the court notes that Netflix’s privacy policy tells users that if they share their devices or passwords with others, they take “full responsibility for their actions.”

Plaintiffs argued, citing to legislative history of the VPPA, that Congress intended to regulate disclosures among spouses. The court says that the example cited in the VPPA’s legislative history was not analogous because it involved a divorcing spouse requesting records of the soon-to-be-ex spouse’s viewing habits in order to use this information in a child custody proceeding. The situation in this case is more akin to someone walking into a video rental store with their wife or husband and overhearing a clerk’s reference to a previous rental record (maybe in the context of a late fee discussion). The latter is something the user can control—i.e., by not taking their spouse to the video store with them.

The court also concludes that any disclosure was not knowing (or in the case of 1799.3, willful). The court says that Netflix wouldn’t necessarily know that anyone other than the subscriber could access the rental records and this would be outside of Netflix’s control or knowledge anyway. The court also says that Netflix’s reading of the statute to permit this type of sharing was reasonable.

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This was a crazily misguided lawsuit that just aimed to take advantage of a possible litigation opportunity. If the plaintiffs had won, Netflix would have to make it more difficult for anyone to access their account history on Netflix enabled devices. I doubt anyone wants this outcome (except for the plaintiffs’ lawyers). Not surprisingly, the court shut it down. I’m only surprised that the judge didn’t have harsher words for the plaintiffs’ lawyers.

(This is not to say that intra-spousal disclosures are not consequential. In plenty of other scenarios (HIPPA and ECPA) these disclosures can rightly form the basis of liability. But here, the fact that the disclosure occurred on the device, and was something the account-holder could control should be determinative. The Apple in-app lawsuit that survived a motion to dismiss also came to mind, but there were additional facts in that case that made a claim more plausible.)

In re Hulu set potentially important precedent in construing the VPPA to apply to streaming providers. This lawsuit was filed well before the ruling in Hulu, but I’m curious as to whether the Hulu ruling will open up the floodgates to possible claims against other streaming services. In any event, it’s clear that the VPPA is becoming an important weapon in the arsenal of plaintiffs’ lawyers. We’ve seen cases against Hulu, Redbox, Netflix, among others. It will be interesting to see who else ends up in their crosshairs.

[Update: Netflix clarified via email that Netflix did not concede applicability of the VPPA to its service for all purposes, but only for purposes of the particular motion. To the extent the case continues, Netflix reserved the right to argue that the VPPA does not cover streaming and therefore Netflix is not a VTSP for purposes of the claims against it]

Related posts:

Redbox Can be Liable Under the Video Privacy Protection Act for Failure to Purge Video Rental Records — Sterk v. Redbox

Seventh Circuit: No Private Cause of Action Under the Video Privacy Protection Act for Failure to Purge Information–Sterk v. Redbox

Court Declines to Dismiss Video Privacy Protection Act Claims against Hulu

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