U.S. Seventh Circuit - The FindLaw 7th Circuit Court of Appeals Opinion Summaries Blog

Redbox Isn't Violating 1980s Video-Rental Privacy Law: 7th Cir.

Believe it or not, federal law prohibits disclosing a person's videotape rental records. Congress passed the Video Privacy Protection Act after Judge Robert Bork's video rental history was leaked during his failed nomination to the U.S. Supreme Court in 1987. (The author of a widely read article on "The Bork Tapes," Michael Dolan, said that the leak was a response to Bork's assertions that only statutes, and not the Constitution, could protect the right to privacy.)

Kevin Sterk and Jiah Jung live in the year 2014. They're users of the DVD-rental service Redbox, and they sued under the video rental history law, claiming that Redbox violated the law by forwarding customer information to a company called Stream.

Please Interpret This Very Narrowly or We'll Lose

Stream contracts with Redbox to provide some "back office" functions, like customer service and technical support. The Seventh Circuit affirmed the district court's denial of the lawsuit because of one of the law's exceptions: The law doesn't apply when customer information is disclosed "incident to the ordinary course of business." This term is defined exclusively to encompass only debt collection, transfer of ownership of the business, order fulfillment, and request processing.

Sterk and Jung's arguments rested on flimsy statutory interpretation, including claiming that "request processing" means only those requests for movies made by customers (and thus facilitating a customer support request doesn't qualify). The court said there was nothing in the history or text of the legislation to read such a narrow definition into the words, nor did "order fulfillment" only mean the dispensing of the DVD -- because automated video kiosks didn't exist when Congress drafted the law in 1988. "[W]hen the VPPA was enacted, we can safely assume that Congress contemplated customer service as part and parcel of the ordinary rental experience," the court said.

The plaintiffs also claimed unlawful disclosure happened when Stream gave backup tapes of its server data to Iron Mountain for off-site storage -- but provided no evidence that it happened beyond a mere conclusion located in a footnote found in their opposition to the summary judgment motion.

They Still Make DVDs?

Notably, the court had no problem agreeing that Redbox was a "video tape service provider" within the meaning of the statute, which makes sense, as it's still providing a physical product just like the bygone video rental stores of old. That may or may not be the case with Netflix, which has found itself being sued under the VPAA. Netflix and other streaming services were so worried about the law that they lobbied Congress to amend it in 2011. Now, customers can opt in to sharing their data -- crucial for Netflix's attempt to get customers to link their Facebook accounts to their Netflix accounts.

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