04-04-2025
In fight over video privacy, 1980s law still has teeth
April 4 (Reuters) - As a person of a certain age, I remember when the height of home entertainment was going to the video store to rent a movie.
The technology is obsolete, but a 1988 law protecting the privacy of videotape renters continues to spark legal fights as judges grapple with how broadly the statute applies to technology today.
The latest showdown came Thursday, when a divided 6th U.S. Circuit Court of Appeals panel nixed a proposed class action, opens new tab against Paramount Global under the Video Privacy Protection Act.
The lead plaintiff, who subscribed to Paramount's 247Sports e-newsletter about college athletics, didn't count as a 'consumer' under the law, the Cincinnati, Ohio-based court ruled. In upholding the lower court's decision to dismiss the case, the majority found the newsletter was not audio-visual content covered by the law.
The 2nd Circuit in New York and the Chicago-based 7th Circuit in near-identical cases recently reached the opposite conclusion. (Here, opens new tab and here, opens new tab.) Yet another case is pending before the D.C. Circuit, which heard oral arguments, opens new tab in February. All suggest the issue may be ripe for U.S. Supreme Court review, especially given its implications for targeted online advertising – but more on that later.
Sometimes called 'the Bork bill,' the video privacy law might sound like a relic from the days of big hair and leg warmers. It was enacted after a video store clerk gave a newspaper reporter a list of 146 movies rented by then-U.S. Supreme Court nominee Judge Robert Bork and his family. (He liked Hitchcock films.)
The law allows consumers to assert claims against any 'video tape service provider' for disclosing their personally identifiable information about specific 'audio visual materials' to third parties without express consent. Penalties are steep: up to $2,500 per violation, and successful plaintiffs can also recover legal fees.
The question before the 6th Circuit was how broadly to apply the law in today's online environment, where free video content is ubiquitous on many company websites.
Bailey Glasser partner Joshua Hammack, who represented plaintiff Michael Salazar, declined comment on the decision.
Salazar filed the would-be class action against Paramount in Nashville federal court in 2022. He alleged Paramount surreptitiously installed Meta Platform subsidiary Facebook's tracking pixel – a code that allows Facebook to collect the data of website users who also have a Facebook account – on its website. Paramount then collected data about his identity and the videos he watched and disclosed that information to Facebook without his consent, he alleged.
Meta was not a party to the case and did not respond to a request for comment.
The majority decision by Judge John Nalbandian, who was joined by Senior Judge Alice Batchelder, turned on what 'goods or services' a person must rent, purchase or subscribe to in order to qualify as a 'consumer' under the law. Are such goods or services limited to audio-visual content—or do they 'extend to any and all products or services that a store could provide?'
Here, Salazar argued that he became a subscriber (and thus covered under the video privacy law) when he signed up for its newsletter, which 'contained links to videos, directed subscribers to video content, and otherwise enticed or encouraged them to watch Paramount's videos.'
That doesn't cut it, the majority found.
'Salazar did not plausibly allege that the newsletter itself was an 'audio visual material,' ' the 6th Circuit panel held. Subscribing to it 'was not enough to render him a 'consumer'' under the law.
Paramount lead counsel David Yohai, a partner at Weil, Gotshal & Manges, said via email that the Sixth Circuit made "the correct conclusion on this statute.' A Paramount spokesperson declined comment.
Judge Rachel Bloomekatz in her dissent argued that interpretation is too narrow. 'Salazar is a consumer based on the plain meaning of 'goods or services from a video tape service provider,' " she wrote – and Paramount, which is in the business of delivering video content, counts as such a provider.
Her reasoning is in line with a decision last fall by the 2nd Circuit in a case in which Salazar was also the lead plaintiff. In a suit against the National Basketball Association, he made the now-familiar argument that when he signed up for a free newsletter and later watched videos on the NBA's website, the league improperly allowed Facebook to harvest his personal data.
The 2nd Circuit let his proposed class action proceed, concluding he was indeed a consumer under the video privacy law.
In a petition for review, opens new tab now pending before the U.S. Supreme Court, the NBA argues the appeals court got it wrong -- and that the decision, if it stands, jeopardizes widespread data-use practices by websites that offer audiovisual content.
By extending the video privacy law to cover 'anyone who purchases anything from any business that puts out any video content, even free content on a public website,' NBA lawyers from Skadden Arps wrote, the decision 'endangers the web economy.'
