7th Circuit Opinion Finds that Users Cannot Obtain Damages in Provision of VPPA

Published On March 20, 2012 | By ZwillGen | General, Litigation
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The Seventh Circuit recently found that consumers cannot recover damages under the Video Privacy Protection Act, 18 U.S.C. § 2710 (“VPPA”), for a video provider’s failure to “destroy personally identifiable information as soon as practicable.” 18 U.S.C. § 2710(e).  Redbox, a company that offers movie rentals to consumers through automated self-service kiosks, was sued last year for wrongful retention of video rental records.  Specifically, the plaintiffs alleged that Redbox wrongfully maintained customers’ credit card billing information, along with their “video programming viewing histories,” for longer than necessary in violation of VPPA.  In the District Court, Redbox argued that the VPPA only provides for a private action for wrongful disclosure rather than for “wrongful retention.”   The District Court rejected this argument, but allowed Redbox to appeal.

In its opinion on interlocutory appeal, the Seventh Circuit found that “[u]nlawful disclosure is the only misconduct listed in the statute for which an award of damages is an appropriate remedy.”  Specifically, the Court opined that it would be nonsensical to award damages merely for a failure to destroy information, as consumers cannot have suffered any resulting injury, unless the information had been disclosed.  Further, the Court noted that subsection (c) of the Act, which creates a consumer’s right of action, appears in the statute after the section prohibiting disclosure of information but two sections before the document destruction section, thus “the more plausible interpretation is that it is limited to enforcing the prohibition of disclosure.”  Especially, as the application of subsection (c) to the prohibitions in sections (d) and (e) would create a damages remedy for subsection (d), which prohibits “receiv[ing] information in evidence in an official proceeding,” and would make a judge who admitted evidence in violation liable in damages, thereby calling into question absolute immunity for acts taken in a judge’s judicial capacity.  Thus, the Seventh Circuit concluded, and we believe rightly so, that unless the storage resulted in eventual disclosure, the VPPA does not permit consumers to sue for damages merely because a video provider has kept records containing personal information for longer than necessary.