With Cyber Monday 2024 in the rear-view mirror, we are looking at one of the hot topics in data-privacy and cybersecurity litigation: the Video Privacy Protection Act.
Recent years have seen an uptick in lawsuits asserting violations of the VPPA by companies that host video content on websites or mobile apps and then share information about the individuals who watched those videos with other businesses.
While the companies have experienced some success in getting VPPA claims dismissed, the Second Circuit recently reinstated a putative class action asserting VPPA violations against the NBA that may breathe new life into VPPA claims. Salazar v. National Basketball Association, No. 23-1147 (2d Cir. Oct. 15, 2024). But is the worry about VPPA class actions overblown?
What is the VPPA? The VPPA was passed in 1988. It makes it unlawful for a “video tape service provider” to “knowingly disclose[ ] . . . personally identifying information concerning any consumer of such provider.” It defines a “video tape service provider” as “a person engaged in the business . . . of rental, sale, or delivery of prerecorded video cassette tapes or similar audio visual materials.” And it defines a “consumer” as “any renter, purchaser, or subscriber of goods or services from a video tape service provider.”
How have companies gotten these VPPA suits dismissed in the past? Some defendants have had success arguing that they do not fit within the definition of “video tape service provider.” For example, in Cantu v. Tapestry, Inc., the Southern District of California dismissed a VPPA suit against the owner of Coach.com, the online retail website, because the company’s hosting and producing video content for its retail website did not “rise to the level of engaging in the business of the ‘rental, sale, or delivery of prerecorded . . . audio visual materials’ as required by the VPPA.” 697 F. Supp. 3d 989 (S.D. Cal. Oct. 3, 2023). In reaching this conclusion, the court cited cases holding that the defendant’s involvement with audiovisual services must “connote[ ] a particular field of endeavor” or a “focus of the defendant’s work.”
What about the NBA suit? The primary issue in the NBA suit was whether the plaintiff fit the VPPA’s definition of a “consumer,” specifically whether the plaintiff was a “subscriber of goods or services from a video tape service provider.” The plaintiff had signed up for a free online newsletter from the NBA, which did not include audiovisual content, but then he went to the NBA’s website and watched videos there. The court held that the “goods or services” subscribed to for purposes of the definition of “consumer” did not need to be audiovisual material, so the plaintiff’s subscribing to the NBA newsletter sufficed. The court further reasoned that the term “video tape service provider” was broad, such that “audiovisual content need only be part of the provider’s book of business,” so it covered the NBA.
Why might all the hullaballoo about potential VPPA class actions be overblown? Because a VPPA consumer must be a “renter, purchaser, or subscriber,” there will often be some type of agreement or enrollment that served as the basis for a VPPA claim. That agreement or enrollment could require an agreement to terms and conditions that include an arbitration clause and class-action waiver, as many website’s terms and conditions already do. Courts would then require VPPA claims related to such an agreement to be arbitrated. See, e.g., Kasper v. NFHS Network, LLC, Case No. 24-cv-4682-JD (N.D. Cal. Nov. 20, 2024). And unless the arbitration clause says otherwise, there is a presumption that an arbitration will be on an individual basis — not a class action. See Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010).
TAKEAWAY: While the full ramification of Salazar v. National Basketball Association remains to be seen, there are steps that companies can take to potentially limit their exposure to VPPA claims.