Class Action Lawsuit Continues Against Blockbuster For Making Video Rental Information Available to Facebook Users

On April 15, 2009, a federal district court issued a decision that keeps alive a woman’s suit "against Blockbuster and the way it offers information to the social networking site Facebook."  This was reported in the Dallas Business Journal.  In the ruling (.pdf), the court denied Blockbuster’s motion to compel arbitration by holding that an arbitration clause in the "Terms and Conditions" of Blockbuster Online was unenforceable. 

The case is being brought as a class action under the Video Privacy Protection Act, 18 U.S.C. s. 2710, which was enacted after a newspaper published a list of 146 video tapes rented by the family of Supreme Court judge nominee Robert Bork.  According to the court’s opinion, Blockbuster entered into an agreement with Facebook which caused the movie rental choices of Blockbuster Online’s customers to be sent to Facebook, which would then broadcast those choices to the customer’s Facebook friends.  Plaintiffs claimed this violates that Video Privacy Protection Act, which prohibits a videotape service provider from knowingly disclosing personally identifiable information concerning any customer of the provider unless the customer gives informed, written consent at the time the disclosure was sought (the Act provides for certain other exceptions not applicable to the case).  The Act provides for liquidated damages of $2,500.00 for each violation. 

According to the Plaintiffs’ complaint, when a Blockbuster Online customer rented a movie or placed a movie into their queue, a notification would pop up in the bottom right hand corner of the screen informing the customer that the information would be sent to the user’s Facebook friends.  The customers were allegedly given an opportunity to prevent friends from seeing the information by marking an "x no thanks box," but if they did not respond quickly enough, the pop up went away and a "yes" was sent to Facebook.  The customer’s selection was then placed in the customer’s news feed on their Facebook profile and in their friends’ news feeds, along with a picture of the individual and a Blockbuster ad.  The complaint also alleges that the summary is sent to a user’s Facebook profile even before the user has a chance to decline the distribution of his/her personal information (unless the user has marked a privacy feature telling Blockbuster never to send summaries).

Blockbuster has appealed the court’s decision to the U.S. Court of Appeals for the Fifth Circuit.  The issue of whether the case is subject to arbitration is a narrow one that has little, if anything, to do with the actual merits.  What will be more interesting is to see how the case plays out if the Fifth Circuit affirms and the case moves forward in the district court.






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