Boelter v. Advance Magazine Publishers Inc.

• Decision Date: 28 September 2016
• Docket Number: 15 Civ. 5671 (NRB)
• Citation: 210 F.Supp.3d 579
• Parties: Suzanne BOELTER, individually and on behalf of all others similarly situated, Plaintiff, v. ADVANCE MAGAZINE PUBLISHERS INC., d/b/a Condé Nast, Defendant.
• Court: U.S. District Court — Southern District of New York

210 F.Supp.3d 579

Suzanne BOELTER, individually and on behalf of all others similarly situated, Plaintiff,

v.ADVANCE MAGAZINE PUBLISHERS INC., d/b/a Condé Nast, Defendant.

15 Civ. 5671 (NRB)

United States District Court, S.D. New York.

Signed September 28, 2016

Philip Lawrence Fraietta, Scott A. Bursor, Joseph Ignatius Marchese, Bursor & Fisher, P.A., New York, NY, for Plaintiff.

Sandra Denise Hauser, Dentons U.S. LLP, New York, NY, Kristen C. Rodriguez, Natalie J. Spears, Dentons U.S. LLP, Chicago, IL, for Defendant.

MEMORANDUM AND ORDER

NAOMI REICE BUCHWALD, UNITED STATES DISTRICT JUDGE

PlaintiffSuzanne Boelter brings this action against defendantAdvance Magazine Publishers Inc., d/b/a Condé Nast("Condé Nast"), alleging that Condé Nast disclosed her subscription information in violation of the Michigan Preservation of Personal Privacy Act, Mich. Comp. Laws§ 445.1711 et seq .She also brings a claim for unjust enrichment under Michigan law.Condé Nast moved to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).For the reasons stated herein, Condé Nast's motion is denied.

BACKGROUND¹

I.Factual Background

Condé Nast, based in New York, is an international media company that publishes some of the most widely circulated magazines in the United States.Compl.¶¶ 1, 8.According to Boelter, the company maintains a digital database comprised of subscribers' "Personal Reading Information"("PRI"), which includes "full names, titles of magazines subscribed to, and home addresses."Id .¶¶ 2, 39.Condé Nast discloses this PRI to data mining companies, who supplement it with additional information about subscribers, including "gender, purchasing habits, political affiliation, religious practice, [and] charitable donations."Id .¶ 39.It also sells mailing lists, which include subscribers' PRI and can include the other information obtained from data miners, to various third-party entities.Id .¶¶ 2, 40.Companies can thus purchase lists from Condé Nast identifying its subscribers by income, political affiliation, religious practice, and charitable donations.Id .¶ 41.According to Boelter, regardless of subscription method, Condé Nast never requires an individual to read or agree to any terms of service, privacy policy, or information-sharing policy, and fails to obtain any form of consent from—or provide effective notice to—its subscribers before disclosing their PRI.Id .¶¶ 42-43.

Boelter, a citizen of Michigan, subscribes to Condé Nast magazines Bon Appétit and Self .Id .¶ 7.Condé Nast has disclosed Boelter's PRI in at least two ways: first, by disclosing mailing lists containing her PRI to data miners, who supplemented the PRI with other information from their own databases before sending the mailing lists back to Condé Nast; and second, by selling the supplemented mailing lists containing her PRI to "consumer-facing companies, direct-mail advertisers, and organizations soliciting monetary contributions, volunteer work, and votes."Id .¶¶ 58-59.

Boelter paid for her subscriptions and claims that because she ascribed value to the privacy of her PRI, its sale and disclosure caused her to receive less value than she had paid for in her subscription costs.Had she been adequately informed of Condé Nast's disclosure practices, she would not have been willing to purchase her Bon Appétit and Self subscriptions at the full price charged, if at all.Id .¶¶ 69-71.Moreover, Condé Nast's disclosure of Boelter's PRI to third parties caused an influx of junk mail and marketing calls to her cell phone.Id .¶¶ 7, 72.

II.Procedural Background

On July 20, 2015, Boelter commenced this putative class action on behalf of Michigan residents who had their PRI disclosed to third parties by Condé Nast without their consent.Condé Nast has moved to dismiss pursuant to Federal Rules 12(b)(1) and 12(b)(6).²

DISCUSSION

I.Motion to Dismiss—Legal Standard

To survive a motion to dismiss for lack of subject matter jurisdiction based on standing pursuant to Rule 12(b)(1), the plaintiff"must allege facts that affirmatively and plausibly suggest that it has standing to sue."Amidax Trading Grp. V. S.W.I.F.T. SCRL , 671 F.3d 140, 145(2d Cir.2011).Where a defendant places jurisdictional facts in dispute, the court may properly consider "evidence relevant to the jurisdictional question [that] is before the court."Robinson v. Gov't of Malaysia , 269 F.3d 133, 140(2d Cir2001).However, if a defendant challenges only the legal sufficiency of the jurisdictional allegations, "the court must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiff."Id . (internal quotation marks omitted).

Similarly, a court ruling on a motion to dismiss pursuant to Rule 12(b)(6) must accept as true all factual allegations in the complaint and draw all reasonable inferences in the plaintiff's favor.Harris v. Mills , 572 F.3d 66, 71(2d Cir.2009)."When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief."Ashcroft v. Iqbal , 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868(2009).A claim only has "facial plausibility" when the plaintiff pleads "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."Id . at 678, 129 S.Ct. 1937.

In considering a Rule 12(b)(6) motion, we do not look beyond the "facts stated on the face of the complaint, documents appended to the complaint or incorporated in the complaint by reference, and matters of which judicial notice may be taken."Goel v. Bunge, Ltd. , 820 F.3d 554, 559(2d Cir.2016)(internal quotation marks and ellipses omitted).We may also consider a document not expressly incorporated by reference in the complaint "where the complaint relies heavily upon its terms and effect."Chambers v. Time Warner, Inc. , 282 F.3d 147, 153(2d Cir.2002)(internal quotation marks omitted).

II.The Michigan PPPA

Michigan's Preservation of Personal Privacy Act(or the "PPPA") was enacted in 1988, shortly after the enactment of the federal Video Privacy Protection Act("VPPA"), 18 U.S.C. § 2710.As the First Circuit has explained,

Congress enacted the VPPA in response to a profile of then-Supreme Court nominee Judge Robert H. Bork that was published by a Washington, D.C., newspaper during his confirmation hearings.S. Rep. No. 100–599, at 5(1988), reprinted in1988 U.S.C.C.A.N. 4342–1.The profile contained a list of 146 films that Judge Bork and his family had rented from a video store.Id .Members of Congress denounced the disclosure as repugnant to the right of privacy.Id . at 5–8.Congress then passed the VPPA "[t]o preserve personal privacy with respect to the rental, purchase or delivery of video tapes or similar audio visual materials."Id . at 1.

To effectuate this purpose, Congress in the VPPA created a civil remedy against a "video tape service provider" for "knowingly disclos [ing], to any person, personally identifiable information concerning any consumer of such provider."18 U.S.C. § 2710(b)(1).

Yershov v. Gannett Satellite Info. Network, Inc. , 820 F.3d 482, 485(1st Cir.2016)(alterations inYershov ).

Less than two months after the VPPA was signed into law, Michigan enacted the PPPA.³The bill was enacted to "preserve personal privacy with respect to the purchase, rental, or borrowing" of written materials, sound recordings, and video recordings.1988 Mich. Pub. Acts No. 378at p. 1559.Although drafted to reach a broader range of materials than the VPPA, the PPPA pursues a similar objective.According to an accompanying bill analysis, the PPPA was meant to address concerns raised by many who viewed the disclosure of Judge Bork's video rentals as an "unwarranted invasion of privacy"; noting the recent passage of the VPPA, the analysis states that "[m]any in Michigan also believe that one's choice in videos, records, and books is nobody's business but one's own, and suggest the enactment of a statute to explicitly protect a consumer's privacy in buying and borrowing such items."House Legislative Analysis, Privacy: Sales, Rentals of Videos, Etc., H.B. 5331, (Jan. 20, 1989)("House Analysis").⁴

With certain exceptions, the PPPA, prior to its recent amendment, prohibited persons "engaged in the business of selling at retail, renting, or lending books or other written materials, sound recordings, or video recordings" from disclosing

to any person, other than the customer, a record or information concerning the purchase, lease, rental, or borrowing of those materials by a customer that indicates the identity of the customer.

PPPA § 2.Such a "record or information" could be disclosed only in circumstances listed in Section Three of the Act.Prior to the amendment, those exceptions included disclosure "[w]ith the written permission of the customer"; "[p]ursuant to a court order" or "a search warrant"; "[t]o the extent reasonably necessary to collect payment for the materials"; and for the "exclusive purpose of marketing goods and services directly to the consumer," provided that the disclosing party informed "the customer by written notice that the customer may remove his or her name at any time by written notice to the person disclosing the information."Id .§ 3.

The PPPA was initially passed in 1988 as a criminal statute without any private right of action.See1988 Mich. Pub. ActsNo. 378, § 4, at p. 1560.("A person who violates this act is guilty of a misdemeanor.").It was amended in 1989 to add Section Five, which provides for a civil cause of action.1989 Mich. Pub. ActsNo. 206, § 5, at p. 1352.Prior to the 2016amendment, a customer "identified in a record or other information disclosed in violation" of the PPPA could sue to recover "[a]ctual damages, including damages for emotional distress, or $5,000, whichever is greater."PPPA § 5.

While Condé Nast's motion to dismiss...