Halaburda v. Bauer Publ'g Co.
| Decision Date | 05 August 2013 |
| Docket Number | Case No. 12-CV-12831,Case No. 12-CV-14390,Case No. 12-CV-14221 |
| Parties | CINDY HALABURDA, individually, and on behalf of all others similarly situated, Plaintiff, v. BAUER PUBLISHING CO., LP, a Delaware partnership, Defendant. DAVID GRENKE, individually, and on behalf of all others similarly situated, Plaintiff, v. HEARST COMMUNICATIONS, INC., a Delaware Corporation, Defendant. SUSAN FOX, individually, and on behalf of all others similarly situated, Plaintiff, v. TIME, INC., a Delaware Corporation, Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
HON. GEORGE CARAM STEEH
(DOC. # 2 IN GRENKE CASE; DOC. # 2 IN FOX CASE)
Plaintiffs bring these putative class action suits alleging violations of Michigan's Video Rental Privacy Act ("VRPA"), M.C.L. § 445.1712, and common law breach of contract and, in two of the three cases, unjust enrichment, for the defendant magazine publishers' (collectively "the publishers") alleged disclosures of subscribers' personal information.1
Each of the named plaintiffs in these actions is or was a subscriber to a magazine or magazines published by the respective defendants to these actions. Plaintiffs allege that the defendants sell lists of their customers' names, home addresses, and magazine subscription choices (called "personal reading information" by plaintiffs) to companies that collect and sell that information to other entities. Plaintiffs further allege that they are never informed about this practice.
Before the court are the publishers' motions to dismiss, in which they argue that the plaintiffs have failed to establish either statutory standing under the VRPA or Article III standing. Additionally, defendants claim that plaintiffs fail to state a claim either under the VRPA or for breach of contract/unjust enrichment. The court has heard oral argument on the motions. For the reasons that follow, the court grants in part and denies in part defendants' motions to dismiss as to all three complaints.
When a district court is faced with a motion to dismiss brought on multiple grounds, it is "bound to consider the 12(b)(1) motion first, since the [alternative] challenge becomes moot if the court lacks subject matter jurisdiction." Moir v. Greater Cleveland Reg'l Transit Auth., 895 F.2d 266, 269 (6th Cir. 1990). Rule 12(b)(1) allows a party to challenge the court's subject matter jurisdiction. In deciding a motion to dismiss under Rule 12(b)(1), the court must "dismiss the cause at any stage of the proceedings in which it becomes apparent that jurisdiction is lacking." Sweeton v. Brown, 27 F.3d 1162, 1169 (6th Cir. 1994) (quoting United States v. Siviglia, 686 F.2d 832, 835 (10th Cir. 1981)). Rule 12(b)(1) motions can attack either the claim of jurisdiction "on its face," or the factual basis for jurisdiction. DLX, Inc. v. Kentucky, 381 F.3d 511, 516 (6th Cir. 2004).
In deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court must construe the complaint in favor of the plaintiff, accept the factual allegations as true, and determine whether the allegations present plausible claims. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1964-65 (2007). The pleading must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 1964-65. Although the complaint need not contain detailed factual allegations, its "factual allegations must be enough to raise a right to relief above the speculative level[.]" Ass'n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir. 2007) (citing Twombly, 127 S. Ct. at 1965). The court should first identify any conclusory allegations and bare assertions that are not entitled to an assumption of truth, then consider the factual allegations thatare entitled to a presumption of truth and determine if they plausibly suggest entitlement to relief. Ashcroft v. Iqbal, 556 U.S. 662; 129 S.Ct. 1937, 1951 (2009).
Count I in each of the three complaints is brought pursuant to Michigan's VRPA, M.C.L. § 445.1712. Plaintiff seeks to recover: (1) injunctive relief;2 (2) the greater sum of actual damages or $5,000.00; and (3) costs and reasonable attorney fees. As stated above, plaintiffs' claims stem from the defendants' alleged disclosures of subscribers' "personal reading information." Plaintiffs allege that the defendants disclose information about subscribers to "data miners,"3 and "anybody willing to pay for it," including magazine choices, addresses, and additional information about subscribers' incomes, households, etc., to third parties without the subscribers' consent. Plaintiffs state that there are numerous ways to subscribe to the magazines and state that regardless of the way that a person subscribes, the publishers never provide subscribers with any terms of service, privacy policies, or information-sharing policies. Plaintiffs contend that this practice violates subscribers' statutorily protected right to privacy in their reading choices and personal information under the VRPA.4
Mich. Comp. Laws Ann. § 445.1712. The following section of the act states exceptions to the general provision above, permitting disclosure under circumstances including "the exclusive purpose of marketing goods and services directly to the consumer." Mich. Comp. Laws Ann. § 445.1713. The act then provides that "[a] person who violates this act is guilty of a misdemeanor, § 445.1714, and then contemplates a civil cause of action "for damages to the customer identified in the record ... disclosed in violation of the act," and provides for the recovery of actual damages, including damages for emotional distress, or $5,000, whichever is greater. Mich. Comp. Laws Ann. § 445.1714.
Defendants' first argument asserts that plaintiffs have neither statutory standing nor Article III standing to bring suit under the VRPA. Defendants also argue for dismissal for failure to state a claim under the statute, citing legislative history of § 1715 in support of their argument that neither the VRPA nor its legislative record make "anyreference to magazines," but address only retail rentals. (Motion to Dismiss at 4.) Defendants reference the federal Video Privacy Protection Act, pointing out that it clearly does not address magazine subscription information, which plaintiffs do not dispute. However, defendants contend, even if the Michigan act were found to address magazines, because plaintiffs have not pleaded any "damages" under the act, they do not have standing to bring suit under it. Alternatively, defendants assert that plaintiffs' claims are not encompassed by the VRPA, for a variety of reasons. Finally, defendants assert that plaintiffs have failed to state claims for breach of contract and/or unjust enrichment. These arguments will be addressed in turn.
Defendants take the position that "the Court may rule first on whether [plaintiffs have] statutory standing under the Act without having to reach the Article III issue," citing Justice Stevens' concurrence in Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 97 n. 2 (1988) and 115. However, a reading of the Steel Co. opinion confirms that the plaintiffs' Article III standing, without which the court lacks subject matter jurisdiction, must be addressed first.
Article III standing "requires a plaintiff to show an 'injury in fact,' namely an 'actual or imminent' invasion of a 'concrete and particularized' legally protected interest." Doe v. Boland, 698 F.3d 877, 882 (6th Cir. 2012) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)).
Defendants contend that the three plaintiffs here lack Article III standing because they have alleged no concrete and particularized injury. Defendants quote the Supreme Court case of Raines v. Byrd, 521 U.S. 811, 820 n. 3 (1997): "[i]t is settled thatCongress cannot erase Article III's standing requirements by statutorily granting the right to sue to a plaintiff who would not otherwise have standing." On the other hand, the case of Warth v. Seldin, 422 U.S. 490 (1975), is often quoted for the proposition that "[t]he injury required by Article III can exist solely by virtue of statutes creating legal rights, the invasion of which creates standing." Id. at 500. Defendants contend that plaintiffs, who have alleged only technical violations of Michigan's VRPA, clearly lack standing to bring these actions in federal court, while plaintiffs take the position that an allegation of violations of their Michigan statutory rights is sufficient to confer Article III standing.
In the case of Doe v. Chao, 540 U.S. 614, 621 (2004), cited by defendants, the Supreme Court was faced with claims under the federal Privacy Act, which allows for "actual damages sustained by the individual as a result of the refusal or failure [of a federal agency to comply with the Privacy Act], but in no...
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