Scofield v. Telecable of Overland Park, Inc.

• Decision Date: 26 August 1992
• Docket Number: Nos. 91-3014,s. 91-3014
• Citation: 973 F.2d 874
• Parties: Reid SCOFIELD, Plaintiff-Appellant, Cross-Appellee, v. TELECABLE OF OVERLAND PARK, INC., Defendant-Appellee, Cross-Appellant, National Cable Television Association, Inc.; G. Ray Warner, Professor, Amici Curiae. Debbie D. ANDERSON, Plaintiff-Appellant, Cross-Appellee, v. TELECABLE OF OVERLAND PARK, INC., Defendant-Appellee, Cross-Appellant, National Cable Television Association, Inc.; G. Ray Warner, Professor, Amici Curiae. through 91-3017.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 874

973 F.2d 874

Reid SCOFIELD, Plaintiff-Appellant, Cross-Appellee, v. TELECABLE OF OVERLAND PARK, INC., Defendant-Appellee, Cross-Appellant,

National Cable Television Association, Inc.; G. Ray Warner,

Professor, Amici Curiae.

Debbie D. ANDERSON, Plaintiff-Appellant, Cross-Appellee, v. TELECABLE OF OVERLAND PARK, INC., Defendant-Appellee, Cross-Appellant,

National Cable Television Association, Inc.; G. Ray Warner,

Professor, Amici Curiae.

Nos. 91-3014 through 91-3017.

United States Court of Appeals Tenth Circuit.

Aug. 26, 1992.

As Corrected Sept. 4, 1992.

Steven D. Treaster, Lenexa, Kan., for plaintiffs-appellants, cross-appellees.

Frances J. Chetwynd of Cole, Raywid & Braverman, Washington, D.C. (Paul Glist and Lynn S. Friedman, Cole, Raywid & Braverman, Washington, D.C., R. Kent Sullivan and James W. Howard, Morrison, Hecker, Curtis, Kuder & Parrish, Overland Park, Kan., with her on the briefs), for defendant-appellee, cross-appellant.

Ronald L. Plesser, Emilio W. Cividanes, Mary E. Brobson, Piper & Marbury, Washington, D.C., and Brenda L. Fox and Loretta P. Polk, National Cable Television Ass'n, Inc., Washington, D.C., on the brief for amicus curiae, National Cable Television Ass'n, Inc.

G. Ray Warner, Associate Professor of Law, University of Missouri-Kansas City, Kansas City, Mo., on the brief for amicus curiae, G. Ray Warner.

Before ANDERSON, TACHA, and BALDOCK, Circuit Judges.

STEPHEN H. ANDERSON, Circuit Judge.

In this appeal, we are asked to interpret the subscriber privacy notice provisions and the remedial provisions of section 631 of the Cable Communications Policy Act of 1984 (the "Act"), 47 U.S.C. § 551 ("section 551"). TeleCable of Overland Park, Inc. ("TeleCable") and the plaintiffs below, Reid Scofield and Debbie D. Anderson ("plaintiffs"), appeal from a district court order granting in part and denying in part the parties' cross-motions for summary judgment. See Scofield v. TeleCable of Overland Park, Inc., 751 F.Supp. 1499 (D.Kan.1990) ("Scofield "). The principal questions before us are whether two forms of subscriber privacy notices mailed by TeleCable in 1988 and 1989 violated the section 551(a) notice requirements, see 47 U.S.C. § 551(a)(1)(A)-(E), and if so, whether the district court properly awarded each plaintiff $1000 in liquidated damages for each violation, see 47 U.S.C. § 551(f)(2)(A). We conclude that both notices, taken as a whole, satisfied the section 551(a) notice requirements. Accordingly, we do not reach the issue of damages, and we reverse the district court's judgment.

I.

In their complaints, plaintiffs challenge the adequacy of two different forms of subscriber privacy notices (or "SPNs") that

                TeleCable sent them as required by section 551(a) of the Act. 1  One form, the "pre-1989 SPN" received by plaintiffs in 1988, was issued by TeleCable from 1985 to 1988.   See Appendix A to this opinion.   A second revised form, the "1989 SPN," was issued by TeleCable and received by plaintiffs in 1989.   See Appendix B to this opinion.   Plaintiffs concede that TeleCable's alleged faulty notices have not caused them any actual harm.   Nor would the full and complete disclosure demanded by plaintiffs reveal any practice that violates law or intrudes upon the plaintiffs' substantive privacy interests.   Rather, plaintiffs look to the alleged violation of the notice provisions itself as the source of their injury--an injury that each seeks to remedy with a liquidated damages award of $73,000, the amount to which they claim the statute entitles them
                

A. STATUTORY BACKGROUND

In 1984, Congress enacted the Cable Act to establish national policy and guidelines for the cable television industry. Section 551 of this Act establishes a self-contained and privately enforceable scheme for the protection of cable subscriber privacy. The section was included in the Act in response to Congress' observation that: "Cable systems, particularly those with a 'two-way' capability, have an enormous capacity to collect and store personally identifiable information about each cable subscriber." H.R.Rep. No. 934, 98th Cong., 2d Sess. 29 (1984) U.S.Code Cong. & Admin.News 1984, pp. 4655, 4666. "Subscriber records from interactive systems," Congress noted, "can reveal details about bank transactions, shopping habits, political contributions, viewing habits and other significant personal decisions." Id.

Consequently, Section 551 regulates four types of cable company practices involving "personally identifiable information." ² Most importantly, it limits the cable company's ability to use its system to "peer in" on the cable viewer and collect personally identifiable information such as the subscriber's viewing habits or the nature of transactions made by the subscriber over the cable system, and it limits the types of third-party disclosure that can be made of information the cable company has collected. See 47 U.S.C. § 551(b), (c). Section 551 also requires that cable operators provide subscribers access to personally identifiable information collected and maintained by them, see 47 U.S.C. § 551(d), and it mandates that operators destroy personally identifiable information that is no longer necessary for the purpose for which it was collected, see 47 U.S.C. § 551(e).

In addition, section 551(a) establishes a set of subscriber notice requirements designed to inform subscribers of (1) the operator's information practices that affect subscriber privacy, (2) the subscriber's rights to limit the collection and disclosure of information, (3) the operator's legal duties, and (4) the subscriber's right to enforce those duties. These requirements do not themselves create a class of protected privacy interests. That is, subscribers have no privacy interest in receiving a notice itself. Nor can one infer from the failure to provide a privacy notice that an operator's practices in any way intrude upon subscriber privacy. Instead, the notice requirements provide "procedural safeguards to consumers for the protection of their privacy interests." H.R.Rep. No. 934, 98th Cong., 2d Sess. 77 (1984) U.S.Code Cong. & Admin.News 1974, pp. 4655, 4714.

B. TELECABLE'S INFORMATION PRACTICES

1. Collection of Personally Identifiable Information.

It is undisputed that TeleCable's system is a non-interactive "one-way" system. As opposed to "two-way" systems, TeleCable's system is capable only of transmitting television signals into subscriber homes. Subscribers cannot send messages over the system. TeleCable cannot receive or collect signals from subscribers or monitor how often a subscriber tunes into the system. Therefore, TeleCable cannot "use the cable system to collect personally identifiable information" concerning its subscribers, and the limits found in section 551(b) on the collection of personally identifiable information are inapposite. ³ See 47 U.S.C. § 551(b). Further, TeleCable is not capable of disclosing "the extent of viewing or other use by the subscriber of a cable service or other service" or "the nature of any transaction made by the subscriber over the cable system of the cable operator," as prohibited by section 551(c). See 47 U.S.C. § 551(c)(2)(C)(ii)(I), (II).

The only information TeleCable collects is information that the subscriber has furnished or that TeleCable maintains in the ordinary course of business. This collected information includes a copy of the initial work order (retained for one year after installation of service); the subscriber's name, address, and telephone number; the subscriber's account number, initial level of service (premium channel and pay-per-view events) and the level of service at the time of disconnection; information relating to the location of the cable outlet, number and physical location of the cable outlets, date of installation, date of disconnection, billing dates, the aging of the subscriber's account, the billing and payment history, refund history, record of requests to TeleCable; whether the subscriber was an owner or renter (to determine whether a landlord's permission may be needed to make installations); the date bills (and inserts) were mailed; converter record; whether the subscriber was a new or "restart" customer; whether the subscriber requested removal of his name from subscriber lists for privacy reasons. TeleCable's parent corporation occasionally conducts telephone market research surveys for TeleCable to determine current subscriber satisfaction. Survey data is listed in the aggregate, but seriously dissatisfied subscribers are identified to TeleCable's local office to attempt to resolve problems with the subscriber. TeleCable does not collect and maintain any personally identifiable information concerning the age, sex, race, income or political affiliation, or any other demographic data of any subscriber.

2. Retention of Data.

TeleCable had no written policy regarding the retention and destruction of subscriber information when this action commenced. As set out in the SPNs, however, its general policy is to keep such information so long as TeleCable provides service to the subscriber and "for a longer time if necessary for our business purposes." 1989 SPN. TeleCable's principal repository of subscriber information is an electronic data base or Management Information System ("MIS"). Under the MIS, non-current information is periodically purged from the system to make additional disk space. Ledger data (billing data), for instance, is retained in a subscriber file for 60-90 days.

TeleCable also has supplementary record systems. Some data is kept on "hard copy" for different periods of time depending on TeleCable's asserted business need. The only hard copy item kept for longer than one year is the converter receipt,

                which is kept until the subscriber returns the equipment.   TeleCable also maintains historical accounting and billing data in microfiche form for reference purposes.   Special equipment is needed to make copies,

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