CHICAGO (CN) – Supermarket movie-rental giant Redbox will not have to face a class action that it illegally stores and distributes customers’ personal information, after the 7th Circuit dismissed a critical portion of the complaint.
Movie renters Kevin Sterk and Jiah Chung filed a class action suit against Redbox under the Video Privacy Protection Act, which is intended to prevent companies that rent movies from disclosing personally identifying information about their customers.
“Redbox maintains a veritable digital dossier on millions of consumers nationwide,” the complaint states. “These records contain not only consumers’ credit card number and billing/contact information, but also a highly detailed account of the consumer’s video programming viewing history.”
The suit claimed that Redbox failed to destroy personally identifiable information “as soon as practicable, but no later than one year from the date the information is no longer necessary for the purpose for which it was collected.”
Because Redbox does not refund charges more than 90 days old, the class claimed personally identifiable information should have been destroyed after that period,.
The complaint sought $2,500 per violation of the act, as outlined under the statute, as well as attorneys’ fees and interest.
Though interim appeals are usually “frowned upon,” Judge Richard Posner says that Redbox brought one successfully because it sought to resolve an issue that would “materially advance the ultimate termination of the litigation.”
Redbox had challenged a federal judge’s finding that a damages suit under one section of the Video Privacy Act cannot enforce another of the law’s subsections.
“The statute is not well drafted,” Posner wrote. “If [the section authorizing civil actions] appeared after all the prohibitions, the natural inference would be that any violator of any of the prohibitions could be sued for damages.”
Siding with Redbox, the three-judge panelsaid the lawsuit was impossible because the section of the act providing for a civil action to enforce its terms was placed before the “destruction of old records” section in question.
“This placement could be an accident, but we agree with the only reported appellate case to address the issue [the 6th Circuit] that it is not; that the more plausible interpretation is that it is limited to enforcing the prohibition is that it is limited to enforcing the prohibition of disclosure,” he wrote.