Law School Case Brief
Sterk v. Redbox Automated Retail, LLC - 770 F.3d 618 (7th Cir. 2014)
The Video Privacy Protection Act provides several exceptions to the disclosure prohibition, allowing disclosure of a consumer's video rental history when the consumer has provided written consent, when the party seeking disclosure has obtained a warrant or court order, or when the disclosure is incident to the video tape service provider's ordinary course of business. 18 U.S.C.S. § 2710(b)(2). The statute instructs that "ordinary course of business" means only debt collection activities, order fulfillment, request processing, and the transfer of ownership.
Redbox Automated Retail, LLC (Redbox) was outsourcing its customer service operations to Stream Global Services (Stream). So that Stream could perform Redbox’s customer service functions, Redbox granted Stream access to the database in which Redbox stored relevant customer information. To enable customer service representatives to perform their jons capably, Stream was training its employees on how to use the database to access the information necessary to respond to customer inquiries. Plaintiffs Kevin Sterk and Jiah Chung, who were Redbox users, filed the present lawsuit, alleging that Defendant Redbox violated the Video Privacy Protection Act (VPPA), 18 U.S.C.S. § 2710. The district court granted summary judgment in Redbox's favor, concluding that Redbox's actions fell within the statutory exception for disclosures in the ordinary course of business—more precisely, disclosures incident to "request processing." Plaintiffs challenged the district court’s grant of summary judgment in favor of Redbox.
By disclosing its customer database to a customer service provider, did Redbox Automated Retail, LLC violate the Video Privacy Protection Act, 18 U.S.C.S. § 2710?
The Court of Appeals for the Seventh Circuit held that Redbox did not violate the Video Privacy Protection Act, and thus, plaintiffs’ VPPA disclosure claim failed. According to the Court, Redbox’s actions fell within the statutory exception for disclosures in the ordinary course of business—more precisely, disclosures incident to "request processing," and there was nothing objectionable about the rental company's wholesale disclosure of information pertaining to all customers, for use in the event of a customer's call. As such, the Court affirmed the district court’s grant of summary judgment in favor of Redbox.
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