Split Circuit Decisions on Video Privacy Law Could Tee Up SCOTUS Review, Lawyers Say

“Now we have, over the span of just a couple-day period, a very clear circuit split, two favoring the more expansive interpretation, and only one at the moment, favoring the more limited one,” David Krueger, privacy litigator at Benesch, said.

In a 7th Circuit case, Gardner v. Me-TV , the court held a broad view of what it means to be a “consumer” and a “video tape service provider” under the VPPA (see 2503310018). The case, 22-05963, essentially rules that website visitors who simply subscribe to a free online newsletter enjoy statutory standing to bring claims under VPPA.

“The 7th Circuit's decision is an almost verbatim recitation of the 2nd Circuit's decision at Salazar,” Krueger said. The October ruling said that plaintiff Salazar was a consumer because he had subscribed to a newsletter from the NBA, even though that subscription did not give him special access to videos on the site (see 2501100009).

But the problem with the 2nd and 7th Circuit’s decisions is that “you can't read words of a statute in a vacuum,” Krueger said. “You need to look at the full sentence, the full statute, to figure out what was Congress' actual intent. I think the 6th Circuit got that 100% right.”

In the 6th Circuit case, Salazar v. Paramount Global, the judges here ruled that to be a “consumer” under the VPPA, they had to 'consume' an audio-visual material; however, one of the three judges, Rachel Bloomekatz, issued a dissent from most of the decision (see 2504030064).

“The 6th Circuit spent a lot of time talking about principles of statutory construction,” Krueger said. “To me, it was their way of essentially setting the table saying, ‘Hey, we understand the 2nd and 7th circuit …just want[s] to look at goods or services from a video a service provider. But all principles of statutory construction handed down by the Supreme Court say you can't just look at an individual word or phrase in isolation. You need to look at the overall context, and the overall context is clear that what Congress actually cared about was video purchases, rentals or subscriptions.’”

The circuit split represents that the question at the heart of the case is “not necessarily the easiest issue to dissect,” Ian Ross, partner at Sidley Austin, said.

“We all think we know what a ‘consumer’ is, but not all statutes, especially on the consumer protection side, define what a ‘consumer’ is,” he said. But “different class action attorneys have tested how far those definitions can go under the VPPA.”

This difference in interpretation stems from judge predilection, said Krueger. “A large part of it is that different judges have different default preferences when it comes to canons of statutory interpretation,” he said. “Some judges like the ‘I'm just going to look at the word and the word says what the word says’" method and will use a dictionary to help them with their decisions, even if it “doesn't necessarily lead to a reasonable interpretation of the statute.”

On the flip side, “other judges will default to: ‘Yes, we have to look at the plain language, but we also need to look at the bigger picture,’” Krueger said.

Jenn Hatcher, partner at Shook, Hardy & Bacon agreed that ideologies and backgrounds play a big part in judge interpretations. "Whether or not they're constitutionalists, whether or not they are literalists when it comes to how they interpret texts, whether they consider legislative history and the public policy decisions," all factor in, she said. Also, "judges just kind of vary on where their personal ideology is on that: whether or not legislative history should ever be considered, or whether we should always just go strictly by what's in the text."

The fact that the split is at the circuit level is also significant, Ross said. “If the district court makes a decision, that decision may be persuasive to other courts in that jurisdiction, maybe nationally, but it's not going to be precedential,” he said. “But once a certain court of appeal does so, it's precedent for that entire circuit.”

Krueger said it means litigation will likely increase. “For the immediate short term, given there is a clear circuit split, this is going to encourage plaintiffs’ attorneys to forum shop to look for clients,” he said. But this issue is “ultimately going to be poised for the Supreme Court.”

Ross agreed. “Now that we have the emergence of a clear circuit split, it makes it more likely the Supreme Court will be interested in resolving the issue,” he said. “A lot of times, when you see parties file certiorari petitions, the split isn’t clear, so they're trying to show the Supreme Court that there is an implicit circuit split. … This isn't that situation. This is a situation where the 6th Circuit has come out and expressly said, ‘We disagree with the reasoning of the 7th and 2nd Circuit, and we've come out a different way.’”

But Hatcher disagrees. The VPPA "has required revisions a few times," she said. "It wasn't written in a way that it was ironclad from the beginning....Congress at the time was attempting to think about new technology, but obviously they don't have the foresight to see where things went."

"What lawyers in the space are thinking about, is with the circuit split, is it going to be a Supreme Court issue, or is it going to be another congressional amendment," she said. In 2012 (but signed by the president in 2013), for example, the VPPA was amended in response to the rise of social networking sites.

Ross, however, said "it's more likely ... [that] you'll see courts trying to resolve this issue before you see Congress addressing it.”

But Hatcher said it's hard to say. "Privacy and the influx of privacy litigation, not just in the VPPA, but similar lawsuits that are happening nationwide, on various statutes" like wiretapping, privacy common law and other privacy claims are "certainly a hot topic, and I could see the Supreme Court wanting to weigh in," she said. "But I could also see them thinking, 'This is a statutory interpretation issue that we're going to leave to Congress.'"

Hatcher also said this might not be the privacy area that the Supreme Court will choose to rule on. "I don't know that it is a big enough issue," she said. "There's a lot of privacy litigation out there that might need cleaning up more than the VPPA." But, like Ross said, "a circuit split always provides like a basis for the court to say, 'Okay, wait, maybe we need to take a look at this,'" Hatcher said.

The NBA is already looking to the Supreme Court to review the 2nd Circuit's October decision, filing a petition for a writ of certiorari on March 14 (see 2503190047). The U.S. Court of Appeals for the D.C. Circuit also heard oral argument of a VPPA case at the end of February, and appeared to take a narrow definition of consumer (see 2502280051).

Ross also said the circuit split raises an “interesting issue,” since “not only [do you now] have a lot of district courts wondering what to do if they're not in one of these three circuits, but also, we ... are seeing a lot of these claims brought as arbitrations, and arbitrators are also trying to figure out what the law should be.”

Though consent is a defense against a VPPA claim, that has its difficulties as well, Ross said. “The way [the VPPA is] written…consent needs to be obtained on a separate and distinct form,” Ross said. “Plaintiff attorneys in these cases are arguing that what that means is that a consent obtained through a privacy policy wouldn't be sufficient, because that's not on a separate form other than the legal disclosures.”

However, the defense side of the bar would say, “a privacy policy is itself a separate legal form,” since it often appears on a different webpage from other terms and conditions of the website, Ross said. But “that issue has not been resolved, [and] certainly not [at] the circuit court level.” A recent case in the U.S. District Court for Northern California ruled that a prominent cookie banner, among other things, satisfies the Act's consent provision (see 2504040060).

“For compliance purposes right now, we need to assume that the 2nd and the 7th Circuit will be the law of the land,” Krueger said, “because you don't necessarily know where people are going to be accessing their website from.”

Hatcher agreed. "The best thing to do is continue following the law," she said. "If you have videos on your website, follow what's happening, talk to lawyers, figure out what's coming down the path and know what your website has and know what risk that might create."

The 9th Circuit also recently looked at statute definitions of the VPPA in terms of what it meant for audiovisual material to be purchased, rented or delivered (see 2503270053). In Osheske v. Silver Cinemas Acquisition Co., the interaction between the plaintiff and the movie theater was found not to fall under the VPPA. “The 9th Circuit's decision really just focused on delivery and said, ‘No, what they were delivering was essentially a classic movie experience,’” since “the purchaser didn't control the movie,” Krueger said.

Ross agreed. “The other definition that has been litigated a lot at the motion to dismiss stage is who is a ‘video tape service provider,’” as in case 23-3832 at the 9th Circuit, he said. “Again, that sounds like a pretty intuitive concept, when you think about a traditional video store, but in the online use, websites, apps [space], it's less clear who is and is not a ‘video tape service provider.’”

Hatcher also pointed this out. "It's not just one term in the VPPA that's being litigated," she said. "The circuit split is about the term consumer, but there's also litigation happening about 'what is the videotape service provider?' So it's a complicated issue that still has a lot of narrowing to go."

"Having so many vague terms makes it an even more confusing landscape," Hatcher said. "There's still a lot of unresolved questions, which might be why, ultimately, maybe Congress will take another look at it."

These cases don't mark the end of litigation under the federal act, Ross said. “VPPA litigation felt like it was kind of on the wane a year or two ago,” with “fewer filings,” he said. “But the fact that you're now seeing all this activity at the Circuit Court level, that you're seeing some clarity around what the statute means or not, means that you're probably going to continue to see new filings testing these theories and these definitions for some time to come.”