Sterk v. Redbox Automated Retail, LLC

770 F.3d 618 (7th Cir. 2014)

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Nature of the Case

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Facts

Redbox operates automated self-service kiosks where customers rent DVDs and Blu-ray discs with a debit or credit card for a daily rental fee. D out-sources certain 'back office' functions to various service providers, including Stream. Stream provides customer service to D users when, for example, a customer encounters technical problems at a kiosk and requires help from a live person. D has granted Stream access to the database in which D stores relevant customer information. Ps object both to Stream's ability to access customer rental histories when prompted by a customer call and Stream's use of customer records during the course of employee training exercises. Ps claim that this disclosure violates the Video Privacy Protection Act (VPPA). The VPPA prohibits 'video tape service providers' like D from 'disclosing, to any person, personally identifiable information concerning any consumer of such provider.' The VPPA also provides several exceptions 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. D moved to dismiss arguing that the VPPA does not provide a private right of action for mere 'information retention.' The district court denied the motion but certified for interlocutory appeal the issue of whether the VPPA's private right of action extended to improper retention claims. This court held that the VPPA does not provide a damages remedy for a retention claim, and so Ps could only seek injunctive relief from D for its alleged failure to timely destroy Ps’ information. Discovery regarding the disclosure claims proceeded. D produced over a thousand pages of documents in response to forty-eight document requests; responded to forty-two interrogatories; and produced witnesses for three depositions, including two Rule 30(b)(6) witnesses. D produced information concerning every vendor to which D discloses customer information-including the precise information shared with each. Ps successfully obtained third-party discovery from Stream. D moved for summary judgment. Ps objected to D's summary judgment motion as premature, arguing (pursuant to Federal Rule of Civil Procedure 56(d)) that they needed more discovery in order to adequately respond to D's arguments. Ps pointed to just two issues concerning which they desired more discovery: (1) information regarding the 'technical' method by which 'Stream queries D's database,' and (2) information relating to whether Stream accesses all, or just a portion, of D's customer records. The court granted summary judgment in D's favor. It held that the disclosure falls within the VPPA's 'ordinary course of business' exception. Ps appealed.