Out-of-state residents may sue under a Michigan privacy law, according to one district court decision. In Lin v. Crain Communications Inc., the court held that the statute applies to nonresidents and concluded that the plaintiff had alleged an injury in fact sufficient to confer Article III standing. Practitioners may want to reconsider the wisdom of challenging a plaintiff’s Article III standing in similar complaints for statutory damages under state privacy protection laws, suggest ABA Section of Litigation leaders.
Publisher’s Sale of Personal Information Leads to Privacy Suit
The publisher moved to dismiss the lawsuit, arguing that the plaintiff lacked statutory standing because the PPPA statute does not apply to out-of-state residents. It also argued that the plaintiff had failed to allege an injury sufficient to confer Article III standing.
Court Says Conferring Standing Is Consistent with Legislative Aims
The U.S. District Court of Eastern Michigan denied the motion to dismiss. The court interpreted the PPPA broadly enough to confer statutory standing to out-of-state residents because the statute did not impose any residency requirements. Focusing on the statutory language and relevant case law, it explained that the PPPA “provides a cause of action for customers whose information is disclosed in violation of it.” A customer is defined as “a person who purchases, rents, or borrows a book or other written material.” Thus, the court determined that “the PPPA does not impose a residency requirement for customers to have protections under the statute.”
Additionally, the court noted that the legislative purpose of the statute is not only to protect customers, but also to disallow corporations operating in Michigan from violating the PPPA. It further observed that the legislature could have limited the statute to Michigan residents by including explicit language as it had done in other statutes but did not.
The court also rejected Crain’s arguments that the plaintiff had not suffered an injury in fact as required for Article III standing. In doing so, the court pointed to the plaintiff’s allegations that (1) he ascribed value to the privacy of his PRI, and he would not have purchased a subscription to Autoweek at the full price charged, or at all, had Crain informed him of its disclosure practices; (2) the disclosure of his PRI diminished the value of his magazine subscription; and (3) he received an influx of junk mail and marketing calls due to the disclosure. The court concluded those allegations were sufficient to establish an injury in fact, and in turn, Article III standing.
The Decision’s Broader Impact
The court’s determination that the PPPA’s protections are not limited to in-state residents may add to a trend among states to find standing for nonresidents under their respective state privacy protection laws. “Most jurisdictions, federal or state, find that a plaintiff has standing so long as the plaintiff has suffered the protected statutory harm and the statute creates a private right of action,” notes Alexander (Sandy) R. Bilus, Philadelphia, PA, cochair of the Section of Litigation’s Privacy & Data Security Committee. Plaintiffs’ counsel in other states with similar privacy protection acts may cite to this decision as persuasive authority to support expanding the scope of their states’ privacy protection laws.
The court’s decision on Article III standing is also generally consistent with how other courts have addressed that issue in similar circumstances. In fact, most federal courts across the nation recognize the violation of statutory privacy rights as injuries in fact, observes Adam Polk, San Francisco, CA, cochair of the Section’s Class Actions & Derivative Suits Committee. “There is no reason for practitioners to challenge Article III standing when a plaintiff alleges the illegal disclosure of PRI. Most statutes like the PPPA require no additional harm or loss,” he concludes.
R'iele J. Sims is a contributing editor for Litigation News.
Hashtags: #Privacy, #ClassAction, #ClassActionDefense, #Pretrial Practice, #Standing
- Kelso L. Anderson, “Courts Split on Whether Receipts Confer Article III Standing,” Litigation News (May 3, 2019).
- Christopher G. Binns, “A Loss of $3.76 Is Sufficient for Standing,” Litigation News (Nov. 3, 2020).
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