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Coulter-Owens v. Rodale, Inc.

United States District Court, E.D. Michigan, Southern Division

February 11, 2015

ROSE COULTER-OWENS, individually, and on behalf of all others similarly situated. Plaintiff,
v.
RODALE, INC., a Pennsylvania corporation. Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS (Doc. # 14)

VICTORIA A. ROBERTS, District Judge.

I. INTRODUCTION

Plaintiff Rose Coulter-Owens ("Coulter-Owens") filed a class action complaint against Defendant Rodale ("Rodale") alleging that it sold the personal reading information of Michigan consumers who subscribed to Rodale publications, in violation of Michigan's Video Rental Privacy Act ("VRPA"). Rodale denies all allegations and moves to dismiss Coulter-Owens' Complaint.

The Court GRANTS Rodale's Motion to Dismiss Coulter-Owen's Breach of Contract Claim; but DENIES the motion in all other respects.

II. BACKGROUND

Rodale is a magazine publishing company with various publications. Coulter-Owens is a Michigan resident who subscribes to Rodale's Prevention magazine. Coulter-Owens says Rodale sold personal reading information - information that identifies the subscriber's name, address, demographics, and reading subscriptions. Rodale allegedly sold this information to "data mining" companies - companies that trade, collect, and sell massive databases of consumer information to third parties, such as direct-mail advertisers and organizations. As a result, Coulter-Owens says she receives junk mail and unwanted phone solicitations for money or services. These calls and unwanted mailings have caused Coulter-Owens emotional distress, annoyance, anxiety, and fear that her personal information will fall into the hands of thieves and scam artists.

Coulter-Owens filed a class action complaint on behalf of "[a]ll Michigan residents who had their personal reading information disclosed to third parties by Rodale without consent." (Doc. # 1 at 17). The complaint states three causes of action: (1) violation of M.C.L. § 445.1712, the Video Rental Privacy Act ("VRPA"); (2) breach of contract; and (3) unjust enrichment. In its motion to dismiss, Rodale says Coulter-Owens complaint should be dismissed because Coulter-Owens: (1) lacks Article III standing to assert these claims; (2) lacks statutory standing to assert these claims; (3) fails to identify the contract that entitles her to relief, or any injury that she allegedly suffered as a result of Rodale's breach of contract; and (4) fails to demonstrate a loss or that she did not receive the benefit of her bargain.

III. STANDARD OF REVIEW

F.R.C.P. 12(b)(1) allows a defendant to challenge the court's subject-matter jurisdiction. The burden is on the plaintiff to prove the court has jurisdiction. Moir v. Greater Cleveland Reg'l Transit Auth., 895 F.2d 266, 269 (6th Cir. 1990). If at any time during the course of the proceeding the court determines it lacks subject matter jurisdiction it must dismiss the action. Sweeton v. Brown, 27 F.3d 1162, 1169 (6th Cir. 1994).

A defendant can challenge the subject matter jurisdiction of a court by either a facial attack or a factual attack. Cartwright v. Garner, 751 F.3d 752, 759 (6th Cir. 2014). A facial attack - a challenge to the sufficiency of the pleading itself - goes to the question of whether the plaintiff has alleged a basis for subject matter jurisdiction. Id. The court takes the allegations of the complaint as true for purposes of Rule 12(b)(1) analysis. Id. On the other hand, a factual attack challenges the factual existence of subject matter jurisdiction. Id. Facing a factual attack, a court may view evidence outside of the pleadings as it considers its authority to hear the case. Id. at 560.

F.R.C.P. 12(b)(6) allows a court to dismiss a complaint for failure to state a claim upon which relief can be granted. A court must construe the complaint "in the light most favorable to the plaintiff, accept all the factual allegations as true, and determine whether the plaintiff can prove a set of facts in support of its claims that would entitle it to relief." Albrecht v. Treon, 617 F.3d 890, 893 (6th Cir. 2010). When "determining whether to grant a Rule 12(b)(6) motion, the court primarily considers the allegations in the complaint, although matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint may also be taken into account." Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir.2001).

In general, a complaint requires "a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the... claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). However, as a result of Twombly, a complaint must "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint is plausible if "the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Magna Mirrors of Am., Inc. v. 3M Co., No. 07-10688, 2013 WL 625721, at *5 (E.D. Mich. Feb. 20, 2013) ( quoting, Ashcroft, 556 U.S. at 678).

IV. DISCUSSION

Under the VRPA "a person, or an employee or agent of the person, engaged in the business of selling at retail, renting, or lending books or other written materials, sound recordings, or video recordings shall not disclose to any person, other than the customer, a record or information concerning the purchase, lease, rental, or borrowing of those materials by a customer that indicates the identity of the customer." Mich. Comp. Laws § 445.1712. A violation of the act constitutes a misdemeanor. Mich. Comp. Laws § 445.1714. The act provides a civil cause of action for victims and the victim may recover "[a]ctual damages, including damages for emotional distress, or $5, 000.00, whichever is greater." Mich. Comp. Laws § 445.1715. The Eastern District of Michigan noted, "a close reading of the VRPA reveals that it contains absolutely no language to require that a claimant suffer any actual injury apart from a violation of the statute." Halaburda v. Bauer Pub. Co., LP, No. 12-CV-12831, 2013 WL 4012827, at *4 (E.D. Mich. Aug. 6, 2013). A person can avoid liability by showing ...


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