United States District Court, E.D. Michigan, Southern Division
CAROLYN PERLIN, individually and on behalf of all others similarly situated, Plaintiff,
TIME INC., a Delaware Corporation, Defendant.
OPINION AND ORDER DENYING DEFENDANT'S MOTION TO
DISMISS (DOC. 10)
CARAM STEEH, UNITED STATES DISTRICT JUDGE
Carolyn Perlin filed a two-count complaint against defendant
Time Inc., alleging in Count 1 that Defendant violated
Michigan's Video Rental Privacy Act (“VRPA”),
Mich. Comp. Laws § 445.1711 et seq., and
alleging in Count 2 that Defendant was unjustly enriched
through its violation of the VRPA. (See Compl., Doc.
1). Now before the Court is Defendant's Motion to
Dismiss. (Doc. 10). Defendant argues that a recent amendment
to the VRPA, eliminating the VRPA's statutory-damages
remedy, applies retroactively so as to bar Plaintiff's
claims. Defendant also argues that based on the Supreme
Court's recent decision in Spokeo, Inc. v.
Robins, 136 S.Ct. 1540 (2016), Plaintiff lacks Article
III standing. Finally, Defendant argues that Plaintiff's
unjust-enrichment count fails to state a claim upon which
relief can be granted. A hearing on Defendant's motion
was held on September 1, 2016. For the reasons explained
below, the Court denies Defendant's motion in full.
was a subscriber to People, a magazine published by
Defendant. (Compl. ¶ 30). Plaintiff claims that
Defendant “has disclosed, and continues to disclose,
[Plaintiff's] Personal Reading Information (i.e.,
information that identifies [Plaintiff] as having purchased a
subscription to People)-without obtaining her
permission or providing prior notice-to data mining companies
. . . .” (Id. ¶ 34). “Data miners,
” according to Plaintiff, are “companies [that]
purchase, trade, and otherwise collect massive databases of
information about consumers.” (Id. ¶ 19).
They “profit by selling this ‘extraordinarily
intrusive' information in an open and largely unregulated
market.” (Id.). Plaintiff alleges that
Defendant “profited from its disclosures” to the
data miners, and Plaintiff further alleges that “what
[Plaintiff] received (a subscription without privacy
protections) was substantially less valuable than what she
paid for (a subscription with accompanying privacy
protections).” (Id. ¶¶ 37-38).
claims that Defendant's conduct violates the VRPA. The
VRPA-like the federal Video Privacy Protection Act and
similar state laws around the country-was enacted in the late
1980s in the wake of the disclosure of Robert Bork's
video-rental records during Bork's (ultimately
unsuccessful) candidacy for the position of Supreme Court
Justice. See generally Neil M. Richards,
The Perils of Social Reading, 101 Geo. L.J. 689,
693-97 (2013). Despite its popular name and historical
origin, the VRPA applies to more than just video rentals. Its
central provision states that
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 knowingly disclose to any person, other
than the customer, a record or information that personally
identifies the customer as having purchased, leased, rented,
or borrowed those materials from the person engaged in the
Mich. Comp. Laws § 445.1712(1). The VRPA provides both a
criminal penalty and a civil cause of action to enforce this
prohibition. See Id. §§ 445.1714,
Federal Rule of Civil Procedure 12(b)(1), a defendant may
challenge a court's subject-matter jurisdiction. Where,
as in the instant case, the defendant argues that the
allegations in the complaint are insufficient to create
subject-matter jurisdiction, the court should “confine
its . . . ruling to matters contained within the pleadings
and accept all well-pleaded allegations as true.”
Tackett v. M & G Polymers, USA, LLC, 561 F.3d
478, 481 (6th Cir. 2009); see also Cartwright v.
Garner, 751 F.3d 752, 759 (6th Cir. 2014); Nichols
v. Muskingum Coll., 318 F.3d 674, 677 (6th Cir. 2003).
If the complaint fails to set forth an adequate basis for
subject-matter jurisdiction, the court must dismiss it.
See Sweeton v. Brown, 27 F.3d 1162, 1169 (6th
to Rule 12(b)(6), a defendant may move to have a complaint
dismissed for “failure to state a claim upon which
relief can be granted.” A court confronted with a Rule
12(b)(6) motion must construe the complaint in favor of the
plaintiff, accept the allegations of the complaint as true,
and determine whether the plaintiff's factual allegations
present plausible claims. Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 554-56 (2007). The court must not
accept “legal conclusions cloaked as fact.”
Haddad v. Randall S. Miller Associates, PC, 587
F.App'x 959, 963 (6th Cir. 2014) (unpublished).
Similarly, “naked assertions devoid of further factual
enhancement” and “unadorned,
the-defendant-unlawfully-harmed-me accusation[s]” are
insufficient to “state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). The complaint need not contain
“detailed” factual allegations, but its
“factual allegations must be enough to raise a right to
relief above the speculative level on the assumption that all
of the allegations in the complaint are true.”
Ass'n of Cleveland Fire Fighters v. City of
Cleveland, 502 F.3d 545, 548 (6th Cir. 2007).
Plaintiff Has Standing to Sue.
primary argument is that Plaintiff lacks both statutory
standing under the VRPA and standing under Article III of the
United States Constitution. In a previous case, this Court
held that the VRPA confers statutory standing on a person
whose information was disclosed in violation of the VRPA,
regardless of whether the person suffered actual damages.
Halaburda v. Bauer Pub. Co., LP, No. 12-CV-12831,
2013 WL 4012827, at *6 (E.D. Mich. Aug. 6, 2013)
(unpublished). This Court also held that a person whose
information was disclosed in violation of the VRPA has
suffered a cognizable injury in fact and thus has Article III
standing. Id. at *3-*5. Defendant argues that two
recent developments have undermined the Court's analysis
in Halaburda. First, Defendant points out that the
Michigan legislature recently amended the VRPA to require a
plaintiff asserting a VRPA cause of action to plead actual
damages. Although Defendant allegedly began violating the
VRPA before the amendment took effect (July 31, 2016),
Defendant argues that the amendment is retroactive and
therefore applies to the pre-amendment conduct. The second
development is the Supreme Court's recent decision in
Spokeo, 136 S.Ct. 1540. Defendant contends that
under the standard set forth in Spokeo, the type of
VRPA violation alleged by Plaintiff is now insufficient to
constitute an injury in fact. As explained below, the Court
rejects both arguments.
VRPA Amendment Is Not Retroactive and Therefore Does Not
Deprive Plaintiff of Statutory Standing.
this Court decided Halaburda, the VRPA allowed a
customer whose VRPA rights had been violated to recover
“[a]ctual damages . . . or $5, 000.00, whichever is
greater.” 1989 Mich. Pub. Act No. 206 (codified at
Mich. Comp. Laws § 445.1715(2)(a) until amended by 2016
Mich. Pub. Act. No. 92). However, the Michigan legislature
recently enacted Senate Bill 490. See 2016 Mich.
Pub. Act. No. 92. As amended by Senate Bill 490, the VRPA no
longer contains the $5, 000 statutory damages provision.
See Mich. Comp. Laws § 445.1715(2)(a).
Moreover, the VRPA now only allows “customers
. . . who [have] suffer[ed] actual damages” to bring a
civil action. Id. § 445.1715(2). Senate Bill
490 became effective on July 31, 2016. See 2016
Mich. Pub. Act No. 92. The Court must decide whether Senate
Bill 490 applies retroactively, so as to preclude Plaintiff
from proceeding with her suit against Defendant without
alleging actual damages. Other district courts have already held
that Senate Bill 490 is not retroactive. Boelter v.
Hearst Commc'ns, Inc., No. 15 CIV. 3934 (AT), 2016
WL 3369541, at *4-*6 (S.D.N.Y. June 17, 2016); Boelter v.
Advance Magazine Publishers, Inc. d/b/a Condé
Nast, No. 15-cv-5671, 2016 WL 5478468, at *12 (S.D.N.Y.
Sept. 28, 2016); Moeller, et al. v. American Media, Inc.
et al., No. 16-cv-11367, 2017 WL 416430 (E.D. Mich. Jan.
Senate Bill 490 applies retroactively depends on Michigan
law-and, in particular, on Michigan principles of statutory
interpretation. See Kia Motors Am., Inc. v. Glassman
Oldsmobile Saab Hyundai, Inc., 706 F.3d 733, 739 (6th
Cir. 2013). Under Michigan law, a statute is presumed to
operate prospectively, but this presumption can be rebutted
by a “clear manifest[ation]” of “contrary
intent.” Frank W. Lynch & Co. v. Flex Techs.,
Inc., 463 Mich. 578, 583, 624 N.W.2d 180 (2001) (quoting
Franks v. White Pine Copper Div., 422 Mich.
636, 671, 375 N.W.2d 715 (1985)) (internal quotation marks
omitted); see also Kia Motors, 706 F.3d at 739;
LaFontaine Saline, Inc. v. Chrysler Grp., LLC, 496
Mich. 26, 38, 852 N.W.2d 78 (2014) (“We have . . .
required that the Legislature make its intentions clear when
it seeks to pass a law with retroactive effect.”);
cf. Bowen v. Georgetown Univ. Hosp., 488 U.S. 204,
208 (1988) (“Retroactivity is not favored in the
principles govern the inquiry into the legislative intent.
The first principle is that a court should give effect to
“specific language in [a] new [statute] which states
that it should be given retrospective or prospective
application.” In re Certified Questions from the
United States Court of Appeals for the Sixth Circuit,
416 Mich. 558, 570, 331 N.W.2d 456 (1982); accord
LaFontaine, 496 Mich. at 38. Second, a statute does not
“operat[e] retroactively merely because it relates to
an antecedent event.” LaFontaine, 496 Mich. at
39. Third, “retrospective application of a law is
improper where the law ‘takes away or impairs vested
rights acquired under existing laws.'”
Certified Questions, 416 Mich. at 572 (quoting
Hughes v. Judges' Ret. Bd., 407 Mich. 75, 85,
282 N.W.2d 160 (1979)); see also LaFontaine, 496
Mich. at 39. And fourth, “a remedial or procedural act
not affecting vested rights may be given retroactive
effect.” LaFontaine, 496 Mich. at 39; see
also Certified Questions, 416 Mich. at 572.
the first, third, and fourth principles are applicable to the
instant case. See Certified Questions, 416 Mich. at
571 (“Second rule cases relate to measuring the amount
of entitlement provided by a subsequent statute in part by
services rendered pursuant to a prior statute . . .
.”). Moreover, the third and fourth principles are
really two sides of the same coin, and therefore the Court
will analyze them together. See Id. at 575
(“[R]ule four [is] the corollary to the general
proscription found in rule three.”).
Language of the Amending Act
first factor that the Court must consider is whether the
language of Senate Bill 490 indicates that it is to have
retroactive effect. Senate Bill 490 does not contain any
express language indicating that it is to be applied
retroactively. Thus, the first factor weighs against
retroactive application. See Kia Motors, 706 F.3d at
739 (“[T]he Michigan Legislature ‘knows how to
make clear its intention that a statute apply retroactively,
' so the absence of express retroactive language is a
strong indication that the Legislature did not intend a
statute to apply retroactively.” (quoting
Brewer v. A.D. Transp. Exp., Inc., 486
Mich. 50, 56, 782 N.W.2d 475 (2010))); LaFontaine,
496 Mich. at 39-40. This conclusion is confirmed by the fact
that Senate Bill 490 contains a provision stating that Senate
Bill 490 would take effect ninety days after enactment.
See 2016 Mich. Pub. Act. No. 92, enacting § 1
(“This amendatory act takes effect 90 days after the
date it is enacted into law.”). As the Michigan Supreme
Court has explained, “providing a specific, future
effective date and omitting any reference to retroactivity
supports a conclusion that a statute should be applied
prospectively only.” Johnson v. Pastoriza, 491
Mich. 417, 432, 818 N.W.2d 279 (2012) (quoting Brewer v.
A.D. Transp. Exp., Inc., 486 Mich. 50, 56, 783 N.W.2d
475 (2010)) (internal quotation marks omitted).
disagrees with the Court's conclusion that there is no
retroactivity language in Senate Bill 490. Defendant points
to the enacting language of Senate Bill 490, which states
that the amendment “is curative and intended to clarify
. . . that a civil action for a violation of [the VRPA] may
only be brought by a customer who has suffered actual damages
as a result of the violation.” 2016 Mich. Pub. Act. No.
92, enacting § 1. According to Defendant, Senate Bill
490 “was passed amid controversy in the courts
regarding whether the VRPA requires actual injury.”
(Def.'s Mot. Dismiss at 13). Defendant explains that
“[f]or 25 years [after its enactment], the VRPA sat
dormant, with no one ever charged with a misdemeanor . . . or
sued civilly. That changed in 2012 when attorneys started
brandishing it against magazine publishers.”
(Id. at 18). Many of the plaintiffs in these VRPA
actions had not suffered actual damages, and federal courts
were allowing their suits to proceed under the
statutory-damages provision of the VRPA. According to
Defendant, the Michigan legislature regarded this as a
negative development and consequently enacted Senate Bill 490
to clarify that a person must suffer actual damages in order
Defendant points out, Michigan courts have held that
“[a]n amendment may apply retroactively where the
Legislature enacts an amendment to clarify an existing
statute and to resolve a controversy regarding its
meaning.” Gen. Motors Corp. v. Dep't of
Treasury, 290 Mich.App. 355, 371-72, 803 N.W.2d 698
(2010) (quoting Mortgage Elec. Registration Sys., Inc. v.
Pickrell, 271 Mich.App. 119, 126, 721 N.W.2d 276 (2006))
(internal quotation marks omitted); see also Workman v.
Detroit Auto. Inter-Ins. Exch., 404 Mich. 477, 521, 274
N.W.2d 373 (1979) (“When amendments are passed in the
midst of controversy over a provision's meaning, the
usual presumption that an amendatory act declares new law is
overcome and a legislative intent to clarify rather than to
change the law may be inferred.”). In other words, a
purported amendment may not be an amendment at all, but
rather a “clarif[ication] [of] the original intent of
[the] legislation.” Moore v. Detroit Sch. Reform
Bd., 293 F.3d 352, 360 (6th Cir. 2002).
enacting provision cited by Defendant simply evinces the
Michigan legislature's belief that Senate Bill 490 will
clarify that future VRPA violations will only be
actionable if they cause actual damages. If, as Defendant
contends, the legislature had intended to clarify that
past VRPA violations-including those that had
generated lawsuits pending at the time of Senate Bill
490's enactment-would no longer be actionable absent
actual damages, the legislature would have explicitly said
so. As Plaintiff points out, several cases cited by Defendant
involve just this kind of express retroactivity language.
See, e.g., Dep't of Treasury, 290
Mich.App. at 366-67 (amending act not only stated that it was
“curative and intended to prevent any
misinterpretation, ” but also expressly provided that
“[t]his amendatory act is retroactive”); Doe
v. Dep't of Corr., 249 Mich.App. 49, 56, 641 N.W.2d
269 (2001) (amending act stated that it was “curative
and intended to correct any misinterpretation of
legislative intent in the [previous] court of appeals
decision in [the Doe case]” (emphasis
added));Romein v. Gen. Motors Corp., 168
Mich.App. 444, 450-51, 425 N.W.2d 174 (1988) (amending act
specifically identified a Michigan Supreme Court decision
that was “erroneously rendered, ” explained that
the act was intended to be “remedial and curative,
” and expressly provided that it would apply
retroactively); In re Oswalt, 318 B.R. 817, 822
(W.D. Mich. 2004), aff'd, 444 F.3d 524 (6th Cir.
2006) (legislative history of the amending act contained
language stating that the act would "reinstate the
financing practices that existed in Michigan before” [a
certain Sixth Circuit opinion interpreting the pre-amendment
statute]" (internal quotation marks and citation
omitted) (emphasis removed)); see also Boelter, 2016
WL 3369541, at *4 (“The phrases ‘curative'
and ‘intended to clarify' do not, as Defendant
argues, unequivocally indicate that the amendments apply to
pre-existing disputes. Absent additional qualifying language,
it is just as likely that the terms denote the
amendment's purpose for consideration in future
applications of the law.”).
cites Allstate Ins. Co. v. Faulhaber, 157 Mich.App.
164, 403 N.W.2d 527 (1987), and People v. Sheeks,
244 Mich.App. 584, 625 N.W.2d 798 (2001), as examples of
cases in which a clarifying act was given retroactive effect.
These cases are both distinguishable. In Allstate,
the Michigan Court of Appeals applied a
statute-of-limitations provision retroactively. 157 Mich.App.
164. The trial court, before the amendment, had been
presented with several conflicting statute-of-limitations
provisions and had applied the shorter statute of
limitations, dismissing the action as time-barred.
Id. at 163-64. The Michigan Court of Appeals,
reversing, applied the newly enacted statute of limitations
and allowed the plaintiff to proceed with its suit.
Id. at 168. The court explained that “prior to
the enactment of this statutory amendment there was no
clear statute of limitations governing” the
action. Id. at 166 (emphasis added). The instant
case is distinguishable from Allstate because the
VRPA was quite clear prior to the amendment. The VRPA clearly
provided for statutory damages. See Halaburda, 2013
WL 4012827, at *6. Thus, the amendment cannot be seen as
merely a clarification. Moreover, the new
statute-of-limitations provision in Allstate was, at
most, a procedural change in the law; as the Court will
explain in the following section, Senate Bill 490's
amendments are substantive, not procedural.
Sheeks, a defendant was convicted of violating a
vehicle-width restriction when he drove his oversize farming
equipment on a state highway. 244 Mich.App. 584. The trial
court ruled that the defendant's equipment did not fall
within a statutory exception for farming equipment
“required for normal farming operations.”
Id. at 587-88. Subsequent to the defendant's
conduct, the legislature amended the statutory exception,
replacing the “required for normal farming
operations” language with “required, designed,
and intended for farming operations.” Id. at
589. The Michigan Court of Appeals retroactively applied the
amended statute, noting that in the earlier version of the
statute, the term “normal” was not defined.
Id. at 590. The court also noted that the
legislative record showed that the purpose of the amendment
was to clarify the meaning of the statute. Id. at
590-91. Sheeks is distinguishable from the instant
case because the amendment in that case can reasonably be
viewed as clarifying a prior legislative intent that the
farming-equipment exception should apply to a wide, rather
than a narrow, range of farming equipment. In contrast,
Senate Bill 490 completely excises the VRPA's statutory
cause of action. In no way can this reasonably be construed
as a clarification rather than a substantive change in the
law. See Dep't of Treasury, 290 Mich.App. at 372
(“An amendment that affects substantive rights
generally will not [be considered ‘curative legislation
merely bringing clarity to existing law'].”).
also relies on the fact that the section of Senate Bill 490
amending VRPA's statutory-damages provision lacks
language stating that it is to be given prospective effect.
Defendant contrasts this section with another section of
Senate Bill 490, which amended the VRPA to allow certain
disclosures “incident to the ordinary course of
business.” Mich. Comp. Laws § 445.1713(d). This
latter section “only applies to a record or information
that is created or obtained after the effective date of the
amendatory act.” Id. Defendant argues that
“[i]f the legislature had not intended that [Senate
Bill] 490's clarification regarding actual damages be
applied retroactively, it would not have expressly limited
the ordinary course of business exception to prospective
application.” (Def.'s Mot. Dismiss at 25).
Defendant's argument fails. It is well established that
“words and phrases used in an act should be read in
context with the entire act and assigned such meanings as to
harmonize with the act as a whole.” People v.
Couzens, 480 Mich. 240, 249, 747 N.W.2d 849 (2008);
see also Dean v. Byerley, 354 F.3d 540, 547 (6th
Cir. 2004) (“When construing a statute, we must look at
the whole law and effectuate the legislature's
intent.”). In particular, “when language is
included in one section of a statute but omitted from another
section, it is presumed that the drafters acted intentionally
and purposely in their inclusion or exclusion.”
People v. Peltola, 489 Mich. 174, 185, 803 N.W.2d
140 (2011); accord Sanders v. Allison Engine Co.,
703 F.3d 930, 936 (6th Cir. 2012). Applying these
uncontroversial principles of statutory construction, the
Court can with some confidence conclude that the
after-acquired-information proviso in the
ordinary-course-of-business exception does not also apply to
the actual-damages requirement. But this does not
mean that the actual-damages requirement is to be given
retroactive effect. Rather, it simply means that a
plaintiff alleging a post-amendment VRPA violation will have
to satisfy the actual-damages requirement, even if the
defendant acquired the relevant records or information prior
to the effective date of Senate Bill 490. See
Boelter, 2016 WL 3369541, at *5.
fact, Defendant's whole-act argument actually cuts
against Defendant's position that Senate Bill
490 should be given retroactive effect. As noted above, the
Michigan legislature expressly labeled Senate Bill 490 as a
“curative” and “clarif[ying]” act.
Since at least one section of Senate Bill 490-the section
creating the ordinary-course-of-business exception- is
prospective, it appears that the Michigan legislature did not
believe that the clarifying or curative nature of Senate Bill
490 was inconsistent with prospective application.
Senate Bill 490 lacks an express statement of retroactivity.
Although the legislature did characterize Senate Bill 490 as
“curative and intended to clarify, ” such
language does not, on its own, manifest an intent that the
act should be applied retroactively. The whole-act canon