Seventh Circuit Limits Availability of Statutory Damages under the Video Privacy Protection Act | Practical Law

Seventh Circuit Limits Availability of Statutory Damages under the Video Privacy Protection Act | Practical Law

On March 6, 2012, the US Court of Appeals for the Seventh Circuit issued an opinion on an interlocutory appeal in Sterk v. Redbox finding that Redbox cannot be found liable for statutory damages under the Video Privacy Protection Act for failing to destroy personal information because no injury actually occurred.

Seventh Circuit Limits Availability of Statutory Damages under the Video Privacy Protection Act

by PLC Intellectual Property & Technology
Law stated as at 08 Mar 2012 • USA (National/Federal)
On March 6, 2012, the US Court of Appeals for the Seventh Circuit issued an opinion on an interlocutory appeal in Sterk v. Redbox finding that Redbox cannot be found liable for statutory damages under the Video Privacy Protection Act for failing to destroy personal information because no injury actually occurred.
On March 6, 2012, in Sterk v. Redbox Automated Retail, LLC, the US Court of Appeals for the Seventh Circuit issued an opinion reversing the district court's ruling that Redbox could be held liable for statutory damages under the Video Privacy and Protection Act (VPPA) for failing to destroy customers' private information even if the information was not disclosed and no injury was caused (18 U.S.C. § 2710).
In its decision on Redbox's interlocutory appeal, the Seventh Circuit emphasized that:
  • Redbox, a video service provider that rents DVDs, Blu-ray Discs and video games to consumers, would have violated subsection (e) of the VPPA by failing to destroy its records of these transactions.
  • Redbox did, however, maintain these records in secrecy and never disclosed them from its files.
  • Redbox's mere failure to destroy its records of these transactions, while a violation of subsection (e), could not alone have caused injury to the plaintiff class of consumers.
  • The plaintiffs could not, therefore, hold Redbox liable for statutory damages under subsection (c) of the VPPA.
In support of this ruling, the Seventh Circuit cited both the special link between the statute's non-disclosure (subsection (b)) and statutory damages provisions (subsection (c)), and the presumption that a reasonable Congress could not have intended to award "liquidated damages" (an estimated surrogate for actual damages) where no injury has been proved.

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