Supreme Court Holds Pandora Users Not Imbued With Privacy
For those that do not know, Pandora streams music based on a user's preferences; the user cannot store, download or rewind the tune. A premium version of the service allows a user to skip commercials for a monthly fee.
A user can indicate preferences by creating a music "station" by searching for a song, artist or genre, or by indicating "thumbs up" or "thumbs down" for each song streamed by Pandora in response to the user's search request. Over time, Pandora utilizes complicated algorithms to refine a user's musical tastes, and uses that data to select new songs it thinks the user will like based on that user's input.
The California federal courts have defined a stream as, "an electronic transmission that renders the musical work audible as it is received by the client-computer’s temporary memory." Peter Deacon, a Michigan resident and Pandora user, sued Pandora in federal court for violation of Michigan's preservation of personal privacy act [also known as the video rental privacy act - VRPA].
Deacon sued in the Northern District of California based on diversity jurisdiction: each party to the lawsuit is from a different state. Deacon is from Michigan and Pandora's headquarters are located in Oakland, California.
The trial court ruled in Pandora's favor, dismissing Deacon's lawsuit. On appeal, the Ninth Circuit Court of Appeals, in a relatively rare procedure, certified a legal question to the Michigan Supreme Court:
Has Deacon stated a claim against Pandora for violation of the VRPA by adequately alleging that Pandora is [in] the business of “renting” or “lending” sound recordings, and that he is a “customer” of Pandora because he “rents” or “borrows” sound recordings from Pandora?The Michigan Supreme Court concluded that Deacon is not a "customer" of Pandora as he did not "rent" songs due to the fact that he did not pay Pandora for the right to listen to its stream.
Deacon claimed violation of the Michigan law on the basis that Pandora made its users' profiles available and searchable on the Internet. Also, Deacon claimed Pandora tied those user profiles into the users' Facebook profiles without the users' knowledge or permission.
Our High Court started its analysis by stating the purpose of the personal privacy protection act: to preserve personal privacy with respect to the purchase, rental, or borrowing of certain materials and to punish violators of such privacy. The central provision of the Act provides:
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.The Act defines a "customer" as "a person who purchases, rents, or borrows a book or other written material, or a sound recording, or a video recording." The Act, however, does not define "rent" or "borrow".
In a unanimous decision, the Supreme Court concluded that renting requires a payment of some type and Deacon availed himself only of Pandora's free services. Nor did he borrow the recordings as there was no implied promise to return the item borrowed.
Therefore, Deacon is not a customer within the scope of the privacy act according to the Michigan Supreme Court. The decision will now be considered in the federal case pending on appeal in San Francisco.
We here at the Law Blogger again find ourselves warning our readers: when your fingers do the walking on your computer keyboard, do not hold onto a sense of privacy regarding where you've been on the Internet.