Perlin v. Time Inc.

Filing 27

OPINION AND ORDER denying #10 defendant's Motion to Dismiss. Signed by District Judge George Caram Steeh. (MBea)

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

CAROLYN PERLIN, individually
and on behalf of all others
similarly situated,
Plaintiff,

CASE NO. 16-10635
HON. GEORGE CARAM STEEH

v.
TIME INC., a Delaware Corporation,
Defendant.
/
OPINION AND ORDER DENYING
DEFENDANT’S MOTION TO DISMISS (DOC. 10)
Plaintiff 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.
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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.
I. BACKGROUND
Plaintiff 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

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substantially less valuable than what she paid for (a subscription with
accompanying privacy protections).” (Id. ¶¶ 37-38).
Plaintiff 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 name1 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 business.

1

The act has also been called the “[P]reservation of [P]ersonal [P]rivacy [A]ct (PPPA).”
In re Certified Question from United States Court of Appeals for Ninth Circuit, No.
151104, 2016 WL 3619346 (Mich. July 6, 2016).

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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, 445.1715.
II. LEGAL STANDARDS
Under 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 wellpleaded 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 subjectmatter jurisdiction, the court must dismiss it. See Sweeton v. Brown, 27
F.3d 1162, 1169 (6th Cir.1994).
Pursuant 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

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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).
III. DISCUSSION
A.

Plaintiff Has Standing to Sue.

Defendant’s 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

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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-*5.2 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.3 The second
development is the Supreme Court’s recent decision in Spokeo, 136 S. Ct.

2

See also Owens v. Rodale, Inc., No. 14-CV-12688, 2015 WL 575004 (E.D. Mich. Feb.
11, 2015) (unpublished) (Roberts, J.) (holding that the VRPA does not require a
showing of actual damages and that a violation of the VRPA is sufficient to create
Article III standing); Kinder v. Meredith Corp., No. 14-CV-11284, 2014 WL 4209575
(E.D. Mich. Aug. 26, 2014) (unpublished) (Ludington, J.) (same); Cain v. Redbox
Automated Retail, LLC, 981 F. Supp. 2d 674 (E.D. Mich. 2013) (Rosen, J.) (same).
3

Plaintiff’s complaint alleges that Defendant continues to violate VRPA. The parties do
not make this distinction in their arguments, but regardless of whether the VRPA
amendment is retroactive, it appears that it would apply to Plaintiff’s claim to the extent
that the claim is based on Defendant’s alleged post-amendment conduct.

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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.
1.

The VRPA Amendment Is Not Retroactive and
Therefore Does Not Deprive Plaintiff of Statutory
Standing.

When 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

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damages.4 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. 27,
2017).5
Whether 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

4

Plaintiff claims in her response that she did adequately plead actual damages in her
complaint. (Pl.’s Resp. Def.’s Mot. Dismiss, Doc. 14, at 16 n.3). The Court does not
need to address this argument, given its resolution of the retroactivity issue.
5

Plaintiff filed a notice of supplemental authority (Doc. 15) that cites a recent Michigan
Supreme Court decision. See In re Certified Question from the United States Court of
Appeals for the Ninth Circuit, No. 151104, 2016 WL 3619346 (Mich. July 6, 2016).
Although the opinion references the recent amendment to the VRPA, the opinion
provides no guidance on whether the amendment is retroactive.

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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 law.”).
Four 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

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procedural act not affecting vested rights may be given retroactive effect.”
LaFontaine, 496 Mich. at 39; see also Certified Questions, 416 Mich. at
572.
Only 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.”).
a.

Language of the Amending Act

The 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

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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.”).6 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).

6

As Defendant notes, Senate Bill 490 also contained contradictory language “order[ing]
[Senate Bill 490] to take immediate effect.” 2016 Mich. Pub. Act. No. 92, enacting § 2.
Although neither party has offered argument on this provision, it appears to be the
standard, boilerplate enacting language. Accordingly, the ninety-day language is a
more accurate indicator of the legislative intent.

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Defendant disagrees with the Court’s conclusion that there is no
retroactivity language in Senate Bill 490.7 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 statutorydamages provision of the VRPA. According to Defendant, the Michigan
7

In its reply brief, Defendant also argues that a court can apply a statute retroactively
even if the statute lacks retroactivity language. (Def.’s Reply at 14-15). Defendant is
correct that the first retroactivity factor is not dispositive. See, e.g., Kia Motors Am., 706
F.3d at 740; Seaton v. Wayne Cty. Prosecutor, 233 Mich. App. 313, 590 N.W.2d 598
(1998). But as explained below, the third and fourth factors in the Michigan Supreme
Court’s four-factor test also compel the conclusion that Senate Bill 490 should be
applied only prospectively.

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legislature regarded this as a negative development and consequently
enacted Senate Bill 490 to clarify that a person must suffer actual damages
in order to sue.
As 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).

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The 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));8
Romein v. Gen. Motors Corp., 168 Mich. App. 444, 450-51, 425 N.W.2d

8

Interestingly, although the Doe court found that the first of the four retroactivity
principles indicated that the amendment should be applied retroactively, the court found
that the other principles cut the other way. 249 Mich. App. at 61-63. Thus, the court
declined to apply the amendment retroactively.

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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.”).
Defendant 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

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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.
In 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

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“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’].”).

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Defendant 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
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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 actualdamages 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.
In 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

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the clarifying or curative nature of Senate Bill 490 was inconsistent with
prospective application.
In sum, 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 likewise
fails to show by negative implication that Senate Bill 490 should be applied
retroactively.9
9

Defendant also relies on the legislative history of Senate Bill 490. First, Defendant
cites a floor statement by Senator Rebekah Warren, who opposed Senate Bill 490.
2016 Mich. S. Journal 473 (No. 33, Apr. 12, 2016). In her statement, Ms. Warren said,
“[I]f passed, the [Senate Bill 490] will likely be interpreted as retroactive, meaning that all
of these companies [that violated the VRPA] will get the get-out-of-jail-free card that
they are asking for.” Id. Several other state senators concurred in Ms. Warren’s
statement. Second, Defendant points to testimony by Plaintiff’s counsel, Ari Scharg, at
a legislative hearing concerning Senate Bill 490. Hearing on S.B. 490 Before the Mich.
H.R. Comm. on Commerce & Trade (Feb. 9, 2016) (testimony of Ari J. Scharg). In his
testimony, Mr. Scharg claimed that “the out-of-state magazine publishing companies
behind this Bill . . . want you to wipe away all liability for their past and continuing
misconduct by giving SB 490 retroactive effect.” Id. at 10.
Neither Ms. Warren’s statement nor Mr. Scharg’s testimony is helpful in resolving
whether the Michigan legislature intended Senate Bill 490 to apply retroactively.
Perhaps the legislators who voted in favor of Senate Bill 490 disagreed with Ms.
Warren’s and Mr. Scharg’s assessments that courts would view the law as retroactive.
Or perhaps they voted in favor of Senate Bill 490 despite—or because of—their belief
that the law would be retroactive. The Court has no way of knowing. See Chrysler
Corp. v. Brown, 441 U.S. 281, 311 (1979) (“The remarks of a single legislator, even the
sponsor, are not controlling in analyzing legislative history.”); see also Boelter, 2016 WL
3369541, at *5; Frank W. Lynch, 463 Mich. at 588 n.7 (“[R]esort to ‘legislative history’ in
the search for legislative intent is a perilous venture.”).
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b.

Pg ID 499

Whether Retroactive Application of the
Amending Act Would Take Away or Impair
Vested Rights

The next two factors that the Court must consider are (1) whether
retroactive application of Senate Bill 490 would take away or impair vested
rights and (2) whether Senate Bill 490 is a remedial or procedural act not
affecting vested rights. As remarked above, these two factors essentially
come to the same thing: Either an act is remedial or procedural or the act
affects vested rights. Thus, the general rule is that if retroactive application
of an act would take away or impair a vested right, the act is not remedial
or procedural and should not be given retroactive effect. See Seaton v.
Wayne Cty. Prosecutor, 233 Mich. App. 313, 317-18, 590 N.W.2d 598
(1998); Duffy v. Grange Ins. Co., No. 290198, 2010 WL 3655979, at *2
(Mich. Ct. App. Sept. 21, 2010) (unpublished) (“[A] statute that affects
substantive rights is not remedial.”).
In Michigan case law, the term “remedial statute” has two distinct, but
related, meanings. Under one definition of the term, a remedial statute is a
statute that is “designed to correct an existing oversight in the law, redress
an existing grievance, introduce regulations conducive to the public good,
or . . . reform or extend existing rights.” Duffy, 2010 WL 3655979, at *2;
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Pg ID 500

see also Rookledge v. Garwood, 340 Mich. 444, 453, 65 N.W.2d 785
(1954); Allstate, 157 Mich. App. at 167. Under the other definition, a
remedial statute is a statute that is related to “the means employed to
enforce a right or redress an injury.” Rookledge, 340 Mich. at 453 (quoting
50 Am. Jur. Contracts § 15) (internal quotation marks omitted); see also
Dale Baker Oldsmobile, Inc. v. Fiat Motors of N. Am., Inc., 794 F.2d 213,
220 (6th Cir. 1986) (explaining that remedial statutes are those that
“determine the manner of effecting a remedy”). Furthermore, although
Michigan courts have said that statutes that are “remedial” or “procedural”
should be applied retroactively, a procedural statute is “essentially . . . the
same thing [as a remedial statute]—[it is a] law[] that [is] procedural in
nature and do[es] not create or destroy substantive rights.” Kia Motors,
706 F.3d at 739; see also Allstate, 157 Mich. App. at 167.
A vested right is “an interest that the government is compelled to
recognize and protect of which the holder could not be deprived without
injustice.” City of Detroit v. Walker, 445 Mich. 682, 699, 520 N.W.2d 135
(1994). “A right cannot be considered a vested right, unless it is something
more than such a mere expectation as may be based upon an anticipated
continuance of the present general laws . . . .” GMAC LLC v. Treasury
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Pg ID 501

Dep’t, 286 Mich. App. 365, 377, 781 N.W.2d 310 (2009) (quoting Cusick v.
Feldpausch, 259 Mich. 349, 352, 243 N.W. 226 (1932)) (internal quotation
marks omitted). Of particular relevance to the instant case, a cause of
action becomes a vested right “once [it] accrues,—i.e., [once] all the facts
become operative and are known.” Certified Questions, 416 Mich. at 574.
If the Court were to apply Senate Bill 490 retroactively, Plaintiff would
be deprived of her right to sue for statutory damages under the VRPA and
her right to sue without making a showing of actual damages. Both of
these rights accrued—and thus vested—at the time Defendant committed
its alleged VRPA violations. Thus, there is no question that retroactive
application of Senate Bill 490 would impair Plaintiff’s vested rights.
Moreover, it is clear that Senate Bill 490 is not merely procedural or
remedial. Senate Bill 490 completely excised the VRPA’s statutorydamages provision. This was essentially a deletion of an entire cause of
action. This was a substantive—not a procedural or remedial—change in
the law. See Boelter, 2016 WL 3369541, at *6.
None of the cases cited by Defendant indicate otherwise. In Duffy,
the plaintiff claimed benefits under Michigan’s no-fault insurance law for an
accident involving an off-road vehicle. 2010 WL 3655979, at *1. After the
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Pg ID 502

plaintiff’s accident, the Michigan legislature amended the no-fault law to
exclude off-road vehicles from the law’s protections. Id. The Michigan
Court of Appeals refused to apply the amendment retroactively, explaining
that “[b]ecause all of the facts in plaintiff’s case were known and operative
[at the time of her accident], her cause of action accrued, and she had a
vested right.” Id. at *3. Like Duffy, Plaintiff’s cause of action here is
dependent on a statute which the legislature amended after Plaintiff’s
cause of action accrued. As in Duffy, Plaintiff has a vested right in her
cause of action, and that right would be completely extinguished if the
Court were to give retroactive effect to the amendment.
In Certified Questions, the Michigan Supreme Court gave retroactive
effect to a new comparative-negligence law. 416 Mich. at 578. This law,
when applied by the trial court, resulted in the plaintiff’s recovery being
reduced by ninety-five percent. Id. at 562. The Michigan Supreme Court
found that the amendment did not destroy a vested right because although
“the total damages which plaintiff could have received were significantly
reduced . . . , plaintiff’s cause of action was not legally barred or taken
away.” Id. at 577. The instant case is distinguishable because retroactive
application of Senate Bill 490 would not just limit Plaintiff’s recovery—
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Pg ID 503

rather, it would completely destroy her cause of action (except to the extent
that she can prove actual damages).
In Fosterling v. Lahti, the Michigan Supreme Court retroactively
applied an amendment to Michigan’s workers’ compensation law. 357
Mich. 578. The amendment eliminated a restriction in the law that had
previously limited the medical benefits that the plaintiff could recover. Id. at
581. The court explained that the workers’ compensation law “was
originally adopted to give employers protection against common-law
actions and to place upon industry, where it properly belongs, . . . the
expense of the hospital and medical bills of the injured employee.” Id. at
585. The court noted that under the common law, the plaintiff would have
had the right to recover the medical benefits requested, and the court
concluded that the amendment simply “restored” this remedy. Id. at 589.
Moreover, the court held that the amendment did not affect any vested
rights because it “did not afford the employee a new cause of action, but
merely expanded the remedies then in effect.” Id. at 587. Lahti is
distinguishable because the amendment in that case did nothing more than
somewhat reduce the protections afforded to the employer by the workers’
compensation act, still leaving the employer in a better position that it would
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Pg ID 504

have been had it been subject to tort liability. Retroactive application of
Senate Bill 490, by contrast, would completely eliminate Plaintiff’s right to
sue for statutory damages, leaving her without a remedy unless she can
prove actual damages.
Rookledge also involved an amendment to Michigan’s workers’
compensation law. 340 Mich. 444. The plaintiff was injured in an
automobile accident while on the job. Id. at 448-49. At the time of the
accident, the workers’ compensation law afforded two mutually exclusive
options to the plaintiff: He had the option of either seeking recovery from
his employer under the workers’ compensation law or suing the tortfeasor
responsible for the accident. Id. The plaintiff chose to recover under the
workers’ compensation law. Id. The law was later amended to allow the
plaintiff to recover from the tortfeasor notwithstanding his choice to seek
compensation under the workers’ compensation law. Id. at 450.
Subsequently, the plaintiff sued the tortfeasor. Id. at 449. The court
applied the amendment retroactively and declined to dismiss the suit
against the tortfeasor defendant, explaining that the “defendant . . . did not
have a vested right in the statutory defense accorded him under the prior
provision of the Workmen’s Compensation Act. His right then . . . ‘sprang
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Pg ID 505

from the kindness and grace of the legislature. And it is the general rule
that that which the legislature gives, it may take away.’”10 Id. at 457
(quoting Wylie v. City Comm’n of Grand Rapids, 293 Mich. 571, 588, 292
N.W. 668 (1940)). Rookledge is distinguishable from the instant case
because the tortfeasor defendant did not have a right, pre-amendment, to
avoid liability. Rather, any protection that the defendant received from the
pre-amendment workers’ compensation law depended completely on a
choice by the plaintiff. In the instant case, by contrast, Plaintiff had an
actual right, before Senate Bill 490, to sue for statutory damages—this right
did not depend on the actions or decisions of any other party (except, of
course, for Defendant’s alleged violations of the VRPA that comprise the
10

Lahti contains similarly broad language: “It is the general rule that that which the
legislature gives it may take away. A statutory defense, or a statutory right, though a
valuable right, is not a vested right, and the holder thereof may be deprived of it.” Lahti,
357 Mich. at 588-89; see also Romein, 168 Mich. App. at 455. It does not appear that
this broad language in Lahti and Rookledge represents current doctrine (at least outside
the workers’ compensation context). See White v. Gen. Motors Corp., 431 Mich. 387,
397, 429 N.W.2d 576 (1988) (casting doubt on Michigan cases, including Lahti, that
have used “the broad meaning of ‘remedial’ to apply arguably substantive amendments
to the [workers’ compensation act] retrospectively”); see also Kia Motors Am., Inc. v.
Glassman Oldsmobile Saab Hyundai, Inc., No. 11-CV-12090, 2012 WL 175489, at *5
(E.D. Mich. Jan. 23, 2012) (unpublished), aff’d, 706 F.3d 733 (6th Cir. 2013) (“[M]ore
recent cases from the Michigan Supreme Court cast doubt on Lahti’s broad language.”);
but see, e.g., Cona v. Avondale Sch. Dist., 303 Mich. App. 123, 138, 842 N.W.2d 277
(2013) (reiterating—albeit in a different and completely distinguishable context—the
“general rule that that which the legislature gives, it may take away”).

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Pg ID 506

subject matter of the suit). Retroactive application of Senate Bill 490 would
eliminate that right.
In GMAC, the Michigan Court of Appeals retroactively applied an
amendment to the Michigan tax code that clarified that certain entities were
not entitled to claim a “bad debt deduction.” 286 Mich. App. 365. The
amending act expressly stated that the amendment was “curative and shall
be retroactively applied, expressing the original intent of the [L]egislature.”
Id. at 369 (citation and internal quotation marks omitted) (alteration in
original). Given this express language, GMAC is clearly distinguishable
from the instant case, for the reasons set forth in the immediately preceding
section. However, the GMAC court also went on to say that the
amendment did not affect the plaintiffs’ vested rights, because “a vested
right cannot be premised on an expectation that general laws will continue
and certainly cannot be premised on the continuation of tax law.” Id. at
378. This reasoning is somewhat hard to follow since the amendment in
GMAC was not purely prospective. The elimination of a previously
acquired tax deduction certainly would appear to affect a taxpayer’s vested,
substantive rights. It appears that the court’s analysis of the first
retroactivity factor (the presence or lack of retroactivity language in the
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Pg ID 507

statute) bled over into the court’s analysis of the third and fourth
retroactivity factors. Alternatively, it could be that the GMAC holding carves
out an exception for changes to tax law, labeling all such changes as per
se procedural or remedial. Either way, GMAC is distinguishable: the first
retroactivity factor in the instant case weighs against retroactive application,
and the instant case does not involve tax law.
Defendant also cites a couple of cases involving purely procedural
changes to the law. See Walker, 445 Mich. at 704 (holding that an
amendment allowing local governments to collect taxes by filing in
personam actions simply “implemented an additional enforcement
mechanism” and did not change the defendant’s tax liability or otherwise
affect the defendant’s vested rights); Seaton, 233 Mich. App. at 323
(holding that an amendment to Michigan’s Freedom of Information Act
(FOIA) precluding prison inmates from making FOIA requests was merely
procedural because, notwithstanding the amendment, “prisoner[s] [still]
ha[ve] a substantive constitutional right to obtain [government] records”).
As stated several times above, Senate Bill 490 makes a substantive
change to the VRPA, and this change is clearly distinguishable from these
procedural changes.
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Pg ID 508

Finally, Defendant cites cases in which the court held that a
prospective modification of a statute did not affect vested rights. See Att’y
Gen. v. Flint City Council, 269 Mich. App. 209, 215-16, 713 N.W.2d 782
(2005); Van Buren Twp. v. Garter Belt Inc., 258 Mich. App. 594, 632-33,
673 N.W.2d 111 (2003). These cases have no relevance to the
retroactivity issue in the instant case.
In conclusion, the third and fourth retroactivity principles weigh
against retroactive application of Senate Bill 490. Senate Bill 490 is not
purely procedural or remedial, and retroactive application would impair or
destroy Plaintiff’s vested right to sue for statutory damages without making
a showing of actual damages. Based on the first, third, and fourth
retroactivity principles, the Court concludes that Senate Bill 490 is not
retroactive. Therefore, the Court’s statutory-standing holding in Halaburda,
2013 WL 4012827, at *6, is applicable to the instant case. Plaintiff has
statutory standing.
2.

Plaintiff Has Article III Standing Under Spokeo.

Defendant’s next argument is that Plaintiff’s complaint fails to
establish an injury in fact under the Supreme Court’s recent decision in

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Pg ID 509

Spokeo, 136 S. Ct. 1540. For the reasons explained below, the Court
rejects this argument.
a.

Article III Standing Doctrine

The standing requirement is a bedrock constitutional doctrine that
“limits the category of litigants empowered to maintain a lawsuit in federal
court to seek redress for a legal wrong.” Spokeo, 136 S. Ct. at 1547. It is
the “threshold question in every federal case.” Miller v. City of Cincinnati,
622 F.3d 524, 531 (6th Cir. 2010) (internal quotation marks and citation
omitted). A plaintiff bears the burden of demonstrating that he or she has
standing to sue. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61
(1992). To discharge this burden, a plaintiff must establish three elements;
an injury in fact, “a causal connection between the injury and the conduct
complained of,” and that the injury will be redressed if the court grants the
requested relief. Id. Defendant only challenges the existence of an injury
in fact, “the ‘[f]irst and foremost’ of standing’s three elements.” Spokeo,
136 S. Ct. at 1547 (quoting Steel Co. v. Citizens for a Better Env’t, 523 U.S.
83, 103 (1998)) (alteration in original).
An injury in fact is an “invasion of a legally-protected interest.” Exel,
Inc. v. S. Refrigerated Transp., Inc., 807 F.3d 140, 148 (6th Cir. 2015). In
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Pg ID 510

order for a plaintiff to show an injury in fact, the plaintiff must establish that
he or she has suffered an injury that is “concrete and particularized” and
“actual or imminent, not conjectural or hypothetical.” Lujan, 504 U.S. at
560 (citation and internal quotation marks omitted). “A ‘concrete’ injury
must be ‘de facto’; that is, it must actually exist.” Spokeo, 136 S. Ct. at
1548. “‘Concrete’ is not, however, necessarily synonymous with ‘tangible.’
. . . [I]ntangible injuries can . . . be concrete.” Id. at 1549.
b.

The Injury-in-Fact Analyses in Halaburda and
Beaudry

In Halaburda, this Court held that a statutory violation of the VRPA
was sufficient to underwrite Article III standing. 2013 WL 4012827, at *3*6. The Court expressed “some hesitation [that a statutory violation of the
VRPA] meet[s] the definition of an injury in fact.” Id. at *4. But the Court
concluded that Beaudry v. TeleCheck Services, Inc., 579 F.3d 702 (6th Cir.
2009), in which the Sixth Circuit found that a statutory violation constituted
an injury in fact, was factually indistinguishable and thus governed the
case.
The plaintiff in Beaudry alleged that the defendants committed a
willful violation of the Fair Credit Reporting Act (“FCRA”). 579 F.3d at 703-

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Pg ID 511

04. The plaintiff claimed that “the defendants failed to account for a . . .
change in the numbering used by the [state] driver’s license system,
leading their systems to reflect incorrectly that many . . . consumers,
including [the plaintiff], were first-time check-writers.” Id. at 703. The
plaintiff did not assert that any of her checks were rejected or that she
experienced any harm other than the FCRA violation itself. Id. at 705.
Nonetheless, the court held that FCRA’s statutory-damages provision
provided plaintiff with Article III standing. Id. at 707. The court explained
that “Congress ‘has the power to create new legal rights, [including] right[s]
of action whose only injury-in-fact involves the violation of that statutory
right.’” Id. (quoting In re Carter, 553 F.3d 979, 988 (6th Cir. 2009))
(alterations in original). The court further explained that there were only
two limitations on Congress’s power, neither of which applied in Beaudry:
First, [the plaintiff] must be “among the injured,” in the sense
that she alleges the defendants violated her statutory rights. [In
re Carter, 553 F.3d 979, 988 (6th Cir. 2009)]; see Sierra Club v.
Morton, 405 U.S. 727, 734-35, 92 S.Ct. 1361, 31 L.Ed.2d 636
(1972). Yet that limit poses no obstacle here: [the plaintiff]
alleged that she was one of the consumers about whom the
defendants were generating credit reports based on inaccurate
information due to their failure to accommodate the new . . .
driver's license numbering system. She thus has alleged that
the defendants’ failure to follow “reasonable procedures to
assure maximum possible accuracy” of credit reporting
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Pg ID 512

information occurred “with respect to” her, as the statute
requires. 15 U.S.C. §§ 1681e(b), 1681n(a). Second, although
a right created by Congress “need not be economic in nature, it
still must cause individual, rather than collective, harm.” Carter,
553 F.3d at 989. [FCRA’s] statutory damages [provision]
clears this hurdle as well: It does not “authorize suits by
members of the public at large,” id.; it creates an individual right
not to have unlawful practices occur “with respect to” one’s own
credit information, 15 U.S.C. § 1681n. This nexus between the
individual plaintiff and the legal violation thus suffices to sustain
this statutorily created right.
Beaudry, 579 F.3d at 707.
This Court believed that Halaburda “f[ell] in line with Beaudry . . . .
[The VRPA] was created by a state legislature to protect individual
consumers from certain disclosures of their personal information.” 2013
WL 4012827, at *6. Indeed, each VRPA violation involves the disclosure of
a particular person’s information. Thus, like the FCRA plaintiff in Beaudry,
a plaintiff claiming that a defendant disclosed his or her information in
violation of the VRPA necessarily alleges that he or she is “among the
injured.”
c.

The Spokeo Case

Like Beaudry, Spokeo is a FCRA case. 136 S. Ct. 1540. The
defendant operated a “people search engine.” Id. at 1544. The plaintiff
alleged that there were inaccuracies in “some of the information” about the
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Pg ID 513

plaintiff that the defendant “gathered and then disseminated” through the
search engine. Id. Among other things, the search engine falsely indicated
that the plaintiff was married with children, that the plaintiff was middleaged, and that the plaintiff “ha[d] a job, [was] relatively affluent, and [held] a
graduate degree.” Id. at 1546. The plaintiff claimed that the defendant had
violated FCRA by, inter alia, failing to “‘follow reasonable procedures to
assure maximum possible accuracy of’ consumer reports.” Id. at 1545
(quoting 15 U.S.C. § 1681e(b)). The Ninth Circuit found that the plaintiff
had established an injury in fact:
[The Ninth Circuit] began by stating that “the violation of a
statutory right is usually a sufficient injury in fact to confer
standing.” [Robins v. Spokeo, Inc., 742 F.3d 409, 412 (9th Cir.
2014)]. The [Ninth Circuit] recognized that “the Constitution
limits the power of Congress to confer standing.” Id., at 413.
But the court held that those limits were honored in this case
because [the plaintiff] alleged that “[the defendant] violated his
statutory rights, not just the statutory rights of other people,”
and because his “personal interests in the handling of his credit
information are individualized rather than collective.” Ibid.
(emphasis in original).
Spokeo, 136 S. Ct. at 1546. The Supreme Court determined that the Ninth
Circuit had conflated the concreteness and particularity elements of the
injury-in-fact requirement. See id. at 1545 (“The Ninth Circuit’s analysis
focused on the second characteristic (particularity), but it overlooked the
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Pg ID 514

first (concreteness).”). Thus, the Court reversed and remanded for further
consideration of the concreteness element. See id.
For the benefit of the Ninth Circuit on remand, the Supreme Court’s
opinion elucidated the concreteness component of the injury-in-fact
requirement. The Court explained that a concrete injury must be “de facto”
but that it does not necessarily have to be “tangible.” Spokeo, 136 S. Ct. at
1548-49. Of particular relevance to the instant case, a violation of a statute
“can be sufficient in some circumstances to constitute injury in fact. . . . [A]
plaintiff in such a case need not allege any additional harm beyond the one
Congress has identified.” Spokeo, 136 S. Ct. at 1549; see also Imhoff Inv.,
L.L.C. v. Alfoccino, Inc., 792 F.3d 627, 633 (6th Cir. 2015) (“Congress may
. . . ‘enact statutes creating legal rights, the invasion of which creates
standing, even though no injury would exist without the statute.’” (quoting
Linda R.S. v. Richard D., 410 U.S. 614, 617 n.3 (1973))). But “a bare
procedural violation [of a statute], divorced from any concrete harm,” does
not constitute an injury in fact. Spokeo, 136 S. Ct. at 1549; see also Sierra
Club v. Morton, 405 U.S. 727, 738 (1972) (Statutory “broadening [of] the
categories of injury that may be alleged in support of standing is a different

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Pg ID 515

matter from abandoning the requirement that the party seeking review must
himself have suffered an injury.”).
The Court explained that “Congress is well positioned to identify
intangible harms that meet minimum Article III requirements.” Spokeo, 136
S. Ct. at 1549. Therefore, Congress’s (or a state legislature’s) “judgment is
. . . instructive and important” in deciding whether a statutory violation is
sufficient to support Article III standing. Id. But “Congress’ role in
identifying and elevating intangible harms does not mean that a plaintiff
automatically satisfies the injury-in-fact requirement whenever a statute
grants a person a statutory right.” Id. The Court further explained that “it is
instructive to consider whether an alleged intangible harm has a close
relationship to a harm that has traditionally been regarded as providing a
basis for a lawsuit in English or American courts.” Id.
One type of statutory violation that is insufficient to satisfy the injuryin-fact requirement is a “bare procedural violation, divorced from any
concrete harm.” Spokeo, 136 S. Ct. at 1549. The Court noted that in the
context of FCRA, a defendant’s failure to follow reasonable procedures to
ensure accuracy or to provide the statutorily required notice to a consumer
“may result in no harm.” Id. at 1550. A procedural violation may not even
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Pg ID 516

result in the disclosure of inaccurate information. Id. And “not all
inaccuracies cause harm or present any material risk of harm. . . . [For
example, i]t is difficult to imagine how the dissemination of an incorrect zip
code, without more, could work any concrete harm.” Id.
d.

Whether, Post-Spokeo, VRPA’s Statutory Cause
of Action Is Still Sufficient to Support Article III
Standing

The Sixth Circuit’s analysis in Beaudry is very similar to the Ninth
Circuit’s analysis in Spokeo, which the Supreme Court criticized for
conflating the concreteness and particularity requirements. Thus, Spokeo
casts some doubt on the holding of Beaudry and this Court’s reliance on
Beaudry in Halaburda. Nonetheless, the Court concludes that under the
principles set forth by the Supreme Court in Spokeo, a violation of the
VRPA is sufficient to satisfy the injury-in-fact requirement.
First, the Court heeds the Supreme Court’s admonition in Spokeo
to give due consideration to the legislature’s judgment in enacting the
VRPA’s civil cause of action. The VRPA’s plain language and legislative
history demonstrate that it “was created by [the Michigan] legislature to
protect individual consumers from certain disclosures of their personal
information.” Halaburda, 2013 WL 4012827, at *6. Indeed, the VRPA’s
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Pg ID 517

long title is: “An act to preserve personal privacy with respect to the
purchase, rental, or borrowing of certain materials, and to provide penalties
and remedies for violation of this act.” 1988 Mich. Pub. Act No. 378; see
also Richards, supra, at 693-97 (explaining the motivation for the federal
Video Privacy Protection Act and related state laws, including the VRPA).
When the Michigan legislature enacted the VRPA, the legislature created a
new right to privacy. A violation of this right results in real, concrete harm,
even if the harm is not tangible. See Church v. Accretive Health, Inc., No.
15-15708, 2016 WL 3611543, at *3 (11th Cir. July 6, 2016) (applying the
Supreme Court’s holding in Spokeo and holding that “through the [federal
Fair Debt Collection Practices Act], Congress has created a new right—the
right to receive [certain] required disclosures in communications governed
by the [Act]—and a new injury—not receiving such disclosures”); In re
Nickelodeon Consumer Privacy Litig., No. 15-1441, 2016 WL 3513782, at
*7 (3d Cir. June 27, 2016) (holding that disclosure of information in violation
of the federal Video Privacy Protection Act resulted in a concrete harm “in
the sense that it involve[d] a clear de facto injury, i.e., the unlawful
disclosure of legally protected information”).

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Pg ID 518

Second, the type of statutory violation alleged in the instant case is
not a “bare procedural violation,” Spokeo, 136 S. Ct. at 1549, but rather a
violation of the VRPA’s substantive core. The central provision of the
VRPA states that a person “shall not knowingly disclose . . . a record or
information that personally identifies the customer as having purchased,
leased, rented, or borrowed [various written and audiovisual] materials.”
Mich. Comp. Laws § 445.1712(1) (emphasis added). Defendant is
accused of violating this injunction. Such a violation can hardly be deemed
merely procedural. See Sterk v. Redbox Automated Retail, LLC, 770 F.3d
618, 623 (7th Cir. 2014) (rejecting the defendant’s standing argument that
the plaintiff had suffered no harm from its “technical” violation of the federal
Video Privacy Protection Act because “‘technical’ violations of the statute
(i.e., impermissible disclosures of one’s sensitive, personal information) are
precisely what Congress sought to illegalize by enacting the VPPA”).
Third, the Court notes that the right guaranteed by the VRPA is
similar in kind to other privacy rights that were gradually recognized by
American courts over the course of the last century, following the
publication of Samuel Warren and Louis Brandeis’s landmark article The
Right to Privacy, 4 Harv. L. Rev. 193 (1890). See generally Neil M.
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Pg ID 519

Richards & Daniel J. Solove, Privacy’s Other Path: Recovering the Law of
Confidentiality, 96 Geo. L.J. 123 (2007); William L. Prosser, Privacy, 48
Cal. L. Rev. 383 (1960). Moreover, as Plaintiff points out, precursors to
American privacy law can be found in nineteenth century English law. See,
e.g., Prince Albert v. Strange, (1849) 41 Eng. Rep. 1171, 1178 (Ch.)
(enjoining the defendant from disseminating the plaintiff’s etchings that the
defendant obtained through a “breach of trust, confidence, or contract”); but
see Richards & Solove, supra, at 130 (“Prince Albert was a famous
confidentiality and literary property case that Warren and Brandeis artfully
(and perhaps disingenuously) recharacterized as a privacy case.”). The
history of American and English courts recognizing causes of action similar
to the cause of action asserted in the instant case is “relevant to the
constitutional standing inquiry since . . . Article III’s restriction of the judicial
power to ‘Cases’ and ‘Controversies’ is properly understood to mean ‘cases
and controversies of the sort traditionally amendable to, and resolved by,
the judicial process.’” Vt. Agency of Nat. Res. v. U.S. ex rel. Stevens, 529
U.S. 765, 774 (2000) (quoting Steel Co. v. Citizens for a Better Env’t, 523
U.S. 83, 102 (1998)). This factor is not dispositive, however, because
privacy law is a relatively recent development (it did not exist, for example,
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Pg ID 520

at the time of the Nation’s founding), and because the resemblance
between the VRPA cause of action and earlier privacy based causes of
action is only partial.
Defendant relies primarily on a number of district court cases, which
are not binding on this Court, and, to the extent that they are persuasive,
are distinguishable. In Gubala v. Time Warner Cable Inc., for example, the
plaintiff alleged that the defendant cable-services provider retained his
personal information after the plaintiff terminated his cable services. No.
15-CV-1078, 2016 WL 3390415, at *1 (E.D. Wis. June 17, 2016). The
defendant’s conduct allegedly violated the federal Cable Communications
Policy Act, which requires cable operators to destroy such information “[i]f
the information is no longer necessary for the purpose for which it was
collected.” 47 U.S.C. § 551(e). The court held that this procedural violation
did not result in a harm that was sufficiently concrete to constitute an injury
in fact. 2016 WL 3390415, at *4. The Gubala court may have been right
that a party’s mere retention of private information results in such an
insubstantial harm that Congress or a state legislature cannot pass a
statute that would elevate it to the level of an injury in fact. But the instant
case involves a disclosure of private information and thus is
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Pg ID 521

distinguishable. Even the Gubala court recognized this. See id. at *4
(“[T]here are no allegations . . . showing that the plaintiff has suffered a
concrete injury as a result of the defendant’s retaining his personally
identifiable information. . . . He does not allege that the defendant has
disclosed his information to a third party.”). Defendant’s other cases are
similarly distinguishable. See Sartin v. EKF Diagnostics, Inc., No. 16-1816,
2016 WL 3598297 (E.D. La. July 5, 2016) (holding that the plaintiff suffered
no concrete harm from being sent “unsolicited fax advertisements”); Smith
v. Ohio State Univ., No. 2:15-CV-3030, 2016 WL 3182675 (S.D. Ohio June
8, 2016) (holding that the plaintiffs suffered no concrete harm when, in the
process of submitting to a background check for defendant, they were
provided with “disclosure and authorization [forms] which improperly
included extraneous information such as a liability release, in violation of
the FCRA”); Wall v. Rental, No. 15-13254, 2016 WL 3418539 (E.D. Mich.
June 22, 2016) (holding that tenants did not suffer a concrete harm when
their landlords stored their security deposits at a different bank than the one
indicated in the lease agreement); Khan v. Children’s Nat’l Health Sys., No.
CV TDC-15-2125, 2016 WL 2946165, at *5 (D. Md. May 19, 2016) (holding
that patients did not suffer a concrete harm from a breach of a hospital’s
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Pg ID 522

computer system where “there [was] no indication that the patients’
personal data was actually viewed, accessed, or copied, or was even the
target of the [breach]”).
In sum, the Court concludes that a violation of the VRPA’s disclosure
prohibition results in a concrete injury. Moreover, as noted above, it is
evident that a VRPA violation results in a harm to the particular customer
whose information was disclosed. Thus, the injury-in-fact requirement is
satisfied. Because Plaintiff’s VRPA claim (Count 1) and unjust-enrichment
claim (Count 2) are both based on Defendant’s VRPA violation, the
foregoing standing analysis applies to both claims.11

11

Because the Court finds that the VRPA underwrites standing for Plaintiff’s VRPA and
unjust-enrichment claims, the Court does not need to consider the parties’ other
standing arguments. The Court notes, however, that if the Michigan legislature had not
provided a cause of action in the VRPA, the disclosures alleged in this case would
probably be insufficient, in themselves, to satisfy the injury-in-fact requirement. For
example, in Carlsen v. Gamestop, 112 F. Supp. 3d 855, 858 (D. Minn. 2015), the
plaintiff alleged that he suffered an injury in fact when the defendant disclosed his
personal information. The defendant had obtained the plaintiff’s personal information
when the plaintiff subscribed to the defendant’s website. Id. The plaintiff claimed that
he was harmed by the disclosure because he either would not have paid as much for a
subscription or would not have subscribed at all “if he had known how his [personal
information] would be handled.” Id. at 861, 864. The court rejected this argument,
explaining that the plaintiff “only allege[d] a general theory of overpayment . . . [and]
does not allege that he paid anything specific for [privacy].” Id. at 862; see also Galaria
v. Nationwide Mut. Ins. Co., 998 F. Supp. 2d 646, 658 (S.D. Ohio 2014) (rejecting the
argument that “the loss of privacy alone” was a cognizable injury); Low v. LinkedIn
Corp., No. 11-CV-01468-LHK, 2011 WL 5509848, at *4 (N.D. Cal. Nov. 11, 2011)
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B.

Pg ID 523

Plaintiff Has Stated a Claim for Unjust Enrichment.

Defendant argues that Count 2 of Plaintiff’s complaint fails to state a
claim for unjust enrichment. Defendant asserts two arguments. First,
Defendant argues that the unjust-enrichment claim fails because Plaintiff
does not allege that she suffered a loss. Second, Defendant cursorily
argues that the VRPA preempts Plaintiff’s unjust-enrichment claim. Both
arguments lack merit.
1.

Plaintiff Does Not Need to Show That She Suffered a
Monetary Loss in Order to Make Out Her UnjustEnrichment Claim.

Defendant’s first argument is that “Plaintiff fails to state an unjust
enrichment claim because she fails to allege that she lost anything of
value.” (Def.’s Mot. Dismiss at 35). Under Michigan law, “[u]njust
enrichment is defined as the unjust retention of money or benefits which in
justice and equity belong to another.” Tkachik v. Mandeville, 487 Mich. 38,
48, 790 N.W.2d 260 (2010) (quoting McCreary v. Shields, 333 Mich. 290,
294, 52 N.W.2d 853 (1952)) (internal quotation marks omitted). A plaintiff

(unpublished) (holding that the plaintiff’s allegation that his improperly disclosed
“personal information ha[d] an independent economic value” was “too abstract and
hypothetical to support Article III standing”).

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alleging unjust enrichment must establish two elements: “(1) the receipt of
a benefit by defendant from plaintiff, and (2) an inequity resulting to plaintiff
because of the retention of the benefit by defendant.” Belle Isle Grill Corp.
v. City of Detroit, 256 Mich. App. 463, 478, 666 N.W.2d 271, 280 (2003).
It is evident from these cases that “loss” is not an element of an
unjust enrichment claim under Michigan law. Defendant cites Kammer
Asphalt Paving Co., Inc. v. East China Township Schools, which states that
“[a] person who has been unjustly enriched at the expense of another is
required to make restitution to the other.” 443 Mich. 176, 185 (1993)
(quoting Restatement (First) of Restitution § 1 (1937)) (internal quotation
marks omitted) (alteration in original). But it is not the case that a plaintiff
must literally have suffered a “loss” in order for a defendant to have been
enriched “at [the plaintiff’s] expense.”
Allor v. DeClark, Inc., illustrates this point. No. 300953, 2012 WL
555779 (Mich. Ct. App. Feb. 21, 2012) (unpublished). The plaintiff in Allor
licensed software to one company but later found out that another company
was using the software. Id. at *1. The plaintiff sued the latter company to
recover licensing fees, based on an unjust-enrichment theory. Id. The
court held that the plaintiff had successfully proved unjust enrichment:
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Pg ID 525

“Plaintiff presented evidence that defendant received the benefit of using
[the software] for 15 months and that plaintiff suffered an inequity because
defendant did not pay for that usage.” Id. at *2. The plaintiff did not suffer
any loss, except insofar as the plaintiff was not paid for the value of the
software. If this is a loss, then Plaintiff has successfully pleaded a loss.
Plaintiff alleges, inter alia, that Defendant disclosed her personal
information and profited from it, without paying Plaintiff for the value of this
information.
Moreover, Plaintiff has stated a plausible basis for the two actual
elements of an unjust-enrichment claim. First, Plaintiff alleges that she
conferred benefits on Defendant. These benefits included the subscription
fees paid by Plaintiff. (Compl. ¶ 69). These benefits also included the
personal information provided by Plaintiff to Defendant, which Defendant
allegedly monetized by selling to “data miners.” (Id. ¶¶ 3, 69 ). Second,
Plaintiff alleges that the Defendant violated the VRPA by disclosing the
information that Defendant received in the course of Plaintiff’s subscription.
If true, this would appear to render Defendant’s retention of the benefits
conferred by Plaintiff inequitable. (Id. ¶ 72).

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2.

Pg ID 526

Plaintiff’s Unjust-Enrichment Claim Is Not Preempted
by the VRPA.

Defendant’s final argument is that “[b]ecause any privacy interest in
non-disclosure of Plaintiff’s Personal Reading Information is covered by the
VRPA, if Plaintiff’s VRPA claim survives the Amendment, it preempts her
unjust enrichment claim.” (Def.’s Mot. Dismiss at 37). This argument fails.
A statutory remedy preempts a common law claim if the statute
“exclude[s] the availability of alternative common-law remedies.” Morris
Pumps v. Centerline Piping, Inc., 273 Mich.App. 187, 729 N.W.2d 898, 907
(2006). “Whether or not a statutory scheme preempts the common law on
a subject is a matter of legislative intent.” Kraft v. Detroit Entm’t L.L.C., 261
Mich.App. 534, 683 N.W.2d 200, 206 (2004) (citations omitted). A statutory
remedy will supersede a common law remedy “where comprehensive
legislation prescribes in detail a course of conduct to pursue and the parties
and things affected, and designates specific limitations and exceptions.”
Id.; see also Hoerstman Gen. Contracting, Inc., v. Hahn, 474 Mich. 66, 711
N.W.2d 340, 346 (2006). “Therefore, statutes only operate to exclude
common law claims when they feature express language to that effect, or
when they are part of a ‘comprehensive’ legislative scheme.” Boelter v.

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Pg ID 527

Hearst Commc’ns, Inc., No. 15 CIV. 3934 (AT), 2016 WL 3369541, at *4-*6
(S.D.N.Y. June 17, 2016) (collecting cases and summarizing Michigan
state law). “The VRPA does not include express language limiting a
plaintiff’s other potential remedies and is not part of a comprehensive
legislative scheme. Therefore, it does not preclude plaintiff’s unjust
enrichment claim.” Id.
IV. CONCLUSION
Plaintiff has both statutory standing under the VRPA and Article III
standing. And Plaintiff’s unjust-enrichment count (Count 2) states a claim
upon which relief may be granted. Therefore, Defendant’s motion to
dismiss (Doc. 10) is DENIED.
IT IS SO ORDERED.
Dated: February 15, 2017
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
February 15, 2017, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk

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