Pett v. Publishers Clearing House, Inc.

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MARY LOU PETT, et al., Plaintiff, v. PUBLISHERS CLEARING HOUSE, INC. Defendant.

No. 22-11389

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

May 23, 2023

ORDER GRANTING IN PART AND DENYING IN PART

DEFENDANT'S MOTION TO DISMISS [ECF NO. 25] AND DENYING AS SUPERSEDED DEFENDANT'S MOTION TO DISMISS [ECF NO. 20]

DENISE PAGE HOOD, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

The nine named Plaintiffs filed this putative class action on June 22, 2022, alleging that Defendant Publishers Clearing House, Inc.^[1] (“Defendant” or “PCH”) violated Michigan's Preservation of Personal Privacy Act, M.C.L. § 445.1712 (“PPPA”), when it disclosed, without Plaintiffs' consent, information that identified Plaintiffs as purchasers of certain types of written materials and sound and video recordings sold by Defendant. Plaintiffs have filed two amended class action complaints, the most recent on November 8, 2022 (the “Complaint”). ECF No. 22.^[2] Defendant filed its Motion to Dismiss Second Amended Class Action Complaint on December 6, 2022 (the “Motion”), and the Motion is fully briefed and numerous supplemental filings were filed by the parties. See ECF Nos. 33-34, 36-42. The Court held a hearing on the Motion on February 1, 2023. For the reasons that follow, the Motion is granted in part and denied in part.

II. BACKGROUND

It is undisputed that the relevant provision of the PPPA, in the version that existed prior to July 31, 2016, provided:

[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....[A] person who violates this act shall be liable in a civil action for damages to the customer identified in a record or other information that is disclosed in violation of this act.

M.C.L. § 445.1712.

Each of the nine Plaintiffs makes identical allegations in the Complaint:

Plaintiff [] is a natural person and citizen of the State of Michigan and resides in [], Michigan. Plaintiff [] purchased written materials, sound recordings, and/or video recordings sold by PCH, including but not limited to subscriptions to magazines, prior to July 31, 2016 (including during the relevant pre-July 31, 2016 time period). While residing in, a citizen of, and present in Michigan, Plaintiff [] purchased such products, including such magazine subscriptions, directly from PCH. Prior to and at the time Plaintiff [] purchased such products (including magazine subscriptions) from PCH, PCH did not notify Plaintiff [] that it discloses the Private Purchase Information of its customers, and Plaintiff [] has never authorized PCH to do so. Furthermore, Plaintiff [] was never provided any written notice that PCH rents, exchanges, or otherwise discloses its customers' Private Purchase Information, or any means of opting out. Since purchasing products (including magazine subscriptions) from PCH, and during the relevant pre-July 31, 2016 time period, PCH disclosed, without the requisite consent or prior notice, Plaintiff []'s Private Purchase Information to data aggregators, data appenders, and/or data cooperatives, who then supplement that information with data from their own files. Moreover, during that same period, PCH rented or exchanged mailing lists containing Plaintiff []'s Private Purchase Information to third parties seeking to contact PCH customers, without first obtaining the requisite written consent from Plaintiff [] or even giving her prior notice of the rentals, exchanges, and/or other disclosures.

ECF No. 22, PageID.1240-49 (¶¶ 18-26). Plaintiffs define “Private Purchase Information” as Defendant's “customers' information---including their full names, titles of the written materials (i.e., magazines, books, journals, newsletters, or newspapers) and/or audiovisual materials (i.e., sound recordings, including music or audiobooks, and video recordings, including television shows or movies) they purchased, and home addresses.” ECF No. 22, at ¶14.

The only “data aggregators, data appenders, and/or data cooperatives” (or any other similar entity)^[3] that Plaintiffs specifically identify in the Complaint as possessing Plaintiffs' PPI are NextMark, Inc. (“NextMark”) and List Services Corp. (“LSC”). The Complaint alleges that NextMark is a “list broker” on whose website “PCH offers to provide renters access to the mailing list titled ‘Publishers Clearing House Magazine Buyers Mailing List', which contains the Private Purchase Information of all 647,541 of PCH's U.S.-based magazine subscription purchasers at a base price of ‘$100.00/M [per thousand][.]” ECF No. 22 (at ¶ 2) (alterations in original). Plaintiffs allege that, on NextMark's website, “PCH also offers to provide renters access to the mailing list titled ‘Publishers Clearing House Book, Music & Video Buyers Mailing List', which contains the Private Purchase Information of 1,429,511 of PCH's U.S.-based book, music, and video purchasers at a base price of ‘$100.00/M [per thousand][.]' Id. at ¶ 3 (alterations in original).

In support of these two allegations, Plaintiffs include within and attach to the Complaint two screenshots from NextMark's website. Id. at ¶¶ 2-3, Exs. A and B.

The Complaint alleges that LSC “serves as [PCH's] list manager” and has served PCH in that role since “April 1, 2002.” Id. at ¶ 5. Plaintiffs allege that LSC manages PCH “mailing lists” that “include magazine buyers, merchandise buyers, sweeps nos entries and pch.com buyers and entrants....” Id. Plaintiffs further allege that, “for the entire duration of the pre-July 31, 2016 time period, PCH continuously and systematically disclosed-at least as frequently as once a month-all of its customer's Private Purchase Information via list rentals, exchanges, and transfer to LSC and other third-party entities.” Id. at ¶ 6.

In support of their claims, Plaintiffs attach to the Complaint four exhibits that Plaintiffs assert demonstrate that PCH violated the PPPA. Id. at Exs. D-G.

III. APPLICABLE LAW

A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of the plaintiff's complaint. Accepting all factual allegations as true, the court will review the complaint in the light most favorable to the plaintiff. Eidson v. Tennessee Dep't of Children's Servs., 510 F.3d 631, 634 (6th Cir. 2007). As a general rule, to survive a motion to dismiss, the complaint must state sufficient “facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).

The complaint must demonstrate more than a sheer possibility that the defendant's conduct was unlawful. Id. at 556. Claims comprised of “labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

IV. ANALYSIS

The Court notes that the Complaint's allegations must be accepted as true, and the question is whether those allegations, viewed together and with all reasonable inferences drawn in the plaintiff's favor, are plausibly suggestive of a claim for relief. See, e.g., Doe v. Michigan State Univ., 989 F.3d 418, 425 (6th Cir. 2021). The Court therefore must view Plaintiffs' allegations as true and determine whether they give rise to a reasonable inference that Plaintiffs are entitled to relief under the PPPA. Mediacom Se. LLC v. BellSouth Telecommunications, Inc., 672 F.3d 396, 400 (6th Cir. 2012).

The Complaint alleges, in part:

1. “[F]or the entire duration of the pre-July 31, 2016 time period, PCH continually and systematically disclosed - at least as frequently as once a month - all of its customers' Private Purchase Information via list rentals exchanges, and transfers to LSC and other third-party entities. For example, in 2014, LSC's website advertised for rental the PCH customer list (and all of the related “selects” available for purchase for each customer, in addition to every customer's Private Purchase Information)” (¶6);

2. “Copies of the data cards on LSC's website advertising the availability of the PCH “Masterfile” - i.e., PCH's entire customer database, which PCH transmitted to LSC (and innumerable other renters and exchangers of this data) - which were cached by The Wayback Machine in 2014, were available on LSC's website (and other websites, including Nextmark's) throughout the relevant pre-July 31, 2016 time period, and are still publicly accessible today on both LSC's and Nextmark's websites, thus demonstrating that, during the relevant pre-July 31, 2016 time period, PCH was disclosing its entire customer database to LSC, to various third party renters of the database, and to other companies who exchanged their own customer database with PCH in return for PCH's customer database.” (¶7);

3. “[F]rom 2002 through the present, including throughout the entire preJuly 31, 2016 time period, LSC has also acted as PCH's data appender by continuously using PCH's customer database (transmitted to it by PCH on at least as frequently as a monthly basis) to “enhance” PCH's consumer data files and LSC's other data files, including both its own consumer data files and other clients' consumer data files that it managed, by appending to the files other “demographic, ethnic, lifestyle, . . . and e-mail” information about each consumer listed in these files -which made PCH's list and

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