Michigan's Preservation of Personal Privacy Act: Reading Records, the 2016 Amendment and the Limitations Fight

What MCL 445.1712 Prohibits

Michigan's Legislature enacted 1988 PA 378 as "AN ACT to preserve personal privacy with respect to the purchase, rental, or borrowing of certain materials," effective March 30, 1989. The Legislature's index carries its popular name as the Video Rental Privacy Act, although its coverage goes well past video. The civil remedy in section 5 was added later, by 1989 PA 206.

The operative prohibition is MCL 445.1712(1). As amended in 2016, 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." Subsection (2) excludes records that have been "aggregated or has been processed in a manner designed to prevent its association with an identifiable customer."

Section 1 defines a customer as "an individual who purchases, rents, or borrows a book, other written material, a sound recording, or a video recording." It defines "ordinary course of business" as "activities related to the sale, rental, or lending of, or advertising in, materials described in section 2," and states that "written" includes electronic means under the Uniform Electronic Transactions Act. Section 4 makes any violation a misdemeanor.

Section 3 lists the only circumstances in which a covered record may be disclosed:

• With the written permission of the customer
• Pursuant to a warrant or court order
• To the extent reasonably necessary to collect payment, after written notice that payment is due and a failure to pay within a reasonable time
• To any person, if the disclosure is incident to the ordinary course of business of the discloser; this applies only to records created or obtained after the 2016 amendment took effect
• For marketing goods and services to customers, after written notice that the customer may remove their name at any time and how; the notice may appear in or with the materials, at the time of the order, or clearly and conspicuously in an online privacy policy, must include a non-electronic opt-out unless the business communicates with customers electronically, and an opt-out takes effect 30 days after the customer's notice
• Pursuant to a search warrant issued by a state or federal court or a grand jury subpoena

Books, Recordings and Videos: Who Counts as a Customer

Because the statute covers written materials and sound recordings, it has been tested against business models the 1988 Legislature did not have in view. The Michigan Supreme Court addressed music streaming in In re Certified Question (Deacon v. Pandora Media, Inc.), 499 Mich. 477 (2016), answering a question certified by the Ninth Circuit. Applying the pre-2016 text, the court limited the question to whether the plaintiff was a "customer" because he rented or borrowed sound recordings from Pandora, and answered no.

Reading 1980s dictionaries, the court concluded that the verb "rent" contemplates payment, and that the plaintiff, a listener on Pandora's free service, "was not a person who rented a sound recording because he did not give any payment for it." It concluded that "borrow" contemplates a promise to return the item or its equivalent, and there was no such promise because the service "only involved the delivery of a sound recording to the listener." Since only a customer may sue, the court did not reach whether Pandora was in the business of renting or lending sound recordings. The plaintiff did not argue that he had purchased anything.

The Sixth Circuit addressed print in Coulter-Owens v. Time Inc., Nos. 16-1321 and 16-1380 (6th Cir. June 26, 2017), an unpublished decision. A class of roughly 40,000 subscribers who bought Time, Fortune and Real Simple through online subscription agents sought $5,000 each over Time's sharing of order information with Acxiom and Wiland. The court affirmed summary judgment for Time on the ground that the statute's phrase "at retail" "has to mean something." There were two sales, the court reasoned: the agent's sale to the subscriber, which was at retail, and Time's sale to the agent, which "was not 'at retail' under the facts of this case."

The 2016 Amendment and Actual Damages

The amendment began as Senate Bill 490 of 2015, introduced September 10, 2015. The bill history records Senate passage 38 to 0 on December 15, 2015, House passage of a substitute 59 to 49 on March 24, 2016, Senate concurrence 28 to 8 on April 12, 2016, and approval by the Governor on May 2, 2016 as Public Act 92 of 2016. The Michigan Compiled Laws list the amended sections as effective July 31, 2016.

The pre-amendment text appears in Coulter-Owens and Deacon. Section 5 then provided that a violator "shall be liable" to the customer for "Actual damages, including damages for emotional distress, or $5,000.00, whichever is greater," plus costs and reasonable attorney fees. Section 2 had no "knowingly" element and reached "a record or information concerning the purchase, lease, rental, or borrowing of those materials by a customer that indicates the identity of the customer." Its marketing exception applied only if the disclosure was "for the exclusive purpose of marketing goods and services directly to the consumer." There was no ordinary course of business exception and no carve-out for aggregated data.

Section 5 now provides that a customer "who suffers actual damages as a result of a violation" may recover actual damages, including damages for emotional distress, and reasonable costs and attorney fees, and that no liability results from a disclosure permitted under section 3. Enacting section 2 of the 2016 act declares it "curative and intended to clarify" that the prohibitions do not bar ordinary-course disclosures or marketing with written notice, and "that a civil action for a violation of those prohibitions may only be brought by a customer who has suffered actual damages."

The Sixth Circuit did not give that label retroactive effect. In Coulter-Owens, it held that under Michigan law a statute is presumed prospective, that the amended act contains no express statement of retroactivity and has a future effective date, and that "given the extensive substantive changes (such as excising the statutory damages provision) it cannot be viewed as merely a 'clarifying' amendment." Because the amendment "eliminates vested rights, such as the right to sue for statutory damages," it is not retroactive. The same opinion held that the plaintiff had Article III standing, because disclosure of reading choices is a violation of "the PPPA's most basic substantive protection." As a result, disclosures made on or before July 30, 2016 continued to be litigated under the $5,000 version.

The Limitations Period in Federal Decisions

Neither version of the PPPA contains a limitations provision, so courts have had to choose between two general Michigan statutes: MCL 600.5805(2), three years for injury to a person or property, and MCL 600.5813, six years for "all other personal actions." The choice matters most for pre-amendment claims, because the $5,000 remedy is available only for disclosures before July 31, 2016. The decisions below are federal; none is from a Michigan appellate court, and each is described on its own terms.

• Boelter v. Hearst Communications, Inc., 269 F. Supp. 3d 172 (S.D.N.Y. Sept. 7, 2017). The defendant argued some claims were time-barred under Michigan's three-year statute, and the plaintiff argued for tolling. The court applied the three-year period, held the claims tolled under Michigan Court Rule 3.501(F) for the full length of an earlier putative class action (883 days) and the pendency of the original Boelter case, and concluded that disclosures after December 20, 2009 were actionable.
• Pratt v. KSE Sportsman Media, Inc., No. 1:21-cv-11404 (E.D. Mich. Feb. 15, 2022). Treating the question as one of first impression, the court held "A six-year statute of limitations applies to PPPA claims," relying on the Sixth Circuit's published reading in Palmer Park Square v. Scottsdale Insurance that section 600.5813 governs statutory causes of action without their own period. It described earlier S.D.N.Y. decisions as having assumed the three-year period because the parties did not contest it. It dismissed claims accruing on or before June 15, 2015 and allowed claims from June 16, 2015 to July 30, 2016.
• Krassick v. Archaeological Institute of America, No. 2:21-cv-180 (W.D. Mich. June 9, 2022). The court held that the right to privacy in one's reading materials, though "similar in kind" to the common-law privacy tort, "is nonetheless the creation of a statute; it did not exist under common law," so the claim is not a traditional tort under section 600.5805 and the six-year period applies. It rejected the defendant's reliance on an older Court of Appeals test, noting that the Michigan Supreme Court had overruled a decision applying it.
• Nashel v. The New York Times Co., No. 2:22-cv-10633 (E.D. Mich. Oct. 11, 2022). The court applied the six-year period, stating that the Michigan Supreme Court "has never settled" the question, then dismissed the complaint for failure to state a claim and denied as moot the defendant's motion to certify the limitations question to the Michigan Supreme Court.
• Bozung v. Christianbook, LLC, No. 1:22-cv-304 (W.D. Mich. Mar. 6, 2023). The court applied six years and added the Michigan Supreme Court's COVID-19 administrative orders, which it counted as tolling limitations periods for 102 days, which put the latest deadline for the plaintiff's claim at November 9, 2022. It then held the complaint did not plausibly allege a disclosure in the relevant period.
• Gottsleben v. Informa Media, Inc., No. 1:22-cv-866 (W.D. Mich. July 7, 2023). Applying six years, the court rejected arguments that the COVID-19 orders extended only deadlines falling during the emergency, that they did not apply to a plaintiff who faced no pandemic obstacle, and that a federal court should not apply them, following the Michigan Court of Appeals in Carter v. DTN Management. It accepted the plaintiff's 101-day count while noting that June 20, 2020 is 102 days after March 10, 2020.
• Lee v. Belvoir Media Group, LLC, No. 4:22-cv-12153 (E.D. Mich. Sept. 27, 2023). The court called the six-year period "consistent with the now well-established rulings from courts within the circuit," applied 101 days of COVID-19 tolling to allow claims for disclosures back to at least June 4, 2016, and declined to decide whether an earlier putative class action in the Western District tolled the period further.

Two points remain visible across these decisions. The three-year versus six-year question has been decided by federal courts predicting Michigan law, and Nashel's request to put it to the Michigan Supreme Court was not reached. The tolling arithmetic has also varied, with courts counting the COVID-19 exclusion as 101 or 102 days and leaving class action tolling open.

How It Compares With the Federal VPPA

The federal Video Privacy Protection Act, 18 U.S.C. 2710, was enacted the same year. The two statutes differ in scope and remedy:

• Materials. The VPPA covers a "video tape service provider" dealing in "prerecorded video cassette tapes or similar audio visual materials." The PPPA adds books and other written materials and sound recordings.
• Who is protected. The VPPA protects a "consumer," defined as "any renter, purchaser, or subscriber of goods or services" from a video tape service provider. The PPPA protects a "customer" who purchases, rents or borrows the covered materials, and Coulter-Owens adds the "at retail" limit for sellers.
• Ordinary course of business. The VPPA defines it as "only debt collection activities, order fulfillment, request processing, and the transfer of ownership." Michigan's 2016 definition covers activities related to sale, rental or lending of, "or advertising in," the materials.
• Consent. The VPPA requires informed, written consent in a form "distinct and separate" from other obligations, given at the time or in advance for up to two years, with a clear way to withdraw. The PPPA requires "written permission" without those form requirements.
• Damages. The VPPA allows actual damages "but not less than liquidated damages in an amount of $2,500," punitive damages, attorneys' fees and equitable relief. Since July 31, 2016 the PPPA allows only actual damages, including emotional distress, plus costs and fees, to a customer who suffered actual damages.
• Limitations. The VPPA requires suit within two years from the act complained of or its discovery. The PPPA states no period of its own.
• Other duties. The VPPA requires destruction of personally identifiable information within one year after it is no longer needed and excludes improperly obtained information from evidence. The PPPA has neither provision, but it makes a violation a misdemeanor.

The VPPA's preemption clause states that it preempts "only the provisions of State or local law that require disclosure prohibited by this section," which leaves the PPPA's separate prohibitions in place.

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