U.S. Supreme Court appears skeptical of consumer privacy lawsuit

The U.S. Supreme Court appeared skeptical Wednesday during arguments over whether video consumers are protected from having data shared between online companies.Justices on the high court heard arguments in Salazar v. Paramount, a case focused on the 1988 Video Privacy Protection Act. The legislation prevents a “consumer” of video goods and services from having personally identifiable information released to a third party.
Michael Salazar subscribed to Paramount’s online newsletter 247Sports to view videos. According to his lawyers, Paramount shared his Facebook ID and video-watching history to Meta.
Justices debated the definition of the term “consumer” in the law Congress adopted. Congress defined a consumer as “a subscriber of goods or services from a video tape service provider.”
Justices Brett Kavanaugh, Samuel Alito and Amy Coney Barrett expressed concerns about expanding the definition of video tape service providers into the modern age. Each justice said the case could lead to large civil penalties against streaming service providers based on a decades-old Congressional statute.
“You’ve waved away concerns about the breadth of your argument under certain circumstances,” Justice Brett Kavanaugh told Joshua Hammack, Salazar’s lawyer. “Suits have been brought against every sector of the economy.”
Barrett questioned whether a business like Nordstrom could be found liable for collecting this kind of information if it provides video services on its website.
Hammack said a direct profit motive to the video content would need to be established so that a business could be found liable.
“The only thing that triggers liability is the knowing disclosure of personally identifiable information without consent,” Hammack said.
Hammack argued that Paramount did not obtain explicit consent when it shared Salazar’s information with Meta. He asserted that Paramount regularly engaged in unsanctioned behavior.
“Paramount Global systematically discloses personally identifiable information to Facebook without obtaining consent,” Hammack said.
Hammack argued that Congress intended a broader scope of protection for personal information when it described video tape service providers. He said these protections could extend for businesses that do not primarily sell video tapes.
Justice Samuel Alito criticized the inclusion of businesses that happen to sell video tapes but primarily sell other items. He equated the issue to describing the department store “Sam’s Club” as a “provider of optical services.”
“Don’t read the statute for all its worth when Congress wasn’t thinking about this,” Alito said regarding technology differences between now and the law’s enactment.
Paul Clement, a lawyer for Paramount, said allowing the interpretations of the Video Privacy Protection Act to go forward in a broad way could lead to billions of dollars in civil damages. He estimated the case with Paramount could end with as much as $250 million in damages based on current pending litigation.
“There are over 100,000 subscribers to 247sports in a class action, seeking $250 million in liability from this case alone,” Clement said. “There is a reason that every district court judge says this cannot be right. This is crazy.”
However, several justices on the court appeared skeptical of arguments in favor of Paramount. Justices Sonia Sotomayor, Ketanji Brown Jackson and Elena Kagan, pointed to the law’s congressional intent, born out of a privacy issue when a reporter obtained video rental records of Supreme Court nominee Robert Bork.
Kagan said allowing personally identifiable information to be accessed would be similar to obtaining video rental records and could cause embarrassment for an individual. She argued Congress was trying to avoid this when it created the statute in 1988.
“Maybe Congress should take away that limitation, it excludes some people who might be embarrassed,” Kagan said.
Jackson argued that the law primarily took into account disclosure of personally identifiable information being different based on the business at issue.
“What mattered in the statute was the unlawful disclosure of the personally identifiable information coming out differently depending on what particular item the consumer purchased,” Jackson said.
Justices on the high court will deliberate on the case over the next several months. The U.S. Supreme Court will issue a ruling in the consumer protection case by July 2027.

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