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Kevin Sterk and Jiah Chung v. Redbox Automated Retail

March 6, 2012

KEVIN STERK AND JIAH CHUNG, ON BEHALF OF THEMSELVES AND OTHERS SIMILARLY SITUATED, PLAINTIFFS-RESPONDENTS,
v.
REDBOX AUTOMATED RETAIL, LLC, DEFENDANT-PETITIONER.



Petition for Permission to Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 11 C 1729--Matthew F. Kennelly, Judge.

The opinion of the court was delivered by: Posner, Circuit Judge.

SUBMITTED JANUARY 24, 2012

Before POSNER, ROVNER, and SYKES, Circuit Judges.

Redbox, a company that special- izes in renting DVDs, Blu-ray Discs, and video games to consumers from automated retail kiosks and is the defendant in this class action suit under the Video Privacy Protection Act, 18 U.S.C. § 2710, asks us to allow it to take an interlocutory appeal under 28 U.S.C. § 1292(b). The issue it wants to appeal is whether subsection (e) of the Act can be enforced by a damages suit under subsection (c). The district judge held that it can be; Redbox asks us to rule that it cannot be.

Interlocutory appeals are frowned on in the federal judicial system. They interrupt litigation and by inter- rupting delay its conclusion; and often the issue presented by such an appeal would have become academic by the end of the litigation in the district court, making an interlocutory appeal a gratuitous burden on the court of appeals and the parties, as well as a gratuitous interruption and retardant of the district court proceedings. But there are a number of exceptions to the final-judgment rule, among them 28 U.S.C. § 1292(b), which allows the court of appeals in its discretion to hear an interlocutory appeal if the district court certifies that the appeal presents "a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation." There is no doubt that the appeal that Redbox wants us to hear involves "a controlling question of law as to which there is substantial ground for difference of opinion." But the plaintiffs argue that answering that question will not "materially advance the ultimate termination of the litigation" because they have pleaded another ground for relief--that Redbox violated subsection (b)(1), which forbids a "video tape service provider" to "knowingly disclose[], to any person, personally identifiable information concerning any consumer of such provider."

But all that section 1292(b) requires as a precondition to an interlocutory appeal, once it is determined that the appeal presents a controlling question of law on which there is a substantial ground for a difference of opinion, is that an immediate appeal may materially advance the ultimate termination of the litigation. This appeal is almost certain to do so. The plaintiffs' original com- plaint was limited to the destruction subsection, (e), and thus did not allege a violation of the disclosure subsec- tion, (b)(1), which first appeared in the amended com- plaint, filed after Redbox moved to dismiss the destruc- tion claim. If the appeal is not allowed, and the suit proceeds in the district court on both the disclosure and destruction claims, the completion of the litigation will take longer than if the destruction claim is out of the case, especially since that claim appears to be the plaintiffs' main one, with the disclosure claim perhaps just a life jacket. Moreover, uncertainty about the status of the destruction claim may delay settle- ment (almost all class actions are settled rather than tried), and by doing so further protract the litigation. That is enough to satisfy the "may materially advance" clause of section 1292(b); neither the statutory language nor the case law requires that if the interlocutory appeal should be decided in favor of the appellant the litigation will end then and there, with no further proceedings in the district court. McFarlin v. Conseco Services, LLC, 381 F.3d 1251, 1259 (11th Cir. 2004); In re Baker & Getty Financial Services, Inc., 954 F.2d 1169, 1172 and n. 8 (6th Cir. 1992); compare White v. Nix, 43 F.3d 374, 378-79 (8th Cir. 1994).

So we accept the appeal and move to the merits, which, having been adequately briefed in the petition for permission to appeal and the plaintiffs' response to the petition, we can decide without additional briefing.

We will have to quote a good deal of the Video Privacy Protection Act in order to explain and resolve the issue that the appeal presents:

18 U.S.C. § 2710. Wrongful Disclosure of Video Tape Rental or Sale Records:

(a) Definitions.--For purposes of this section--

(1) the term "consumer" means any renter, purchaser, or subscriber of goods or services from a video tape service provider . . .;

(3) the term "personally identifiable information" includes information which identifies a person as having requested or obtained specific video materials or services from a video tape service pro- vider; and

(4) the term "video tape service provider" means any person, engaged in the business, in or affecting inter- state or foreign commerce, of rental, sale, or delivery of prerecorded video cassette tapes or similar audio visual materials, or any person or other entity to whom a disclosure is made under subparagraph (D) or (E) of ...


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