Antitrust Law Daily Wrap Up, PRIVACY—E.D. Tenn.: HBO Max subscriber’s privacy suit against WarnerMedia transferred, (Jul 31, 2024)

By E. Darius Sturmer, J.D.

Claims that company violated VPPA by sharing her personal video watch history with advertisers were subject to Terms of Use clause requiring New York forum, court says.

WarnerMedia Direct, LLC, is entitled to the transfer of a lawsuit brought by a subscriber alleging violation of the Video Privacy Protection Act (VPPA) to the federal district court in New York City, the federal district court in Winchester, Tennessee, has decided. Because the complaining subscriber agreed to the HBO Max streaming platform’s Terms of Use, a forum selection clause in that agreement applied to the dispute requiring her to bring her claim in New York, the court found. Therefore, WarnerMedia’s motion to transfer was granted, and alternative motions for remand and to compel arbitration were denied as moot (Martin v. WarnerMedia Direct, LLC, No. 4:24-cv-00043-TRM-CHS (E.D. Tenn. July 24, 2024)).

The subscriber alleged that WarnerMedia shared her personal data—specifically her video watch history—with digital advertisers such as Facebook, Instagram, Google, and Braze. In so doing, she claims, WarnerMedia ran afoul of the VPPA, which prohibits a “video tape service provider” from “knowingly disclos[ing] to any person, personally identifiable information concerning any consumer of such provider” without that person’s informed written consent.

In April 2024, the plaintiff filed the suit in a small claims court, the General Sessions Court of Coffee County, Tennessee. In May, WarnerMedia removed the case to the federal court in Winchester, and in June the plaintiff filed a motion to remand it back. Later in June, WarnerMedia moved to transfer the case to the New York district, which is currently overseeing a factually identical action—brought against WarnerMedia by a group of California subscribers—that had been transferred there based on the same forum selection clause argument. At the same time, the company also filed a motion to compel the case to arbitration.

While both parties agreed that the action should not be before the court, they disagreed on which possible forum was most appropriate: arbitration, the General Sessions Court of Coffee County, or the U.S. District Court for the Southern District of New York.

The court began its analysis by explaining that all the parties’ arguments turned on interpretation of HBO Max’s Terms of Use. As WarnerMedia is based in New York, and nothing suggests that applying New York law would violate Tennessee’s public policy, the Terms of Use’s “choice-of-law” provision applies, so the court was bound to follow New York law interpreting the Terms of Use. New York law requires courts to interpret a contract by looking at the plain meaning of its words and phrases, the court noted, adding that if the contract’s language is clear and unambiguous, it may not look beyond the four corners of the document to ascertain the parties’ intent.

Ultimately, the Terms of Use required the plaintiff to file the case in New York, in the court’s view. An argument by WarnerMedia that the dispute fell under the Terms of Use’s dispute resolution section, such that the court must compel arbitration, was rejected. The plaintiff had acted within her contractual right to pursue a claim in small claims court instead of arbitration, the court determined. Thus, the dispute was not subject to arbitration when filed. However, the court said, the Terms of Use required any small claims action to be brought in New York. Tennessee small claims court was not an option, it added.

The court declined to entertain the plaintiff’s argument that the case could not be transferred “pursuant to the forum selection clause, because remand was instead appropriate,” concluding that it was not required to decide a motion to remand before a motion to transfer.

No other reasons to bar transfer. No extraordinary circumstances or other reasons were asserted by the parties to bar the transfer of the action to New York, the court noted. The plaintiff’s contention that enforcement of the forum selection clause was unconscionable because it forces her to litigate a thousand miles from home” went nowhere with the court, which noted that the same argument had been rejected by the federal judge that had transferred the factually identical case against WarnerMedia from California to New York. Moreover, the court pointed out, the Sixth Circuit has routinely enforced forum selection clauses even when doing so requires litigation in distant forums.

Finally, the court also disagreed with the plaintiff’s assertion that transfer would render illusory and unconscionable “the contract’s promise that [she] could proceed in small claims court so long as the case remained there[.]” Transfer of the case to the court the parties had contemplated in their agreement would allow that agreed forum to decide whether to order the case to arbitration and thereby give effect to the parties’ contract.

The Case is No. 4:24-cv-00043-TRM-CHS.

Judge: McDonough, T.

Attorneys: Garth R. Seagroves (Ray Jackson Construction LLC) for Wendy Aston-Martin. Britt K. Latham (Bass, Berry & Sims, PLC) for Warner Media Direct LLC.

Companies: Warner Media Direct LLC

Cases: Privacy TennesseeNews NewYorkNews CyberPrivacyFeed DataPrivacy