Pandora Privacy Class Action Lawsuit Faces Major Setback

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Earlier this week, a class action lawsuit over Pandora Media Inc.’s privacy policies was dealt a major setback when Michigan’s Supreme Court ruled that Pandora users don’t “borrow” or “rent” songs from the music streaming company.

Pandora operates a program that allows users to stream music through the internet. Pandora users are able to create a customized radio station by selecting a preferred musical genre or artist.

Pandora streams songs that match the listener’s preferences, and the user can indicate whether he or she likes or dislikes a song. The music Pandora streams then becomes increasingly refined to match the listener’s music preferences.

Although users can choose to skip songs, they cannot save, rewind or fast forward a song. Pandora users are also unable to select a specific song that they wish to hear. Pandora offers a free version of the music streaming service, but users may pay to receive a commercial-free version.

Plaintiff Peter Deacon initially filed the Pandora class action lawsuit back in 2011, claiming that Pandora violated the Preservation of Personal Privacy Act (commonly known as the Video Rental Privacy Act) by publicly disclosing information about his music preferences.

Deacon claims that Pandora made its users’ profile pages publicly available on the internet and that it integrated listeners’ profile pages with their Facebook accounts, essentially releasing “sensitive listening records” to all of their Facebook friends.

Pandora successfully dismissed the music streaming privacy class action lawsuit in 2012, and Deacon appealed the dismissal of the PPPA (or VRPA) claim in the 9th U.S. Circuit Court of Appeals. The privacy law does not provide a definition of either “rent” or “borrow.”

The appeals court subsequently asked the Michigan Supreme Court to determine whether Deacon stated a claim under the VRPA by adequately alleging that Pandora “rents” or “lends” music to users, and that he is a “customer” because he “rents” or “borrows” the music from Pandora.

In its July 6 decision, the Michigan Supreme Court unanimously ruled that Deacon was not a “customer” under the PPPA because he did not pay for the service. The court determined that he neither rented nor borrowed music from Pandora because renting involves paying for something and borrowing involves returning it.

“Put simply, the music-streaming program offered by defendant only involved the delivery of a sound recording to the listener; there was no corresponding ‘return’ of a recording or its equivalent from the listener to defendant,” according to Michigan’s high court.

The Michigan Supreme Court did not answer the question of whether users who pay to use Pandora’s music streaming service would be considered “customers” under the PPPA. The court also did not address the issue of whether, under state law, Pandora is engaged in the business of lending or renting sound recordings, or whether Deacon had standing to file the Pandora class action lawsuit.

Deacon is represented by Ari Jonathan Scharg, Ryan D. Andrews, Jay Edelson and James Dominick Larry of Edelson PC.

The Pandora Privacy Class Action Lawsuit is Deacon v. Pandora Media Inc., Docket No. 151104, in the Michigan Supreme Court, Lansing, Michigan.