IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

ROSE COULTER-OWENS,

Plaintiff,

v.

RODALE INC.,

Defendant.

Case No. 2:14-cv-12688

Honorable Victoria A. Roberts

Mag. Judge R. Steven Whalen

DEFENDANT’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS

Attorneys for Defendant Rodale Inc.

Peter B. Kupelian (P31812)

Carol G. Schley (P51301

CLARK HILL PLC

151 S. Old Woodward, Suite 200

Birmingham, MI 48009

(248) 530-6338

(248) 988-2312 (fax)

pkupelian@clarkhill.com

cschley@clarkhill.com

Natalie J. Spears

Anthony T. Eliseuson

Kristen C. Rodriguez

DENTONS US LLP

233 South Wacker Drive, Suite 7800

Chicago, IL 60606

(312) 876-8000

(312) 876-7934 (fax)

natalie.spears@dentons.com

anthony.eliseuson@dentons.com

kristen.rodriguez@dentons.com

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Plaintiff’s opposition spends 19 pages arguing a point she claims is not

subject to serious debate—namely, whether an alleged statutory violation alone

confers Article III standing. The ink spilled is telling. Not only have the other

courts to review this issue under the VRPA expressed reluctance in finding

standing, there is a Petition for Certioriari on this very issue pending before the

Supreme Court. Rodale respectfully submits that a concrete, particularized harm is

required for Article III standing beyond an alleged statutory violation and that

Plaintiff’s hollow allegations of harm do not suffice.

Plaintiff’s opposition relegates the main issues raised by Rodale’s Motion to

Dismiss regarding the flaws with her common law claims for breach of contract

and unjust enrichment to the end of her brief, and fails to salvage either. In fact,

the same authority Plaintiff relies upon for her standing arguments resoundingly

dismissed the identical breach of contract count against other magazine publishers

as “nonsensical”—a point she fails to acknowledge, let alone rebut.

I. Plaintiff Lacks Both Article III And Statutory Standing.

Plaintiff asserts that Rodale has attempted to “manufacture” some sort of

debate about whether a statutory violation allegation alone is sufficient to create

Article III standing. (Resp. at 13-14.) Yet, a Petition of Certiorari is currently

before the Supreme Court asking it to review this very question in one of

Plaintiff’s attorneys’ other cases. See Brief for Petitioner, Spokeo Inc. v. Robins,

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No. 13-1339, 2014 WL 1802228 (U.S. May 1, 2014). In fact, in the Brief for the

Petitioner and by certain amici, the parties specifically note that resolving this

question could impact cases brought under the VRPA, and its federal counterpart,

the Video Privacy Protection Act. Id. at *16-19; see also Amici Brief of eBay,

Facebook, Google, and Yahoo!, 2014 WL 2582797, at *17-18 (U.S. June 6, 2014)

(citing Halaburda v. Bauer Publishing Co., L.P., 2013 WL 4012827 (E.D. Mich.

Aug. 6, 2013) as representative of the “confusion and inconsistent rulings” existing

among district courts on this issue).1Three weeks ago, the Supreme Court notably

asked the Solicitor General to weigh in on the issue. 2014 WL 4956804 (U.S. Oct.

6, 2014).

Thus, while it is true that the two other cases in this District have found

under similar facts that Article III standing was satisfied—as Rodale fully noted in

its Opening Brief—the reality is that the question is one of serious debate, and one

Rodale is entitled to raise and this Court is entitled to evaluate independently.

Indeed, even the Halaburda court had “some hesitation in finding that [plaintiff’s]

allegations meet the definition of an injury in fact, which the Supreme Court has

1 Compare also, e.g., David v. Alphin, 704 F.3d 327, 338-39 (4th Cir. 2013)

(refusing to find that a “deprivation of [a] statutory right . . . is sufficient to

constitute an injury-in-fact for Article III standing”) with Sterk v. Redbox

Automated Retail, LLC, 2014 WL 5369416 (7th Cir. Oct. 23, 2014) (summarily

finding Article III standing based solely on an allegation of a violation of the

federal Video Privacy Protection Act, but affirming judgment for defendant on the

merits).

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described as ‘an invasion of a legally protect interest which is . . . concrete and

particularized,’ and an ‘irreducible constitutional minimum of standing.’”

Halaburda, 2013 WL 4012827, at *4 (quoting Lujan v. Defenders of Wildlife, 504

U.S. 555, 560 (1992)). Likewise, the court in Cain v. Redbox Automated Retail,

LLC “echo[ed] [the Halaburda court’s] ‘hesitation’ with regards to whether

Plaintiffs meet the ‘injury-in-fact’ definition.” 981 F. Supp. 2d 674, 683 (E.D.

Mich. 2013). But notwithstanding these courts’ “reluctance” to find defendants

could potentially be liable for $5,000 per violation despite the lack of injury in fact

allegations, both felt compelled to find Article III standing because they could not

“sufficiently distinguish” Beaudry v. TeleCheck Services, Inc., 579 F.3d 702 (6th

Cir. 2009). Halaburda, 2013 WL 4012827, at *5; Cain, 981 F. Supp. 2d at 683.

Rodale respectfully submits that interpreting Beaudry like the Halaburda

and Cain courts did is contrary to Supreme Court precedent that confirms the

legislature simply “cannot erase Article III’s standing requirements by statutorily

granting the right to sue to a plaintiff who would not otherwise have standing.”

Raines v. Byrd, 521 U.S. 811, 820 n.3 (1997); see also Lujan, 504 U.S. at 578

(Congress may only create remedies for “de facto injuries”).

Hedging her own bets on the issue, Plaintiff argues that even if an injury

were required, she also has pled “economic loss” in the form of her overpayment

for her subscription to Prevention. (Resp. at 15-16.) That is not an injury in fact;

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4

it’s an after-the-fact lawyer’s construct. Nor is it enough to overcome the bulk of

authority rejecting the argument that personal information supposedly has

diminished “economic” value because of disclosure (see Rodale Br. at 18).2

Moreover, Plaintiff’s bare-bone allegations as to this “overpayment” theory

do not pass the rigor imposed by Iqbal and Twombly and simply cannot serve as

the basis for plausibly alleging an actual injury. There are no allegations in her

Complaint as to the value of Plaintiff’s personal information; nor any allegations

explaining how disclosure deprived her of that value; in fact, there are no

allegations as to what representations by Rodale even caused the alleged

overpayment in the first instance.3Further, Plaintiff’s cases are all distinguishable

because in those cases the defendant made some sort of representation that caused

the overpayment; yet there are no such allegations here. (Resp. at 16-17.)

Finally, even if Plaintiff had alleged enough for Article III standing, there

remains a serious question of statutory standing under the VRPA, namely, whether

2 On this point, Plaintiff attacks Rodale for citing In re Facebook Privacy

Litigation, 791 F. Supp. 2d 705, 715 n.10 (N.D. Cal. 2011), for a ruling that had

been overturned by the Ninth Circuit. In actuality, however, Rodale cited that case

for a separate proposition in the context of the unjust enrichment claim (that

personal information does not equate with “money or property” (Rodale Br. at 12)),

a point on which the Ninth Circuit affirmed in its unpublished, non-precedential

opinion. 572 F. App’x 494, 494 (9th Cir. 2014)

3 Notably, the “recent studies” cited by Plaintiff that supposedly confirm

consumers “price privacy into their purchases” are actually Plaintiff’s counsel’s

own expert reports in a wholly unrelated matter. (Resp. at 17 n.12.)

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she ultimately must prove—and not just allege—actual damages to potentially

recover $5,000 per violation. Rodale submits that in enacting the VRPA—a

criminal statute with civil remedies—the legislature’s use of the express words that

liability is available “in a civil action for damages to the consumer” means what it

says: that damages must be shown for recovery.4See MCL § 445.1715 (emphasis

added). Otherwise, to allow a plaintiff to recover thousands of dollars without

showing any “actual damages” means the statute would authorize “giveaways to

plaintiffs with nothing more than ‘abstract injuries.’” Doe v. Chao, 540 U.S. 614,

625-26 (2004) (internal quotation omitted). This Court can and should decline to

do so.

II. Plaintiff Has No Breach Of Contract Claim.

Both courts to consider the identical breach of contract allegations against

magazine publisher defendants under the VRPA have dismissed the breach of

contract claims with prejudice. Halaburda, 2013 WL 4012827, at *8, 9; Kinder v.

Meredith Corp., 2014 WL 4209575, at *6, 7 (E.D. Mich. Aug. 26, 2014). Plaintiff

does not even bother to address these decisions, let alone attempt to distinguish

them in her Response. That is because she cannot.

4

The fact that the same undersigned counsel made the “verbatim” argument in

another VRPA case is neither here nor there. (See Resp. at 9-10.) This Court is

entitled to evaluate this threshold issue anew.

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There is no contract alleged in her Complaint that required Rodale to refrain

from sharing Plaintiff’s personal information. The only way that Plaintiff attempts

to impose this term of a purported contract is by claiming that the laws in place at

the time of the execution of the contract are subsumed within it. But that argument,

in the words of the Halaburda court, is “nonsensical.” 2013 WL 4012827, at *8;

accord Kinder, 2014 WL 4209575, at *6. For the same exact reason, the breach of

contract claim fails in this case too. Further, while Rodale submits there also is

insufficient injury here to sustain damages under a breach of contract theory

(Rodale Br. at 9-11), this Court need not even reach that inquiry because the

answer to the threshold question of whether there is even a contract here is a

resounding “No.”

III. Plaintiff’s Unjust Enrichment Claim Fails.

Plaintiff’s unjust enrichment claim is a stretch at best. Even accepting her

allegations that she “expected” her information to be kept confidential as a result of

her “subscription payment,” Plaintiff has offered no allegations as to why or how

she came to that expectation—especially given the very public way magazine

subscriptions are distributed through the mail, with the name and address of the

subscriber on the front of the magazine. Her allegations are simply insufficient to

“‘state a claim to relief that is plausible on its face.’” Ashroft v. Iqbal, 556 U.S.

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662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570

(2007)).

Likewise, Plaintiff’s allegations of purported “loss” itself are similarly

threadbare, as well as highly questionable as reflected in the numerous decisions

rejecting the argument that alleged “loss of confidentiality” amounts to a legally

cognizable loss of “money” or “benefits”. (See Rodale Br. at 12-13.)5

Thus, while other courts in this District have found that similar allegations

are enough to sustain an unjust enrichment claim, Rodale urges this Court to

independently review the issue and find that Plaintiff’s unjust enrichment claim—

based on the contrived argument that she expected privacy to be a part of her

magazine subscription cost—should not be allowed to go forward.

CONCLUSION

For all of the reasons stated herein and those stated in its opening Brief,

Defendant Rodale Inc. respectfully asks that this Court grant its Motion to Dismiss.

Dated: October 30, 2014 Respectfully submitted,

/s/ Natalie J. Spears

One of the Attorneys for Defendant

Rodale Inc.

5

The appellate case Plaintiff cites as support is readily distinguishable because

there, the defendant allegedly used portions of the premiums paid to cover the

administrative costs of data breach security but then failed to implement those

security measures; here, there are no such allegations that Rodale used a portion of

the subscription price for confidentiality purposes. Resnick v. AvMed, Inc., 693

F.3d 1317, 1328 (11th Cir. 2012).

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CERTIFICATE OF SERVICE

I, Natalie J. Spears, an attorney, hereby certify that on October 30, 2014, a

copy of the foregoing was served via the CM/ECF filing system, which sends

notification to the attorneys of record.

/s/ Natalie J. Spears

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