In a previous blog entry, I discussed the case of the National Association of the Deaf v. Netflix, a decision from the District Court in Massachusetts. In that discussion, I expressed surprise that not only did Netflix not appeal, they settled for $900,000. The reason I expressed surprise was that this case broke new ground by holding that an Internet site was a place of public accommodation if it was doing one of the categories listed for places of public accommodations under 42 U.S.C. § 12181(7). Prior to that, the answers as to whether a place on the Internet could be subject to the ADA was either yes, no because only physical places are subject to the act, or depends if the Internet was a gateway to a physical place (brick-and-mortar). Now we have a case with a contrary view to National Association of the Deaf v. Netflix from the Central District of California that came down May 14, 2014. In this case, a deaf person sued Red Box Retail because its movies as well as its Internet service did not have much in the way of closed captioning. The case is Jancik v. Redbox Automated Retail, LLC, 2014 U.S. Dist. LEXIS 67223 (C.D. Cal. May 14, 2014). In the interest of full disclosure, I am quite aware of the importance of close captioning when watching television. As a deaf person that functions entirely in the hearing world thanks to lip reading and hearing aids, my closed captioning is always on. If I am watching a show that is not close captioned, it is definitely much more of a struggle than it needs to be. As is my usual practice, I have divided the blog entry into categories. The particular categories for this blog entry are facts, court’s reasoning, and takeaways. The reader is free to concentrate on any or all of the categories.
Red Box Retail owns and operates more than 42,000 kiosks, which are self-service automated machines allowing customers to rent and return DVDs by using a touchscreen interface. Surely, the reader has seen them at his or her local grocery store. These kiosks carry only a limited number of close captioned DVDs. They also have a digital service called Red Box Instant, which provides streaming popular entertainment content. The majority of the content available in Red Box Instant is not close captioned. Red Box Retail and Red Box Digital are actually separate companies, and the plaintiff sued them both. Of course, both of the defendants filed a motion to dismiss.
In holding that both of the motions to dismiss were to be granted for the most part, the court reasoned as follows:
1. Title III of the ADA regulates access to the goods at the place of public accommodation and not to the goods themselves. That is, the content of the goods offered by a place of public accommodation are not regulated by the ADA. In other words, title III does not apply to the goods in a retailer’s inventory.
2. 28 C.F.R. § 36.307(a) does not require a place of public accommodation to alter its inventory in order to include accessible or special goods that are designed for, or facilitate use by, persons with disabilities. Close captioned DVDs are just the kind of goods that are designed for individuals with disabilities and are therefore, encompassed by this regulation.
3. Subsection b of that regulation does provide that places of public accommodation have to order accessible or special goods at the request of an individual with disabilities if in the normal course of their operations, they make special orders on request for unstocked goods and if the accessible or special goods can be obtained from a supplier with whom the public accommodation customarily does business. The court said that this provision means the place of public accommodation is liable only if the goods involved were for types of goods for which the place of public accommodation normally makes special orders. In other words, a business that ordinarily takes special orders on unstocked DVDs also has to take special orders on close captioned DVDs if the DVD can be obtained from a supplier with whom the retailer customarily does business with. Accordingly, since there were not enough facts to figure out at the motion to dismiss stage whether Red Box Retail normally takes special orders for DVDs and whether such goods could be obtained from its suppliers, the court denied the motion to dismiss with respect to subparagraph b of 28 C.F.R. § 36.307.
4. The court did not buy Red Box Digital’s argument that the plaintiff lacked standing to pursue a title III claim against the streaming service because the plaintiff had made allegations that the significant lack of close captioning in its streaming service deterred him from signing up for the streaming service.
5. Despite National Association of the Deaf v. Netflix, the court holds that a place of public accommodation must be a physical space and said that is the law in the Ninth Circuit. One of the cases that they cite for that proposition is a case involving eBay, which was appealed to the Ninth Circuit and a decision is expected anytime.
6. Even though the court says the rule in the Ninth Circuit as it stands at this very moment is that a place of public accommodation must be a physical space, the court does spend quite a bit of time talking about National Federation of the Blind v. Target Corporation, 452 F. Supp. 2d 946 (N.D. Cal. 2006), which held that an Internet site could be subject to the ADA if it is a gateway to a brick-and-mortar store. Even so, the court said that the case didn’t apply because the Red Box kiosks and Red Box Instant could not be said to be heavily integrated with each other, rather they are two entirely separate services. The fact that the services are sold together does not mean they are heavily integrated.
1. It is interesting to note that Red Box Retail conceded that the Red Box kiosks were places of public accommodation as it isn’t clear to me that such a concession was a foregone conclusion.
2. The gateway theory of when an Internet site is subject to the ADA definitely has currency in the courts of the Ninth Circuit.
3. If your company has a streaming entertainment product, it is far from clear whether that product would be subject to the ADA.
4. If you are on the plaintiff’s side in a case like this, it is important to frame the lack of accessibility as something pertaining to accessing one of the places of public accommodations listed in 42 U.S.C. § 12181(7). On the other hand, if you are the defense, it is important to frame the issue in terms of the goods themselves rather than in terms of accessing the place of public accommodation.
5. With respect to standing, it bears noting that this court adopted the deterrence test.
6.The E bay ruling expected any day now from the Ninth Circuit is going to have a big impact on all of this. Eventually, one figures that the Circuits could very well split and this will wind up in the Supreme Court. What is very interesting is to consider the impact of the decision that just came down from the United States Supreme Court holding that a warrant is necessary to search a cell phone (Riley v. California). That decision very much talks about how technology can change the world and the law must meet the challenges of that technology consistent with fundamental principles. Many a court has noted that the ADA was meant to evolve with technology, and one wonders if the cell phone decision isn’t an indicator that the Supreme Court might at a minimum be receptive to a National Federation of the Blind v. Target approach if not a National Association of the Deaf v. Netflix approach. Hard to believe that the Supreme Court would sign off on the physical space only approach. It is also hard for me to believe that the Supreme Court would sign off on an approach saying the Internet itself is always a place of public accommodation (an approach which comes from dicta in Doe v. Mutual Of Omaha Insurance Company, 179 F.3d 557 (7th Cir. 1999).