Is Michigan’s Consumer Privacy Law Unconstitutional?

What can a magazine do with your subscriber information? Do they have the free speech right to share your information? Or can states like Michigan create consumer privacy laws to protect you from an onslaught of solicitation? It depends on whether the Michigan Preservation of Personal Privacy Act is deemed unconstitutional in a federal lawsuit filed in New York.

Can a magazine company like Consumers Union disclose your subscriber information to data-mining companies or third parties without your knowledge? Michigan’s Preservation of Personal Privacy Act says no. The law prevents a person or business from disclosing information about a customer’s purchase, rental, or borrowing of videos, books, and audio recordings if that information identifies the customer. While there are several exceptions, the law is to protect a consumer from having their personal interests, particularly reading and listening habits, used against them.

In a lawsuit filed in the United States District Court for the Southern District of New York, Don Ruppel claimed that Consumers Union disclosed his information in violation of the Privacy Act. But Consumers Union took the position that its constitutionally protected right to Free Speech included the right to make those statements.

Now Michigan Attorney General Bill Schuette has intervened in the suit to protect the law and consumers’ privacy. Schuette says that the Privacy Act regulates commercial speech in a way that is tailored to advance the state’s substantial interest in protecting the privacy of its citizens. If the court agrees, it will likely rule that the law is constitutional.

Companies like Consumers Union have free speech rights under the First Amendment, just like individuals do. But when their speech is “commercial speech” a government can regulate it more easily. Commercial speech “does no more than propose a commercial transaction,” Schuette says, quoting a prior federal court decision. It “relates solely to the economic interests of the speaker and its audience.”

According to Schuette, the distribution of subscriber information falls within this category of commercial speech. His brief to thecourt says:

“For example, the information allows a purchaser to directly solicit or advertise, or at the very least narrow the scope of their solicitations or advertisements, at a fraction of the cost of blanket solicitations or advertisements, in order to transmit their own (likely commercial) speech to those with the most potential to be interested. Simply put, the information at issue is a record of certain individuals’ economic activity that is sold for economic gain for the economic benefit of the purchaser.”

If the court doesn’t agree with Schuette, it could punch a hole in the protections Michigan gives to its residents’ privacy. By allowing commercial distribution of subscriber information, the court could open residents up to abusive and currently unlawful solicitation by third party companies they have no contact with.

Dani Liblang is a consumer protection attorney at The Liblang Law Firm, P.C., in Birmingham, Michigan. If your information has been illegally sold, contact The Liblang Law Firm, P.C., for a free consultation.