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Judge Dismisses Billion Dollar Pandora Lawsuit

10-4-2012

Great coverage on this story from CNET reporter Declan McCullagh. A class action suit was filed against Pandora in 2010 when the company started integrating with Facebook. McCullagh writes, "The suit claimed violations of an obscure pre-Internet era Michigan law, which says a company "renting or lending" sound recordings may not disclose details about customers' transactions without their written permission. Because it specifies $5,000 penalty per violation, the possible damages could total in the tens of billions -- far more than Pandora's actual $1.8 billion market capitalization.

Law firm Edelson McGuire specializes in class action suits. They alleged that, "Pandora has willfully violated its users' privacy rights" and made a "reckless decision to disclose this information." U.S. District Judge Saundra Armstrong wasn't convinced. McCullagh writes, "The 1988 state privacy law does not permit a class action "by a person who has not suffered actual loss" or harm, she wrote in an opinion on Friday. "Had the Michigan legislature intended to provide such a remedy, it plainly could have done so. Pandora argues that it merely streamed music to plaintiff's computer, and therefore, could not have violated (state law) because it never rented, lent, or sold sound recordings to him. The court agrees."
 
Read the entire McCullagh piece at CNET HERE



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