Netflix Fails to Dismiss Americans With Disabilities Act Claim

Posted by on Jul 3, 2012 in Litigation

Judge allows disability civil rights claim against Netflix to proceedNational Association of the Deaf v. Netflix, Inc., 2012 WL 2343666 (D. Mass. June 19, 2012)

Whoa, talk about floodgates.  If this case gets upheld on appeal, it might let loose a new wave of American With Disabilities Act (ADA) litigation.  Two groups advocating for the rights of the deaf and hearing impaired sued Netflix under the ADA for failing to provide equal access to its video streaming web site.  Now, live video streaming is critical to Netflix’s business model, so the ruling is certainly a blow to Netflix.  But the ruling has far greater implications.  The basic question is whether websites are “public accommodations” to which the anti-discrimination provisions of the ADA.  The federal district court of Massachusetts said yes.

The ruling was handed down in the context of Netflix’s motion for judgment on the pleadings, which is an attempt to end the case at an early stage.  Netflix argued that websites are not in the list of public accommodations in the ADA statute.  The court rejected the argument, noting that while web-based services are not specifically listed in the statute as public accommodations, Congress intended the ADA to adapt to changes in technology.  Moreover, the streaming video website fell into one or more of the listed ADA categories of public accommodations, including a “place of exhibition or entertainment” and a “rental establishment.”  But the streaming service is different from a bricks-and-mortar establishment, Netflix argued, because the videos are accessed in private residences, not in public spaces.  No matter, said the court.  The ADA covers the services “of” a public accommodation, not services “at” or “in” one.  Many businesses provide services to a customer’s home (plumbers, pizza delivery services, and moving companies are the ones listed in the court opinion) and they are not necessarily exempt from the ADA.

Netflix made two additional arguments relating to captioning.  First, Netflix argued that the plaintiffs failed to allege that Netflix controls the captioning of streaming video content.  According to Netflix, owners of video programming (not distributors like Netflix) hold the exclusive copyrights necessary to caption content.  Without the copyrights, Netflix cannot caption content without the permission of the copyright owners.  The court rejected this argument because Netflix alleged that it is working to provide captioning for the content on its streaming service.  This suggests that Netflix has some degree of control over the captioning of its video streams.

Netflix’s second captioning argument was that interpreting the ADA to cover the captioning of video programming would create an irreconcilable conflict with the Twenty-First Century Communications and Video Accessibility Act of 2010 (CVAA), which regulates the closed captioning of online video content.  This argument did not persuade the court either, as it found that the CVAA did not conflict with ADA even if the latter imposes broader duties on Netflix than the CVAA; it was possible to comply with both laws.

LegalTXT Lesson: Netflix likely will appeal to the First Circuit, and with good reason.  Small business owners are familiar with the rash of lawsuits spawned by the ADA.  If it stands, this ruling exposes a whole new class of businesses to ADA claims.  Many web-based services could be potential targets of ADA lawsuits.  For instance, could a restaurant that allows customers to make reservations online be sued under the ADA if it doesn’t close-caption its website?  Would a hotel booking website violate the ADA by failing to provide a voice activation feature on its site?  It all remains to be seen.  Stay tuned.

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