Netflix Part Deux: California Federal Court Rules that Netflix is Not a Public Accommodation

Recently I wrote about a decision from the federal district court in Massachusetts which held that the ADA applied to Netflix’s Internet-streamed movies. That decision (which is now subject to a petition for appeal) would have required the company to ensure that all of its “on demand” movies had closed captioning to accommodate customers with hearing-related disabilities. Recently, another federal court—this time in California—ruled in favor of Netflix dismissing a claim that the company violated the ADA by failing to provide closed captioning for every movie in its “streaming video library.”

Unlike the District of Massachusetts, which held that the ADA’s definition of “public accommodation” was broad enough to encompass the virtual world of the Internet, the California federal court found that Netflix’s Internet-streamed video library “is not an actual physical place and therefore, . . . is not a place of public accommodation.” Hence, it need not satisfy the ADA’s requirement that businesses which offer goods and services take measures to ensure full and equal access for the disabled, including measures to ensure access for the hearing impaired.

These divergent decisions (and their inevitable appeals) will likely set up a showdown in the U.S. Supreme Court over how to apply the ADA’s mandates (initially passed into law in 1990) to the world of Web-based and other “virtual businesses.” The outcome of this question is high stakes for any business that offers goods and services over the Internet. Unlike civil rights laws addressing employee relations, the ADA’s public accommodations requirements do not turn on the size or assets of a business.  If the “Massachusetts Rule” is ultimately adopted as law, it will not matter whether the sign on your door says “Netflix,” or whether you are a one-person business selling candles over a Facebook virtual store.  In either scenario your business would be a public accommodation that must comply with the requirements of the ADA.  We will continue to track these cases as they progress through the courts.

The case is Cullen v. Netflix, Inc. Case No. 5:11cv-01199,  __ F. Supp. 2d __ (N.D. Cal. July 13, 2012).

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