Texas Judge Rules Against Blockbuster in Privacy Suit: Via Law.com .

Remember the uproar over Facebook's controversial Beacon ad program a couple years ago? That program notified a user's friends when he or she bought something online. Facebook modified the program, which helped mollify some critics, but the privacy lawsuits that Beacon spawned, against Facebook and retailers, have not gone away.

Dallas County resident Cathryn Elaine Harris sued Blockbuster (though not Facebook) more than a year ago in Dallas federal district court, claiming that Blockbuster Online's arrangement with Facebook--which caused Blockbuster customers' movie rental choices to be automatically posted on their friends' Facebook pages--violated the Video Privacy Protection Act, a federal statute passed in response to the public disclosure of Supreme Court nominee Robert Bork's video rental records. Harris, who seeks class action status, is demanding $2,500 for each violation of the statute.

Her suit took a big step forward last week when Dallas federal district court judge Barbara Lynn denied Blockbuster's motion to compel arbitration. (Here's MediaPost News's story on the ruling.) Judge Lynn found that the arbitration clause in Blockbuster’s terms and conditions agreement with its customers was illusory because Blockbuster reserves the right to modify the terms "at its sole discretion" and "at any time."

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