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Harris v. Blockbuster, Inc., 622 F.Supp.2d 396 (N.D. Tex. Apr. 15, 2009) (full-text).

Factual Background[]

Blockbuster entered into an agreement with Facebook whereby a customer’s rental choices on Blockbuster Online would be published on their Facebook profile page. Plaintiff claims this agreement violated the Video Privacy Protection Act, which prohibits a “videotape service provider from disclosing personally identifiable information about a customer unless given informed, written consent at the time the disclosure is sought.” Blockbuster invoked an arbitration clause in its agreement which stated that Blockbuster could, at any time and at its sole discretion, modify the Terms and Conditions of Use of Blockbuster Online.

Trial Court Proceedings[]

Plaintiff challenged the arbitration clause and the court determined that it was illusory, and therefore unenforceable, because Blockbuster could change it at any time. Provisions of this type are sometimes preserved by clauses stating that changes will not take effect until they have been published to the customer or that limit the changes that can be made by the provider. The Blockbuster Online agreement contained no such provision.

Additionally, while challenges to a contract as a whole must be determined by the arbitrator, plaintiff challenged the arbitration clause itself and therefore the issue was properly heard by the court.