• by Wendy Davis  @wendyndavis, October 12, 2009

Facebook probably thought its Beacon problems were behind it last month, when it announced an agreement to settle a class-action privacy lawsuit. But three Texas residents who have a pending lawsuit against Blockbuster for participating in the Beacon program have just filed a new case against Facebook.

In papers filed Friday in federal district court in Texas, the consumers allege that the Beacon program violated the 1988 Video Privacy Protection Act by sharing information about their movie rentals and purchases without first obtaining their written consent. That statute provides for damages of $2,500 per incident.

A Facebook spokesperson declined to comment on the potential class-action lawsuit except to say: "This suit is without merit and we will fight it vigorously."

At this point, it's not clear whether the new lawsuit will affect the proposed settlement of a separate class-action lawsuit in California against Facebook. That agreement calls for Facebook to permanently shutter Beacon and to pay $9.5 million to a settlement fund. Around two-thirds of the money will be used to create a new privacy research foundation. Individual plaintiffs in that case also will receive settlements ranging from $15,000 to $1,000.

Facebook's Beacon program told users about their friends' e-commerce activity at sites like Zappos, Blockbuster and Overstock. The platform initially operated by default, spreading news about members' purchases unless they affirmatively opted out. Within weeks of its November 2007 launch, Facebook revamped the program to make it opt-in. Shortly afterwards, the company added a feature that allowed people to permanently opt out.

The Texas residents who just sued Facebook recently won a significant ruling against Blockbuster stemming from its participation in Beacon. Earlier this year, a federal judge rejected the movie rental store's argument that the case should have been brought before an arbitrator. Blockbuster argued that its contract with users calls for any disputes to be heard by an arbitrator rather than in court, and also said users waived their right to file a class action lawsuit.

But U.S. District Court Judge Barbara Lynn in Dallas held that Blockbuster's contract with users was "illusory" because the agreement said that movie rental store could change the terms and conditions at any time. Therefore, she ruled, the case could proceed in federal court as a class-action. Blockbuster is appealing that decision.