• by Wendy Davis  @wendyndavis, June 24, 2013

Pandora did not violate a Michigan privacy law by allegedly sharing Web users' music-listening history with their Facebook friends, the online radio service argues in new papers filed with a federal appellate court.

The company is asking the Ninth Circuit Court of Appeals to uphold a decision issued last year by U.S. District Court Judge Saundra Brown Armstrong in Oakland, Calif. She dismissed a potential class-action lawsuit alleging that Pandora violated Michigan's Video Rental Privacy Act, which prohibits companies that rent, lend or sell music, as well as books and videos, from disclosing customers' identities without their consent.

The 2011 lawsuit stems from Pandora's participation in Facebook's “instant personalization” program. At launch, the program automatically shared some information about Facebook users' activities at outside companies. Facebook user and Michigan resident Peter Deacon alleged in a potential class-action lawsuit that Pandora was illegally sharing information about his music selections.

Armstrong dismissed Deacon's lawsuit last year, ruling that Michigan's privacy law doesn't apply when companies stream tracks -- as opposed to lending, renting or selling them.

Deacon filed papers last month asking the appellate court to revive his lawsuit. He argues that Armstrong misinterpreted the law by disregarding “the commonly accepted, everyday meanings of the terms rent and lend.”

He also says that Armstrong's ruling doesn't adequately account for Michigan lawmakers' intent to protect people's “choices in movies, music, and reading material from unwanted public disclosure.”

But Pandora counters in new court papers that Armstrong's decision was correct. “Temporarily caching data on listeners' computers to enable streaming is not 'renting' or 'lending' under any common definition of those terms,” the company argues in legal papers filed late last week.

The company also says that users like Deacon don't have enough control over the music that's streamed to be considered either borrowers or renters. “Pandora asks listeners only for musical preferences and then selects and streams 'songs containing similar musical attributes' that Pandora alone controls,” the online music service argues. “It would be entirely novel to have a rental or borrowing arrangement where the user does not even know what songs will be borrowed.”