The plaintiffs claim that agreement with Facebook violates the Video Privacy Protection Act, which prohibits video service providers from disclosing personal identifiable information without consent.

The provision waives the right of its users to commence any class action and allowed Blockbuster to reserves the right to modify the "Terms and Conditions" at its sole discretion and at any time.

The plaintiffs argued that the arbitration provision was unenforceable because it was illusory and unconscionable.

Following the reasoning in a Fifth Circuit case, Morrison v. Amway Corp.,[2] and consistent with a Ninth Circuit case, Douglas v. U.S. District Court ex rel Talk America[3] the court found that Blockbuster's arbitration provision was illusory and unenforceable, because there was nothing in the Terms and Conditions that would prevent Blockbuster from "unilaterally changing any part of the contract", "at its sole discretion" and "at any time."

Some websites' "terms and conditions" may be deemed an illusory contract and unenforceable if the language can be changed at any time by the company without notifying users and giving them a chance to reject the new changes.