California Invasion of Privacy Act (“CIPA”) wiretapping claims against online businesses are topics with which our readers are well-versed. Inconsistent court decisions about whether wiretapping claims under CIPA apply to the use of third-party tracking technologies have only fueled the continued assertion of these claims. However, the latest CIPA wiretap decision brings these claims into focus and may substantially affect future CIPA claims. Below, we discuss a recent California federal court decision granting summary judgment and its impact.
Defendants Prevail in Defending Against CIPA Wiretap Claim
In Torres v. Prudential Financial, Inc., plaintiffs Valerie Torres and Rhonda Hyman (“Plaintiffs”), on behalf of themselves and a putative class, alleged that defendants, Prudential Financial, Inc., ActiveProspect, Inc., and Assurance IQ (“Defendants”), violated CIPA by illegally wiretapping their communications without their consent. Specifically, Plaintiffs claimed that Prudential and Assurance embedded ActiveProspect’s “TrustedForm” software into the source code of an online webform to capture Plaintiffs’ interactions, such as button clicks, mouse movements, and keyboard inputs. After the Court granted Plaintiffs’ Motion for Class Certification, Defendants moved for summary judgment.
In granting summary judgment in favor of Defendants, the Court determined that there was no genuine dispute of material fact as to whether ActiveProspect read or attempted to read the contents of Plaintiffs’ communication while in transit. The Court found that accepting Plaintiffs’ interpretation of CIPA stretched the statutory language too far because it required the Court to interpret the meaning of “while . . . in transit” “to encompass any hypothetical future attempt to read or understand that meaning of a communication.” Because Plaintiffs could not demonstrate a genuine dispute as to whether ActiveProspect attempted to understand or decipher their communications while in transit, the Court granted summary judgment for Defendants.
What Is The Impact of This Decision for Your Company?
Needless to say, this decision is a monumental victory for online companies. Prior to this decision, courts only had determined whether a CIPA wiretapping claim had been plausibly pleaded, which is a relatively low threshold to meet, or cases settled before reaching the summary judgment stage. Although the ramifications of the Court’s decision remain to be seen, companies facing CIPA wiretapping allegations now have additional ammunition to push back against such claims. Given the time and resources Defendants devoted to getting to summary judgment in this case, however, this decision is unlikely to prevent future CIPA wiretapping lawsuits from being filed. Because the statute allows for the recovery of: (1) $5,000 per violation; or (2) three times the amount of actual damages, if any; and (3) injunctive relief, these alleged violations, especially when they are brought as a class action, can be quite lucrative for the plaintiffs’ bar.
Complying with CIPA, and other state privacy laws, is nuanced and fraught with potential pitfalls. Hiring experienced counsel is vital to avoiding these hazards and potentially costly litigation. Not only do the attorneys at Klein Moynihan Turco (“KMT”) have decades of experience assisting companies with federal and state marketing and consumer privacy law compliance, but its litigation team has successfully defended numerous businesses in CIPA lawsuits. If your company employs third-party tracking software or has been served with a CIPA lawsuit, please email us at info@kleinmoynihan.com or call us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice nor is it a substitute for seeking legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
Attorney Advertising
Photo by Štefan Štefančík on Unsplash
Similar Blog Posts:
Can’t Teach An Old Dog New CIPA Claim Tricks
