On December 22, 2022, the United States District Court for the Northern District of California granted the motion to dismiss filed by Defendants, What If Holdings LLC (“What If”) and ActiveProspect Inc. (“ActiveProspect”). Plaintiff, Loretta Williams, alleged in her complaint that while visiting a website owned by What If, TrustedForm (an ActiveProspect website recording software platform) was used to illegally record her keystrokes, her consent to telemarketing, and the provision of other registration data on the website.
Plaintiff alleged that the website recording violated: (1) the wiretapping provision of the California Invasion of Privacy Act (“CIPA”); (2) California’s Unfair Competition Law (“UCL”); and (3) Plaintiff’s right to privacy under the California Constitution. Defendants moved to dismiss all three claims.
Motion to Dismiss
The Court found that because What If was the intended recipient of plaintiff’s communication, it was a party to the conversation and, therefore, could not eavesdrop on its own conversation. As a result, What If’s liability necessarily turned on whether ActiveProspect violated the wiretapping statute. To determine that issue, the Court explained that the operative question was “whether ActiveProspect was an independent third party hired to eavesdrop on What If’s communications, or whether Active Prospect’s software was merely a tool that What If used to record its own communications with Plaintiff.” In finding that it was the latter, the Court’s analysis turned on the fact that ActiveProspect did not use the recording for its own purposes. The data that ActiveProspect recorded was deemed “routine” and “clerical in nature” by the Court, which is “qualitatively different from data mining.” Therefore, the Court dismissed the wiretapping claim, finding that “TrustedForm functioned as a recorder, and not as an eavesdropper.”
In so ruling, the Court held that the UCL and privacy claims also failed because the underlying CIPA claim was without merit. Accordingly, the Court granted the Defendants’ motions to dismiss.
What Does This Website Recording Decision Mean for Your Business?
This decision comes as a significant victory to the telemarketing industry, especially in light of the Ninth Circuit decision in Javier and the Third Circuit decision in Popa. The decision affirms that businesses may freely use third-party service providers to assist in website visit recordings, assuming, of course, that this is done in accordance with applicable federal and state notice and consent requirements.
Please note that the Court did not reach the question of whether or not Plaintiff had provided prior consent to the recording on the website. The Court specifically stated that reliance on Javier was not controlling precedent given that Javier was “expressly cabined to the question of consent.” Notwithstanding the foregoing, the Court did note that the issue of consent is not irrelevant and left the door open for the issue to be decided in future cases.
What If was represented by Klein Moynihan Turco in this matter. This decision adds to the long string of wins that KMT has secured over the years for its clients in this space. The attorneys at Klein Moynihan Turco have decades of experience in all aspects of telemarketing and Internet marketing law. KMT can assist your business in: (1) staying compliant with applicable federal and state laws; and (2) defending against any unforeseen marketing-related lawsuits.
If you need assistance with updating your marketing policies and procedures and/or in defending against any website recording wiretapping claims, please email us at email@example.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.