Facebook Case Highlights Privacy Class Action Standing Issues

The U.S. District Court for the Northern District of California recently granted Facebook’s motion to dismiss a potential $15 billion privacy class action case. Facebook had challenged all of the plaintiffs’ allegations based on a lack of standing due to their failure to establish a cognizable injury. However, the court agreed only in part, finding that the plaintiffs were able to establish statutory standing for some of their claims.

The plaintiffs alleged that Facebook knowingly tracked its users’ internet activities after they had logged out of their Facebook accounts, in violation of the federal Wiretap Act and Stored Communications Act (SCA) and the California Invasion of Privacy Act (CIPA), as well as several California state laws that specifically require a showing of economic injury-in-fact to establish standing. The plaintiffs maintained that their injury stemmed from the financial benefit Facebook obtained by collecting their personal information and web activity given the market for information about how people use the internet.

The court, however, found the plaintiffs lacked standing in relation to some of their state law claims because they did not suffer an actual or threatened economic injury through Facebook’s tracking activities. The court noted that Facebook’s actions neither deprived the plaintiffs of the opportunity to personally sell their own information nor did the tracking diminish the value of the plaintiffs’ information. Of note, while the court also dismissed the plaintiffs’ Wiretap, SCA, and CIPA claims, it did so for failure to establish a plausible claim and not because the plaintiffs lacked standing. The court noted that the plaintiffs established standing for these particular claims simply by sufficiently alleging that Facebook violated these laws.

TIP: Despite many privacy class actions being dismissed, including this one, it is a reminder that plaintiffs continue to bring actions against companies for alleged privacy problems.