Judge in gargantuan Google privacy class action: No harm, no case

January 2, 2013

Last June, while the country was transfixed by the U.S. Supreme Court’s ruling on the constitutionality of Obamacare, the justices quietly ducked an issue that has bedeviled Silicon Valley for more than a decade. The court issued a ruling that it had “improvidently” granted certiorari in a case called First American Financial v. Edwards, which presented the question of whether plaintiffs have standing to sue if they cannot demonstrate an injury. The Supreme Court’s decision to pass left in place a 9th Circuit Court of Appeals finding that plaintiffs can establish standing through a statutory claim even if they weren’t harmed by the defendant’s conduct.

Tech companies had been hoping for a different result, since plaintiffs in class actions claiming violations of their privacy often can’t show that they suffered any actual injury from the use of their personal information. Defendants have been fairly successful with arguments that class members in privacy cases can’t establish standing through an injury-in-fact, but plaintiffs can still survive dismissal motions by citing violations of laws that carry statutory damages. That’s why cases such as the class action involving Facebook’s “Sponsored Stories” advertising result in multimillion-dollar settlements: Defendants face statutory claims by legions of class members.

Last Friday, Google avoided a similar fate, at least for the time being. U.S. Magistrate Judge Paul Grewal of San Jose, California, dismissed a class action asserting that the universal terms of service Google imposed in March 2012 violated users’ privacy rights, as well as the federal Wiretap Act and California state consumer laws. The magistrate said that the class, represented by Gardy & Notis, Grant & Eisenhofer and Bursor & Fisher, can file an amended complaint based on the state Right to Publicity Act but said that plaintiffs will have to show specifically that Google used their voice or likeness without their consent, which they so far haven’t been able to do. (Plaintiffs’ lawyer Kelly Noto didn’t return my call for comment.)

The class had argued in its response to Google’s motion to dismiss that members suffered actual damages when, for instance, they had to replace Android devices to avoid Google’s invasive policies. The magistrate said, however, that the amended complaint hadn’t established that (or any other) injury. “Plaintiffs have not identified a concrete harm from the alleged combination of their personal information across Google’s products and contrary to Google’s previous policy sufficient to create an injury in fact,” Grewal said. Moreover, he wrote, class counsel couldn’t solve that problem by asserting statutory violations. “Nothing in the precedent of the 9th Circuit or other appellate courts confers standing on a party that has brought statutory or common law claims based on nothing more than the unauthorized disclosure of personal information, let alone an unauthorized disclosure by a defendant to itself,” the magistrate said, citing U.S. District Court Judge Lucy Koh‘s November 2011 decision in Low v. LinkedIn.

The ruling lets Google off a very large hook, considering that the class action was filed on behalf of every owner of an Android device and everyone with a Google account. The company is represented by Michael Page of Durie Tangri, who declined comment.

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