UPDATE -- Google has filed an appeal to the 9th Circuit to review this lower court decision "before forcing to proceed with protracted litigation" on the federal wiretapping case. Good article by David Kravets of Wired here
Written by Kevin McGinty
Regular readers of this blog will be familiar with my view that difficulty in proving actual damages poses challenges to would-be plaintiffs in privacy class actions. The trial court’s decision on the motion to dismiss the class action complaint filed in In re Google Street View Electronic Communications Litigation, No. 5:10-md-02184 (N.D. Cal.) (“Google Street View”), illustrates why that is so for claims brought under state consumer protection statutes . The IN RE GOOGLE, INC. STREET VIEW -- Complaint asserts claims under federal and state wiretapping laws and under California Business and Professional Code § 17200. In an opinion issued on June 29, 2011, a federal judge in the Northern District of California denied Google’s motion to dismiss the federal wiretapping claims, but dismissed the state law wiretapping claims and the § 17200 claim. Given the small likelihood that wiretapping claims would apply to class actions outside of the unique context of this particular case, the dismissal of the § 17200 claim has far greater significance for other potential privacy class actions, and reinforces the difficulty in bringing such cases.
More after the jump.....
The Google Street View class action concerns the collection of unencrypted WiFi data by vehicles that Google sent out to take street level photographs to be incorporated into Google’s popular Google Maps and Google Earth applications. Plaintiffs allege that Google used sophisticated equipment that was not available to the general public to decipher the intercepted WiFi data in order to determine what web sites were being visited by users whose data had been collected. Plaintiffs claimed that such unauthorized collection constituted an illegal wiretap within the meaning of the federal wiretapping statute, 18 U.S.C. § 2511, and cognate state wiretap laws. Plaintiffs also alleged that the WiFi collection program constituted an unfair and deceptive trade practice in violation of § 17200. Google moved to dismiss all claims.
The court denied the motion to dismiss the federal wiretapping claim. Google argued that unencrypted WiFi data constituted publicly-available transmissions, thereby placing the collection of such transmissions outside of the ambit of the statute. Based on its analysis of the statutory language and legislative history, the court disagreed. Because the WiFi communications were not intended to be public and could not be deciphered without the use of sophisticated equipment that was not readily available to the general public, the court concluded that the allegations as to Google’s collection activities stated a claim under § 2511. The court, however, granted Google’s motion to dismiss plaintiffs’ state wiretap claims, concluding that the state wiretap statutes were preempted by federal law.
The court also granted Google’s motion to dismiss the § 17200 claim. Based on the recently-enacted Proposition 64 modifications to § 17200, a plaintiff cannot bring a § 17200 claim unless he or she can allege the loss of money or property as a consequence of the purportedly unfair or deceptive conduct of the defendant. Plaintiffs, however, did not allege that Google’s collection of their WiFi data had resulted in any losses of any kind. Therefore, that claim was dismissed.
Although the court’s decision on the wiretap claims establishes an important precedent for the application of 18 U.S.C. § 2511 to the interception of WiFi data, it is not likely to have a great impact on future privacy class actions, insofar as interception of WiFi data on the broad scale allegedly undertaken by Google is not a common occurrence. The dismissal of plaintiffs’ § 17200 claim, however, draws a bright line that greatly decreases the likelihood that plaintiffs will be able to pursue privacy-related class actions under California’s consumer protection statute. Even if a named plaintiff in a putative class action could show a pecuniary loss resulting from a data breach or privacy violation, it would still be necessary to establish such losses for absent class members as well. The individual fact finding that would be required to resolve absent class members’ claims would predominate over issues common to the class as a whole and preclude class certification. Accordingly, even though the decision in Google Street View will permit the plaintiffs in that case to continue to pursue class-based wiretapping claims against Google, the precedent established by that decision under § 17200 will aid future defendants in resisting class action privacy claims brought under consumer protection statutes.