Over the last several years, California appellate courts have begun to align the threshold standing analysis under California law with the federal Article III standing requirements, presenting an emergingly viable jurisdictional defense for defendants, particularly for those who are facing claims for intangible privacy or informational harms.
Standing under the California Constitution
The California Constitution does not impose an equivalent “cases” or “controversies” limitation as required under Article III of the United States Constitution. National Paint & Coatings Ass’n v. State of California, 58 Cal.App.4th 753, 761 (1997) (“Our state Constitution contains no ‘case or controversy’ requirement.”). Instead, the California Constitution allows California courts to hear all “causes,” encompassing a broader scope for standing than its federal counterpart. Cal. Const. art. VI, § 10. California courts have interpreted this as requiring a plaintiff to have “a personal interest in the litigation’s outcome” to confer standing. Bilafer v. Bilafer, 161 Cal.App.4th (2008).
As a result of this broader conception of standing, some California statutes have incorporated certain limitations for who can bring a lawsuit under those laws. For example, California’s Unfair Competition Law (“UCL”) imposes a statutory standing requirement where plaintiffs must show they have suffered an economic or property harm caused by the defendant’s violation. See Bus. & Prof. Code §17204. California’s Revenue and Tax Code similarly imposes a limitation on standing in tax refund actions allowing only the person who paid the tax to maintain an action. See Cal. Rev. & Tax. Code Ann. § 5140; IBM Personal Pension Plan v. City and Cnty. of San Francisco, 32 Cal.Rptr.3d 656, 662-66 (2005).
However, over the past couple of years, California appellate courts have begun to articulate meaningful limitations about who has standing to initiate a lawsuit in the State regardless of the statutory cause of action alleged, aligning California’s standing jurisprudence closer to the federal standing requirements. See Limon v. Circle K. (“Limon”), 84 Cal.App.5th 671 (2022); Muha v. Experian Information Solutions, Inc. (“Muha”), 106 Cal.App.5th 199 (2024).
Evolving standing jurisprudence articulated in Limon and Muha
In Limon and Muha, the plaintiffs asserted claims under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681, et seq. which were dismissed and remanded following removal to federal court, for lack of Article III standing. Limon, 84 Cal.App.5th at 680; Muha, 106 Cal.App.5th at 204. Each plaintiff then pursued their FCRA claims in California state court to avoid the Article III standing barrier. However, as described below, the Limon and Muha courts likewise found that the plaintiffs failed to allege a sufficient injury to confer standing in California state court.
In both cases, the plaintiffs’ FCRA claims were based on the defendants’ purported failures to provide the required disclosures when the defendants sought the plaintiffs’ authorizations to obtain their consumer reports. Limon, 84 Cal.App.5th at 671; Muha, 106 Cal.App.5th at 203. The plaintiffs in each case argued that the informational harm inherently caused by the purported FCRA violations was sufficient to confer standing to sue in state court.1
However, Limon and Muha rejected the plaintiffs’ theory of standing. The Limon and Muha courts instead reasoned that although California is not constrained by the case or controversy provisions of Article III, courts “have equated the ‘beneficially interested’ test for standing in California to the injury-in-fact prong of the [A]rticle III test for standing in federal courts.” Limon, 84 Cal.App.5th at 697-98 (emphasis added). Thus, when assessing a plaintiff’s standing to pursue claims in California, courts must consider whether the plaintiff suffered an “invasion of [his] legally protected interests” that is “concrete and particularized, actual or imminent, and not conjectural or hypothetical” – a parallel requirement to the federal injury-in-fact requirement. Limon, 84 Cal.App.5th at 694 (citing Associated Builders and Contractors, Inc. v. San Francisco Airports Com., 21 Cal.4th 352, 362 (1999)); Muha, 109 Cal.App.5th at 208. In applying this test, both courts concluded that the purported informational injury the plaintiffs suffered due to the defendants’ FCRA violation, without more, was insufficient to establish standing under California law. See Limon, 84 Cal.App.5th at 706-07, Muha, 109 Cal.App.5th at 629 (citing Limon to reach the same conclusion).
Challenging CIPA claims for lack of statutory standing
As companies continue to face class actions involving allegations of intangible privacy or informational harms, Limon’s and Muha’s standing analysis present companies an increasingly viable jurisdictional defense.
Over the past couple of years, companies have seen a wave of California Invasion of Privacy Act (“CIPA”) class action suits alleging that their use of basic web tracking technologies on their websites amounts to either wiretaps, under CIPA § 631, or trap and trace devices/pen registers, under CIPA § 638.51, with plaintiffs seeking statutory damages for their purported privacy harms.2 Many plaintiffs have chosen to file CIPA suits in California state court, in part, to avoid the inevitable challenge that they lack Article III standing to sue. See, e.g., Xu v. Reuters News & Media Inc., 2025 WL 488501, at *3-5 (S.D.N.Y. Feb. 13, 2025) (dismissing CIPA pen register claim for lack of Article III standing); Carlous v. Nextstar Media Inc., 2025 WL 1338193, at *1 (N.D. Cal. Apr. 9, 2025) (same).
However, recent case law – relying on the reasoning in Limon and Muha – demonstrates that plaintiffs may face similar standing challenges in state court. For example, under CIPA, plaintiffs may only bring a civil action if they have “been injured by a violation of” a CIPA provision. CIPA § 637.2(a) (emphasis added). Limon and Muha make clear that this requires the plaintiff to adequately allege a concrete harm to establish statutory standing. In the context of privacy harms, this likely requires an alleged invasion of a “legally protected interest” for which the plaintiff “has an objectively reasonable expectation of privacy.” Hill v. Nat’l Collegiate Athletic Assn., 7 Cal.4th 1, 27 (1994). Plaintiffs may struggle to meet this standard when asserting CIPA claims premised on companies’ use of ubiquitous web tracking technologies that purportedly collect users’ non-sensitive browsing information. See e.g. Casillas v. Transitions Optical, Inc., No. 23STCV30742 (Cal. Super. Apr. 23, 2024) (citing to Limon in dismissing a CIPA claim for lack of standing where plaintiff failed to allege he suffered a privacy injury); Palacios v. Office Depot, LLC. No. 24STCV11977, at *5 (Cal. Super. Ct. Dec. 4, 2024) (citing Limon in sustaining demurrer of CIPA claim for lack of standing where plaintiff did not have a protected privacy interest in her device’s IP address that defendant purportedly recorded).
Companies facing statutory claims premised on intangible privacy or informational harms should carefully evaluate (i) whether the statute at issue directly confers the plaintiff with standing for a violation of the statute alone, and (ii) if not, whether the plaintiff adequately alleges a concrete harm to establish standing. Limon and Muha suggest that arguments challenging the sufficiency of these types of intangible harms to support standing may have an increasingly receptive audience in California courts.
References
1 Limon, 84 Cal. App. 5th at 700 (Limon contends “the FCRA established statutory penalties for these types of willful violations regardless of whether they result in an injury”); Muha, 109 Cal.App.5th at 209 (Muha alleged plaintiffs “have a beneficial interest because they suffered an informational injury – the failure to include one required disclosure – that entitles them to statutory damages.”).
2 See e.g. Casillas v. Transitions Optical, Inc., No. 23STCV30742 (Cal. Super. Ct. Sept. 9, 2024); Rodriguez v. Fountain9, Inc., No. 24STCV04504 (Cal. Super. Ct. July 9, 2024); Rodriguez v. Pilvo Inc., No. 24STCV08972 (Cal. Super. Ct. Oct. 2, 2024).
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