Readers of this blog are well aware of the proliferation of lawsuits alleging that websites which utilize Meta Pixel tracking software violate the California Invasion of Privacy Act (“CIPA”). These lawsuits typically allege that the use of Meta Pixel technology, without consumer consent, violates CIPA’s wiretapping provision or its provision prohibiting the use of pen registers and trap and trace devices. Some lawsuits, like the one discussed in this piece, allege both. Below, we briefly discuss the allegations in the Complaint and a recent decision denying Meta’s motion to dismiss the action.
Meta Pixel Allegations and Claims
In In re Meta Pixel Tax Filing Cases, Plaintiffs assert that several online tax filing services used Meta Pixel software on their websites. As the name suggests, the Meta Pixel is a tool developed by Meta that third parties can install on their websites to, among other things, track the interactions of website visitors. By virtue of the subject tax filing companies’ use of Meta Pixel technology, it is alleged that Meta obtained access to, among other things, users’: (1) financial information; (2) names; (3) email addresses; (4) data about income, filing status, refund amounts, and dependents’ college scholarship amounts. Plaintiffs filed a second amended consolidated class action complaint which asserted that: (1) the Meta Pixel’s sending of information from the tax services’ websites to Meta violated the provision of CIPA that prohibits wiretapping without the consent of all parties to the communications; and (2) use of Meta Pixel technology violated the provision of CIPA prohibiting the installation of a pen register without a court order. Because the Court previously ruled that Plaintiffs plausibly pled that the Meta Pixel was an unlawful wiretap under CIPA, Meta only moved to dismiss the pen register claim.
The two primary arguments Meta advanced in support of its Motion to Dismiss were: (1) the Complaint fails to allege that Meta installed or used the Meta Pixel technology at issue; and (2) Plaintiffs pled themselves out of their pen register claim by alleging that the Meta Pixel disclosed the “contents of communications.” The Court did not find either argument persuasive. In ruling on Meta’s first argument, the Court held that Plaintiffs plausibly pled that Meta did in fact use Meta Pixel software because the Complaint alleged that Meta Pixels allowed Meta to collect data in real time in order to provide the third-party websites with analytics services. Focusing on the California Legislature’s intent when it enacted CIPA, the Court dispensed with Meta’s second argument, finding it “highly unlikely that the Legislature intended to permit the installation and use of pen registers so long as those devices also record the contents of a third party’s communications.” According to the Court, accepting Meta’s “proposed loophole would allow any entity to avoid CIPA’s pen register provisions simply by employing more intrusive forms of technology.” Accordingly, the Court denied Meta’s Motion to Dismiss.
Meta Pixel Lawsuits Will Continue
Enacted in 1967, CIPA clearly was designed to protect individuals from unauthorized recording of or eavesdropping on private communications, particularly telephone calls. While some courts have recognized this fact and have denied extending CIPA to third-party tracking of internet communications, many California courts have gone in the opposite direction. With courts struggling to determine whether CIPA applies to internet communications and the use of third-party tracking technologies, such as Meta Pixel software, online businesses should anticipate that online tracking technology lawsuits will continue. As such, it is imperative that businesses evaluate their data collection technology practices, particularly how consent to use that data is obtained from website visitors.
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