Readers of this blog are aware of the barrage of California Invasion of Privacy (“CIPA”) claims brought against online companies. Recently, an unfavorable decision from the Ninth Circuit Court of Appeals (“Ninth Circuit”) reversed the lower court’s dismissal of CIPA wiretapping claims. Below, we discuss the decision and its implications for future pixel tracking claims.
Pixel Tracking Software Wiretapping Claims
In Mikulsky v. Bloomingdale’s LLC and Bloomingdales.com, LLC, Plaintiff alleged that Defendants violated CIPA by using third-party tracking software to illegally wiretap her communications while visiting Defendants’ website. Specifically, Plaintiff alleged that Defendants utilized, without her consent, third-party pixel tracking and “session replay” software code to collect information, such as: (i) mouse movements; (ii) clicks; (iii) keystrokes; (iv) URLs of web pages visited; and (v) other electronic communications in real-time. According to the Complaint, the collection of this data allowed Defendant to create a video replay of her visit to the website. In response, Defendants moved to dismiss, and the District Court granted the motion holding that Plaintiff failed to plausibly allege that Defendants captured the “contents” of communications necessary to give rise to a CIPA-wiretapping claim. Plaintiff appealed the ruling to the Ninth Circuit.
On appeal, the Court reasoned that Plaintiff’s Complaint alleged sufficient facts demonstrating that Defendants “aided, agreed with, employed, or conspired with [third-party] providers to enable [them] to read, attempt to read, or to learn the contents or meaning of any message, report, or communication while . . . in transit . . . without the consent of all parties.” The Court held that the District Court erred in determining that the pixel tracking software only captured the characteristics of Plaintiff’s communications, and not the contents. Accordingly, the Court reversed the District Court’s dismissal of the Complaint.
CIPA-Pixel Tracking Lawsuits Will Continue to Be Filed
Although the significance of this ruling is mitigated by the fact that it is an unpublished decision (and thus, has limited precedential value), this holding undoubtedly will embolden the plaintiffs’ bar to continue filing CIPA-pixel tracking lawsuits. Companies must carefully review their websites to ensure that they are providing adequate notice of the use of third-party tracking software. Before any tracking begins, companies should disclose on their website’s landing page that the site uses third-party tracking software and require visitors to affirmatively consent to its use. In addition, online businesses should regularly review and update their privacy policies to reflect changes to their data collection, use and sharing practices, as well as to comply with ever-evolving privacy laws.
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