The Ninth Circuit on Friday held that vehicle infotainment systems that illegally record private communications might generate an injury-in-fact sufficient to satisfy Article III standing—but (without more) such recordings fail to injure a plaintiff’s “person,” “business,” or “reputation” as is required to gain statutory standing under the Washington Privacy Act (“WPA”).

Plaintiffs Mark Jones and Michael McKee filed a putative class action complaint asserting WPA claims against Ford in Washington state court.  Plaintiffs alleged that after Jones connected his phone to an infotainment system in a Ford automobile, the system unlawfully downloaded a text message exchange between Jones and McKee, and those text messages remained in the infotainment system’s memory even after Jones disconnected his phone.  Although Ford itself never accessed the messages, third party corporations were allegedly capable of doing so (and might, in theory, sell the messages to private investigation services or other third parties).  Ford removed the case to the Western District of Washington under the Class Actions Fairness Act (“CAFA”), and successfully moved to dismiss Plaintiffs’ WPA claim on statutory standing grounds.

The Ninth Circuit affirmed the district court’s dismissal of the complaint, but it first made clear that Article III’s injury-in-fact requirement stands apart from the WPA’s “more-demanding statutory injury requirements.”  Plaintiffs’ complaint, in the eyes of the court, plausibly established Article III standing—as the “law is settled” that violations of codified privacy rights constitute injuries-in-fact, and the plaintiffs adequately alleged a violation of the WPA’s substantive prohibitions (which the court described as “one of the most restrictive electronic surveillance laws ever promulgated”).  

The WPA does not, however, authorize plaintiffs to sue defendants for all nominal violations of its terms.  To establish statutory standing, a plaintiff must suffer an injury to their “business, person, or reputation.” The Ninth Circuit held that this requires not only a privacy violation, but downstream harm in the form of financial loss, physical injury, or reputational damage. While the plaintiffs argued that any privacy violation should suffice, the Ninth Circuit explained their reading would impermissibly render the WPA’s standing provision “mere surplusage.”  And because the named plaintiffs had failed to allege any concrete injury beyond the privacy violation itself—and the mere possibility of such an injury was not enough—they had failed to state a claim.

The Ninth Circuit’s ruling is not the only recent decision dismissing putative class action claims attacking vehicle infotainment systems on standing grounds.  But it does highlight the importance to defendants of raising statutory standing arguments in addition to those based in Article III.  The Ninth Circuit’s opinion is available here.