With the growing popularity in cryptocurrency investments, class actions related to crypto assets have soared. These lawsuits raise a host of novel legal questions, including how established personal jurisdiction principles apply to crypto companies. A Colorado federal court recently provided guidance on this question, dismissing a lawsuit involving crypto wallet Atomic Wallet for lack of personal jurisdiction. See Meany v. Atomic Protocol Sys. OU, 2024 WL 4135762 (D. Colo. Sept. 10, 2024).Continue Reading A Closer Look: Court Applies Established Personal Jurisdiction Principles to Dismiss Crypto Wallet Companies In Class Action Filed After $100 Million North Korean Crypto Hack.
California State Court Holds That A Concrete Injury-In-Fact Is Required To Bring Claims Under CIPA
The California Invasion of Privacy Act (CIPA) provides a private right of action only to those who have “been injured by a violation of” CIPA. A California Superior Court decision, Rodriguez v. Fountain9, Inc., 2024 WL 3886811, at *4 (Cal. Super. July 9, 2024), confirmed that a plaintiff cannot satisfy this statutory standing requirement unless the plaintiff alleges “a concrete injury-in-fact.”Continue Reading California State Court Holds That A Concrete Injury-In-Fact Is Required To Bring Claims Under CIPA
Court Tosses Google Pixel Wiretap Complaint: Plaintiffs Fail to Allege How Pixel Was Configured or Intent to Collect Health Data
Website analytics tools targeted in wiretapping lawsuits, such as pixels, often allow businesses to shield or mask collected data to avoid the transmission of sensitive data. A California federal judge recently dismissed a wiretapping complaint filed against Google that glossed over this nuance “to the point of seeming intentionally slippery” in John Doe I, et al. v. Google LLC, 23-cv-02431, 2024 WL 3490744 (N.D. Cal. July 22, 2024).
The twelve plaintiffs in this case claimed that their healthcare providers installed Google technology on their websites, including Google Analytics, to track and collect data about their website activity for advertising purposes. Among the data allegedly collected was the plaintiffs’ “personal health information.” Plaintiffs filed a complaint against Google, asserting a mix of privacy claims, including under the California Invasion of Privacy Act (“CIPA”). According to the plaintiffs, Google unlawfully wiretapped the plaintiffs’ communications with their healthcare providers’ websites, obtaining allegedly sensitive health data in the process.Continue Reading Court Tosses Google Pixel Wiretap Complaint: Plaintiffs Fail to Allege How Pixel Was Configured or Intent to Collect Health Data
California Federal Court Grants Summary Judgment to Defendant in CIPA Website Wiretapping Case
Delivering a significant win for businesses hit with website wiretapping lawsuits, a California federal judge granted a defendant’s motion for summary judgment under the California Invasion of Privacy Act (“CIPA”) in Gutierrez v. Converse Inc., 2024 WL 3511648 (C.D. Cal. Jul. 12, 2024).
The website tool at issue in this case, like hundreds of other cases, was a third-party-enabled chat feature that businesses install on their websites to connect customers with live customer service agents. Plaintiff Nora Gutierrez alleged that she visited Defendant Converse’s website with this chat feature installed, and that the chat provider stored her chat communications with Converse’s customer service agents on its servers. Gutierrez characterized this practice as “wiretapping” and she asserted a claim against Converse for aiding and abetting the alleged wiretapping in violation of the first and second clause of CIPA section 631(a).Continue Reading California Federal Court Grants Summary Judgment to Defendant in CIPA Website Wiretapping Case
California Federal Court Puts Teeth Behind “Communication” Element of Website Wiretapping Claims
Hundreds of lawsuits have accused businesses of using website analytics tools to “wiretap” their customers’ interactions with their website, but these lawsuits often overlook a basic pleading requirement of any wiretapping claim: the collection of a “communication.” A California federal judge last week added teeth to this requirement, dismissing a wiretapping lawsuit filed against Great Wolf Resorts, Inc. (“Great Wolf”) because the plaintiff failed to plead what “communication” she had with the Great Wolf website in the first place. See Augustine v. Great Wolf Resorts, Inc., 2024 WL 3450967 (S.D. Cal. July 18, 2024).Continue Reading California Federal Court Puts Teeth Behind “Communication” Element of Website Wiretapping Claims
Second Circuit Identifies Pitfalls to Avoid When Implementing Arbitration Provisions
Companies implementing arbitration provisions should ensure that they adequately inform customers about the provision and their options for opting out. The Second Circuit recently reaffirmed the importance of this exercise in Lipsett v. Popular Bank, 2024WL 111247 (2nd Cir. Jan. 10, 2024), finding a bank’s arbitration provision unenforceable over a decade after it was first implemented.Continue Reading Second Circuit Identifies Pitfalls to Avoid When Implementing Arbitration Provisions
California Court Applies “Substance Over Form,” Allows True Lender Claim to Proceed
May courts look beyond the face of a loan transaction to identify the “true lender”? In a lawsuit filed by California’s financial regulator, a California state court recently answered yes, finding that a fact-intensive inquiry into the “substance” of a loan transaction was necessary to determine who the “true lender” is and declining to dismiss a lawsuit. See Opportunity Fin., LLC v. Hewlett, No. 22STCV08163 (Cal. Super. Ct. Sept. 30, 2022).Continue Reading California Court Applies “Substance Over Form,” Allows True Lender Claim to Proceed
Seventh Circuit Rejects “Stealth” Class Actions
Can plaintiffs spring a class action on defendants in the late stages of a case? The Seventh Circuit recently answered no in Ali v. City of Chicago, 34 F.4th 594 (7th Cir. 2022), rejecting so-called stealth class actions and reaffirming a seemingly obvious rule: a class action “must be brought as a class action.”Continue Reading Seventh Circuit Rejects “Stealth” Class Actions
Bank Partnership Attacked (Again) Under True Lender Theory
A bank partnership is the target of yet another “true lender” attack in a new class action filed last week. Michael v. Opportunity Fin., LLC, No. 1:22-cv-00529 (W.D. Tex. June 1, 2022). The lawsuit is aimed at the lending partnership between OppFi (a fintech) and FinWise Bank (its bank partner), which was also the target of a recent investigation by California’s banking regulator and another class action earlier this year. This latest development cements a growing trend of true lender attacks after Congress repealed a regulation on the topic last year, dashing hopes of a uniform and predictable standard to identify the “true lender” in bank partnerships.Continue Reading Bank Partnership Attacked (Again) Under True Lender Theory
A Closer Look: Avoiding Personal Jurisdiction Under An Alter Ego Theory
Class action plaintiffs often attempt to drag an out-of-state parent company into a forum based solely on the contacts of a subsidiary under the so-called alter ego theory of personal jurisdiction (sometimes called a jurisdictional veil-piercing theory). This theory allows a court to impute a subsidiary’s contacts with a forum to its parent when the subsidiary is found to be an “alter ego” of the parent company.
Companies must understand how courts apply the alter ego jurisdictional theory and best practices to minimize the unique risks this theory presents.Continue Reading A Closer Look: Avoiding Personal Jurisdiction Under An Alter Ego Theory