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Facebook attorney Aaron Panner of Kellogg, Huber, Hansen, Todd, Evans & Figel argued that disclosure of mere ID numbers didn't cause any appreciable damage under California law, but Judge Richard Tallman didn't sound convinced.

“We're here on basically a pleadings appeal,” he said, “so we don't have any discovery about how valuable is this information.” The Ninth Circuit may have to certify the state law issues to the California Supreme Court, he added.

How much those claims would be worth is unclear, though plaintiff attorney Kassra Nassiri argued the user IDs lead to “a goldmine of information” on which Facebook's entire business model is predicated.

Robertson v. Facebook, 12-15619, and Graf v. Zynga, 11-18044, were filed in 2010 shortly after The Wall Street Journal revealed that Facebook user IDs were being transferred to advertisers via HTTP referers when users clicked on advertisements appearing on Facebook or apps like Zynga. U.S. District Judge James Ware of the Northern District of California dismissed both cases in 2011.

Last month, the Ninth Circuit panel, comprised of Tallman, Sandra Ikuta and Arthur Alarcon, consolidated arguments in the two cases.

The case against Facebook is fairly straightforward. Nassiri argues the company promised users that it would protect their personal information and share only “non-personally identifiable attributes” with advertisers. Facebook broke that promise and violated state and federal laws including the Wiretap Act and the Stored Communications Act, 18 U.S.C. 2511, in the process, he says. Those laws impose penalties of hundreds or even thousands of dollars per violation.

The case against Zynga is more complicated, as it involves users clicking on third-party ads in a Zynga frame running on the Facebook platform. Plaintiff attorney Adam Levitt spent much of his argument answering questions from Judge Sandra Ikuta about what exactly he was alleging.

Tallman, a tech-savvy jurist who brings his laptop to every argument, seemed equally perplexed. “What's the beef here?” he asked. “Who's being misled?”

Levitt argued that “the sanctity of electronic communications” are at stake, drawing a parallel to the problems confronting the National Security Agency.

Zynga's attorney, Richard Seabolt of Duane Morris, replied that Facebook IDs are public information, discoverable via a simple Google search. The reason the claims are hard to understand, he argued, is that they don't fit the statutes.

Levitt's appeal is limited to federal claims. Nassiri, the lead attorney against Facebook, emphasized that he's bringing contract and California statutory claims as well.

That seemed like his only hope, as Tallman said Ninth Circuit case law has consistently held that disclosing mere phone numbers or similar metadata doesn't violate federal wiretapping laws.

“Those are Fourth Amendment cases,” Nassiri argued, “and they're not directly on point.”

“Yes, they are,” Tallman replied.

Tallman also pushed back on Facebook counsel Panner when Panner said Congress never intended to bring simple identifiers under the ambit of those laws.

“I don't think Congress thought in its wildest dreams about what your client is doing now,” Tallman said.

' Scott Graham, The Recorder

Cooley Advises LegalZoom in Private Equity Infusion

LegalZoom, a Web-based provider of legal services, withdrew its initial public offering plans last month to pave the way for European private equity firm Permira Advisers to take a $200 million controlling stake. LegalZoom tapped a Los Angeles-based team from Cooley to advise on the acquisition, which is expected to close during the first quarter of 2014. Permira sought counsel from Fried, Frank, Harris, Shriver & Jacobson.

Glendale, CA's LegalZoom first filed to go public in May 2012, but it had shelved those plans by August of that year after a series of false starts. See, “Report: LegalZoom.com IPO Delayed,” Los Angeles Business Journal.

Though the prospects for technology IPOs were dimmed in 2012, in part by Facebook's disappointing debut, such deals have since rebounded. The legal services industry has also seen increased activity and interest as new startups have entered the marketplace. See, “Start-Ups Look for Piece of the Legal Research Market,” The Recorder.

' Chelsea Allison, The Recorder

Ninth Circuit Cool to Privacy Claims against Facebook, Zynga

Two privacy class actions with the potential for millions in statutory damages against Facebook and Zynga sounded destined to fail on Jan. 17 at the U.S. Court of Appeals for the Ninth Circuit.

But Facebook may not be completely off the hook, because a three-judge panel sounded willing to entertain breach-of-contract and other state law claims against the social network for revealing user IDs to third parties.

Facebook attorney Aaron Panner of Kellogg, Huber, Hansen, Todd, Evans & Figel argued that disclosure of mere ID numbers didn't cause any appreciable damage under California law, but Judge Richard Tallman didn't sound convinced.

“We're here on basically a pleadings appeal,” he said, “so we don't have any discovery about how valuable is this information.” The Ninth Circuit may have to certify the state law issues to the California Supreme Court, he added.

How much those claims would be worth is unclear, though plaintiff attorney Kassra Nassiri argued the user IDs lead to “a goldmine of information” on which Facebook's entire business model is predicated.

Robertson v. Facebook, 12-15619, and Graf v. Zynga, 11-18044, were filed in 2010 shortly after The Wall Street Journal revealed that Facebook user IDs were being transferred to advertisers via HTTP referers when users clicked on advertisements appearing on Facebook or apps like Zynga. U.S. District Judge James Ware of the Northern District of California dismissed both cases in 2011.

Last month, the Ninth Circuit panel, comprised of Tallman, Sandra Ikuta and Arthur Alarcon, consolidated arguments in the two cases.

The case against Facebook is fairly straightforward. Nassiri argues the company promised users that it would protect their personal information and share only “non-personally identifiable attributes” with advertisers. Facebook broke that promise and violated state and federal laws including the Wiretap Act and the Stored Communications Act, 18 U.S.C. 2511, in the process, he says. Those laws impose penalties of hundreds or even thousands of dollars per violation.

The case against Zynga is more complicated, as it involves users clicking on third-party ads in a Zynga frame running on the Facebook platform. Plaintiff attorney Adam Levitt spent much of his argument answering questions from Judge Sandra Ikuta about what exactly he was alleging.

Tallman, a tech-savvy jurist who brings his laptop to every argument, seemed equally perplexed. “What's the beef here?” he asked. “Who's being misled?”

Levitt argued that “the sanctity of electronic communications” are at stake, drawing a parallel to the problems confronting the National Security Agency.

Zynga's attorney, Richard Seabolt of Duane Morris, replied that Facebook IDs are public information, discoverable via a simple Google search. The reason the claims are hard to understand, he argued, is that they don't fit the statutes.

Levitt's appeal is limited to federal claims. Nassiri, the lead attorney against Facebook, emphasized that he's bringing contract and California statutory claims as well.

That seemed like his only hope, as Tallman said Ninth Circuit case law has consistently held that disclosing mere phone numbers or similar metadata doesn't violate federal wiretapping laws.

“Those are Fourth Amendment cases,” Nassiri argued, “and they're not directly on point.”

“Yes, they are,” Tallman replied.

Tallman also pushed back on Facebook counsel Panner when Panner said Congress never intended to bring simple identifiers under the ambit of those laws.

“I don't think Congress thought in its wildest dreams about what your client is doing now,” Tallman said.

' Scott Graham, The Recorder

Cooley Advises LegalZoom in Private Equity Infusion

LegalZoom, a Web-based provider of legal services, withdrew its initial public offering plans last month to pave the way for European private equity firm Permira Advisers to take a $200 million controlling stake. LegalZoom tapped a Los Angeles-based team from Cooley to advise on the acquisition, which is expected to close during the first quarter of 2014. Permira sought counsel from Fried, Frank, Harris, Shriver & Jacobson.

Glendale, CA's LegalZoom first filed to go public in May 2012, but it had shelved those plans by August of that year after a series of false starts. See, “Report: LegalZoom.com IPO Delayed,” Los Angeles Business Journal.

Though the prospects for technology IPOs were dimmed in 2012, in part by Facebook's disappointing debut, such deals have since rebounded. The legal services industry has also seen increased activity and interest as new startups have entered the marketplace. See, “Start-Ups Look for Piece of the Legal Research Market,” The Recorder.

' Chelsea Allison, The Recorder