Privacy Ruling Reverberates in Case Against Facebook

Plaintiffs suing Facebook over its alleged practice of scanning direct messages are invoking a recent ruling from U.S. District Judge Lucy Koh clearing the way for a similar case against Yahoo Inc.

Ruling last month, Koh allowed plaintiffs to move forward with privacy claims under the Stored Communications Act and California's Invasion of Privacy Act, finding plaintiffs put forth sufficient facts to allege Yahoo had illegally shared the contents of e-mails with third parties. See the Order at http://bit.ly/1AEgmQ7.

“Yahoo's own FAQ page admits that Yahoo shares e-mail content with third parties,” Koh wrote.

Though not a complete win for plaintiffs ' Koh also knocked out allegations under the federal Wiretap Act, 18 U.S.C. '2510, et. seq.'and the California Constitution ' lawyers with Lieff Cabraser Heimann & Bernstein, Pomerantz and Carney Bates & Pulliam seem to think the Yahoo ruling will help their case against Facebook. The team submitted notice of the ruling to U.S. District Judge Phyllis Hamilton, who is presiding over the case.

The suit alleges Facebook intercepted users' private messages and scanned them for links, which the social networking company then used to add “likes” to Facebook pages associated with those links.

The Lieff Cabraser team pointed out Koh refused to decide whether Yahoo scanned the e-mails in question while they were in transit to its users, or while they were stored on Yahoo's servers. Yahoo had argued the e-mails were in storage when they were scanned, a defense to claims under the Wiretap Act and California's Invasion of Privacy Act, Cal. Penal Code '631.

“The court must defer resolution of whether Yahoo accessed the emails only after the emails were on Yahoo's servers until after discovery makes clear where and how Yahoo's scanning technology intercepted the emails,” Koh wrote.

Facebook's lawyers with Gibson, Dunn & Crutcher made the same argument in their June motion to dismiss ' claiming plaintiffs' Wiretap Act claim falls flat because the messages in question were stored on Facebook's servers when they were scanned. See, http://bit.ly/YINgS9. A hearing on that motion is scheduled for September.

Koh also sidestepped another hot-button privacy issue in the Yahoo case ' whether the company is covered by an exemption in the Wiretap Act for practices conducted by e-mail providers in the ordinary course of business. Last year, Koh refused to apply that exemption to Google in a similar case over its handling of Gmail, but the position has not been consistently adopted in the district.

Koh punted that question in the Yahoo case after dismissing plaintiffs' Wiretap Act claims on other grounds.

The suit was brought in February by a class of non-Yahoo users who allege they did not consent to Yahoo screening their messages. Yahoo's terms stipulate it will scan e-mails sent to and received by its users, in order to provide more specifically targeted advertisements. The company says it's up to Yahoo account holders to inform acquaintances without accounts of this policy.

Yahoo is represented by a team from Morrison & Foerster's San Francisco office and ZwillGen's Washington, DC, office. Plaintiffs are represented by Girard Gibbs and Kaplan Fox & Kilsheimer.

Koh dismissed a claim under the Wiretap Act, which requires that only one party to the communication consent to interception. Yahoo's terms of service agreement “explicitly acknowledges that Yahoo scans and analyzes users' e-mail for various purposes,” Koh wrote.

Marisa Kendall is a Reporter for The Recorder, an ALM sibling publication of Internet Law & Strategy.

Plaintiffs suing Facebook over its alleged practice of scanning direct messages are invoking a recent ruling from U.S. District Judge Lucy Koh clearing the way for a similar case against Yahoo Inc.

Ruling last month, Koh allowed plaintiffs to move forward with privacy claims under the Stored Communications Act and California's Invasion of Privacy Act, finding plaintiffs put forth sufficient facts to allege Yahoo had illegally shared the contents of e-mails with third parties. See the Order at http://bit.ly/1AEgmQ7.

“Yahoo's own FAQ page admits that Yahoo shares e-mail content with third parties,” Koh wrote.

Though not a complete win for plaintiffs ' Koh also knocked out allegations under the federal Wiretap Act, 18 U.S.C. '2510, et. seq.'and the California Constitution ' lawyers with Lieff Cabraser Heimann & Bernstein, Pomerantz and Carney Bates & Pulliam seem to think the Yahoo ruling will help their case against Facebook. The team submitted notice of the ruling to U.S. District Judge Phyllis Hamilton, who is presiding over the case.

The suit alleges Facebook intercepted users' private messages and scanned them for links, which the social networking company then used to add “likes” to Facebook pages associated with those links.

The Lieff Cabraser team pointed out Koh refused to decide whether Yahoo scanned the e-mails in question while they were in transit to its users, or while they were stored on Yahoo's servers. Yahoo had argued the e-mails were in storage when they were scanned, a defense to claims under the Wiretap Act and California's Invasion of Privacy Act, Cal. Penal Code '631.

“The court must defer resolution of whether Yahoo accessed the emails only after the emails were on Yahoo's servers until after discovery makes clear where and how Yahoo's scanning technology intercepted the emails,” Koh wrote.

Facebook's lawyers with Gibson, Dunn & Crutcher made the same argument in their June motion to dismiss ' claiming plaintiffs' Wiretap Act claim falls flat because the messages in question were stored on Facebook's servers when they were scanned. See, http://bit.ly/YINgS9. A hearing on that motion is scheduled for September.

Koh also sidestepped another hot-button privacy issue in the Yahoo case ' whether the company is covered by an exemption in the Wiretap Act for practices conducted by e-mail providers in the ordinary course of business. Last year, Koh refused to apply that exemption to Google in a similar case over its handling of Gmail, but the position has not been consistently adopted in the district.

Koh punted that question in the Yahoo case after dismissing plaintiffs' Wiretap Act claims on other grounds.

The suit was brought in February by a class of non-Yahoo users who allege they did not consent to Yahoo screening their messages. Yahoo's terms stipulate it will scan e-mails sent to and received by its users, in order to provide more specifically targeted advertisements. The company says it's up to Yahoo account holders to inform acquaintances without accounts of this policy.

Yahoo is represented by a team from Morrison & Foerster's San Francisco office and ZwillGen's Washington, DC, office. Plaintiffs are represented by Girard Gibbs and Kaplan Fox & Kilsheimer.

Koh dismissed a claim under the Wiretap Act, which requires that only one party to the communication consent to interception. Yahoo's terms of service agreement “explicitly acknowledges that Yahoo scans and analyzes users' e-mail for various purposes,” Koh wrote.

Marisa Kendall is a Reporter for The Recorder, an ALM sibling publication of Internet Law & Strategy.