Judge Dismisses Class Action Lawsuit Over Google’s Privacy Policy

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For a second time, Google Inc. has escaped a proposed class action lawsuit accusing the company of violating privacy laws by aggregating users’ data across its various platforms. However, a California federal judge has given the plaintiffs one more opportunity to amend their complaint.

On Tuesday, U.S. District Judge Paul S. Grewal granted Google’s motion to dismiss the user privacy class action lawsuit, finding that the plaintiffs’ claims still did not meet pleading requirements. The court agrees with Google that the amended complaint is defective and therefore must be dismissed, but only in part and with further leave to amend, the judge wrote in his Dec. 3 decision.

Judge Grewal gave the plaintiffs until Jan. 16, 2014 to amend the class action lawsuit, but warned that their case would be unlikely to survive a third dismissal.

The Google privacy class action lawsuit consists of several consolidated complaints from around the United States that allege Google violated the Electronic Communications Privacy Act as well as other state and federal laws when it changed its privacy policy without users consent in March 2012. The privacy policy change allowed Google to aggregate data from all of its products and services, which include Google’s popular search engine as well as Gmail, Google Plus and YouTube. As a result, the plaintiffs claim users were subject to unauthorized use of their likenesses for advertisements. They also claim their personal information was disclosed to third parties without their consent.

Some of the plaintiffs said that they purchased Android phones, which run on Google’s open-source operating system, prior to the privacy change. In order to access the Google Play marketplace, users were required to create a Google account, which subjects them to Google’s privacy policy.

Judge Grewal first dismissed the Google privacy class action lawsuit in January, finding that the plaintiffs did not have standing to sue because they failed to show they were injured by Google’s privacy policy change. The judge found that they had sufficiently established standing in their revised complaint by alleging direct economic injuries because, when their Android devices sent their personal information to third-party app developers, the communications consumed bandwidth and battery power. The plaintiffs argued that they suffered economic loss because they had to pay for the battery and bandwidth consumed by the unauthorized transmissions.

Judge Grewal also found that the plaintiffs successfully alleged that Google allowed unauthorized access and wrongful disclosure of communications to third parties, and that the plaintiffs were injured by these unauthorized communications. Therefore, the judge concluded that they had standing to bring the class action lawsuit.

Although Judge Grewal found that the plaintiffs successfully showed they had standing to sue, he found their claims under various laws to be lacking. Specifically, he took issue with the plaintiffs’ failure to show that Google’s aggregation of data between platforms fell outside the ordinary course of business.

In his order granting the motion to dismiss the class action lawsuit, Judge Grewal found that this shortcoming doomed their claims under the Wiretap Act. He also found that Google had clearly disclosed how the Google Plus feature worked when the network was first launched, so the plaintiffs essentially consented when they chose to use it.

Even if its earlier policies were not transparent, Google provided notice to its users when it changed its privacy policy, which undercuts any unethical or immoral allegations; this was not a change made in the dark, but rather one broadcast to all those affected, Judge Grewal wrote in his decision to dismiss the Google privacy class action lawsuit.

The plaintiffs are represented by Mark C. Gardy, James S. Notis, Kelly A. Noto and Charles A. Germershausen of Gardy & Notis LLP; L. Timothy Fisher and Sarah N. Westcot of Bursor & Fisher; and James J. Sabella of Grant & Eisenhofer PA.

The Google Privacy Policy Class Action Lawsuit is In re: Google Inc. Privacy Policy Litigation, Case No. 5:12-cv-01382, in the U.S. District Court for the Northern District of California.

UPDATE: Plaintiffs filed an amended class action lawsuit addressing Judge Grewal’s concerns. Google motioned to dismiss the case for good on Feb. 21, 2014.