Yahoo Email Scanning Class Action Lawsuit Interception Claims Trimmed

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On Tuesday, Yahoo Inc. successfully argued to dismiss claims that it illegally intercepted emails without consent from the class action lawsuit lodged against it 2013, but claims that it illegally gave content data to third parties was retained by a California federal judge.

In a consolidated class action, plaintiffs alleged that Yahoo! Inc. violated the Wiretap Act when it copied and analyzed user emails. The content, the plaintiffs alleged, was then used for any number of purposes, including advertising, to create profiles, and to ferret out spam and other abuse of the services. The plaintiffs also argued that the interception and dissemination of user data constituted a violation of California privacy rights.

U.S. District Court Judge Lucy H. Koh ruled on Tuesday that Yahoo’s interception of user emails could be dismissed from the class action lawsuit, but accusations that Yahoo illegally divulged user data to third parties could be retained. Judge Koh explained that the plaintiffs’ allegations that Yahoo disclosed the contents of Yahoo user emails to third parties could constitute a violation of the Stored Communications Act by Yahoo. “Yahoo’s own FAQ page admits that Yahoo shared email content with third parties,” Judge Koh explained in her order. “Under these circumstances, the court concludes that plaintiffs have plausibly alleged that Yahoo improperly disclosed ‘contents’ of email communications to third parties.”

However, Judge Koh ruled that the plaintiffs’ argument that Yahoo violated the Wiretap Act, which does not allow the unauthorized interception of any electronic communication, could not be supported because “[t]he Wiretap Act only requires one party to the communication to consent to an interception to relieve the provider of liability. … In light of clarity of the language in this disclosure, to which Yahoo Mail users agreed when creating an account, the court finds that the ATOS [Additional Terms of Service] provides explicit and sufficient notification to Yahoo Mail users that any communication sent via Yahoo Mail will be scanned and analyzed for the stated purposes of providing personal product features, providing targeted advertising and detecting spam and abuse.” Jude Koh did leave room for the plaintiffs to amend their class action lawsuit complaint for their allegations related to users’ consent to “future use” of the content of their emails.

Judge Koh did not agree with Yahoo’s argument that emails originating from non-Yahoo accounts should not be considered under the Wiretap Act allegations because these emails are not recorded until the emails are stored on Yahoo’s server. The judge wrote, “At this stage, the court must accept as true plaintiffs’ allegations that the emails were in transit when Yahoo accessed them.” Judge Koh also refused to dismiss plaintiffs claims under the California Invasion of Privacy Act stating, “Again here, Yahoo’s argument assumes the emails were on Yahoo’s server when intercepted, which this court simply cannot assume at this stage when allegations in the complaint are to the contrary.”

The plaintiffs are represented by Daniel C. Girard, Amanda M. Steiner, Matthew B. George and Jennifer L. McIntosh of Girard Gibbs LLP and Laurence D. King, Frederic S. Fox and David A. Straite of Kaplan Fox & Kilsheimer LLP.

The Yahoo Email Scanning Class Action Lawsuit is In re: Yahoo Mail Litigation, Case No. 5:13-cv-04980, in the U.S. District Court for the Northern District of California.

UPDATE: On Feb. 5, 2015, plaintiffs filed a motion for Class certification in the consolidated Yahoo email scanning class action lawsuit.

UPDATE 2: On Jan. 7, 2016, plaintiffs asked a judge to grant preliminary approval to a proposed class action settlement that requires Yahoo to make several changes to its website and email servers.