Facebook, Google, eBay Ask Supreme Court to Limit Privacy Class Actions Against Tech Companies

Tech giants Facebook, eBay and Google have teamed up to urge the Supreme Court to reverse a Court of Appeals decision they say allows costly privacy class action lawsuits to move forward against them, without plaintiffs having to prove “actual harm.”

The move comes as the Supreme Court considers whether consumers should have been allowed to sue credit reporting agency TransUnion for violations of the Fair Credit Reporting Act (FCRA) in a class action lawsuit heard by the Ninth Circuit where members were awarded $60 million in damages. 

The trio and three tech and internet lobbies argued in a February petition to the court that this decision and others had allowed a flood of class action lawsuits against tech companies to hit the federal court, with little evidence of harm apart from the law being broken.

“The suits typically seek hundreds of millions or more than a billion dollars in statutory damages based on allegations of technical or trivial statutory violations and/or novel, untested legal theories,” the brief argued. “Commonly, many if not most members of the putative class are unaware of the defendant’s technical violation and entirely unharmed.”

In the TransUnion case, lead plaintiff Sergio Ramirez said he was unable to buy a car because TransUnion told lenders he was a potential match with entries in the U.S. Department of the Treasury’s Office of Foreign Assets Control’s database of criminals and terrorists, Law360 reported. 

The class action lawsuit argued that TransUnion did not ensure accuracy as required by the FCRA. 

The tech giants argue that while Ramirez may have been harmed, there was no evidence other members who joined the class action lawsuit suffered a similar harm. 

Allowing these types of class actions dramatically expanded the scope of class actions allowed, and the potential liability of tech companies, the brief stated.

“This approach encourages opportunistic plaintiffs’ lawyers to seek out a plaintiff with a highly uncommon injury resulting from a statutory violation and to extend the plaintiff’s claim to as broad a class as possible.”

The brief pointed to an August 2019 decision in the Ninth Circuit that pushed Facebook to settle with claimants for $650 million, after a class action alleged it breached Illinois biometric privacy law. 

There was no resulting injury to any class member in that action, the brief stated.

“These cases involve billions if not trillions of dollars of potential exposure for technical or procedural violations from which a class does not allege that all members have been harmed, or that the lead plaintiff’s injury is typical across the class.” 

This petition is the latest in litigation against tech companies regarding users’ privacy. In January, a federal judge in California dismissed a class action case against Facebook that claimed the social media network improperly used location data.

Earlier this week a class action lawsuit was filed that argued major internet companies are choking the competition over digital ad space with unfair monopolies over the systems that serve them.

Facebook, Google, eBay and the other filers are represented by Patrick J. Carome, Felicia H. Ellsworth, Kevin R. Palmer, Ari Holtzblatt and Paul Vanderslice of WilmerHale.

What do you think about the privacy class actions against tech companies? Share your experience in the comments below.

The Transunion Sergio Ramirez Class Action Lawsuit is TransUnion LLC v. Sergio L. Ramirez, Case No. 20-297, in the Supreme Court of the United States. 

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