Retailer's Combined Privacy Suit Highlights Recent Litigation Trends, Lawyer Says
A federal court’s decision to consolidate more than 2,400 individual arbitration claims into a single class-action complaint against a clothing retailer for its use of pixel-tracking technologies highlights two litigation trends: leveraging old laws for new technologies and the common practice of individuals with the same counsel filing identical arbitration claims and demands, said a privacy lawyer at Robinson+Cole.
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The use of old statutes to address new technologies has been at the heart of many privacy litigation disputes in recent years (see 2501160043).
The U.S. District Court for Northern California recently sided with clothing retailer Janie and Jack, allowing thousands of arbitration cases to consolidate into one privacy suit alleging violations of the California Invasion of Privacy Act (CIPA), said data privacy and security lawyer Kathryn Rattigan. Janie and Jack voluntarily dismissed the original action after the retailer and the complainants agreed to litigate using a class complaint instead.
“This case highlights a common practice: thousands of individuals, all represented by the same counsel, simultaneously file, or threaten to file, arbitration demands with nearly identical claims,” said a Robinson+Cole blog Thursday.
“These allegations mark yet another instance of the growing trend of the plaintiffs’ bars’ push for ‘trap and trace’ claims because they can leverage existing wiretap laws (particularly in California under CIPA) to argue that common online tracking technologies like cookies, pixels, and website analytics tools essentially function as trap and trace devices,” the blog continued. This allows “them to file complaints against companies for collecting user data without proper consent, even though these technologies were originally designed for traditional phone lines, not the internet, opening up a large pool of potential plaintiffs and potentially significant damages.”
On Feb. 24, Janie and Jack filed a lawsuit against the individual arbitration claimants, each represented by law firm Zimmerman Reed. The claimants argued that the retailer’s use of tracking pixels on its website was an invasion of privacy, and sought statutory damages of up to $10,000 under the federal Wiretap Act.
“Within the last twenty-four months, plaintiffs’ counsel, including counsel for Claimants here, have taken to weaponizing arbitration agreements and, in doing so, have negated, entirely, the underlying purpose and benefits of arbitration,” the complaint said. “This ‘weaponization’ comes in the form of plaintiffs’ counsel filing hundreds or, as is the case here, thousands of individual arbitrations on behalf of ‘clients’ who, for the most part, have no relationship with the defendant business. The goal of these filings is not to reduce costs; it is to increase them.”
The blog said this misuse thwarts the “efficient, effective, and timely progression of claims” arbitration is supposed to bring. It also said the retailer “alleges that such claims are inadequate because they lack allegations that the consumers created any accounts or conducted any transactions on the website or that Janie & Jack had breached any of its online terms.”
Robinson+Cole said this is another reminder for companies to assess their website’s online tracking technologies and update their privacy policies and data-collection processes.
The consolidated privacy suit has not yet been filed.