Court dismisses potential $15B class action against Facebook over tracking allegations

By Jessica Karmasek | Nov 4, 2015

SAN JOSE, Calif. (Legal Newsline) - Last month, a federal judge dismissed a potential $15 billion class action filed against Facebook for allegedly secretly tracking the Internet activity of its users after they log off.

Judge Edward Davila of the U.S. District Court for the Northern District of California, San Jose Division, dismissed the claims against the social network. The judge concluded in his Oct. 23 order that the plaintiffs in the case failed to “adequately connect” the value of the data collected by Facebook “to a realistic economic harm or loss.”

“The court accepts as true Plaintiffs’ ascription of some degree of intrinsic value to their personal information for this motion. But what Plaintiffs have failed to do is adequately connect this value to a realistic economic harm or loss that is attributable to Facebook’s alleged conduct,” Davila wrote in his 19-page order granting Facebook’s motion to dismiss.

“In other words, Plaintiffs have not shown, for the purposes of Article III standing, that they personally lost the opportunity to sell their information or that the value of their information was somehow diminished after it was collected by Facebook.”

The consolidated, multi-district lawsuit against Facebook, brought by and on behalf of individuals with active Facebook accounts from May 27, 2010 through Sept. 26, 2011, sought in excess of $15 billion in damages and injunctive relief.

Plaintiffs Perrin Davis, Cynthia Quinn, Brian Lentz and Matthew Vickery, each of whom had an active account during the entire class period, allege Facebook tracked and stored their post-logout Internet usage using “cookies,” which Facebook had embedded in their computers’ browsers.

A “cookie” is a small text file that a server creates and sends to a browser, which then stores the file in a particular directory on an individual’s computer. A cookie contains a limited amount of information, which can relate to the browser or to a specific individual.

The class alleged Facebook’s conduct violated the Wiretap Act by monitoring their online activity while they weren’t logged on, and the Computer Fraud and Abuse Act.

Davila, in his order, concluded Facebook’s arguments are “meritorious.”

“Unlike other data privacy cases, Plaintiffs have alleged the existence of a limited market for their browsing histories. That allegation, however, is still not enough to establish a qualifying injury in fact,” he wrote.

As pled, the consolidated class action complaint only alludes to injury that is “conjectural or hypothetical,” the judge said.

“Since Plaintiffs have not demonstrated that Facebook’s conduct resulted in some concrete and particularized harm, they have not articulated a cognizable basis for standing,” Davila wrote.

However, the court, in its decision, gave the plaintiffs until Nov. 30 to revise their claims, including invasion of privacy and alleged violations of the Wiretap Act.

A case management conference has been set for January.

A spokesperson for Facebook said in an email that it is “pleased with the court’s ruling.”

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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