A consolidated class action lawsuit challenging the use of third-party software used by online retailers to collect detailed information about customers visiting their websites over privacy concerns was dismissed by U.S. District Judge William Pauley III of the Southern District of New York Thursday.
While finding the alleged conduct “troubling,” Pauley nonetheless said the plaintiff, Brady Cohen, largely failed to state a legitimate claim under the various federal and state statutes cited because “that conduct does not violate any of the statutes on which Cohen predicates his claims.”
Cohen filed his complaint in November of last year against three companies—mattress maker Casper, men’s clothier Tyrwhitt, and outdoor retailer Moosejaw—that use computer code from a marketing and data broker company called NaviStone. The code, when used by online retailers, allows the companies to capture a substantial amount of information that can be used to “de-anonymize” customers and retain details about what they click, what they type, and, according to Cohen, what they put in their carts and what data they enter into online forms, even if they never actually submit the forms.
According to Cohen, the actions by the retailers were violations of the federal Electronic Communications Privacy Act and the Stored Communications Act, as well as the state General Business Law.
Cohen claimed that the code functioned as a wiretap, thanks to the ability of NaviStone to access in real-time information gathered by the code used by the retailers. The code also, Cohen further stated, scans the devices of the customers visiting the websites for “personally identifiable information,” which NaviStone uses to build and update a database of profiles of consumers in the United States. Cohen alleged that this all occurred to him when he accessed the defendants’ websites using his Android mobile device.
Pauley found the claims under each of the statutes unavailing.
On his initial ECPA claims, the judge found Cohen’s claims falter “as a threshold matter” because, under the relevant statute, one-party consent is allowed under the statute, which the retailers had done with NaviStone. Pauley noted that Cohen, “in an attempt to circumvent the consent rule,” attempts to invoke the crime-tort exemption in the relevant section, which the judge ruled also failed because he failed to show the defendants purposefully intended to commit a crime or tort when intercepting the communications.
Similarly, under the wiretap section of the law, Cohen’s arguments faltered after Pauley found the section of the law provides for no private cause of action, pointing to a 2004 decision by the U.S. 11th Circuit Court of Appeals supporting the finding.
Cohen’s SCA claims also were dispatched with by the judge, noting that the district judges have routinely held that “communications stored on personal devices are not held in electronic storage” for the purposes of the federal law. He noted that a recent holding over cookies transferred by web browsers also failed the test of being held in electronic storage,” noting the “observation applies with equal force” in Cohen’s case.
Finally, while Pauley said he had supplemental jurisdiction over state-law claims, he found Cohen ultimately failed to state a claim under state business laws, as he was unable to identify a cognizable injury. A general invasion of privacy, which the judge found was the situation in Cohen’s case, has been found by both state and federal courts not to rise to the level of injury.
“[A]lthough Cohen’s desire to maintain his privacy is well-founded amid recent ‘seismic shifts in digital technology,’ his allegations fail to overcome countervailing precedent,” Pauley wrote, quoting from the U.S. Supreme Court’s decision in Carpenter v. United States from earlier this year.
Cooley partner Michael Rhodes represented both Casper and Moosejaw in the litigation. He declined to comment on Pauley’s decision.
Bursor & Fisher name attorney Scott Bursor led Cohen’s litigation team. Proskauer Rose partner Margaret Dale was the lead attorney for Tyrwhitt. Neither responded to separate requests for comment on the decision.