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Inside Privacy Updates on Developments in Global Privacy & Data Security from Covington & Burling LLP

California Privacy Claims Survive Motion to Dismiss In NebuAd Lawsuit

Posted in Advertising & Marketing, Litigation, Online, United States

In a recent order, Judge Henderson of the District Court for the Northern District of California denied NebuAd Inc.’s motion to dismiss in Valentine v. NebuAd Inc., No. C08-05113 TEH, finding that plaintiffs had sufficient statutory standing to assert claims under the California Invasion of Privacy Act (“CIPA”) and the California Computer Crime Law (“CCCL”) and that these claims were not preempted by the federal Electronic Communications Privacy Act (“ECPA”).

With respect to standing, the Court found that the California Legislature did not intend to limit the right of action under CIPA and CCCL to in-state plaintiffs, and, thus, the out-of-state plaintiffs in this action could bring suit again a California defendant (NebuAd).  (Notably, this analysis pertained to standing under these specific California statutes, not the Article III constitutional standing that was at issue in the recent RockYou decision, which we wrote about here).  On the preemption issue, the Court rejected the Central District of California’s holding in Bunnell v. Motion Picture Ass’n of Am. that ECPA preempted a CIPA claim.  Instead, the Court said it was more persuaded by the California Supreme Court’s contrary holdings that ECPA does not preempt CIPA in People v. Conklin and Kearney v. Salomon Smith Barney.

The Valentine litigation concerns NebuAd’s “deep packet inspection” technology, which was used to create anonymous, non-sensitive interest categories for subscribers for the purpose of serving targeted ads.  The Court previously dismissed five ISPs from the Valentine action on personal jurisdiction grounds, including Cable One, which was represented by Covington in this matter.