In a decision issued last week that is being described by some as a “landmark,” Judge Koh of the Northern District of California denied a motion to dismiss a complaint filed against Google alleging that its Gmail service unlawfully intercepts the contents of emails sent by and to Gmail users.  The case involves Google’s longstanding practice of targeting ads in Gmail based on keywords in emails.  The plaintiffs claim that this practice violates the federal Wiretap Act and analogous state wiretapping and eavesdropping statutes. 

 The court denied Google’s motion to dismiss as to all but one of these claims.  Most notably, the court held that the plaintiffs’ claim under the Wiretap Act can proceed, rejecting Google’s arguments that its practice of scanning the contents of emails is authorized under exceptions in the Wiretap Act for interceptions that occur (1) in the “ordinary course of business” or (2) with the consent of at least one party to a communication. 

(1)  Ordinary Course of Business Exception.  The Wiretap Act’s ordinary course of business exception permits interceptions of communications content by a “provider of wire or electronic communication service in the ordinary course of its business.”  Google argued that its scanning of emails for ad-targeting purposes was an essential attribute of Gmail, and one of the ways in which Google was able to offer the service for free.  In light of this, Google contended that the scanning fell within the ordinary course of its business.  The court disagreed, holding that “the [ordinary course of business] exception offers protection from liability only where an electronic communication service provider’s interception facilitates the transmission of the communication at issue or is incidental to the transmission of such communication.”  Because the plaintiffs alleged that Google’s interception is “not an instrumental component of Google’s operation of a functioning email system,” the court held that the ordinary course of business exception was not a basis for dismissing the plaintiffs’ claim, at least at the pleadings stage of the litigation. 

(2)  Consent Exception.  The Wiretap Act’s consent exception authorizes interceptions of communications content where at least one party consents to the interception.  Google argued that Gmail users consented to any interception by agreeing to Google’s terms of use and privacy policies that, Google contended, disclosed Google’s email-scanning practices.  Again, the court disagreed with Google, holding that its disclosures were not sufficiently clear to put its users on notice of its practices, such that the user could be deemed to have consented to those practices.  The court gave short shrift to Google’s citations to statements in its terms and privacy policies explaining that Google could, for example, “filter” content and use “information [users] provide” to “display . . . customized content and advertising.” 

The court also rejected as insufficient Google’s separate disclosure explaining that “advertisements may be targeted to the content of information stored on the Services.”  The court held that this disclosure was “defective” because it “demonstrates only that Google has the capacity to intercept communications, not that it will.”  This conclusion may prove to be the broadest-reaching—and the most susceptible to reversal—given that many online privacy policies and terms of use are written using permissive language, which establishes discretion, and not simply capacity, to undertake the indicated activity. 

The court also denied Google’s motion to dismiss the plaintiffs’ wiretap claims under the laws of several states, including California, Maryland, and Pennsylvania.  But the court did dismiss the plaintiffs’ claim that Google violated Section 632 of the California Invasion of Privacy Act, which prohibits eavesdropping on or recording “confidential communications.”  The court held that email conversations are by nature not confidential because they are “recorded on the computer of at least the recipient, who may then easily transmit the communication to anyone else.” 

As for next steps in the litigation, it is possible that Google will seek interlocutory appeal of the decision.  This would require that the Judge Koh agree to certify her opinion for appeal to the Ninth Circuit.  The Ninth Circuit would then have to agree to hear the appeal.  If the decision is not appealed, then discovery on the merits of the asserted claims would continue in the case.