Judge Feess of the Central District of California recently rejected Carrier IQ’s attempt to litigate in federal court a class action concerning whether Carrier IQ’s software, installed on a wide range of smart phone devices from many different manufacturers running on various wireless networks, violated California law. Judge Feess remanded the case to state court in a decision issued on April 27th, instead of transferring it to a multidistrict litigation in the Northern District of California where dozens of actions against Carrier IQ have been consolidated in a multi-district litigation proceeding.
In an apparent effort to avoid removal to federal court, the plaintiffs in this action had sued only Carrier IQ, based in California (and not any of the device manufacturers or carriers), brought the suit only on behalf of a class of California residents, and asserted only California law claims. Carrier IQ had nonetheless contended that the case belonged in federal court because the federal Wiretap Act completely preempts California’s Invasion of Privacy Act, giving rise to federal question jurisdiction. Under California’s Invasion of Privacy Act, it is illegal to read the contents of a communication while it is in transit or being sent or received. Cal. Penal Code. § 631. Carrier IQ argued that the federal Wiretap Act, as amended by the Electronic Communications Privacy Act in 1986, comprehensively regulates privacy claims relating to electronic communications, and thereby completely preempts state law.
Two recent cases from California district courts support Carrier IQ’s argument. Bunnell v. Motion Picture Association of America, a Central District of California case from 2007, and In re Google Inc. Street View Electronic Communications Litigation, a Northern District of California case from 2011, found that ECPA completely preempts state law. These cases relied on a provision of ECPA that says that the “remedies and sanctions described in this chapter” constitute “the only judicial remedies and sanctions for nonconstitutional violations of this chapter involving such communications.”
Judge Feess criticized these cases as “ignor[ing] the great weight of authority holding that one of the principal purposes of the federal statute was to establish minimum standards with which states must comply.” In support of his decision, he pointed to the “clarity” of the legislative history that indicated that the law was meant to establish a floor for, but not override, state law, and to other federal court cases reaching the same result. As a result, this putative class action was remanded to Los Angeles Superior Court and will go forward separate from the proceedings in the Northern District of California.