A California District Court has dismissed with prejudice a class action lawsuit filed against LinkedIn on behalf of its registered users, finding the allegations too speculative to sustain a lawsuit. An earlier Complaint filed by one of the representative Plaintiffs was dismissed by the Court without prejudice, allowing the Plaintiff to amend the Complaint and bring the lawsuit again. In this recent decision, the Court dismissed all of the claims asserted in the Amended Complaint with prejudice, and without leave to amend either because the claims were legally defective or because the Plaintiff failed to cure deficiencies raised in LinkedIn's motion to dismiss the original Complaint or raised in the Court's order dismissing the original Complaint.
Plaintiffs alleged that LinkedIn's web site was programmed to transmit to third parties (including advertisers, marketing companies, data brokers and web tracking companies) the URLs of the LinkedIn profiles users had visited, which contained the LinkedIn IDs of those profiles. In addition, Plaintiffs alleged that LinkedIn transmitted the unique numerical identifiers of third parties' cookies that were present on LinkedIn users' computers. According to Plaintiffs, due to the information transmitted by LinkedIn, third parties had the ability to assume (tenuously, in our view) that the LinkedIn profile most often viewed by the user was, in fact, his own profile. Plaintiffs alleged that this allowed third parties to identify individual LinkedIn users (by looking up their LinkedIn profile using the transmitted LinkedIn ID) and, using their cookie, associate a user's identity with his web browsing history. Plaintiffs alleged that this practice was in violation of LinkedIn's privacy policy, which stated, among other things, that "any information provided to third parties through cookies will not be personally identifiable..." Plaintiffs alleged that these practices violated the Stored Communications Act, the California Constitution, the California False Advertising Law and also alleged common law breach of contract, invasion of privacy, conversion, unjust enrichment and negligence claims.
In deciding to dismiss the Amended Complaint with prejudice (meaning that Plaintiffs are precluded from bringing the case again) the District Court considered a motion to dismiss under Rule 12(b)(1) for lack of subject matter jurisdiction and a motion to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief can be granted.
The only positive result for Plaintiffs was the Court's decision regarding LinkedIn's motion to dismiss for lack of subject matter jurisdiction. The Court considered whether Plaintiffs had suffered sufficient injury to satisfy the "case or controversy" requirement of Article III of the U.S. Constitution. To satisfy this requirement, at least one plaintiff must have suffered an injury in fact that is "concrete and particularized, as well as actual and imminent." Because Plaintiffs alleged that their information was disclosed to third parties, the Court determined that Plaintiffs "sufficiently articulated, with particularity, injuries as to themselves for the purposes of Article III standing."
After finding that Plaintiffs had established Article III standing, however, the remaining issues were resolved in favor of LinkedIn. With respect to LinkedIn's motion to dismiss for failure to state a claim upon which relief can be granted, the Court separately evaluated each claim alleged by Plaintiffs, concluding that they should each be dismissed with prejudice.
For example, the Court dismissed Plaintiffs' claim that LinkedIn violated the Stored Communications Act, which creates criminal and civil liability for certain unauthorized access to stored communications and records, by finding that LinkedIn is not one of the two types of entities covered by the law, including entities that perform electronic communication services" ("ECS") or remote computing services ("RCS"). In making this determination, the Court noted that an ECS is a provider of e-mail services, and a RCS is a "virtual filing cabinet." The Court stated that "[e]ven taking Plaintiffs' allegations as true, it does not appear that LinkedIn was functioning as an RCS when it disclosed the LinkedIn user ID and URL of the profile pages the user had viewed to third parties." Specifically, it was not "processing or storing data by an offsite third party," nor was it "acting as a virtual filing cabinet or as an offsite processor of data with respect to the user IDs it created."
The Court also dismissed Plaintiffs' invasion of privacy claims under both the California Constitution and common law, holding that Plaintiffs failed to allege sufficient facts to establish a highly offensive disclosure of information or a "serious invasion" of a privacy interest. With respect to the information allegedly disclosed by LinkedIn, the Court noted that "[a]lthough Plaintiffs postulate that these third parties could, through inferences, de-anonymize this data, it is not clear that anyone has actually done so, or what information precisely these third parties have obtained." The Court concluded that the information disclosed to third parties by LinkedIn did not meet the standard set by California courts to prove an invasion of privacy claim.
In addition, the Court dismissed Plaintiffs' allegation that LinkedIn violated California's False Advertising Law ("FAL"). A private plaintiff has standing to pursue a FAL claim if the plaintiff "has suffered injury in fact and has lost money or property as a result of the unfair competition." The Court determined that, with respect to one of the two representative Plaintiffs, the requirement of "lost money or property" was not met because that particular Plaintiff did not allege that he paid any money to LinkedIn and, instead, "relie[d] solely upon a theory that the alleged loss of personal property can constitute 'lost money or property.'" In making its determination, the Court referred to its earlier decision dismissing the original Complaint, nothing that "personal information" does not constitute money or property for purposes of a FAL claim.
Although the Court determined that the other representative Plaintiff met the "lost money or property" requirement by having paid $24.99 for a "Job Seeker Platinum" LinkedIn subscription, and thus established standing to pursue the FAL claim on behalf of the class, the Court ultimately agreed with LinkedIn that neither Plaintiff alleged reliance on false advertisements or misrepresentations made by LinkedIn. Indeed, the Court stated that "Plaintiffs never identif[ied] any advertisements or promotional materials exhibiting the alleged misrepresentations or omissions or allege[d] that Plaintiffs viewed and subsequently relied on these materials." In addition, "Plaintiffs never allege[d] that they were aware of LinkedIn's privacy policy, let alone saw or read it."
The Court also rejected the remaining claims asserted by Plaintiffs, holding that Plaintiffs could not state a claim for breach of contract because neither of their two theories of damages – that Plaintiffs suffered embarrassment and humiliation caused by the disclosure of their personally identifiable browsing history, and that their personal information is valuable property – is sufficient under California law; that Plaintiffs' conversion claim failed to establish the requisite "property interest" because personal information does not constitute property; that Plaintiffs' unjust enrichment claim failed because California does not recognize a stand-alone cause of action for unjust enrichment; and that Plaintiffs' negligence claim failed because Plaintiffs did not identify an "appreciable, non-speculative, present injury."
The decision is a big win for LinkedIn, and is valuable precedent for use in the defense of future privacy claims. Like other cases dismissing privacy claims challenging online user tracking, Plaintiffs were unable to show damages or resulting harm sufficient to sustain their legal claims.
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