Data Privacy Litigation Class Actions on the Rise: Understanding the Trends and Implications for Businesses

Data Privacy Litigation Class Actions on the Rise Nationwide

In recent years, there has been a significant increase in data privacy litigation class actions across the country, particularly focusing on alleged violations of wiretap laws at both the federal and state levels. Consumer-facing businesses are under scrutiny for allegedly sharing users’ communications with third parties without their consent, leading to a surge in lawsuits.

Many businesses utilize various technologies to collect information about users visiting their websites, aiming to enhance user experiences and for advertising purposes. However, with the recent uptick in lawsuits, businesses are advised to carefully review their data collection practices and policies to ensure compliance with privacy laws.

New data privacy litigation class actions are emerging weekly, and this trend is expected to continue. At the federal level, plaintiffs’ attorneys are filing lawsuits under the 1986 Electronic Communications Privacy Act, which was enacted to restrict wiretapping and electronic eavesdropping.

On the state level, class action lawsuits alleging breach of state wiretap laws are most prevalent in states like California, Pennsylvania, Florida, Illinois, and Massachusetts. These statutes typically hold businesses liable for intercepting the contents of users’ communications without prior consent, with potential criminal and civil penalties.

In California, where class action litigation is most common, plaintiffs’ attorneys are invoking the 1967 California Invasion of Privacy Act in their claims. While some lawsuits have been dismissed, others are pending, with statutory damages potentially reaching $5,000 per violation.

Initially, claims were based on businesses’ use of chatbots, website session replay, and pixel tracking technology. Chatbots, website session replay, and pixel tracking technology have been scrutinized for potentially allowing third parties to access private user information without consent.

Plaintiffs’ attorneys have introduced new theories of liability, including identity graphing technology, email marketing technology, and tracking software to monitor user activities. While some claims have been dismissed, courts remain divided on interpreting state wiretap statutes, posing challenges for businesses.

To protect themselves from data privacy lawsuits, businesses are advised to review their technology use, implement robust data security measures, make clear disclosures to users, address data breaches promptly, and obtain affirmative consent from users for data collection practices.

By taking these proactive steps, businesses can mitigate the risk of facing costly class action litigation related to data privacy violations. The evolving landscape of data privacy laws underscores the importance of staying informed and compliant to safeguard user information and maintain trust with consumers.