California Is a Magnet for Consumer Privacy Cases

privacy and security breaches. Joining me is Eric Goldman, a professor at Santa Clara University Law School and co director of the High Tech Law Institute, have federal courts in California lowered the bar for consumers to bring privacy cases

against the tech giants. The California courts are seeing a lot of the privacy relegation nationwide, so they're dealing with a higher volume than any other courts, and many of those courts are resolving the first threshold question cann this case even be heard in court, and many of the California carts are being sympathetic to the plaintiffs in those rulings and willing to entertain lawsuits that might not succeed elsewhere.

Is it because the Ninth Circuit is known as a liberal circuit, and their decisions are following the case law there, or is it for another reason. It's a little hard to pinpoint why the California courts might be more sympathetic. Certainly, California has a reputation is being sympathetic to planet arguments

and open to lawsuits generally. But this particular question on privacy lawsuits about whether the litigants even have the right to be in court really derives from a two thousand and sixteen Supreme Court case that the courts across the country have just read differently. And so it's not clear if the California courts are more biased in one direction another or they're just reading the cases differently than other

courts are. Tell us about that last Supreme Court case in Yeah, it was kids called Spokeyo versus Romans, and the Smokeyo case addressed a very threshold question. In order to get into federal court, planists have to show that they suffered some cognizable injury. They can't just go into court and say I'm upset. They have to show that they suffered some problem that the law recognizes. Now, that's not proof that they suffered problems, but they can't even

articulate how they suffered a guisle injury. The courts are supposed to dismiss the case, basically saying, that's not the kind of case that we're allowed to hear in the first instance. And in the sixteen Supreme Court case, the court gave us some guidance about when the planets suffer cognizable injury. But the guidance the court gave us was somewhat confusing, and that's one of the reasons why courts

across the country have been reading it differently. Have there been appeals to the Supreme Court on these standing issues in privacy cases since then and the Court just hasn't taken it up. Actually, I'm not sure if there have been any appeals of that issue to the Supreme Court. But even if they're worth the Supreme Court takes a very small fraction of the their appealed to it, well

less than one percent. So it wouldn't be unusual for the Supreme Court not to take another case in this area for a while, but to let the issue play out in the lower courts and only after the problems have emerged. Clearly, would the Supreme Court come back in and take another case. Is there any way to account for the fact that the Ninth, the seventh, and the d C circuits seem to be more proplaintive in this area and the fourth and the second are less proplaintive.

Is it just the luck of the draw of the panel that they get or is there a proplaintive bias in those particular circuits. I don't think of the circuits that you mentioned as being particularly proplaintive, especially the Seventh Circuit, which historically has actually been viewed as a pro business circuit, so it would be actually unusual for them to be

considered a pro plaintive circuit. And I don't think it's the differences between panels on the appellate courts as much as just the Supreme Court case has so many ambiguous and possibly contradictory statements that of course across the country have really struggled to figure out what it means. So that's why once one of the circuits starts to answer for the circuit, you might start to see these different

precedents emerge on the circuits that look pro plaintive. But it's just because the first panel that heard that particular issue may have read the opinion in a particular way that led towards a more proper plaintive outcome. Is there a case that you think particularly well explains the kind of standing issues that we're talking about here. The case that stands out of my mind, it's the Zappo's case.

It involves a data breach by the retailers Zappos, and many millions of records were released, and after several years in the case, so the case proceeded on in court for years, the defendant moved to dismiss the case, saying there wasn't a standing because of the fact that nobody had ever shown that their data actually been misused. So there were millions of consumers who are affected by the breach, and after all the work on all the LITA gives to try and find evidence of a problem, there was

no evidence that anyone ever suffered a breach. And the court still said, even though after three plus years of developments in the area where the data has been available and could be misused, we still think that the case should proceed because of the fact that consumer data was released even though there's no evidence anyone's ever used it, and that should be pretty good evidence possibly no one

ever suffered any harm from the case. Well, privacy suits get more aggressive until the Supreme Court decides to take a case and perhaps rain them in. There's no doubt that privacy litigation of the growth industry and the standing issue has contributed to the growth because of the fact that planefts have been able to find ways to get into court even if they can't show the kinds of harms we would expect planeffs to show. That's been emboldening

plane us to bring more cases. I would also point out in California there's a new data breach law that's gonna be going into effect on January one that specifies certain types of harms that can be recognized automatically, and that's going to encourage the planeffs to bring lawsuits also in California State corn and try and take advantage of the laws statutory damages which guarantee certain payoffs and minimum

payoffs even if the planets can otherwise show harm. So data breach relegation is actually about to get a TERMO charge boost from the California law. What we've seen now I think is going to be just a small fraction of the amount of litigation that's going to be spurred by the California law. Thanks Eric, that's Eric Goldman of Santa Clara University Law School. Thanks for listening to the

Bloomberg Law Podcast. You can subscribe and listen to the show on Apple Podcasts, SoundCloud, and on Bloomberg dot com slash podcast. I'm June Brasso. This is Bloomberg to end. In the end up of the fe