E-Commerce Class Action Spying Case Dismissed

New York City Federal Court Dismisses Nationwide Class Action Arising Out of Alleged Spying by E-Commerce Retailers

In a triumph for online merchants, a New York federal court just recently dismissed three putative class action suits induced behalf of website visitors whose mouse clicks, keystrokes, and electronic communications were tracked by a third-party marketing company. The cases were filed against three e-commerce sellers– Casper (a mattress producer and seller), Tyrwhitt (a males’s clothes company), and Moosejaw (an active outside seller)– and versus a marketing company called NaviStone. NaviStone uses computer code that allows e-commerce retailers to figure out the identities of consumers who visit their sites and track their online habits. The complainant declared that the code used by NaviStone, and ingrained in the merchants’ websites, functioned as a prohibited wiretap allowing the retailers and NaviStone to “spy” on website visitors in real time as they browse. The claims declared offenses under the federal Electronic Communications Personal privacy Act (ECPA), the federal Stored Communications Act (SCA), and New York City General Company law (NYGBL).

In dismissing the lawsuits in their totality, the Southern District of New york city especially discovered complainant’s case failed under all3 laws: the ECPA, the SCA, and the NYGBL. The Court held that the complainant’s ECPA claims stopped working, among other factors, since the statute requires only one celebration to authorization to the interception of electronic interactions, and the online merchants plainly consented to NaviStone’s activities. Second, the Court held that the SCA manages only electronic communications that are momentarily stored by electronic interactions services (such as an ISP) incidental to their transmission; and, for that reason, the SCA does not use to communications stored on an individual’s individual gadget. Finally, and significantly, the Court dismissed complainant’s NYGBL claims because an alleged basic invasion of privacy– without more– does not qualify as a cognizable injury under New york city law adequate to give standing to sue under the NYGBL.Putting it Into

Practice: In spite of having actually dismissed the lawsuits in their totality, the Court acknowledged that defendants’conduct raised”unpleasant privacy issues,”leaving the door open-possibly-for the similar claims to be brought under different causes of action. Online retailers need to keep courts ‘prospective worry in mind when utilizing tracking software, and should be conscious of how the usage of such tracking software application is disclosed and represented to customers who visit their websites. Copyright © 2018, Sheppard Mullin Richter & Hampton LLP.

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