Last spring, when every day seemed to bring a new spate of
class actions against Sony for allegedly failing to protect the
private data of PlayStation users, Reuters' Terry Baynes
conducted a fascinating analysis of privacy-breach litigation.
Her conclusion? No one's getting rich from it. Fee awards to
plaintiffs lawyers in the six settled cases she looked at
ranged between $500,000 and $6.5 million, and were typically
shared among a lot of firms (25 plaintiffs firms were in on the
$6.5 million settlement with TJX in 2007). A couple of name
plaintiffs received as much as several thousand dollars.
Ordinary class members got bupkis: a coupon, credit monitoring,
identity-theft insurance and the like.
But those paltry returns haven't stopped lawyers from
jumping aboard every privacy-breach suit to roll through the
station. On November 28, an app developer and spyware expert
named Trevor Eckhart posted a YouTube video that supposedly
demonstrated how Carrier IQ software in many smartphones
secretly tracks users' keystrokes. Within days the class
actions against Carrier and various smartphone makers began to
hit dockets. By December 2, when Pearson, Simon, Warshaw &
Penny asked the Judicial Panel on Multidistrict Litigation to
consolidate the Carrier IQ cases in the Northern District of
California, the firm cited five filed suits.
By December 8, when Strange & Carpentersuggested the Southern District of California as a preferable venue, the
count was up to at least eight. A day later, in a brief opposing quick consolidation of the Northern District class
actions, Skikos, Crawford, Skikos & Joseph said seven cases had
been filed there, with at least a dozen more filed in other
districts. (Carrier IQ, which didn't respond to my request for
comment, has said in a statement that its software "does not
record, store or transmit the contents of SMS messages, email,
photographs, audio or video.")
So are the Carrier IQ class actions going to change the
tide of privacy litigation? Not likely, according to Jeffrey
Jacobson of Debevoise & Plimpton. Jacobson isn't involved in
the Carrier IQ case, but has defended several other software
companies in privacy cases. Many of those cases, like the
Carrier IQ class actions, asserted claims under the Electronic
Communications Privacy Act (or, as it's better known, the
Wiretap Act), which carries statutory damages of up to $10,000
per violation. There are 140 million smartphone users in the
United States, which suggests the possibility of mind-boggling
value in the Carrier IQ litigation. But according to Jacobson,
the Wiretap Act hasn't brought much success to plaintiffs in
privacy suits. "Yes, there's a statute, and yes, there are
statutory damages," he said. "Plaintiffs are still a long way
from proving it's applicable and that the data was misused."
More often than not, he added, the allegedly improper spyware
has been disclosed in user terms and conditions.
In fact, according to the Debevoise lawyer, only a few
Wiretap Act privacy class actions have survived a defense
motion to dismiss. "They've pretty much universally failed so
far," he said.
I left messages requesting comment with four of the
plaintiffs lawyers who've filed Carrier cases but didn't hear
(Reporting by Alison Frankel)
Follow Alison on Twitter: @AlisonFrankel
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