June 27 (Reuters) - Ashlie Beringer of Gibson, Dunn &
Crutcher and her clients at Facebook, Apple and Yelp don't
ordinarily pay much attention to the Real Estate Settlement
Procedures Act, the law at issue in First American Financial Corp v. Edwards, which will be decided Thursday by the U.S.
Supreme Court. First American focuses on whether a homeowner can
sue her title insurance company for receiving kickbacks if the
kickbacks didn't harm her directly -- not exactly a question of
burning concern to the tech bar in Silicon Valley. Nevertheless,
Beringer and other Silicon Valley defense lawyers will be
watching anxiously to see how the court decides the case because
the ruling could have a profound impact on the data privacy
class actions that have become a routine nuisance for Internet
At the heart of First American is a broad question: At what
point does a plaintiff have standing to sue under Article III of
the U.S. Constitution? Do prospective plaintiffs have a cause of
action if they can't demonstrate any injury? That's a defense
Beringer and other tech industry defense lawyers have raised in
motions to dismiss privacy breach cases, arguing that consumers
can't sue social media and smartphone companies for quietly
collecting, using or disclosing their personal data because they
can't show they were actually injured by the practice.
Beringer was one of the first lawyers to successfully
advance an Article III standing argument in a privacy case,
persuading U.S. District Judge George Wu of Los Angeles in April
2011 to dismiss a consumer case against online ad company
Specific Media for allegedly using Adobe Flash cookies to track
information. (At least one other standing grounds defense win
predates Beringer's, with a ruling by a U.S. Judge Otis Wright
II in January 2011 dismissing a proposed Internet privacy class
action against Mayer Brown client Spokeo Inc.) The Gibson
partner went on to win dismissals for Yelp and Mattel on similar
Apple recently hired Beringer after she successfully argued
for the dismissal of class claims against Apple's co-defendants
Flurry Inc and other companies including Admob Inc and Google
Inc in a case accusing all of them of tracking iPhone users'
activity. Less than two hours after a ruling by U.S. District
Judge Lucy Koh of San Jose, California, that left Apple as the
only remaining defendant in the case, Apple notified the court
that it was replacing its Morrison & Foerster team withBeringer
and other Gibson, Dunn partners.
But not every judge overseeing a data privacy case has
bought the Article III argument, especially as the plaintiffs'
bar began to alter its theories to focus on statutory rights to
privacy. Facebook agreed to a $10 million privacy class action
settlement only after Judge Koh held in December that the
plaintiffs did have Article III standing. (Beringer joined the
case soon after that ruling.) As recently as last week, U.S.
District Judge John Coughenour in Seattle said plaintiffs hadstanding to sue Microsoft Corp for transmitting information
about Windows Phone users' location.
A ruling for First American on Thursday could be a big help
to defendants, however. Facebook, Zynga, Yahoo and LinkedIn
hired Wilmer Cutler Pickering Hale and Dorr to file an amicus brief in the case in August, arguing that the Supreme Court
needed to reverse a 9th Circuit Court of Appeals decision that
allowed the homeowner's kickback case to move forward despite
the Article III standing questions. The Electronic Privacy
Information Center countered in its own amicus brief that
consumers need the ability to sue to enforce statutory damages
provisions or else privacy laws "will be rendered ineffective."
The privacy fight likely won't end, regardless of how the
Supreme Court rules Thursday, but Beringer said in an email that
questions about plaintiffs' injuries will "remain critical at
the early stages of most privacy cases -- and will be key to
ensuring that courts are not asked to adjudicate technical and
business standards where no person can show harm."
(Reporting by Nate Raymond)
(An earlier version incorrectly said the Specific Media case
was the first defense win on Article III standing grounds in an
Internet privacy case. An earlier ruling, in January 2011,
involving Spokeo Inc, predates the Specific Media case.)
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