WEBVTT - California Is a Magnet for Consumer Privacy Cases

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<v Speaker 1>Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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<v Speaker 1>day we bring you insight and analysis into the most

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<v Speaker 1>important legal news of the day. You can find more

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<v Speaker 1>episodes at the Bloomberg Law Podcast, on Apple Podcasts, SoundCloud,

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<v Speaker 1>and on Bloomberg dot com slash podcasts. The tech giants

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<v Speaker 1>have faced dozens of consumer class claims in California federal

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<v Speaker 1>courts in recent years after a series of high profile

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<v Speaker 1>privacy and security breaches. Joining me is Eric Goldman, a

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<v Speaker 1>professor at Santa Clara University Law School and co director

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<v Speaker 1>of the High Tech Law Institute, have federal courts in

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<v Speaker 1>California lowered the bar for consumers to bring privacy cases

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<v Speaker 1>against the tech giants. The California courts are seeing a

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<v Speaker 1>lot of the privacy relegation nationwide, so they're dealing with

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<v Speaker 1>a higher volume than any other courts, and many of

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<v Speaker 1>those courts are resolving the first threshold question cann this

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<v Speaker 1>case even be heard in court, and many of the

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<v Speaker 1>California carts are being sympathetic to the plaintiffs in those

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<v Speaker 1>rulings and willing to entertain lawsuits that might not succeed elsewhere.

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<v Speaker 1>Is it because the Ninth Circuit is known as a

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<v Speaker 1>liberal circuit, and their decisions are following the case law there,

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<v Speaker 1>or is it for another reason. It's a little hard

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<v Speaker 1>to pinpoint why the California courts might be more sympathetic. Certainly,

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<v Speaker 1>California has a reputation is being sympathetic to planet arguments

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<v Speaker 1>and open to lawsuits generally. But this particular question on

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<v Speaker 1>privacy lawsuits about whether the litigants even have the right

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<v Speaker 1>to be in court really derives from a two thousand

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<v Speaker 1>and sixteen Supreme Court case that the courts across the

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<v Speaker 1>country have just read differently. And so it's not clear

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<v Speaker 1>if the California courts are more biased in one direction

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<v Speaker 1>another or they're just reading the cases differently than other

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<v Speaker 1>courts are. Tell us about that last Supreme Court case

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<v Speaker 1>in Yeah, it was kids called Spokeyo versus Romans, and

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<v Speaker 1>the Smokeyo case addressed a very threshold question. In order

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<v Speaker 1>to get into federal court, planists have to show that

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<v Speaker 1>they suffered some cognizable injury. They can't just go into

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<v Speaker 1>court and say I'm upset. They have to show that

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<v Speaker 1>they suffered some problem that the law recognizes. Now, that's

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<v Speaker 1>not proof that they suffered problems, but they can't even

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<v Speaker 1>articulate how they suffered a guisle injury. The courts are

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<v Speaker 1>supposed to dismiss the case, basically saying, that's not the

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<v Speaker 1>kind of case that we're allowed to hear in the

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<v Speaker 1>first instance. And in the sixteen Supreme Court case, the

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<v Speaker 1>court gave us some guidance about when the planets suffer

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<v Speaker 1>cognizable injury. But the guidance the court gave us was

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<v Speaker 1>somewhat confusing, and that's one of the reasons why courts

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<v Speaker 1>across the country have been reading it differently. Have there

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<v Speaker 1>been appeals to the Supreme Court on these standing issues

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<v Speaker 1>in privacy cases since then and the Court just hasn't

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<v Speaker 1>taken it up. Actually, I'm not sure if there have

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<v Speaker 1>been any appeals of that issue to the Supreme Court.

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<v Speaker 1>But even if they're worth the Supreme Court takes a

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<v Speaker 1>very small fraction of the their appealed to it, well

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<v Speaker 1>less than one percent. So it wouldn't be unusual for

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<v Speaker 1>the Supreme Court not to take another case in this

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<v Speaker 1>area for a while, but to let the issue play

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<v Speaker 1>out in the lower courts and only after the problems

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<v Speaker 1>have emerged. Clearly, would the Supreme Court come back in

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<v Speaker 1>and take another case. Is there any way to account

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<v Speaker 1>for the fact that the Ninth, the seventh, and the

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<v Speaker 1>d C circuits seem to be more proplaintive in this

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<v Speaker 1>area and the fourth and the second are less proplaintive.

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<v Speaker 1>Is it just the luck of the draw of the

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<v Speaker 1>panel that they get or is there a proplaintive bias

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<v Speaker 1>in those particular circuits. I don't think of the circuits

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<v Speaker 1>that you mentioned as being particularly proplaintive, especially the Seventh Circuit,

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<v Speaker 1>which historically has actually been viewed as a pro business circuit,

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<v Speaker 1>so it would be actually unusual for them to be

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<v Speaker 1>considered a pro plaintive circuit. And I don't think it's

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<v Speaker 1>the differences between panels on the appellate courts as much

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<v Speaker 1>as just the Supreme Court case has so many ambiguous

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<v Speaker 1>and possibly contradictory statements that of course across the country

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<v Speaker 1>have really struggled to figure out what it means. So

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<v Speaker 1>that's why once one of the circuits starts to answer

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<v Speaker 1>for the circuit, you might start to see these different

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<v Speaker 1>precedents emerge on the circuits that look pro plaintive. But

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<v Speaker 1>it's just because the first panel that heard that particular

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<v Speaker 1>issue may have read the opinion in a particular way

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<v Speaker 1>that led towards a more proper plaintive outcome. Is there

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<v Speaker 1>a case that you think particularly well explains the kind

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<v Speaker 1>of standing issues that we're talking about here. The case

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<v Speaker 1>that stands out of my mind, it's the Zappo's case.

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<v Speaker 1>It involves a data breach by the retailers Zappos, and

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<v Speaker 1>many millions of records were released, and after several years

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<v Speaker 1>in the case, so the case proceeded on in court

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<v Speaker 1>for years, the defendant moved to dismiss the case, saying

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<v Speaker 1>there wasn't a standing because of the fact that nobody

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<v Speaker 1>had ever shown that their data actually been misused. So

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<v Speaker 1>there were millions of consumers who are affected by the breach,

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<v Speaker 1>and after all the work on all the LITA gives

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<v Speaker 1>to try and find evidence of a problem, there was

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<v Speaker 1>no evidence that anyone ever suffered a breach. And the

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<v Speaker 1>court still said, even though after three plus years of

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<v Speaker 1>developments in the area where the data has been available

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<v Speaker 1>and could be misused, we still think that the case

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<v Speaker 1>should proceed because of the fact that consumer data was

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<v Speaker 1>released even though there's no evidence anyone's ever used it,

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<v Speaker 1>and that should be pretty good evidence possibly no one

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<v Speaker 1>ever suffered any harm from the case. Well, privacy suits

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<v Speaker 1>get more aggressive until the Supreme Court decides to take

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<v Speaker 1>a case and perhaps rain them in. There's no doubt

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<v Speaker 1>that privacy litigation of the growth industry and the standing

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<v Speaker 1>issue has contributed to the growth because of the fact

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<v Speaker 1>that planefts have been able to find ways to get

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<v Speaker 1>into court even if they can't show the kinds of

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<v Speaker 1>harms we would expect planeffs to show. That's been emboldening

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<v Speaker 1>plane us to bring more cases. I would also point

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<v Speaker 1>out in California there's a new data breach law that's

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<v Speaker 1>gonna be going into effect on January one that specifies

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<v Speaker 1>certain types of harms that can be recognized automatically, and

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<v Speaker 1>that's going to encourage the planeffs to bring lawsuits also

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<v Speaker 1>in California State corn and try and take advantage of

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<v Speaker 1>the laws statutory damages which guarantee certain payoffs and minimum

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<v Speaker 1>payoffs even if the planets can otherwise show harm. So

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<v Speaker 1>data breach relegation is actually about to get a TERMO

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<v Speaker 1>charge boost from the California law. What we've seen now

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<v Speaker 1>I think is going to be just a small fraction

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<v Speaker 1>of the amount of litigation that's going to be spurred

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<v Speaker 1>by the California law. Thanks Eric, that's Eric Goldman of

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<v Speaker 1>Santa Clara University Law School. Thanks for listening to the

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<v Speaker 1>Bloomberg Law Podcast. You can subscribe and listen to the

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<v Speaker 1>show on Apple Podcasts, SoundCloud, and on Bloomberg dot com

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<v Speaker 1>slash podcast. I'm June Brasso. This is Bloomberg to end.

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<v Speaker 1>In the end up of the fe