Privacy

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In the flurry of deal-making that resulted in a 2,232-page funding bill released Wednesday, lawmakers negotiated the inclusion of “The Clarifying Lawful Overseas Use of Data Act” (often referred to as the “CLOUD Act”) (see page 2,201 of the bill text).  The CLOUD Act provides a procedural structure for law enforcement to pursue the preservation or production of data and other information residing on servers located overseas that is within the possession, custody or control of the provider.

In this age of cloud computing, data can rest overseas or in multiple locations. As we’ve previously discussed, it is increasingly common to see extraterritorial legal disputes arise when parties attempt to apply laws passed before the digital age to our current landscape.

UPDATE: On March 2, 2018, in a related biometric privacy litigation surrounding Tag Suggestions brought by non-users of Facebook, a California district court in a brief order declined to dismiss the action for lack of standing, citing its reasoning in the Patel opinion.  (Gullen v. Facebook, Inc., No. 16-00937 (N.D. Cal. Mar. 2, 2018)). While Facebook offered evidence that it does not store faceprint data on non-users, but only analyzes it to see if there is a match, the court stated such substantive arguments are best left for summary judgment or trial.  Note: the Gullen case is related to the consolidated Facebook biometric privacy litigation and as such, is being heard before the same judge. The difference between the two actions is that Gullen involves non-Facebook users, whereas the plaintiffs in In re Facebook are registered users.

This past week, a California district court again declined Facebook’s motion to dismiss an ongoing litigation involving claims under the Illinois Biometric Information Privacy Act, 740 Ill. Comp Stat. 14/1 (“BIPA”), surrounding Tag Suggestions, its facial recognition-based system of photo tagging.  In 2016, the court declined to dismiss the action based upon, among other things, Facebook’s contention that BIPA categorically excludes digital photographs from its scope.  This time around, the court declined to dismiss the plaintiffs’ complaint for lack of standing under the Supreme Court’s 2016 Spokeo decision on the ground that plaintiffs have failed to allege a concrete injury in fact.  (Patel v. Facebook, Inc., No. 15-03747 (N.D. Cal. Feb. 26, 2018) (cases consolidated at In re Facebook Biometric Information Privacy Litig., No. 15-03747 (N.D. Cal.)).  As a result, Facebook will be forced to continue to litigate this action.

This dispute is being closely watched as there are a number of similar pending BIPA suits relating to biometrics and facial recognition  and other defendants are looking at which of Facebook’s defenses might hold sway with a court. 

We have been closely following the legal and legislative developments relating to biometric privacy, and in particular, the flow of litigation under the Illinois biometrics privacy law.   It was interesting to see how the Illinois law (as well as a similar Texas law) influenced Google’s  offering of a new facial recognition feature on the Google Arts & Culture app. (It is also interesting to note that the media coverage of the app has made the Illinois and Texas laws subjects of mainstream discourse.)

The Google Arts & Culture app, which was originally released a couple years ago, offers users virtual tours of museums and a searchable database of other art-related content.  What recently made it one of the hottest free apps is a new entertaining tool that compares a selfie to a database of great works of art and presents the results that most closely match the user’s face.  [Note: My classical art doppelgänger is “Portrait of a Gentleman in Red” by Rosalba Carriera. What’s yours?].  However, out of an apparent abundance of caution, Google has disabled this art-twinning function in Illinois and Texas, presumably because those states have biometric privacy laws that regulate the collection and use of biometric identifiers like facial templates; while the Texas statute can only be enforced by the state attorney general, Illinois’s Biometric Information Privacy Act (BIPA) contains a private right of action and remedies that include statutory damages. Interestingly, Washington users are able to access this tool, despite Washington having enacted its own biometric privacy law last year.  Perhaps that is because, as described in the referenced blog post, compliance under the Washington statute is less demanding than under the Illinois or Texas statutes.

As 2017 drew to an end, we noted the continuing flood of Illinois biometric privacy suits filed over the past year.  There are literally dozens of cases pending, most in Illinois state courts, alleging violation of Illinois’s Biometric Information Privacy Act (BIPA), which regulates the collection, retention, and disclosure of personal biometric identifiers and biometric information.  The suits initially targeted the use of biometrics on social media platforms, but, perhaps reflecting the increased use of biometrics in the workplace, have increasingly been asserted against businesses that collect biometric data to authenticate customers or employees.

While federal courts have weighed in on whether litigants have standing for asserting procedural violations of BIPA, it was not clear if mere procedural violations of BIPA’s consent and data retention requirements, without any showing of actual harm or data misuse, were actionable under the statute (i.e., whether persons pleading procedural violations are “aggrieved” under the statute, as BIPA expressly provides that “any person aggrieved by a violation” of the BIPA may pursue money damages and injunctive relief against the offending party).

As the year came to a close, an Illinois appellate court may have cooled the New Year’s Eve celebrations of BIPA class action lawyers a bit, as the court issued a decision which could provide defendants with a shield against BIPA suits.  The court ruled that if a party alleges only a technical violation of BIPA without alleging any injury or adverse effect, then such a party is not “aggrieved” under the Act and may not seek remedies (i.e., monetary damages or injunctive relief).  (Rosenbach v. Six Flags Entertainment Corp., No. 2-17-0317, 2017 IL App (2d) 170317 (Ill. App. Dec. 21, 2017)).

As we approach the end of 2017, it is a time to reflect on the dizzying pace of technology evolution this year, and the amazing array of legal issues it presented. Similarly, it is a time to look forward and anticipate what technology-related issues we will be thinking about in the coming year.

For 2017, the list is long and varied.

This year, the true potential of blockchain was recognized by many in the commercial sector. While recent blockchain-related headlines have focused on the rise (and regulation) of cryptocurrencies, a great deal of the blockchain action has been in back office applications in financial services, supply chain and other areas.  Industry wide consortia have been formed, trials and proof of concepts have been run, and, as evidenced by the recent announcement by the Australian Stock Exchange to replace its clearing and settlement system with a blockchain based system, we are moving into full production implementations of blockchain systems.

Cybersecurity garnered major attention in 2017. Unfortunately, data breaches continued to be a constant headline item, as were related class action litigation. As a result, cybersecurity was a “top of the agenda” item for state and federal agencies, state legislatures, regulators, corporate boards, GCs and plaintiffs’ lawyers.

As a related matter, privacy issues were also front and center this year. In particular,  we saw increased activity in some of the cutting edge areas of privacy law, including biometrics-related litigation (particularly under the Illinois Biometric Information Privacy Act (known as BIPA)), video streaming privacy (particularly under the Video Privacy Protection Act, or the VPPA)) and mobile-related privacy issues.

There are many other issues that occupied our minds this year, including artificial intelligence, virtual and augmented reality, online copyright liability (including application of the DMCA in online contexts), and publisher/distributor liability for third party content online (under Section 230 of the Communications Decency Act).  Additionally, parties involved in agreements of all types have been increasingly focused on technology-related legal risk, and were more intent on addressing and shifting technology-related risks with very specific contractual provisions.

In a brief, unpublished opinion, the Sixth Circuit affirmed the dismissal of right of publicity and privacy claims against a host of self-publishing platforms and service providers for distributing an erotic (and purported “less than tasteful”) book whose cover contained an unauthorized copy of the plaintiffs’ engagement photo because the plaintiffs failed to plead more than an “incidental” use of the photo by the service providers. (Roe v. Amazon.com, No. 16-3987 (6th Cir. Nov. 21, 2017) (unpublished)).

This dispute initially raised our interest because it raised the larger issues of how to define a “publisher” and “distributor” in the modern e-commerce environment and to what extent an ebook platform or print-on-demand service could be protected for distributing third-party content by the immunity provided by Section 230 of the Communications Decency Act (“CDA Section 230”).  While we anticipated that such issues would get a full examination on appeal, the Sixth Circuit sidestepped these novel issues and decided the case on the merits of the privacy claims. 

After noting the flood of Illinois biometric privacy suits in September, it appears that the flow of such suits remains robust.  Dozens of suits have been filed in Illinois state court against Illinois-based employers and other businesses alleging violation of Illinois’s Biometric Information Privacy Act (BIPA), which generally regulates the collection, retention, and disclosure of personal biometric identifiers and biometric information, and encourage businesses that collect such personal data to employ reasonable safeguards.

In recent years, biometric privacy suits initially involved social media services and video game makers, but have increasingly been asserted against businesses that collect biometric data to authenticate customers or employees, especially Illinois-based employers that use biometric timekeeping devices to verify employees when clocking in and out.  

In a decision that clarified aspects of the video privacy landscape, the Ninth Circuit affirmed the dismissal of an action alleging a violation of the Video Privacy Protection Act (VPPA) based on an assertion that ESPN’s WatchESPN Roku channel had shared a user’s Roku device number and video viewing history with a third-party analytics company for targeted advertising purposes.  (Eichenberger v. ESPN, Inc., No. 15-35449 (9th Cir. Nov. 29, 2017)).  The appeals court found that such a disclosure of a device identifier did not constitute “personally identifiable information” (PII) under the VPPA.  In doing so, the court declined to take a broad interpretation of the 1980s era statute originally aimed at video stores, but which in recent years has been applied to online video streaming services and mobile and video streaming apps.

With the flood of Illinois biometric privacy suits lodged against employers in recent months, and multiple biometric privacy suits against social media and other mobile platforms currently pending over the use of photo tagging functions, 2017 has been a busy year in this area.  In a notable circuit court level…

This month, in one of the many recently-filed Illinois biometric privacy suits, a class action complaint alleging violations of Illinois’s Biometric Information Privacy Act (BIPA) was lodged against Wow Bao, a restaurant chain, over its use of self-order kiosks that allow customers to use faceprints as a method to authenticate purchases. (Morris v. Wow Bao LLC, No. 2017-CH-12029 (Ill. Cir. Ct. filed Sept. 5, 2017)).  The suit against Wow Bao was not the only BIPA-related suit filed in September, as several businesses with an Illinois presence, including Crunch Fitness and Speedway, Inc., were served with complaints. And more than a week ago, an Illinois federal court refused to dismiss BIPA claims against photo storage service Shutterfly over claims that its photo tagging feature created a faceprint of the non-user plaintiff after a friend uploaded a group photo, and upon the service’s suggestion, then tagged the plaintiff, thereby storing plaintiff’s faceprint and name in Shutterfly’s database without his notice or consent. (Monroy v. Shutterfly, Inc., No. 16-10984 (N.D. Ill. Sept. 15, 2017)).