Apple to Face Lawsuits Over Mobile Tracking

June 19, 2012 9:17 PM

SAN FRANCISCO - Apple Inc. will face a proposed class action accusing the company of letting advertisers track users' activity without their permission, a federal judge ordered Tuesday 12 June.

Owners of Apple devices, including the iPhone, iPad and iPod Touch, may pursue claims under two California consumer protection laws, U.S. District Judge Lucy Koh said.

But Koh threw out privacy claims addressing records disclosure, computer fraud and the Federal Wiretap Act, which provides for fines of a minimum of $100 each day of any violation or $10,000, whichever is greater.

Koh also dismissed all claims against other defendants in the case, including Google Inc., AdMarval Inc., Admob Inc., Flurry Inc. and Medialets Inc.

"Plaintiffs claims fail not based on a deficiency in pleading, but rather because the theories regarding how defendants' practices constitute actionable conduct are defective," Koh wrote in her 44-page ruling.

With respect to the plaintiffs' privacy claims under the California Constitution, Koh found the disclosures, even if made without the plaintiffs' consent, didn't amount to an "egregious breach of social norms."

The case involves 19 proposed class actions that were consolidated before Koh in August. Plaintiffs claim that Apple designed its devices to let mobile advertising companies collect users' personal data whenever free apps are downloaded, despite saying that the company would safeguard against the misuse of personal information. Some plaintiffs allege that the apps gathered their addresses, genders, ages and other personally identifiable information. Others claim that the apps were tracking their exact location. They also said that because Apple failed to make clear how the apps were using their information, they overpaid for their products because they failed to recognize their true cost.

Koh had dismissed an earlier consolidated complaint in September for lack of standing. Plaintiffs filed an amended complaint on Nov. 22, including for the first time allegations of violations of the Stored Communications Act, the Wiretap Act and the state Constitution.

Lawyers watching the case said Koh's order will likely be cited in other court rulings. Dismissal of the federal wiretap claims in particular, they said, could make it harder for plaintiffs to get damages in other privacy class actions making similar allegations.

Interim lead plaintiffs attorney Scott Kamber of KamberLaw in New York said he thinks his clients still have a strong case. Koh said plaintiffs may pursue claims under the Consumer Legal Remedies Act and the Unfair Competition Law alleging that Apple caused them to overpay for their devices.

"This case started out as a case about Apple frustrating the privacy expectations of its customers," Kamber said. "And now after a year and a half of litigation and multiple motions to dismiss, the case remains that, and plaintiffs look forward to discovery and proving their claims in court."

Apple had been represented by attorneys from Morrison & Foerster's San Francisco, Palo Alto and Washington, D.C., offices with a team led by partner James McCabe. But on Tuesday, Apple replaced them with a team from Gibson, Dunn & Crutcher led by Palo Alto partner S. Ashlie Beringer.

MoFo partner Penelope Preovolos referred questions to Apple. Officials from Apple did not respond to requests for comment.

(The Recorder)