Hulu hoops: standing & damages as threshold issues in privacy cases (Paul Hastings, Jan 2014) – Imagine you are in the mall, and you overhear an interaction between a clerk and another shopper. The clerk asks to see a drivers’ license to verify their identity. The clerk then remarks, “Your age makes you eligible for our senior discount-you get 10% off on this order!” The shopper, aghast, threatens to sue the store. It’s seemingly an empty threat-you can’t sue without being hurt, right? According to a California magistrate judge, that’s not necessarily true-at least in the context of privacy lawsuits. And as the number of privacy suits continue to skyrocket, that means the cost of doing business is about to go up. That commonsense inkling that someone must be injured in some tangible way to pursue a lawsuit (at least, a lawsuit in federal court) is codified in Article III of US Constitution, in a legal doctrine known as “standing.” To show standing, a plaintiff must allege an injury that is (1) “concrete and particularized” and “actual or imminent,” (2) traceable to an action by a defendant, and (3) able to be redressed by a decision of the court. This hurdle has been historically difficult to overcome in privacy suits, where the “injuries” are often nebulous concepts like a “violation of privacy” or “slowing down my computer with cookies.” See, e.g., In Re DoubleClick, Inc. Privacy Litigation, 154 F. Supp. 2d 497 (S.D.N.Y. 2001) (rejecting plaintiffs’ damages theories under the CFAA, holding that the cost of “remediate” cookies and the alleged decreased value of personal information fail to meet the CFAA damages requirement). But times, they are changing. The Ninth Circuit-a hotbed of innovation and the home jurisdiction for many of the tech companies being sued-has decided that in some cases, simply invoking the name of a federal statute and alleging its violation can provide standing.

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Image courtesy of FreeDigitalPhotos.net/Stuart Miles.