Bloomberg News

Yahoo Privacy Plaintiffs Want Judge Who Ruled Against Google (1)

November 18, 2013

Lawyers mounting privacy lawsuits over Yahoo! Inc. (YHOO:US)’s mail service are lining up to be heard by U.S. District Judge Lucy H. Koh after she ruled against Google Inc. (GOOG:US) in a case mirroring their clients’ accusations that Yahoo intercepted e-mails for its own gain without getting consent.

One plaintiff who filed a complaint Nov. 15 against Yahoo made a request that same day that his case be joined with related cases before Koh. His move followed an Oct. 25 request by plaintiffs in another suit against the largest U.S. Web portal to join an Oct. 2 complaint Yahoo assigned Oct. 23 to Koh in San Jose, California.

Koh rejected Mountain View, California-based Google’s bid in September to dismiss a privacy suit over its Gmail service, saying the operator of the world’s largest search engine hadn’t explicitly sought consent for all its uses of personal information gleaned from e-mails.

Her ruling was “enormously important” for plaintiffs in group privacy suits, lawyer David Straite said in an e-mail after the Google ruling and before his firm, Kaplan Fox & Kilsheimer LLP, filed the Nov. 15 complaint. The plaintiff in the case, Brian Pincus, is seeking class-action status on behalf of others affected by Yahoo’s privacy practices, and is demanding more than the $5 million minimum threshold for damages in such cases, Straite said today.

Koh hasn’t ruled yet on Google’s request to appeal her decision, which the company said is so “novel” that it warrants review by a higher court.

Yahoo’s Request

Yahoo, based in Sunnyvale, California, doesn’t comment on lawsuits, Sarah Meron, a spokeswoman, said in an e-mail. For efficiency, Yahoo asked the court on Oct. 30 to join two other privacy suits against it to the Oct. 2 case brought by plaintiff John Kevranian, according to filings.

It “appears likely that there will be an unduly burdensome duplication of labor and expense or conflicting results if the cases are conducted before different judges,” the company said.

The law firm that filed the Kevranian case, Cotchett Pitre & McCarthy LLP in Burlingame, California, asked this month that it and Kirtland & Packard LLP be allowed to lead a possible class-action suit.

Each of the cases against Yahoo include allegations that the company scans e-mail messages for targeted advertising.

“As in the Kevranian action, the Pincus action alleges that defendant scans the content of e-mails sent by non-Yahoo! Mail subscribers to Yahoo! Mail users, and that such scanning violates, among other things, the California Invasion of Privacy Act,” according to the Nov. 15 complaint.

A September lawsuit alleging LinkedIn Corp. (LNKD:US) hacked into subscriber e-mail contacts without their consent was assigned to Koh, according to court records.

Scanning Policies

In the past, Internet companies have persuaded courts to dismiss such complaints after pointing out that plaintiffs consented to e-mail scanning policies when they signed up for services.

Koh said in her ruling on the Google complaint that plaintiffs weren’t explicitly told private messages sent through Gmail would be used to build user profiles and aid advertisers, and their consent wasn’t valid.

Pincus, who didn’t subscribe to Yahoo’s mail service, said in his complaint he never consented to scanning policies published for its customers.

Yahoo’s policy states that “automated systems scan and analyze all incoming and outgoing communications content sent and received from your account,” according to the complaint. The purpose is to “match and serve targeted advertising and for spam and malware detection.”

Tailoring Advertisements

Information that Yahoo gleans from users’ and non-users’ messages is used for tailoring advertisements, increasing the company’s revenue, according to the complaint.

Ads bring in three-quarters of revenue (YHOO:US) for Yahoo, which has more than 275 million customers globally, Pincus said in his complaint.

In another case involving privacy issues, Koh in 2011 refused to dismiss a suit against Facebook Inc. (FB:US) over claims that the operator of the world’s largest social network used subscribers’ names without their permission in its “Sponsored Stories” program.

She cited Chief Executive Officer Mark Zuckerberg’s comments reproduced in the complaint that such ads, based on a recommendation by a Facebook “friend,” are a “holy grail” of marketing. Without giving a reason, Koh later recused herself from overseeing a settlement of the case when it was proposed.

The judge hasn’t always ruled for plaintiffs in privacy cases. In a consumer case against Apple Inc. (AAPL:US) over applications approved by the company for the iPhone, she first told plaintiffs they hadn’t shown they were harmed by use of their personal information, then dismissed some key claims in an amended complaint because they hadn’t proved defendants were breaking applicable laws.

The case is Pincus v. Yahoo! Inc., 13-cv-05326, U.S. District Court, Northern District of California (San Jose).

To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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