Antitrust and Unfair Competition Law

Facebook Tracking MDL Dismissed by Northern Distrct of California Court

Sonal Mittal Tolman
Wilson Sonsini Goodrich & Rosati

On November 17, 2017, Northern District of California District Court Judge Edward J. Davila dismissed the massive multidistrict tracking litigation against Facebook for the third and final time. In re Facebook Internet Tracking Litigation, No. 5:12-md-02314-EJD, 2017 WL 5525895 (N.D. Cal. Nov. 17, 2017). Judge Davila held the plaintiffs, who accused Facebook of tracking users’ browsing activity after they signed off, failed to identify any contract that prohibited such practices.

Plaintiffs alleged that Facebook tracked users’ web browsing activity across third-party websites while the users were logged out of their Facebook accounts. They originally asserted a variety of common law, tort, and statutory claims. After two earlier rounds of motions to dismiss in which the majority of the plaintiffs’ claims were dismissed with prejudice, plaintiffs filed their Third Amended Complaint which asserted claims for breach of contract and breach of the duty of good faith and fair dealing. 2017 WL 5525895, at *1-2.

Plaintiffs argued that they each entered into a contract with Facebook made up of Facebook’s Statement of Rights and Responsibilities (“SRR”), Privacy Policy, and several Help Center pages. Both parties agreed that the SRR constituted a contract between the parties. But Plaintiffs also alleged the promises in Facebook’s Privacy Policy are incorporated into the SRR because the SRR states: “Your privacy is very important to us. We designed our Privacy Policy to make important disclosures about … how we collect and can use your content and information. We encourage you to read the Privacy Policy, and to use it to help you make informed decisions.” And they alleged that a version of the Privacy Policy–the Data Use Policy–promises users Facebook will not track them across third party websites using their Facebook User IDs unless they are logged into Facebook. 2017 WL 5525895, at *3. But Facebook did not post the Data Use Policy until four months after it posted the version of the SRR that Plaintiff’s cite in their complaint. Id. Judge Davila thus held the SRR does not and could not refer to the Data Use Policy, and that the promises therein are not incorporated by reference into the SRR. Id, at *4.

Plaintiffs also argued that various Help Center pages promising Facebook will not track users when they are signed off are incorporated into Facebook’s Privacy Policy (which is in turn incorporated into the SRR). 2017 WL 5525895, at * __. Judge Davila likewise dismissed that theory because, while the Privacy Policy links to some Help Center pages, it does not link to or directly reference any pages containing Facebook’s promises to not track users who are logged-out. Id, at *5. And Judge Davila rejected Plaintiffs’ argument that Facebook’s Help Center pages are part of a single “broader document” that is entirely incorporated into the Privacy Policy: “[t]he Help Center pages exist independently at different URLs” and “[n]o evidence suggests that a Facebook user who reads one Help Center page has also read, or is even aware of, any of the others.” Id. Because Plaintiffs failed to identify any contractual premise that Facebook violated, Judge Davila also dismissed their claim for breach of the duty of good faith and fair dealing. Id.

Given that Plaintiffs’ failure to cure these defects in their complaint after multiple leaves to amend, Judge Davila dismissed the remaining claims in the action with prejudice. 2017 WL 5525895, at *6. Plaintiffs have since appealed the dismissal to the Ninth Circuit. In Re: Perrin Davis, et al., v. Facebook, No. 17-17486 (9th Cir. Dec. 15, 2017).

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