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Facebook Fights Ruling Over Cambridge Analytica User Suits (1)

Oct. 9, 2019, 3:00 PM

Facebook Inc. wants the Ninth Circuit to review a district court ruling that its users have the right to sue over the Cambridge Analytica data scandal, arguing the decision is at odds with what other courts have said about plaintiff standing in privacy lawsuits.

The U.S. District Court for the Northern District of California ruled last month that users have a privacy interest in data shared with friends and could continue with their claims, even if they didn’t show they were victims of identity theft or other economic injuries. Plaintiffs in the case claim Facebook collected their data and shared it with third parties without their permission.

The decision doesn’t line up with standing decisions by the U.S. Supreme Court, or federal circuit and district courts, Facebook argued in its Oct. 8 motion to appeal. It wants the U.S. Court of Appeals for the Ninth Circuit to immediately review the decision to avoid a drawn-out trial.

“Because there is a serious threshold question about Plaintiffs’ standing to sue, the Ninth Circuit should have an opportunity to address that question before the parties undertake” costly litigation, Facebook said in its filing.

Uphill Battle

The company may face a daunting task at the Ninth Circuit, which has a track record of consumer-friendly standing decisions, privacy attorneys and academics said. The appeals court, along with the Seventh and District of Columbia Circuits, have allowed consumers to beat early standing challenges in privacy litigation. The circuit courts have generally ruled that a possible risk of future harm is enough to beat early challenges to their privacy cases.

“Facebook is arguing that it can pretty much do anything it wants with our data because it’s habit of sharing our information with third parties hasn’t resulted in any loss of money, or physical harm, or identity theft” Ari Ezra Waldman, director of the innovation center for law and technology at the New York Law School, said.

But, the Ninth Circuit has ruled “that data use violations themselves should be enough to constitute injury for the purposes of standing,” Waldman said.

The Ninth Circuit is likely to issue a pro-plaintiff ruling in the Facebook class action because of its prior decisions allowing similar claims to proceed, privacy attorneys and academics said. That could lead Facebook to appeal to the U.S. Supreme Court to get clarity about when consumers can bring privacy actions in federal court, they said.

The issue may reach the justices “because, as Facebook knows, the Ninth Circuit has tended to find Article III standing in consumer privacy cases,” Justin Kay, class action partner at Drinker Biddle & Reath LLP in Chicago, said in an email. The appeal is a prelude to getting the issue before the high court, he said.

Facebook didn’t immediately respond to a request for comment.

Gibson, Dunn & Crutcher LLP represents Facebook. Morgan and Morgan PA, which represents the class, didn’t immediately respond to a comment request.

The case is In re Facebook, Inc. Consumer Privacy User Profile Litig., N.D. Cal., No. 18-md-02843, interlocutory appeal 10/8/19.

To contact the reporter on this story: Daniel R. Stoller in Washington at dstoller@bloomberglaw.com

To contact the editors responsible for this story: Rebecca Baker at rbaker@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com