Disney, Viacom Kids’ Gaming App Privacy Suits Survive Dismissal

Walt Disney Co., Viacom Inc., and others must keep defending proposed class claims alleging their gaming apps secretly tracked children’s online behavior and that they sold data to advertisers.

The children’s parents adequately stated claims for intrusion upon seclusion under California tort law and a violation of privacy rights under the California Constitution, the U.S. District Court for the Northern District of California said.

The court also refused to dismiss claims under California and New York consumer protection laws that bar deceptive business practices.

At issue are three suits that involve the Subway Surfers, Disney Princess Palace Pets, Where’s My Water, and Llama Spit Spit apps.

According to the suits, the gaming app is downloaded onto a phone or other mobile device. As the user plays the game, embedded code communicates with the code developer’s server, sending the user’s personal information and calling for a targeted ad to appear on the user’s device.

The court said they parents adequately pleaded the privacy claims because they alleged in detail what data was secretly collected, how the collection was done, and how the harvested data was used.

Privacy expectations are developing with respect to a key issue in these cases: Whether the data subjects own and control their personal information and whether a commercial entity that secretly harvests it commits a highly offensive act, the court said.

The court also refused to dismiss claims alleging a violation of Massachusetts’ statutory right to privacy.

But some claims were thrown out, for now.

Sybo Games ApS, allegedly involved in the Subway Surfers game, won dismissal of non-California plaintiffs’ claims. The connection to California is insufficient to give a California court jurisdiction over Sybo, a Denmark company, the opinion said.

Bristol-Myers Squibb Co. v. Superior Court of California, which requires a link between the defendant’s conduct in a state and the plaintiffs’ claims, applies to this case, the court said.

The court also dismissed claims against Flurry Inc. and Oath Americas Inc., which allegedly developed code used in the apps, for procedural reasons.

But the plaintiffs may replead the dismissed claims, it said.

Lieff Cabraser Heimann & Bernstein, LLP and others represent the plaintiffs.

Skadden Arps Slate Meagher & Flom LLP represents Sybo. Munger Tolles & Olson LLP represents Disney. Covington & Burling LLP represents Viacom.

The case is McDonald v. Kiloo Aps, 2019 BL 187225, N.D. Cal., No. 17-04344, 5/22/19.