Video Privacy Class Action Wave Slowed by High Dismissal Rate

A flood of video privacy class actions exposing hundreds of businesses to costly litigation has begun to abate as plaintiffs and judges dismiss claims in droves, a Bloomberg Law analysis of federal cases found.

The rate of new cases seeking millions of dollars from companies for disclosing an individual’s video-viewing history without consent peaked in September 2022, with occasional spurts in monthly filings amid a general decline since, court docket data reveals.

Federal class actions filed under the Video Privacy Protection Act picked up at the start of 2022 as plaintiffs’ attorneys around the country pushed a new interpretation of the decades-old statute, attempting to hold businesses with websites liable for tracking which videos online visitors watched. But now they may be running low on new targets after exposed companies scrambled to preemptively avoid VPPA violation allegations and courts narrowed the scope of viable claims, plaintiff and defense attorneys said.

“Some of the more active firms within the plaintiffs’ class action bar went all in on the VPPA theory and after some initial decisions in their favor, we really saw the number of cases skyrocket,” said Marshall Baker, a consumer class action defense litigator at Akin Gump Strauss Hauer & Feld LLP.

“But over the better part of the last year, we’ve seen the losses really pile up on the plaintiff side.”

At least 19 cases filed since the wave began were dismissed by a judge in response to a defendant’s motion. More than a dozen others ended in individual settlements before class certification, per analysis of Bloomberg Law’s federal docket data covering more than 70 dispositive actions in VPPA cases centering on web tracking from Nov. 1, 2018, through Nov. 17, 2023.

Despite causes of action that require the type of fact-specific analysis that often survive early motions to dismiss, nearly half of VPPA suits that have concluded in the last three years—34 cases—were voluntarily dismissed before the defendant ever filed a response or motion to dismiss the original complaint.

That rate of dismissals could indicate the claims had a low chance of success or were resolved outside of court, attorneys said.

“As with any putative class litigation it’s quite easy to slap class action on a complaint—it’s another proposition entirely to prosecute a class action through the end on the merits, so I think a lot of what you’re seeing is a result of those issues,” Baker said.

To be sure, many VPPA cases remain active and a number of new filings continue to crop up each month—but 85% of voluntary dismissals since the litigation wave began were filed this year alone.

Congress established the privacy protections in 1988 and allowed private litigants to recoup as much as $2,500 per violation after the Washington City Paper published the video tape rental history of then-US Supreme Court nominee Robert Bork.

The latest wave of complaints have landed a handful of multi-million dollar class action settlements with companies including Sony Corp. and the Boston Globe. They typically accuse a business of associating a person’s identifiable information—often their Facebook profile—with the videos they watched on the entity’s website, and of unconsentingly sharing that data with a third party, such as Meta Platforms Inc. or Alphabet Inc.‘s Google.

Developing Case Law

The plaintiffs’ bar has been the primary driver behind developing video privacy case law to address online tracking, and as the volume of filings grew, so did the number of cases that didn’t allege a clear impact to privacy, said Eli Wade-Scott, who leads Edelson PC’s plaintiff class action practice.

“Unfortunately, we also see that others don’t necessarily think strategically about VPPA cases and instead take an approach of filing cases that are not necessarily strong or even tolerable, which I think has a negative impact,” Wade-Scott said.

“If you file a good case, and you can actually litigate it, you’re not going to see dismissals right off,” he added.

Another possible explanation for the high rate of dismissals: some plaintiffs’ attorneys use class action filings as leverage to secure an out-of-court settlement, said Avril Love, commercial disputes defense counsel at K&L Gates LLP. But even the number of cases filed may understate the push for such settlements.

“For every one VPPA case that gets filed, there could be 10 other claims that are sent to businesses in the form of a demand letter only that are never filed,” Love said.

The volume of these demand letters can make businesses concerned that if they engage with one settlement, they could be “buried under a pile of demand letters and claims forever,” so some have chosen to ignore the letters unless a case is filed against them in court, she added.

Some companies prefer out-of-court settlements, finding them “significantly cheaper” than engaging in any defensive litigation, according to Daniel Rockey, co-leader of the data privacy class action defense team at Bryan Cave Leighton Paisner LLP.

New Claims, Old Pattern

The current wave of VPPA litigation, focusing on allegations of sharing users’ viewing history with social media and advertising companies, differs somewhat from the most recent previous wave, which targeted streaming services for displaying users’ watch histories during in the mid-2010s, Rockey said.

The ebb and flow of video privacy class-action filings illustrates a strategy within a segment of the plaintiffs’ bar to litigate statutes at a high frequency until most of the viable cases dry up, defense attorneys said.

“One of the things I think I’m seeing is that the same plaintiffs law firms that were bringing ADA cases, accessibility cases, they are now bringing a lot of privacy cases, not just under the VPPA, but other statutes as well,” Love said.

A common thread between alleged violations of the federal accessibility and video privacy laws is their fact-specific nature, making them harder to kill at the motion-to-dismiss stage, she added.

Those website ADA class actions were filed and dismissed at similar rates to those in the newest VPPA litigation trend, Rockey said.

Wade-Scott of Edelson said filing a high-volume of litigation is “absolutely the business model” of some plaintiffs’ firms, but doesn’t represent the entire bar and can undermine work pursued by other firms.

“The problem is that these high-volume filers often end up constituting the majority of the cases on a particular issue,” Wade-Scott said.

“We have been as outspoken against these firms as we are when we see corporate America engaged in illegal or unethical business practices.”

Limiting Exposure

Those whose core business revolves around delivering video content face the greatest liability exposure from VPPA complaints, while companies that use video for secondary purposes like marketing may be more insulated from video privacy claims going forward, Rockey said.

He pointed to a recent VPPA class action dismissal his team secured by arguing that Tapestry Inc., parent company of fashion brands Coach and Kate Spade, didn’t qualify as a video service provider under the statute.

The rate of case filings could also be falling because many businesses began removing the tracking technology—often an embedded tracking pixel from Meta or Google—from webpages that host video content in an effort to limit legal exposure, he said.

But defense attorneys said some ambiguities in the case law still exist, including the standard for determining what’s considered identifiable information and who qualifies as a video service provider under the VPPA.

Appellate courts may soon have a chance to weigh in on some of those very questions, with cases pending before at least the Second, Sixth, and Ninth Circuit courts of appeals.

A handful of district-level cases have been stayed until the Second Circuit addresses how to define a consumer under the video privacy statute in Salazar v. National Basketball Association, where the appellant brief was filed Oct. 31.

Attorneys will be watching those cases closely for “appellate-level clarity,” Baker of Akin Gump said. “In the meantime, though, district court battles are going to continue to wage on and it will be interesting, I think for me, to see how those issues gets resolved at later phases of the case, including the summary judgment stage and potentially class certification stage.”