California's Shine the Light Law: A Heightened Pleading Requirement

by White & Case LLP
Contact

In three nearly-identical unpublished opinions, the United States Court of Appeals for the Ninth Circuit affirmed the dismissal of three separate class actions brought under California's Shine the Light Law.1 The Ninth Circuit decisions indicate that to bring a cause of action under the Shine the Light law, plaintiffs must allege more than simply a technical violation of the law. Plaintiffs are required to plead statutory injury by showing that they either submitted a request for information from the defendant or that they would have submitted such a request had accurate contact information been provided. Failure to do so creates a likelihood of a dismissal.

Pursuant to California's Shine the Light law,2 companies that sell consumer information to third parties for direct marketing purposes are required to respond to a customer's request to disclose the identity of third parties that customer information is shared with, and the types of customer information that the company shares.3 To facilitate such disclosures, companies are required to provide consumers with contact information that allows them to make these requests. This can be done by (i) posting a notice at the company's physical place of business, (ii) notifying the company's customer service employees so that they may inform inquiring customers, or (iii) posting information to the company's website.4 A company is exempt from these requirements if it adopts a privacy policy that informs customers of their right to prevent disclosure of their personal information, and provides customers a cost free means of either opting in or opting out of such information sharing.5 Companies are also exempt if they have and follow a policy of not disclosing customers' personal information to third parties for direct marketing purposes.6

A plaintiff that is injured by a violation of the Shine the Light law may file a civil action to (i) recover damages, (ii) if the court finds willful, intentional or reckless violations of the law, recover a civil penalty, and (iii) obtain an injunction against any business that violates, proposes to violate or has violated the statute.7

In all three cases before the Ninth Circuit, the Court held that the plaintiffs lacked standing under the Shine the Light law, because the plaintiffs failed to allege that they submitted a request for information as permitted under the statute, or that they would have submitted such a request had accurate contact information been provided.8 In reaching its decisions, the Ninth Circuit cited to a recent case in the California Supreme Court, Boorstein v. CBS Interactive, Inc., which requires that "a plaintiff must have made, or attempted to make, a disclosure request in order to have standing under the STL [Shine the Light law]."9

In the three cases before the Ninth Circuit, the plaintiffs alleged that they suffered an injury when the companies didn't disclose on their websites information about their third party data sharing practices.10 Plaintiffs argued that this injury granted them standing to bring suit, whether or not they actually sought out information from the defendants.11 The Ninth Circuit rejected this argument, and stated that California does not recognize such an informational injury, and added that even if California did recognize such an injury, the plaintiffs failed to state a claim for an informational injury because the plaintiffs' "mere allegations" that the defendants failed to provide contact information "does not pertain to the STL's primary purpose."12 Therefore, to show statutory injury sufficient to state a claim under the Shine the Light law, plaintiffs must show that they either submitted a request for information from the defendant, or that they would have submitted such a request had accurate contact information been provided.

Although these Ninth Circuit decisions are helpful to defendants, companies should still ensure that they have proper procedures in place for responding to data privacy related requests from customers in a timely fashion. Plaintiffs will learn from these three cases and adjust their pleadings accordingly, assuming the requisite facts exist. Companies should also regularly assess their privacy policies and practices to ensure that they comply with the minimum standards required by state and federal laws and guidelines, as they develop.

1 - King v. Conde Nast Publ'ns, No. 12-57209 (9th Cir. Feb. 18, 2014), available here; Miller v. Hearst Comm'cns Inc., No. 12-57231 (9th Cir. Feb. 18, 2014), available here; Baxter v. Rodale, Inc., No. 12-56925 (9th Cir. Feb. 21, 2014), available here.
2 - Cal. Civ. Code §§ 1798.83-1798.84.
3 - Id. at § 1798.83(a).
4 - Id. at §§ 1798.83(b)(1)(A)-(C).
5 - Id. at § 1798.83(c)(2).
6 - Id.
7 - Id. at §§ 1798.84(b), (c), (e).
8 - King, No. 12-57209 at 3; Miller, No. 12-57231 at 3; Baxter, No. 12-56925 at 3.
9 - 165 Cal. Rptr. 3d 669, 673 (Cal. Ct. App. 2013).
10 - See, First Amended Class Action Complaint, King v. Conde Nast Publ'ns, 12-cv-00719-GHK-E (C.D. Cal. Aug. 17, 2012), ECF No. 31; First Amended Class Action Complaint, Miller v. Hearst Comm'cns Inc., 12-cv-00733-GHK-PLA (C.D. Cal. Aug. 16, 2012), ECF No. 35; Complaint, Baxter v. Rodale, Inc., 12-cv-00585-GAF-AGR (C.D. Cal. Jan. 23, 2012), ECF 1.
11 - Id.
12 - King, No. 12-57209 at 4 n.1; Miller, No. 12-57231 at 4 n.1; Baxter, No. 12-56925 at 4 n.1.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© White & Case LLP | Attorney Advertising

Written by:

White & Case LLP
Contact
more
less

White & Case LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.