In the face of a significant increase in data privacy-related lawsuits in the last several years, Thompson Hine LLP shared that Steve Stransky, a partner and co-chair of the privacy and cybersecurity practice group, and Kim Sim Sandell, a senior counsel, recently met with California State Senator Catherine Blakespear to discuss the influx of privacy lawsuits in California and their impact on small business owners.
The firm has been on the forefront of defending clients in litigation, proactively counseling on privacy compliance measures, and educating the legal community.
At the core of many of these data privacy lawsuits is the California Invasion of Privacy Act’s (CIPA) prohibition on the use of pen registers and trap and trace devices. Specifically, plaintiffs are alleging that the use of common and ordinary website tracking technologies, such as analytic and marketing cookies and pixels, violate CIPA when they are deployed without the consent of a website end-user.
However, the legislative purpose of these CIPA provisions was to authorize law enforcement to seek orders for telephone surveillance; they were never intended to address the privacy rights of Internet users. In addition, a few years after CIPA was enacted, the California legislature adopted the California Consumer Privacy Act (CCPA) to specifically regulate the use of website tracking technology, among other areas. But this reasoning has not hindered these types of CIPA actions, which are having a devastating impact on small businesses.
“When a company is served with a complaint or presented with a legal demand alleging CIPA violations, they are often forced between having to defend their interests in court or entering into a settlement agreement with the claimant,” said Mr. Stransky. “For small businesses in particular, the costs and expenses associated with this type of litigation and settlement can have devastating consequences.”
Thompson Hine has been a thought leader on CIPA litigation, and has published several articles on the rapid evolution of this area of law. For example, its February 2024 “Open Letter” addressed to business leaders and privacy counsel provided granular details on CIPA and potential litigation defense options. According to Mr. Stransky, “the purpose of our Open Letter on CIPA was to equip organizations, especially small businesses, with a complimentary resource to better understand the nature and scope of these claims, and their possible defense options. We are very proud of the work we put into our Open Letter and are grateful for the tremendous support we received for it.”
Mr. Stransky and Ms. Sandell recently met with Senator Blakespear to share the firm’s collective knowledge on CIPA litigation and compliance. “We have deep experience assisting organizations, especially small business, who have been on the wrong side of a CIPA complaint,” said Ms. Sandell. “And there is a consensus among all of our clients that they want the California legislature to take action and update CIPA to ensure it better aligns with California’s privacy laws and regulations, in order to prevent the continuation of these lawsuits.”
Senator Blakespear was open to the points raised by Thompson Hine and participated in an informative discussion. She is committed to ensuring that the California justice system is not exploited by plaintiffs to target small businesses with frivolous complaints, and requested further information from the firm to help resolve this issue through a legislative amendment process.