California Judges Split in Google Privacy Cases

, The Litigation Daily

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Julia Love writes for The Recorder, an American Lawyer affiliate.

SAN FRANCISCO — A pair of Silicon Valley judges have dramatically parted ways on how much wiggle room email providers have under federal wiretap laws to gather user information.

In an order issued Tuesday evening, U.S. Magistrate Judge Paul Grewal of the Northern District of California tossed a class action that accused Google of violating users' privacy by harnessing their personal data across various products. Grewal ruled in In re Google Privacy Policy Litigation, 12-1382, that Google's practices fall under an exemption in federal anti-surveillance laws for activities conducted by communications service providers in the "ordinary course of business." Congress crafted that phrase to cover a wide range of activity, he concluded, siding with Google's lawyers at Durie Tangri.

"The amended complaint fails to allege any interception that falls outside the scope of this broad immunity," he wrote in a 30-page order.

That philosophy appears to clash with the thinking of U.S. District Judge Lucy Koh, who refused to let Google off the hook in another pending privacy suit. In September, Koh denied Google's motion to dismiss In re Google Gmail Litigation, 13-2430, a series of coordinated cases claiming the company violates Gmail users' privacy by automatically scanning their messages to target advertisements. Koh wrote that the practice would only qualify for protection under the "ordinary course of business" exception if it helped Google transmit emails.

"The statutory scheme suggests that Congress did not intend to allow electronic communication service providers unlimited leeway to engage in any interception that would benefit their business models, as Google contends," Koh wrote in a 43-page order.

It's not the first time notes of dissonance have rung out in the San Jose courthouse. In January, Grewal entered a permanent injunction against A10 Networks Inc. at the request of competitor Brocade Communications Systems. His order followed Koh's famous decision to deny a sales ban sought by Apple Inc. against Samsung Electronics Co.

As data privacy suits mushroom, Bay Area lawyers are taking note of the judges' split over what activities companies can categorize as routine business practices. Days after Koh let plaintiffs move forward with their claims against Google, Cotchett, Pitre & McCarthy principal Ara Jabagchourian filed a similar suit against Yahoo. Jabagchourian was dismayed by Grewal's broad view of the protections companies can claim as they screen, collect and sell user information. "The ordinary course of business exception that he's citing is one that swallows the rule," Jabagchourian said.

Koh and Grewal's differing takes make it clear that the issue is ripe for the consideration of a higher court, said Eric Goldman, director of the High Tech Law Institute at the Santa Clara University School of Law.

"One possibility is that Judge Grewal and Judge Koh should go take a Starbucks break," he said. "But I think at this point we need the Ninth Circuit to tell us how they view the 'ordinary course of business' exception for email service providers."

Represented by lawyers at Gardy & Notis and Grant & Eisenhofer, plaintiffs pounced on Google after the company ditched its privacy policies for separate services in favor of one over-arching policy. The new umbrella policy notifies users that Google may pool personal information harvested from different services, according to the ruling. But plaintiffs argued that the new practice violated the old policy, which allowed users to isolate their personal information.

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