Readers may recall prior pieces in which we discussed a pair of law firms responsible for bringing California Invasion of Privacy Act (“CIPA”) arbitration demands against online businesses. These CIPA arbitration demands typically claim that companies have violated the wiretapping or pen register/trap and trace provisions of CIPA by collecting consumer data from visitors to their websites. Below, we discuss CIPA arbitration demands generally, and what companies should do if they receive such a demand.
Types of CIPA Arbitration Demands
Based in California, Pacific Trial Attorneys (“Pacific Trial”) and Swigart Law Group, APC (“Swigart Law”) regularly serve companies with arbitration demands for alleged CIPA violations. Initially, these CIPA arbitration demands focused on CIPA’s wiretapping provision, which makes it unlawful to intentionally eavesdrop or record confidential communications without the consent of all parties. The crux of these demands generally allege that online companies “eavesdrop” on consumers when they collect data from consumers visiting their websites and share that data with third parties. As our readers are aware, recent favorable decisions have led Pacific Trial and Swigart Law to transition to another provision of CIPA, which prohibits the use of pen registers and trap and trace devices without either consumer consent or a court order. Similar to the wiretapping claims, CIPA arbitration demands broadly claim that the use of third-party tracking software (e.g., Meta Pixel, Google Analytics, TikTok, etc.), without consumer consent, constitutes the use of an illegal pen register and/or a trap and trace device. Fueling the onslaught of CIPA arbitration demands is the lack of any consistency among the rulings of California courts.
Help! I Received a CIPA Arbitration Demand
Until California courts reach a consensus, law firms will continue to serve companies with CIPA arbitration demands, especially because CIPA violations are quite lucrative for the plaintiffs’ bar. If your company receives a CIPA arbitration demand, you should, among other things, immediately review your website’s Terms and Conditions and the relevant arbitration provision thereof to determine what defenses you may have.
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