Cross-posted by Forbes.com at WLF contributor site
Federal courts spent the last two weeks of 2011 cranking out notable rulings in many areas of law and affecting a broad range of American businesses. One particularly interesting decision came from the Northern District of California, a hotbed of online privacy-related class action litigation. Judges there have generally been stiff-arming plaintiffs, as a November 28 Legal Pulse post discusses, but one suit against Facebook has now survived a motion to dismiss.
In Fraley et al. v. Facebook, plaintiffs sued Facebook under California’s Right of Publicity Statute and its Unfair Competition Law alleging that the social networking giant’s “Sponsored Stories” program harmed them. A Sponsored Story appears on a Facebook friend’s page when another friend indicates he or she “likes” something. It includes the friend’s name, a photo, and the “like” assertion along with an advertiser’s logo. The plaintiffs argue that Facebook is using them to endorse products or services without their permission and without compensation, an action which allegedly earns Facebook additional advertising revenue.
Presiding Judge Lucy Koh had rejected class action plaintiffs’ arguments in other recent privacy cases, including the Low case discussed in our November 28 post. She saw the situation in Fraley as being much different, however. Judge Koh distinguished Fraley from those cases, noting that Fraley alleges a violation of a statutory right, which automatically confers standing. She also found that unlike in Low, where the economic harm involved unwittingly helping advertisers advertise to them, in Fraley the harm involved the economic value of a commercial endorsement to someone else.
Judge Koh’s reasoning isn’t entirely convincing on the difference between the two. Continue reading “Judge “Likes” Plaintiffs’ Arguments, Online Privacy Class Action Proceeds”