Published by LawTechie - May 2, 2011 - LawTechie

The Central District of California has made a sweeping new ruling that could drastically change the face of privacy litigation. Mediapost reports:

U.S. District Court Judge George Wu in the Central District of California ruled on Thursday that the seven Web users who are suing [Specific Media] for computer fraud didn’t adequately allege¬† they suffered any economic losses as a result of the alleged [flash cookie] tracking.

The federal computer fraud statute allows consumers to file suit if they have suffered at least $5,000 in damages. The consumers had argued that information about themselves is valuable, and pointed to new sites like and that offer ways for users to receive compensation for their data.

The Judge wasn’t convinced that plaintiffs had sufficiently alleged that their personal information could be sold for more than $5,000 and, accordingly, dismissed the suit. The complaint was dismissed without prejudice, so plaintiffs could amend and refile which means we have yet to see if plaintiffs could never allege sufficient damages on this type of privacy breach.

Nevertheless, it is tough to imagine a situation where plaintiff’s could allege sufficient damages on breach of “anonymous” data (e.g., locations, sites visited, etc…) — we will wait and see. Coupled with last week’s Supreme Court ruling that websites could stifle potential class-action suits via a TOS arbitration agreement, this week’s ruling could severely limit relief on privacy violations via the web.

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.


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