Lawsuit Over Google's Data Usage to Proceed

     SAN JOSE (CN) - Google users barely managed to survive a third dismissal in their class action over the search giant's commingling of user data across Google products and disclosure of such data to third parties.
     Lead plaintiff Robert Demars and others filed the original complaint after Google updated its privacy policy on March 1, 2012, to permit the commingling of user data across different Google products such as Gmail and YouTube.
     The new policy allowed Google to combine a user's information from one service with the user's information from other services.
     The users claimed that the policy violates their privacy rights by allowing Google to take information from their Gmail accounts to be used in a different context, such as to personalize search engine results or advertisements.
     They also said that Google disclosed their data to application developers and advertisers.
     U.S. Magistrate Judge Paul Grewal twice before dismissed the users' claims against Google, finding that the first complaint lacked standing because the users could not show how they were economically harmed and that the second complaint contained insufficient facts to support the users' claims.
     He warned that any further dismissals would likely be with prejudice.
     The users' latest complaint included the addition of allegations concerning Google's plan, "Emerald Sea," which was unveiled as early as May 2010 with the apparent objective to reinvent Google as a social media advertising company.
     "The plan's execution involves creating cross-platform dossiers of user data that would allow third-parties to better tailor advertisements to specific consumers. Plaintiffs allege that despite this objective, Google left in place the prior policies in order to avoid tipping-off customers. They cast Emerald Sea as evidence of Google's intent to deceive consumers by disregarding existing privacy policies in pursuit of ad revenue," Grewal wrote in his dismissal ruling.
     The new allegations effectively allege the same harm as before. An Android Device Switch Sublass further alleges that its class members had to replace their Android devices in order to avoid Google's invasive policy, costing them money.
     An Android Application Disclosure Subclass claims that Google's disclosures to third parties increased their phones' battery and bandwidth consumption, causing them to incur additional costs, and invaded their statutory and common law privacy rights.
     The users asserted their claims as violations of the California Consumers Legal Remedies Act, Federal Wiretap Act, Stored Electronic Communications Act, California's Unfair Competition Law, in addition to common law theories of breach of contract and intrusion upon seclusion.
     Google urged the court to dismiss the users' case once and for all.
     "Like Rocky rising from Apollo's uppercut in the 14th round, plaintiffs' complaint has sustained much damage but just manages to stand," Grewal stated in a 28-page ruling that dismissed all but two of the users' claims.
     "After running each claim (and subclaim) of each class (and subclass) through the gauntlet of constitutional and procedural hurdles, two claims remain: the App Disclosure Subclass' breach of contract claim, and the fraudulent prong of the App Disclosure Subclass' UCL claim. Plaintiffs may proceed on these two causes of action alone," Grewal wrote.
     Because the users did not amend their claims following the court's dismissal of their Wiretap Act, Stored Communications Act and breach of contract claim on behalf of the entire class, those claims must be dismissed with prejudice.
     The users' Consumers Legal Remedies Act claims fail because they do not claim that any of the members of the Device Switch Subclass read, heard or were otherwise aware of Google's operative privacy policy before creating their account, so they could not have relied on any representation it contained in making their decision to purchase Android phones.
     However, the App Disclosure Subclass can continue with its breach of contract claim alleging that its members entered into a contract with Google when they registered for an Android Market/Google Play account and Google breached the contract's terms by disclosing user data to third parties following every download or purchase of an app. They cite damages in the form of resource consumption.
     As the court already ruled, allegations of resource depletion, including battery power, give rise to standing. Additionally, despite Google's arguments to the contrary, the subclass points to explicit terms in the contracts that Google allegedly breached.
     The subclass' claim under the fraudulent prong of the UCL also carries weight.
     The users "allege that Google left a privacy policy in place which led consumers to believe that access to their data would be limited to certain groups. These allegations fill 10 pages with extensive detail about the plan and its concealment, such that they clear the bar of Rule 9(b). Plaintiffs also successfully plead that they relied on these policies in making the decision to use Google Play and download Android applications. Finally, plaintiffs plead that they have suffered the loss of battery power and other system resources as a result of Google's fraudulent and surreptitious conduct. Once again, whatever the ultimate merits of this claim, the App Disclosure Subclass has stated a claim for relief that may go forward," Grewal wrote.