A recent decision from the Northern District of California on a motion to dismiss examined consent and other key privacy issues.  The putative class action claimed that payment processing company Stripe Inc. collected and used personal information from visitors to merchant partners’ websites in violation of various privacy laws, including the California Invasion of Privacy Act, Florida Security of Communications Act, and Washington’s wiretap law.

Stripe moved to dismiss based on plaintiffs’ consent to the challenged collection and uses, among other grounds.  On July 28, 2021, Judge Yvonne Gonzalez Rogers partially granted and partially denied Stripe’s motion.

The court first found that the privacy policy at issue constituted an enforceable “sign-in wrap” agreement because the merchant’s page displayed a “conspicuous and obvious” hyperlink and required users to agree to the policy when placing orders.  That policy disclosed that “partners” like Stripe “may” collect and use plaintiffs’ personal information, so the court concluded that plaintiffs had consented to Stripe’s data collection and dismissed their wiretap claims.  The decision is important in acknowledging that a third-party vendor (here, Stripe) can rely upon a commercial customer’s disclosure to its users to establish consent to the third party’s activities.

The court declined, however, to find at the pleading stage that plaintiffs also consented to Stripe’s alleged dissemination of their personal information to other third parties, such as Stripe’s own merchants and other customers.  On that basis, the court allowed plaintiffs’ privacy claims to proceed under the California constitution, common law, and the “unfair” prong of California’s Unfair Competition Law.

Photo of Kathryn Cahoy Kathryn Cahoy

Kate Cahoy co-chairs the firm’s Class Actions Litigation Practice Group and serves on the leadership committee for the firm’s Technology Industry Group. She defends clients in complex, high-stakes class action disputes and has achieved significant victories across various industries, including technology, entertainment, consumer…

Kate Cahoy co-chairs the firm’s Class Actions Litigation Practice Group and serves on the leadership committee for the firm’s Technology Industry Group. She defends clients in complex, high-stakes class action disputes and has achieved significant victories across various industries, including technology, entertainment, consumer products, and financial services. Kate has also played a key role in developing the firm’s mass arbitration defense practice. She regularly advises companies on the risks associated with mass arbitration and has a proven track record of successfully defending clients against these challenges.

Leveraging her success in class action litigation and arbitration, Kate helps clients develop strategic and innovative solutions to their most challenging legal issues. She has extensive experience litigating cases brought under California’s Section 17200 and other consumer protection, competition, and privacy laws, including the Sherman Act, California Consumer Privacy Act (CCPA), California Invasion of Privacy Act (CIPA), Wiretap Act, Stored Communications Act, Children’s Online Privacy Protection Act (COPPA), Video Privacy Protection Act (VPPA), along with common law and constitutional rights of privacy, among others.

Recent Successes:

Represented Meta (formerly Facebook) in a putative nationwide advertiser class action alleging violations under the California Unfair Competition Law (UCL) related to charges from allegedly “fake” accounts. Successfully narrowed claims at the pleadings stage, defeated class certification, opposed a Rule 23(f) petition, won summary judgment, and defended the victory on appeal to the Ninth Circuit. The Daily Journal selected Covington’s defense of Meta as one of its 2021 Top Verdicts, and Law.com recognized Kate as a Litigator of the Week Shoutout.
Defeated a landmark class action lawsuit against Microsoft and OpenAI contending that the defendants scraped data from the internet for training generative AI services and incorporated data from users’ prompts, allegedly in violation of CIPA, the Computer Fraud and Abuse Act (CFAA), and other privacy and consumer protection laws.

Kate regularly contributes to the firm’s blog, Inside Class Actions, and was recently featured in a Litigation Daily interview titled “Where Privacy Laws and Litigation Trends Collide.” In recognition of her achievements in privacy and antitrust class action litigation, the Daily Journal named her as one of their Top Antitrust Lawyers (2024), Top Cyber Lawyers (2022), and Top Women Lawyers in California (2023). Additionally, she received the Women of Influence award from the Silicon Valley Business Journal and was recognized by Daily Journal as a Top Attorney Under 40.

Photo of Kanu Song Kanu Song

Kanu Song is a litigator who represents clients in the technology and life sciences industries in complex, high-stakes matters, including data privacy class actions, trade secret litigation, copyright and trademark disputes, and actions brought under unfair competition and consumer protection laws. She has…

Kanu Song is a litigator who represents clients in the technology and life sciences industries in complex, high-stakes matters, including data privacy class actions, trade secret litigation, copyright and trademark disputes, and actions brought under unfair competition and consumer protection laws. She has substantive experience in all stages of litigation, including arbitrations and appeals, with a strong track record of success on dispositive motions.

Kanu also maintains an active pro bono practice focused on serving women and children, and assisting individuals and small businesses with intellectual property disputes.