724 F.Supp.3d 987
N.D. Cal.2024Background
- Plaintiffs allege that Meta Platforms, via its "Meta Pixel" tracking tool, collected confidential financial information (including tax data) from users of third-party tax preparation sites (H&R Block, TaxAct, TaxSlayer) without proper disclosure or consent.
- The Meta Pixel is a piece of JavaScript installed by website developers that allows Meta to receive information about user actions on those sites, which is purportedly used for ad targeting and creating user profiles.
- Plaintiffs are residents from several states and seek to represent a nationwide class, as well as state subclasses, for claims arising under a variety of state and federal privacy, wiretap, consumer protection, and unjust enrichment statutes.
- Meta moved to dismiss the consolidated putative class action for failure to state a claim and challenged some statutory applicability based on their Terms of Service, among other legal arguments.
- The judge ruled on each claim's sufficiency at the pleading stage, granting some parts of the motion to dismiss (with leave to amend) and denying others, generally allowing several claims related to wiretap statutes and privacy invasions to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Consent and intent under privacy/wiretap statutes | No actual consent; insufficient disclosure; Meta intended/motivated by ad targeting | Policies disclosed data collection; users/sites consented by contract; Meta prohibits sharing sensitive info | Dismissal denied—consent and intent are factual issues for discovery |
| Applicability of state statutes to non-residents | Non-residents can bring claims under CA law; state statutes apply to their subclasses | Choice-of-law in TOS limits to CA law; statutes don't apply out-of-state | Not resolved at this stage; factual question; claims may proceed |
| Causation/reliance in consumer fraud/deceptive practice claims | Omission/misrepresentation about data practices is actionable; damages from lost data value | No evidence that plaintiffs actually saw or relied on disclosures; no proximate cause | Dismissed with leave to amend—must allege actual reception/causation |
| Negligence and economic loss rule | Breach of duty to safeguard data; suffered privacy and economic injury | Only economic loss alleged; no duty; economic loss rule bars non-physical damages | Sufficient allegations to proceed; economic loss rule does not bar claims here |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (standard for facial plausibility of pleadings)
- Rowe v. Educ. Credit Mgmt. Corp., 559 F.3d 1028 (courts must accept factual allegations as true at 12(b)(6) stage)
- Lee v. City of L.A., 250 F.3d 668 (judicial notice limited to existence/contents, not truth, of other court's opinions)
- Cabral v. Ralphs Grocery Co., 51 Cal. 4th 764 (California law of negligence presumes a general duty of care)
- Kwikset Corp. v. Super. Ct., 51 Cal. 4th 310 (standing under California UCL for economic injury from unfair competition)