On May 12, 2011, a California federal court dismissed substantive claims in a class action privacy lawsuit against Facebook.  The plaintiffs alleged eight causes of action under federal and state law, claiming that Facebook shared users’ personal information with advertisers without the users’ consent.  Although the judge found that the plaintiffs had standing to bring the suit in federal court, he nonetheless dismissed all claims for not alleging facts upon which the court could afford relief.

Following a line of consistent precedent, the court held that for purposes of California’s Unfair Competition Law, personal information does not constitute property.  The court distinguished the Doe 1 v. AOL, LLC case because the consumers in that case paid fees for services to the company that was alleged to have disclosed users’ personal information in violation of the company’s policies. The court concluded that users of free websites cannot state a UCL claim. Similarly, the court rejected the contention that for purposes of California’s Consumer Legal Remedies Act, personal information constitutes a form of payment, such that users’ of social networking sites that provide that information become consumers and therefore have a cause of action under the statute.

The court’s decision highlights the difficulties plaintiffs face in bringing claims against social networking websites for dissemination of personal information and other privacy breaches. For users of free websites, the problem is especially acute if attempting to bring a claim under California’s consumer statutes.

The plaintiffs filed an amended complaint on June 13, 2011.