Earlier this year we wrote to you about an increase in litigation claiming violations of California’s Shine the Light law. Since that time, multiple courts have had the opportunity to interpret the law. This has brought some much-needed clarity to the exact contours of the law, and provided direction on what is required for companies to remain in compliance.
As you will recall, the Shine the Light law, California Civil Code 1798.83, is intended to provide transparency to meet consumers’ demand to know how the businesses they patronize use, share, and disclose personal information. Multiple class actions were filed alleging that certain businesses did not provide consumers with the information necessary to obtain an accounting of how their personal information was used and disclosed.
In order to maintain a lawsuit, however, these initial court decisions have made it clear that a plaintiff must allege more than failure to provide contact information to obtain an accounting of the use and disclosure of personal information. A plaintiff must also properly allege an injury in order to have standing. So far, plaintiffs have taken two different approaches to alleging an injury, one of which suggests that this is not the end of Shine the Light litigation.
First, plaintiffs have advanced numerous theories of economic injury, with no success to date. In Boorstein v. Men’s Journal LLC, 2012 WL 2152815, the court rejected the theory that failure to provide a method for obtaining an accounting diminished the value of plaintiff’s personal information. In Miller v. Hearst Communications, Inc., 12-CV-0733 (C.D. Cal.), the court has rejected this same “diminished-value-of information theory,” and then on an amended complaint, rejected the theory that compliance with the Shine the Light law was part of the benefit of the bargain, and that failure to comply deprived plaintiff of the full value of its subscription.
Second, these plaintiffs have argued that they have standing because of “informational injury.” That is, the plaintiffs were injured because they failed to obtain information that must be publicly disclosed pursuant to a statute. While neither case above found an informational injury in those instances, they did note that information injury may be viable in certain narrow circumstances. In order to have standing, a plaintiff must either show that it in fact requested this information and did not receive it, or provide evidence that it would have requested the information if the company disclosed a method for doing so. In a third case, Baxter v. Rodale, Inc., 12-CV-00585 (C.D. Cal.), the court in fact found that plaintiff did have standing under the informational injury theory because plaintiff had visited the company’s website on numerous occasions and the required disclosures were not there. That case, however, was nonetheless dismissed, as the court found that the company did provide contact information for consumers to opt out of information-sharing and thus was in compliance with the law.
In summary, while plaintiffs have not yet found success in Shine the Light litigation, the courts have found that in limited situations, informational injury may provide a basis for a plaintiff to have standing to maintain a lawsuit. Given that the courts have left the door slightly open in part, we likely have not heard the last of Shine the Light litigation. Further, it should be noted that the same plaintiffs’ lawyers have begun filing similar class actions under other states’ laws. It is critical that you stay up-to-date and ensure compliance with the law.