32 | Weil, Gotshal & Manges LLP LITIGATION TRENDS 2024 | 33 T O C E M P A N T I I P C A P R O W C C O N T A C T I N T A P P P A T C C L S E C businesses. The speed at which AI is growing can make it difficult to stay abreast of the risk areas, but companies can mitigate risks by monitoring changes in laws and policies in this area, bearing in mind that privacy regulations vary by state and by AI use. In particular, companies should keep a close eye on what business practices potentially implicate which laws. This often begins with identifying the many uses of AI within a business. And in addition to establishing clear guidelines for leveraging AI, companies should regularly monitor its use to ensure compliance. Plaintiffs Expand Targets for State Law Wiretapping Cases In 2022, there was an explosion in litigation alleging that the use of common website analytics tools – which track visitors’ interactions with a website, including their mouse movements, keystrokes, and clicks – violated various state wiretapping laws. Since then, plaintiffs’ firms have expanded their targets beyond websites using such “session replay” technology to websites using other kinds of technologies, including customerservice-chat technologies and advertising technologies. Specifically, dozens of recent cases have targeted the use of routine marketing tools like the Meta Pixel and Google Analytics, alleging that they and others intercept communications between visitors and the website in violation of state law. Beyond the traditional courtroom setting, claims under these state wiretapping laws have also recently become popular in mass arbitrations, the goal of which is to use punishing filing fees to leverage early settlements against corporate defendants (see expanded discussion of this trend in the Class Action section). These state wiretapping claims appeal to plaintiffs due to the pervasive nature of such advertising technology throughout the modern internet, as well as the availability of statutory damages. The California Invasion of Privacy Act (“CIPA”), for instance, provides for $5,000 per violation, while both the Florida Security of Communications Act (“FSCA”) and the Pennsylvania Wiretapping and Electronic Surveillance Control Act (“WESCA”) provide for at least $100 per day for each day of violation or $1,000, whichever is higher. Because statutory damages provide parties with a clear method to quantify defendants’ exposure and often obviate the need to prove actual damages, they too are a powerful tool for encouraging early settlement. Another tool is the potentially factintensive nature of some of the strongest defenses against these state wiretapping claims. One defense against certain CIPA claims, for instance, is that no communication between visitors and the website has been intercepted “in transit” as required by the statute. Cal. Pen. Code § 631(a); see also Jacome v. Spirit Airlines, NO: 2021-000947-CA01 (Fla. 11th Cir. Ct. June 17, 2021) (dismissing a FSCA claim where the plaintiff failed to plead facts sufficient to show that “any interception happened contemporaneously with transmission”). While many courts have dismissed CIPA claims on this basis, some federal judges have found even conclusory allegations that a communication was intercepted “in transit” to be sufficient at the pleading stage. See, e.g., Licea v. Old Navy, No. 5:22-cv-01413-SSS-SPx (C.D. Cal. Apr. 19, 2023). Accordingly, some plaintiffs’ firms continue to threaten these claims in the hopes of strong-arming defendants into early settlements, regardless of the true merits of their claims. As plaintiffs expand their targets beyond “session replay” technologies, mitigation efforts become increasingly complicated. Websites often utilize many different third-party service providers, and plaintiffs are becoming increasingly indiscriminate about which they allege violate state wiretapping laws. Accordingly, it has become more and more difficult to take targeted approaches to reducing the risk of these claims. In light of these developments, some website providers are revisiting previously unpopular broad mitigation strategies, such as Complex Commercial Litigation C C L
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