What's Happening?
Orrick, Herrington & Sutcliffe LLP, a prominent law firm, represented Tripadvisor in a privacy-tracking class action lawsuit that was ultimately dismissed. The plaintiff, Anthony D’Antonio, a California resident, accused Tripadvisor of violating the California Invasion
of Privacy Act (CIPA) by installing website tracking tools on his browser without consent, which collected his IP address and other data for third-party sale. The case was initially filed in California state court but was dismissed due to a forum selection clause in Tripadvisor's terms of use, mandating disputes be brought in Massachusetts. D’Antonio refiled in Suffolk Superior Court in Massachusetts, where Judge Christopher K. Barry-Smith ruled in favor of Tripadvisor. The judge found that a Massachusetts choice-of-law provision within the terms of use barred the plaintiff from bringing his case under California law and that D’Antonio had reasonably assented to Tripadvisor's terms of use and privacy statement through a clickwrap agreement.
Why It's Important?
This ruling is significant for companies operating online, particularly those with users across different states, as it reinforces the enforceability of forum selection and choice-of-law clauses in online terms of use. For U.S. businesses, especially those engaged in e-commerce or data collection, the decision highlights the importance of clearly presented and assented-to terms and conditions. It suggests that companies can leverage these clauses to defend against class action lawsuits, particularly those brought under stricter state-specific privacy laws like California's CIPA. The outcome benefits companies by potentially centralizing legal disputes in jurisdictions favorable to their terms, reducing the risk of litigation in multiple states with varying legal standards. Conversely, it could make it more challenging for consumers to pursue claims under the privacy laws of their home states if they have agreed to terms specifying a different jurisdiction's laws.
What's Next?
The decision is expected to influence how companies structure their online terms of use and privacy policies, potentially leading to a greater emphasis on conspicuous clickwrap agreements and robust forum selection and choice-of-law provisions. Legal experts suggest that companies will continue to scrutinize their online contract formation processes to ensure they meet the standards for reasonable notice and assent, as highlighted by Judge Barry-Smith's comments that Tripadvisor 'could have done better' in presenting its terms. This ruling may also encourage more companies to include Massachusetts choice-of-law clauses as a defensive measure against privacy litigation. For consumers, it underscores the need to carefully review terms of service, as these agreements can significantly impact their legal recourse in privacy disputes.
Beyond the Headlines
The case delves into the broader ethical and legal debate surrounding online privacy and consumer consent in the digital age. The enforceability of clickwrap agreements, where users often click 'agree' without thoroughly reading the terms, raises questions about genuine informed consent. While the court found reasonable assent, the discussion among legal professionals indicates a tension between business needs for streamlined user agreements and consumer rights to privacy and legal protection. This ruling contributes to the evolving legal landscape of data privacy, where companies are increasingly navigating a patchwork of state and federal regulations. It also highlights the power dynamics between large corporations and individual users, with contractual terms often dictating the terms of engagement and dispute resolution, potentially limiting avenues for consumer redress.
