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Those tracking CIPA litigation are familiar with the recent decision holding in favor of a company whose site had an online chat operated by a vendor. The court in that case held (1) that the company had not violated the California Invasion of Privacy Act (CIPA), and (2) that its chat was not unauthorized "wiretapping." This ruling came as welcome news to companies who offer online chat features, especially those who face—or fear—similar lawsuits.
The case, Gutierrez v. Converse Inc., 2024 WL 3511648 (C.D. Cal. July 12, 2024), followed a similar pattern and set of claims as others have faced. The plaintiff alleged that she used a third-party enabled chat function on Converse's website and that the chat providers stored the chat conversation on third-party servers without her consent. Thus, her attorneys argued, the chat provider aided and abetted "wiretapping" under Section 631(a) of the CIPA.
The court granted the motion for summary judgment on grounds that the chat provider did not engage in wiretapping as a matter of law. Specifically, the court held that Section 631(a) only applies to telephones and did not include smart phones where the plaintiff uses an internet connection to access the chat. Additionally, the statute requires that the chat provider "willfully and without consent" read or attempts to read or learn the contents of a communication. The court held that the plaintiff did not meet this standard because the message was encrypted in transit and password-protected on the chat provider's servers. The court held that the "mere possibility" that the chat provider could read a message was not enough to establish a genuine issue of material fact. There was no CIPA violation, so Converse could not have aided and abetted a non-existent violation.
Putting it into Practice: Although this decision is a promising one for companies who operate online chat features, it is still helpful to provide notice if recording chats. Additional disclosures should be included if the chat functionality is run or hosted by a third party. While there can be other defenses available to businesses facing one of the chatbot suits, these notice steps can help.
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