HTC, AccuWeather Settle Smartphone Tracking Suit (Law360)

HTC Corp. and AccuWeather Inc. on Monday reached an undisclosed settlement with a group of plaintiffs who had filed a proposed class action against the companies alleging they developed and distributed a smartphone application that needlessly tracked consumers' locations.

AccuWeather attorney Thomas R. Merrick said he could not disclose the terms of the agreement.

"The case has been resolved by settlement to the satisfaction of all the parties," Merrick said Monday.

A federal judge dismissed the suit, filed in the U.S. District Court for the Western District of Washington, on Monday. The settlement was reached before any decision had been made to certify a class.

Plaintiffs Chad Goodman, Jon Olson and James Worsham had alleged the weather service tracks users' exact geographic location through a smartphone application and uses the information to sell advertising.

HTC America Inc.'s EVO 3D and 4G smartphones are defective because the AccuWeather app transmits unnecessarily precise location data — within feet of a user's whereabouts, allegedly — without any encryption, according to the plaintiffs' complaint.

AccuWeather uses the location data to identify users and create a profile for them based on the activities on their phone, which is then shared with third parties for advertising purposes, the complaint said.

If EVO users had known about the purported defects, they would have bought phones that both were cheaper and less intrusive, according to the complaint. Users' locations could easily be made more secure if HTC used SSL encryption, the complaint says.

AccuWeather's app didn't really need a user's exact location to forecast the weather and should have used the nearest cellphone tower instead, the complaint says.

The suit isn't the only proposed class action HTC is facing.

Earlier this month HTC and Google Inc. escaped a pair of California-consolidated breach of warranty class actions accusing the companies of making promises about the Nexus One phone's high-speed Internet capabilities that the phone could not deliver.

In granting Google and HTC's motion to dismiss the suit, a federal judge said while the plaintiffs' amended complaint had sufficiently shifted focus from flaws in T-Mobile USA Inc.'s 3G network to defects in the phone itself, they still failed to argue a viable claim on which the phone's alleged defects could be pursued.

And in July HTC and T-Mobile USA Inc. and HTC America Inc. asked a California federal judge to dismiss a proposed class action, which alleges the companies lied about the capabilities of their 4G wireless phones and networks, because the plaintiff has not diligently pursued her claims.

The companies said plaintiff Stacy Arellano was ordered by the court more than 14 months ago to proceed with her case in individual arbitration but has not yet done so.

Goodman and Olson are represented by Scott A. Kamber, David A. Stampley and Grace E. Parasmo of KamberLaw LLC, Cliff Cantor of the Law Offices of Clifford A. Cantor PC, and George Pressly of Kyros & Pressly LLP.

HTC is represented by Christopher B. Durbin, Michael G. Rhodes and Matthew D. Brown of Cooley LLP.

AccuWeather is represented by Thomas R. Merrick of Merrick Hofstedt & Lindsey PS.

The case is Goodman et al. v. HTC America Inc. et al., case number 2:11-cv-01793, in the U.S. District Court for the Western District of Washington.

--Additional reporting by Greg Ryan and Brian Mahoney. Editing by Jeremy Barker. 

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Related Contacts
Michael Rhodes Partner, San Francisco
Matthew D. Brown Partner, San Francisco
Christopher B. Durbin Partner, Seattle