Privacy and CP Group of the Year: Cooley (Law360)

By Keith Goldberg

Few technology companies are more closely entwined with the personal information of their users than Facebook Inc., and Cooley LLP earned a spot on Law360's list of Privacy and Consumer Protection Groups of 2011 by helping the social networking giant fend off a string of class actions over its use of users' personal data.

Cooley partner Mike Rhodes co-chairs the firm's privacy practice group and led its representation of Facebook in those class actions. He believes such suits highlight a steady increase in litigation resulting from the clash between business models that rapidly incorporate evolving technologies, such as social networking, and antiquated privacy laws, such as the Electronic Communications Privacy Act, which was passed in 1986.

"There isn't this overarching, broad swath of uniform laws, you're dealing with state-by-state laws, or federal laws written in a bygone era," Rhodes told Law360. "You've got this classic intersection between law and technology, and that's grist for the privacy litigation mill."

Cooley's biggest Facebook victory arguably came on Nov. 22, when a California federal judge tossed a proposed class action arguing Facebook improperly shared with advertisers URLs that contained Facebook user IDs when users clicked on an ad. It was the lead case in series of lawsuits consolidated California federal court and closely watched by social media companies.

U.S. District Judge James Ware sided with Facebook after agreeing the plaintiffs had not met requirements set out under the Wiretap Act, Stored Communications Act and California laws. He also ruled the plaintiffs had not demonstrated sufficient damages to support their breach of contract claim.

Judge Ware, who had dismissed the plaintiffs' original complaint in May, was also persuaded by Cooley's argument that personal information didn't constitute a form of currency, property or payment.

It was the third significant win Cooley had scored for Facebook in consecutive months. On Oct. 27, a California federal judge tossed a putative class action brought by a group of Facebook users who allege they were harmed by the site's use of their names and likenesses on its Friend Finder service.

In dismissing the case, U.S. District Judge Richard Seeborg rejected the users' argument that they were entitled to damages because, despite their noncelebrity status, they still had cognizable economic interests in their names and likenesses, which Facebook was using without their permission to turn a profit by selling advertising.

Judge Seeborg previously tossed the suit with leave to amend in June, finding the class failed to show how the mere disclosure to their Facebook friends that they have used the Friend Finder service causes them any cognizable harm.

On Sept. 22, a California state judge nixed a proposed class action claiming Facebook violated state laws by posting ads showing that users who were minors had "liked" a product without first getting their parents' permission.

Los Angeles Superior Court Judge Debre K. Weintraub determined that the plaintiffs' claims were preempted by the Children's Online Privacy Protection Act, but allowed them to amend the complaint. The plaintiffs then voluntarily dismissed the suit.

"Dealing with child protection — where do you draw the line with families who want to share their info with family, including children," said Cooley partner Susan Lyon, who co-chairs the privacy practice group.

Lyon says there's a disconnect between lawmakers' desire to protect privacy rights and consumers' increased willingness to share their personal information, especially on the Internet.

"I think it's a new way [consumers] view privacy," Lyon told Law360. "I don't think they've given up the concept that they want privacy, I think it's morphed into them wanting to pick and choose what they want to share."

Cooley's privacy wins in 2011 weren't limited to Facebook. The firm also successfully represented Google Inc. in a series of class actions in Arkansas state court. The first class action alleged that applications running on Google's Android operating system improperly transmitted private consumer data without their consent. The plaintiffs voluntarily dismissed their suit in June, Rhodes said.

The second alleged that Google unit YouTube LLC and others improperly used cookies for viewing on-line videos in Adobe Flash format. After a judge granted Cooley's dismissal motion, Rhodes said the plaintiffs voluntarily dropped YouTube from the suit in July.

"The way [Web] browser cookies work, it stores information about you on the computer as you go from website to website," Rhodes said. "A Flash cookie is another piece of code that sits on your computer when you access a Flash video. The Flash cookie would look for the browser cookie to operate and would sync with the browser cookie."

"The claim was written to say that the use of the Flash cookie violated people's privacy rights," Rhodes continued. "But the Flash cookie is just a codec, that would store a sound setting."

Cooley also scored a win for five mobile-technology companies that were ensnared in a multidistrict litigation accusing Apple Inc. and several others of violating consumer privacy laws by offering smartphone apps that allegedly track user data.

In dismissing the suit on Sept. 20, U.S. District Judge Lucy H. Koh found that the plaintiffs had failed to allege concrete, particularized injuries to themselves as opposed to consumers in general, or to assert an injury in fact.

There are about 40 Cooley lawyers who advise clients on privacy and data issues, and they're spread throughout the firm's U.S. offices. Lyon, who's based in Seattle, says expanding the practice group's scope is one of the firm's top initiatives.

The firm recently became a corporate member of the International Association of Privacy Professionals, a global privacy and security group. Lyon says the firm will also launch a privacy and data security blog, one of several tools it's developing to help its clients navigate through the murky waters of privacy law.

"We'll be doing much more educational outreach to clients and potential clients," Lyon said. "They want advice that would help them avoid things like class actions."

Cooley partner Matt Brown, who was co-counsel in the Facebook class actions, suspects that privacy laws will always struggle to keep up with rapidly evolving technologies.

"We're seeing an expanding of district court case law in the area, but by nature, it will take longer for the appellate case law to develop," Brown told Law360. "I think it's important for clients to understand that in certain circumstances, they may be operating in a gray area, legally, and it's often a good idea for them to reach out to outside counsel, and get counsel early — before they even get to markets."

Methodology: In November, Law360 solicited submissions from over 500 law firms for its practice group of the year series. The more than 550 submissions received were reviewed by a committee of Law360 editors. Winners were selected based on the significance of the litigation wins or deals worked on; the size and complexity of the litigation wins or deals worked on; and the number of significant, large or complex deals the firms worked on or lawsuits the firm had wins in. Only accomplishments from Dec. 1, 2010, to Dec. 1, 2011, were considered.

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