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Lawsuits Allege Secret Tracking of Online Activities Violates Wiretap Act

Published: February 7, 2018

Author: Richard Newman

The use of consumer data for legitimate, reasonably anticipated purposes has been an ongoing theme of late, from consumer, advertiser, and government plaintiff perspectives. Two recently filed lawsuits allege that mattress company Casper Sleep, Inc. and lender Quicken Loans illegally tracked consumers online activities. The substance – and the results – of the lawsuits are worth monitoring for advertisers in all industries.

Mr. Brady Cohen purportedly visited the website of Casper Sleep, a leading manufacturer and retailer of mattresses in the U.S., on multiple occasions to shop for a new mattress. According to Mr. Cohen’s New York federal court class action complaint against Casper and NaviStone, Inc., an online marketing company and data broker that deals in U.S. consumer data, Casper utilized NaviStone’s “secretly embedded software” that functions as an “obfuscated” wiretap to “immediately, automatically, and secretly” collect keystrokes, mouse clicks, and other electronic communications in real time for purposes of gathering personally identifiable information to de-anonymize visitors.
Mr. Cohen alleges that matching previously unidentifiable website visitors to obtain their names and home addresses, along with detailed data concerning their browsing habits, is conducted without consent and regardless of whether visitors ultimately make a purchase. As alleged in the complaint, “the intercepted communications include, among other things, information typed on forms located on casper.com, regardless of whether the user completes the form or clicks ‘Submit.’”
“None of these actions was undertaken in the ordinary course of business.  On the contrary, these actions are contrary to the legitimate expectations of website visitors, and are contrary to established industry norms,” Mr. Cohen alleges.
By doing so, Mr. Cohen alleges the defendants have violated Title I of the Electronic Communications Privacy Act of 1986, also known as the “Wiretap Act,” which prohibits the intentional interception of wire, oral, and electronic communications unless specifically authorized by a court order.
For the alleged interception, disclosure and use of electronic communications, as well as for the alleged manufacture, distribution, possession, and advertising of electronic communication intercepting devices, Mr. Cohen seeks actual damages, statutory damages (the greater of $100 per day for the duration of the violations, or $10,000), punitive damages, and equitable and declaratory relief.
Casper Sleep has denied the claims as coercive in nature, adding that the online marketing practices are industry standard.
Almost immediately thereafter, Mr. Michael Allen filed a virtually identical lawsuit in New Jersey federal court against Quicken Loans, Inc. and NaviStone.
The Casper Sleep complaint can be seen here.
ADVERTISING MATERIAL. These materials are provided for informational purposes only and are not to be considered legal advice, nor do they create a lawyer-client relationship. No person should act or rely on any information in this article without seeking the advice of an attorney. Information on previous case results does not guarantee a similar future result. Hinch Newman LLP | 40 Wall St., 35thFloor, New York, NY 10005 | (212) 756-8777.

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