United States: KMT's David Klein And Neil Asnen Discuss LinkedIn Class Action Suit With E-Commerce Law Reports

Last Updated: December 4 2015
Article by David O. Klein and Neil Asnen

Social media giant LinkedIn Corporation ('LinkedIn') recently agreed to settle class action allegations that it violated several federal and state laws by harvesting email addresses from the external contact lists of LinkedIn members, and by sending repeated invitations to join LinkedIn to those addresses. Under the terms of the settlement, LinkedIn will contribute at least $13 million towards consumer relief, and implement changes to its policies and procedures, including more effectively informing users as to how its 'Add Connections' feature functions, as well as more easily allowing users to opt-out of it.

The 'Add Connections' feature is a LinkedIn process through which new and existing members can import contact information from external email accounts and/or invite one or more of those contacts to connect on LinkedIn by sending connection invitations via email, including up to two reminder emails. Notably, these emails had displayed the members' names, photographs, likenesses and/or identities, seemingly endorsing LinkedIn services.

The Plaintiffs, representing a putative class of LinkedIn members, alleged violations of: (1) California's common law right of publicity; (2) California's statutory right of publicity ('§ 3344'); (3) California's Unfair Competition Law ('UCL'), Cal. Bus. & Prof. Code § 17200; (4) theWiretap Act, 18 U.S.C. § 2511; (5) California's Comprehensive Data Access and Fraud Act, Cal. Penal Code § 502 ('§ 502'); and (6) the Stored Communications Act ('SCA'), 18 U.S.C. § 2701. Through two separate motions to dismiss, LinkedIn obtained dismissals of the § 502, § 3334, SCA and Wiretap Act claims, as well as portions of the UCL claims, though the remainder of the allegations survived before ultimately being settled.

Claims related to LinkedIn's email harvesting

Plaintiffs alleged that LinkedIn's practice of harvesting the email addresses of its users' contacts violated the SCA and Wiretap Act. Broadly speaking, the SCA creates a private right of action for intentionally accessing a facility through which an electronic communication is provided without proper authorisation. The Wiretap Act generally prohibits the interception of wire, oral or electronic communications. However, consent and authorisation will preclude liability under these respective statutes.

The United States District Court for the Northern District of California found that due to the relevant disclosures, LinkedIn users would reasonably have understood that LinkedIn was collecting email addresses from the users' respective external email accounts. Specifically, the Court highlighted the fact that when a user enters his/her email address and clicks 'Continue,' s/he receives a notification that states 'LinkedIn.com is asking for some information from your [email account].'At this point, the user can choose 'Allow' or 'No thanks,' and only after pressing 'Allow' do the user's contacts' email addresses get exported to LinkedIn. Importantly, the Court stressed that: (1) this disclosure was not buried within LinkedIn's Terms of Service or Privacy Policy never to be read by a user; and (2) users were presented with an opportunity to opt-out of the harvesting by pressing 'No thanks.' Accordingly, the clarity of the disclosure and the ability to optout persuaded the Court that Plaintiffs had authorised the collection of their contacts' email addresses, which ultimately precluded a finding of liability against LinkedIn.

Rights of publicity claims

Plaintiffs further alleged that they suffered damages to their respective reputations by virtue of the use of their names, images and likenesses in LinkedIn's email marketing to the users' contacts. Plaintiffs sought recovery by alleging violations of California's common law and statutory rights of publicity. In order to establish a claim for violation of California's common law right to publicity, a plaintiff must plead and prove the following elements: (1) defendant's use of plaintiff's identity; (2) appropriation of plaintiff's name or likeness to defendant's advantage, commercial or otherwise; (3) lack of consent; and (4) resulting injury.1 In addition, California's statutory right of publicity requires a plaintiff to allege: (5) a knowing use by defendant; and (6) a direct connection between the alleged use and the commercial purpose.2 Where a § 3344 violation has occurred, a plaintiff may recover an amount equal to the greater of seven-hundred and fifty dollars ($750) or the actual damages suffered due to the unauthorised use.3

The Court dismissed the statutory right of publicity claims after LinkedIn successfully argued that the minimum statutory penalties under § 3344 compensate injuries only to feelings, not to character or reputation, which was the only injury Plaintiffs alleged. The Court found that while the text of § 3344 contains no express requirement that a Plaintiff plead mental harm in order to claim the minimum statutory damages, the legislative history and relevant case law support such an inference. Accordingly, the Court reasoned that dismissal of the statutory claim was warranted, as Plaintiffs sought damages only for commercial loss resulting from alleged reputational harm.

Initial invitation emails

The Court dismissed the initial invitation email-related claims, concluding that a reasonable user would have understood that his/her name would be used in invitations sent to his/her contacts requesting to join the LinkedIn network. Specifically, the Court highlighted the registration process in which the LinkedIn page bears the title, 'Why not invite some people?' and stated, 'Stay in touch with your contacts who aren't on LinkedIn yet. Invite them to connect with you.' The Court found such disclosures to be explicit. As such, the Court concluded that Plaintiffs had consented to the dissemination of the invitation emails, finding sufficient the combination of: (1) the disclosures, which were contained on a page that allowed the users to de-select some or all of the prospective recipients or to 'Skip this step' altogether; and (2) the fact that the Plaintiffs' explicitly chose 'Add to Network.'

Reminder emails

The Court was not convinced that the Plaintiffs had provided similar consent for the sending of the two reminder emails. The Court noted that nothing in the LinkedIn disclosures alerts users to the possibility that their contacts could receive two additional emails after the initial invitation. In fact, the disclosures had affirmatively stated that 'We will not [...] email anyone without your permission.'Accordingly, the Court concluded that a reasonable LinkedIn user could think that s/he authorised LinkedIn to send only the one invitation and that further emails would require further authorisations, which users were never subsequently asked to provide. As such, the Court found that the requisite consent to defeat Plaintiffs' common law right of publicity claim with regard to the reminder emails was not present.

Conclusion

The Court reinforced the notion that obtaining express informed consent from consumers is paramount to avoid liability in the marketing space. LinkedIn could have avoided potential liability here by obtaining authorisation to send subsequent reminder emails on behalf of its users, as it had with respect to the initial invitation emails. However, by neither disclosing to its users that these subsequent emails would be sent, as well as by affirmatively advising the users that such further emails would not be sent without the users' permission, LinkedIn exposed itself to significant liability, ultimately paving the way for this class settlement.

In order to avoid exposure to similar liability, it is critically important that email and internet marketers develop and implement practices and procedures that ensure that users are properly informed that: (1) personal information, including email addresses of contacts, will be collected, stored and potentially utilised; (2) user names, images or  likenesses may be used in endorsements; and/or (3) users will receive email, telephone calls or other marketing-related communications. This should be accomplished through explicit disclosures at the time of sign-up, as well as further elaborated upon in Privacy Policies that are clearly written and accessible online.


1. Abdul-Jabbar v. Gen. Motors Corp., 85 F.2d 407, 414 (9th Cir. 1996).
2. Downing v. Abercrombie & Fitch, 265 F.3d 994. 1001 (9th Cir. 2001).
3. Cal. Civ. Code § 3344(a).

Source: E-Commerce Law Reports, Vol. 15, Issue 6

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