California Federal Court Denies Class Certification In Adtech Case Due To Lack Of Article III Standing

Duane Morris Takeaways: On September 21, 2026, in Smith, et al. v. Rack Room Shoes, Inc., No. 24-CV-6709 (N.D. Cal. Sept. 21, 2026), Judge Rita F. Lin of the U.S. District Court for the Northern District of California denied class certification in a case brought by consumers against an online shoe store company alleging that the company’s use of website advertising technology (“adtech”) violated the California Invasion of Privacy Act (“CIPA”) and Electronic Communications Privacy Act (“ECPA”). The ruling is significant as it shows that before any class can be certified in the hundreds of adtech class actions filed in federal courts across the nation alleging that adtech violates privacy laws, plaintiffs not only bear the burden to establish, by the preponderance of the evidence, that they have suffered an Article III injury, but also cannot meet this burden by showing merely that they visited the defendant’s website at a time when adtech was installed on the website.

Background

This case is one of a legion of class actions that plaintiffs have filed nationwide alleging that third-party technology captured plaintiffs’ information and used it to facilitate targeted advertising. 

This software, often called advertising technologies or “adtech,” is a common feature of millions of consumer products and websites in operation today. In adtech class actions, the key issue is often a claim brought under a the CIPA, the ECPA, or a variety of other statutes providing for statutory damages regardless of whether any actual injury occurred, because plaintiffs often seek millions (and sometimes even billions) of dollars, even from midsize companies, on the theory that hundreds of thousands of consumers or website visitors, times $5,000 per claimant in statutory damages under the CIPA and $10,000 per claimant in statutory damages under the ECPA, for example, equals a huge amount of damages. Plaintiffs have filed the bulk of these types of lawsuits to date against healthcare providers, but they have filed suits against companies that span nearly every industry including retailers, consumer products, universities, and the adtech companies themselves. Several of these cases have resulted in multimillion-dollar settlements, several have been dismissed, and the vast majority remain undecided. 

In Smith, the plaintiffs brought suit against Rack Room Shoes, Inc., an online shoe store company, alleging that in 2024, during their online web visits to purchase shoes from the company, the company had embedded on its website adtech supplied by Meta and other adtech companies that covertly intercepted the plaintiffs’ identities and interactions with the website, including the items the plaintiffs viewed, added to the their cart, and purchased, in alleged violation of the CIPA and the ECPA. 

The company answered the complaint, and the parties engaged in discovery, including the depositions of the plaintiffs and plaintiffs’ subpoenas to the adtech companies. 

Based on this discovery, the record reflected that in 2021 to 2023, the Meta pixel installed on the company’s website captured activities from devices and browsers that were signed into the plaintiffs’ accounts. However, the plaintiffs provided no evidence that these 2021-2023 incidents involved their own web activities as opposed to activities of their family members using the same devices and browsers, that Meta captured any activity from the plaintiffs’ devices and browsers during their own sole 2024 visits, or that the other adtech installed on the company’s website captured any activities at all.

The plaintiffs moved for class certification, arguing that they had standing to bring their claims and that they satisfied Rule 23.

The Court’s Decision

The Court disagreed that the plaintiffs established standing and denied class certification on that basis without addressing or needing to address any of the parties’ arguments under Rule 23.

In their motion for class certification, the plaintiffs proffered two theories of injury in support of their argument that they had standing to bring their claims: one based on the actual interception of their information, and one based on the attempt to intercept their information. (Slip Op. at 5.)

On the plaintiffs’ interception injury theory, the Court found no evidence that the Meta pixel embedded on the company’s website collected any data from the plaintiffs’ 2024 website visits, and no evidence that the activity that was recorded by Meta 2021-2023 was the plaintiffs’ own browsing activity. Further, the Court rejected the plaintiffs’ argument that the company’s general use of the Meta pixel during 2024 was circumstantial evidence of actual tracking. As the Court explained, citing the company’s expert testimony, the ability of adtech to collect and transmit data in a manner that can be linked to the website user “is impacted by many factors, including the browser being used, whether the browser and device are signed in to a social media account, and what cookie blocking features are enabled.” (Id. at 7.) In sum, the Court found that plaintiffs failed to present evidence from which a reasonable jury could find that any adtech installed on the company’s website collected any data attributable to the plaintiffs.

On the plaintiffs’ attempt injury theory, the Court found that the mere presence of active adtech on a company’s website does not bear the requisite close relationship to the type of harm traditionally at issue in intrusion upon seclusion and which type of harm the plaintiffs argued was the historical analog to the type of injury they suffered and thus sufficient to confer Article III standing. On this point, the Court’s opinion turned on its finding that the plaintiffs presented no evidence that the adtech on the company’s website attempted to collect any “embarrassing, invasive, or otherwise private information.” (Id. at 8.) Further the Court found that the plaintiffs had no reasonable expectation of privacy in their web-browsing data due to the company’s privacy policy because the plaintiffs did not read it and the policy also did not create an expectation of privacy from adtech transmissions, and that even if plaintiffs had had a reasonable expectation of privacy, the plaintiffs failed to show that the mere presence of adtech was highly offensive. (Id. at 9.) In short, the Court held that “[t]he mere presence of active tracking software … on a website involving objectively non-sensitive information” does not bear a close relationship to the type of harm traditionally at issue in intrusion upon seclusion and, therefore, was insufficient to confer Article III standing.

Implications For Companies

Smith provides powerful precedent for any company opposing adtech class action claims where plaintiffs lack evidence from which a reasonable jury could find that any adtech installed on the company’s website actually collected any data attributable to the plaintiffs, by showing that any number of issues could have prevented such collection, such as the browser being used, whether the browser and device are signed in to a social media account, and what cookie blocking features are enabled.

Of course, Smith is just one tool in a defendant’s kit for defeating class certification in adtech cases. Another is that even when named plaintiffs can establish that adtech collected data attributable to themselves (unlike in Smith), the same factors identified in Smith — browser type, social media account login status, cookie blocking features — are individualized issues that prevent named plaintiffs from establishing the defendant’s liability to alleged class members under Rule 23, as we blogged about here.