Love v. Ladder Financial, Inc.

Background

Ladder Financial operates a website that provides insurance quotes. Users enter information including names, ZIP codes, prescription-medication use, medical conditions, and illegal-drug use. The plaintiffs alleged that Ladder used FullStory’s digital-experience tools, including Session Replay, to record and replay users’ keystrokes and clicks, including information entered into the quote forms.

The plaintiffs alleged that Ladder aided and abetted FullStory’s direct violations of the California Invasion of Privacy Act. They relied on the second and third clauses of California Penal Code section 631(a). They also asserted an invasion-of-privacy claim.

California Invasion of Privacy Act claims

The court held that the second clause was not adequately alleged. That clause prohibits, without the consent of all parties, reading, attempting to read, or learning the contents or meaning of a communication while it is in transit. The court said the form entries could qualify as the contents or meaning of a communication, but the plaintiffs had not plausibly alleged that FullStory read, attempted to read, or learned those contents.

The court rejected the plaintiffs’ reliance on FullStory’s privacy policy. Although the policy described certain uses and sharing of information, including aggregated and de-identified information, the court found that the plaintiffs’ selective quotations and broad assertions did not plausibly show that FullStory accessed or learned the detailed information entered into Ladder’s forms.

The court also held that the third clause was not adequately alleged. That clause concerns using, attempting to use, or communicating information obtained through the type of conduct addressed by the second clause. Because the plaintiffs had not plausibly alleged that FullStory learned the form contents, they also had not plausibly alleged that FullStory used the personal information in those forms.

Invasion-of-privacy claim

The court dismissed the invasion-of-privacy claim because the alleged conduct was not highly offensive to a reasonable person or an exceptional kind of prying into private affairs. The court acknowledged that some information entered into the forms was private and sensitive, but found that the allegations showed only that FullStory recorded and stored information users voluntarily shared with Ladder for Ladder’s own use.

Disposition

The court granted Ladder’s motion to dismiss. It stated that it was not clear how the plaintiffs could amend their complaint to correct the defects, but dismissed the claims with leave to amend as a precaution. Any amended complaint was due within 21 days of the May 8, 2024 order.