Smith v. Google, LLC

Background

This consolidated putative class action concerns alleged collection of tax-related financial information through Google Analytics and other Google tracking tools installed on H&R Block, TaxAct, and TaxSlayer websites. The complaint alleges that the tools collected information about users’ interactions with webpages and sent data to Google in real time. It further alleges that H&R Block transmitted information about tax filers’ filings and that TaxAct and TaxSlayer disclosed adjusted gross income and refund amounts to Google.

The named plaintiffs used the tax-preparation services and allege that the services used Google tracking tools. They seek to represent a nationwide class and subclasses in California, Illinois, Florida, and Texas. The complaint asserts eight claims under state and federal privacy and wiretap laws.

Judicial Notice

Google asked the court to take judicial notice of Google Analytics terms, Google website pages, the tax-preparation companies’ privacy policies, and archived versions of those documents. Judicial notice allows a court to recognize certain facts or public documents without requiring ordinary proof.

The court granted the requests, but limited what the documents established. The court recognized the existence and contents of the publicly available documents, including the versions preserved in the Internet Archive. It did not determine that the tax-preparation companies assented to Google’s terms, that the plaintiffs saw or agreed to the policies, that the companies followed their policies, or that the documents accurately described how Google’s tools operated.

Motion to Dismiss Standard

Google moved under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not plausibly state a claim for relief. At this stage, the court accepted the complaint’s factual allegations as true and drew reasonable inferences in the plaintiffs’ favor. The court stated that factual disputes generally could not be resolved on the pleadings.

Claims and Rulings

Count I — California Invasion of Privacy Act, section 631. The court denied the motion to dismiss. The plaintiffs adequately alleged, at the pleading stage, that Google read or used data collected through its tracking tools. The court rejected Google’s arguments that users consented, that Google was merely a vendor of a recording tool, and that the complaint failed to plead intent or the contents of the communications. The court concluded that the allegations about sensitive tax information were sufficient even though the complaint did not specify exactly what information H&R Block transmitted.

Count II — California Invasion of Privacy Act, section 632. The court denied the motion to dismiss. It rejected Google’s argument that California law presumes online communications are not confidential. The court held that the plaintiffs plausibly alleged that their tax information was confidential and that they reasonably expected it to remain confidential. The court also rejected Google’s consent and intent arguments for the same reasons discussed regarding Count I.

Count III — California Invasion of Privacy Act, section 635. The court denied the motion to dismiss. The plaintiffs alleged that Google Analytics was primarily or exclusively designed for eavesdropping and that its invisible tracking code collected detailed information by default. The court treated Google’s arguments that the tool had legitimate uses and was merely a vendor product as factual responses that could not be resolved at this stage.

Count IV — Federal Wiretap Act. The court denied the motion to dismiss. It rejected Google’s arguments that the plaintiffs failed to allege intent, that Google was merely a vendor, and that the tax-preparation websites’ use of Google Analytics established consent. The court stated that it could not presume that website operators understood exactly what data the software would send to Google or how Google might use it.

Count V — Federal law concerning devices used for unlawful interception. The court denied the motion to dismiss. It rejected Google’s consent and device-design arguments and concluded that the plaintiffs plausibly alleged that Google actively participated in using Google Analytics to collect the data. The court also found the allegations about Google’s knowledge and intent sufficient at the pleading stage.

Count VI — Florida Security of Communications Act. The court denied the motion to dismiss. The opinion states that Google’s arguments were rejected for the reasons discussed above.

Count VII — Illinois eavesdropping statute. The court denied the motion to dismiss. The complaint alleged that the tracking code was invisible and quietly transmitted sensitive financial information. The court concluded that these allegations were sufficient to plead intentional interception in a surreptitious manner. Whether disclosures made the collection non-surreptitious was a factual issue.

Count VIII — Texas wiretap statute. The court denied the motion to dismiss, rejecting Google’s arguments for the same reasons given for the federal wiretap claims.

Disposition

Judge P. Casey Pitts granted Google’s requests for judicial notice and denied Google’s motion to dismiss. The opinion also reset the initial case-management conference for June 27, 2024, and required the parties to submit a joint case-management statement by June 13, 2024. The order addressed whether the complaint could proceed past the pleading stage; it did not decide whether Google was ultimately liable.

Classification Note

This is classified as a procedural order because the court ruled on a motion to dismiss under Rule 12(b)(6), which tests whether claims are adequately pleaded rather than deciding the parties’ ultimate rights.