A federal appeals court won’t reconsider an earlier ruling allowing class action lawsuits accusing Google and several other companies of violating a California state law regulating YouTube advertising aimed at children.
Seven parents, on behalf of their minor children, sued Google and YouTube, along with content creators like Mattel, Dreamworks Animation, Hasbro and Cartoon Network, regarding Google’s alleged surreptitious tracking of online behavior.
The putative class action asserts claims under laws of California, Colorado, Indiana, Massachusetts, New Jersey and Tennessee for invasion of privacy, unjust enrichment, consumer protection violations and unfair business practices. The lawsuit agrees that every allegation also would violate a provision in the federal Children’s Online Privacy Protection Act requiring online services directed at children to provide notice of and obtain “verifiable parental consent” for the collection of personally identifying information used in targeted advertising campaigns.
U.S. District Judge Beth Freeman, from the Northern District of California, repeatedly dismissed the plaintiffs’ complaints, finding COPPA expressly preempted the state law claims. When given the chance to amend the complaint to substitute plaintiffs in the 13-16 age range, the plaintiffs instead challenged the dismissal before the U.S. Ninth Circuit Court of Appeals. That panel filed its initial opinion Dec. 28, 2022.
On July 13, the panel denied a petition for rehearing and filed an amended opinion.
Judge Margaret McKeown wrote the opinion; Judges Michael Hawkins and Gabriel Sanchez concurred.
There are three types of pre-emption, the panel wrote: express, conflict and field. Judge Freeman’s ruling was based on express pre-emption, but Google and the channel owners also argued conflict pre-emption exists. Neither party argued field preemption.
The panel said Ninth Circuit precedent establishes that a state law found to “supplement” or “require the same thing” as a federal law is not an obstacle to a congressional statute and therefore doesn’t present an inconsistency that would prevent a lawsuit.
“Under Google’s reading, COPPA would preempt all state law claims protecting children’s online privacy,” McKeown wrote. “Such an interpretation ignores Congress’ distinction between ‘inconsistent’ and ‘consistent’ state laws and contravenes the command that courts ‘must give effect, if possible, to every clause and word of a statute,’ ” with the latter quote referencing a 2014 U.S. Supreme Court opinion, Loughrin v. United States.
In finding Congress didn’t intend COPPA to be the exclusive enforcement means for the conduct framing each allegation, the panel said “it would be nonsensical to assume Congress intended to simultaneously preclude all state remedies for violations of those laws.”
The panel directly asked the Federal Trade Commission to weigh in on the issue, and in an amicus brief from Mariel Goetz, the agency said the appeals panel correctly concluded neither form of preemption applies. That brief said, “Congress did not intend to wholly foreclose state protection of children’s online privacy, and the panel properly rejected an interpretation of COPPA that would achieve that outcome.”
Turning to conflict preemption, the panel said while that concept usually is distinct from express preemption, Google’s argument on express prevention relied on its position the state laws were inconsistent with federal law, which is the same basis for a conflict argument. As such, the panel also determined conflict preemption is not an issue in this instance.
The panel reversed Judge Freeman’s dismissal of the third amended complaint on preemption grounds and remanded the case so she might “consider in the first instance the alternative arguments for dismissal, to the extent those arguments were properly preserved.”
Representing the families in the matter are attorneys from Silver Golub & Teitell, of Stamford, Connecticut, and the Pritzker Levine firm, of Emeryville, California.
Law firms representing the corporate defendants include Hogan Lovells, of Washington, D.C., Menlo Park, California, and San Francisco; Gibson Dunn & Crutcher, of Los Angeles; ZwillGen Law, of San Francisco and Washington, D.C.; Munger Tolles & Olson, of San Francisco and Los Angeles; Jacobson Russell Saltz Nassim & De La Torre, of Los Angeles; Frankfurt Kurnit Klein & Selz, of Los Angeles; and Venable, of Los Angeles and San Francisco.
In addition to the FTC, the U.S. Chamber of Commerce filed an amicus brief through Tyler Badgley, of the U.S. Chamber Litigation Center, as well as Derek Shaffer, of Quinn Emanual Urquhart & Sullivan, both of Washington, D.C.