developer Carrier IQ and a group of mobile phone manufacturers are seeking to pause proceedings in a privacy lawsuit while they appeal a trial judge's refusal to send the case to arbitration.
Carrier IQ and the manufacturers argue that they're likely to prevail on appeal and will “suffer irreparable harm,” unless the case is stayed. They argue that an appellate decision to
send the case to arbitration would be a “hollow victory,” if they must first proceed with litigation in the trial court.
“Public policy supports a stay because it would
conserve judicial resources and avoid the possibility of conflicting rulings,” the companies argue in papers filed this week with U.S. District Court Judge Edward Chen in the Northern District
The consumers oppose putting the case on hold, arguing that they will suffer “significant harm” if there's a delay. “Their right to privacy, in addition to
monetary compensation, would be impaired by further delay,” they argue in papers filed last week. “The class members’ text messages and personal data have been transmitted to third
parties, such as Google, without their knowledge or consent, and the interception and transmission of such data may be ongoing.”
The litigation stems from allegations that Carrier
IQ's software -- which was installed on millions of mobile devices -- could log users' keystrokes. The software's capabilities came to light in November of 2011, when a researcher posted a video clip
that appears to show the company logging keystrokes. Carrier IQ acknowledged in a written report that its software sometimes logs the contents of messages, but said the data isn't readable. The
company also said that its software was intended to help mobile carriers to discover the source of network problems, like dropped calls.
The news sparked litigation against Carrier IQ and
six device manufacturers, including HTC, Samsung and LG Electronics. Carrier IQ and the manufacturers argued that case should go to arbitration on the ground that the software was installed at the
request of three wireless carriers -- all of whom required consumers to agree to take disputes to an arbitrator.
Chen rejected that argument in March, ruling that the arbitration agreements
were between the consumers and carriers -- not between consumers and either Carrier IQ or manufacturers.
News about the software also spurred a Federal Trade Commission action against
manufacturer HTC, which allegedly shipped smartphones with Carrier IQ's diagnostic software. The FTC accused the manufacturer of failing to disable a code used in testing. “Because of that
mistake, all of the sensitive user data logged by Carrier IQ was also written to the device’s system log, which was accessible to any third-party app with permission to read it,” the FTC
said in a blog post.
HTC also allegedly installed Carrier IQ in such a way that many third-party apps could access users' keystrokes and gain access to the phone numbers users' called,
browsing histories and other data.