Ad-Tech Company NaviStone Asks Court To Reconsider Privacy Claim

Ad-tech company NaviStone is urging a federal appellate court to revisit its recent decision to revive a privacy lawsuit over online tracking, arguing that the decision could result in “a significant shift to the national legal landscape.”

The company says the ruling, issued last week by a panel of the 3rd Circuit Court of Appeals, “will reverberate nationally and could lead to significant civil liability and possibly even criminal charges to countless modern commercial, educational, and governmental websites throughout the United States.”

NaviStone on Tuesday asked the panel to reconsider its ruling or, alternatively, for a new hearing in front of all of the 3rd Circuit judges.

The company's request marks the latest development in a dispute dating to 2019, when Pennsylvania resident Ashley Popa sued NaviStone and Harriet Carter over tracking technology that allegedly enables online retailers to arrange to send postal mail to “anonymous” web users after they visit a website.

Popa alleged that she browsed the Harriet Carter site, which included code from NaviStone that allegedly “acted as a secret wiretap” that sends people's IP addresses and other personal information to the company.

Popa contended that the companies violate Pennsylvania's wiretap law, which generally prohibits the interception of electronic communications without the consent of both parties.

The company denies that it identifies individuals or enables retailers to do so.

Last year, U.S. District Court Judge William Stickman IV in the Western District of Pennsylvania, dismissed Popa's complaint, ruling that NaviStone didn't “intercept” any transmissions, given that the information was sent to the company “directly.”

A panel of the 3rd Circuit Court of Appeals reversed that ruling last week and reinstated Popa's claim that NaviStone violated Pennsylvania's wiretap law.

The appellate judges said the key factor in determining whether an “interception” occur is whether the party transmitting information intends to communicate with the recipient -- not whether the information is transmitted directly.

“NaviStone and Harriet Carter cannot avoid liability merely by showing that Popa directly communicated with NaviStone’s servers,” Circuit Judge Thomas Ambro wrote in a 21-page opinion joined by Circuit Judges Michael Chagares and Julio Fuentes. 

The judges left open the possibility that Popa consented to the interception by agreeing to Harriet Carter's privacy policy, and sent the case back to the trial judge to decide that question.

NaviStone argues in its new papers that the ruling marks “an unprecedented change in Pennsylvania law,” adding that “third-party analytics are used by tens of millions of websites daily.”

“Website operators nationwide now face a new rule of unknown dimensions,” NaviStone writes.

NaviStone's tracking technology came to public attention in 2017, when Gizmodo reported that the code can capture email or home addresses that users type into retailers' sites, even if the users never hit the “enter” button. After Gizmodo published the report, NaviStone revised its technology, according to statements in court documents.

The company denies that it identifies individuals or enables retailers to do so.

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