Ruling Against Ad-Tech Company Spurs New Lawsuits Over Tracking

Last month, a federal appellate panel revived claims that ad-tech company NaviStone violated a Pennsylvania wiretap law by allegedly tracking users who visited online retail sites. Since then, at least 10 new lawsuits with similar allegations have been filed against other web companies -- including online pet store, travel service Expedia, and real estate company -- NaviStone's lawyers said in papers filed Friday with the 3rd Circuit Court of Appeals.

In a letter filed Friday with the appellate court, NaviStone's lawyers write that the new cases “illustrate that the panel’s decision effectively renders any company with a website accessible in Pennsylvania” subject to a lawsuit alleging violations of the state's wiretap law.

NaviStone is calling attention to the new cases to bolster its request that the 3rd Circuit reconsider its recent ruling.



Last month's appellate decision against NaviStone grew out of a lawsuit dating to 2019, when Pennsylvania resident Ashley Popa sued NaviStone and retailer 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 said in her complaint that she browsed Harriet Carter's site, which included tracking code from NaviStone that transmitted her IP address and other data.

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

NaviStone 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 did not “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 that determining whether an “interception” occurs hinges on 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  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.

Late last month, NaviStone asked the 3rd Circuit to reconsider, arguing that the ruling marked “an unprecedented change in Pennsylvania law.”

“Website operators nationwide now face a new rule of unknown dimensions,” NaviStone wrote at the time.

The company's tracking technology came to public attention five years ago, 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.

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