Navigating the Evolving Landscape of US Privacy Litigation in April 2025

An Opinion on Recent Developments in U.S. Privacy Litigation

The legal landscape regarding privacy litigation is constantly changing, and recent court decisions have further highlighted the tricky parts and tangled issues inherent in this evolving field. In this editorial, we take a closer look at several significant cases that have set new precedents, including a groundbreaking personal jurisdiction decision involving Shopify, limits on pen registry claims in California, mixed outcomes in wiretapping claims revolving around consent and privacy policies, an Arizona ruling on “spy pixel” allegations, and an expanded understanding of what constitutes “content” for wiretapping purposes. We aim to offer a balanced perspective on these decisions, outlining both the strengths and the potential challenges they present.

Shopify and the California Jurisdiction Question

The recent Ninth Circuit decision that held Shopify could be sued in California marks a turning point in how courts assess personal jurisdiction in online transactions. Traditionally, determining where a website can be subject to litigation has been a nerve-racking process, filled with subtle parts and fine shades that phrase liability based on both the defendant’s conduct and the plaintiff’s location.

Express Aiming and Its Key Role

The core issue in the Shopify case centered around the “Calder effects test.” This test requires that a defendant: (1) commit an intentional act, (2) do so with an eye toward targeting the forum state, and (3) cause harm that the defendant knows will affect that state. While earlier court opinions had failed to pin down whether Shopify had explicitly targeted California users, the latest Ninth Circuit decision reverses that stance.

The court reasoned that even though Shopify did not physically move into California, its business model—which included both payment processing and harvesting valuable personal data for commercial gain—drew a parallel to a scenario where a defendant might break into a physical home. In essence, the court suggested that if a company were to commit such an act in a person’s home, there would be no debate about targeting that specific location; the fact that this occurred electronically should not create an excuse.

Revising the Standard of “Express Aiming”

The decision fundamentally redefines what it means for an online platform to “expressly aim” its wrongful conduct at a particular state. The court’s revised standard posits that if a platform’s contacts with users are of its own choice—not accidental or random—the platform must be prepared to face litigation in any state where those contacts lead to harm. This perspective effectively dismisses the argument that differential treatment—where a company targets only users from specific states—is necessary to establish jurisdiction.

In a detailed analysis, the court also addressed past decisions, including AMA Multimedia LLC v. Wanat and Mavrix Photo, noting that previous panels had relied on the notion that targeting must be evident through different treatment. Rejecting that view, the majority opinion emphasized that establishing liability does not hinge on some form of differential conduct, but rather on the intentional gathering and use of personal data for commercial gain, regardless of where the users reside.

Implications for Online Platforms

This ruling has far-reaching implications for online businesses and will likely be a key reference in future cases where defendants seek to avoid California’s jurisdiction. For in-house counsel and corporate legal teams, the decision is a wake-up call: if your operations inadvertently collect data from California residents, you may now face legal challenges on that front. The decision underscores the importance of carefully considering website practices and privacy policies to avoid unintended liability.

Below is a summary of key points regarding the Shopify decision:

Intentional acts and commercial exploitation of user data play a central role.
The court’s revised standard expands what qualifies as “express targeting” a forum state.
Traditional arguments regarding the absence of differential targeting are no longer persuasive.
This decision may influence similar cases and reshape how personal jurisdiction is assessed in online disputes.

Limits on Pen Registry Claims in California: The Case of TikTok Software

In parallel to the Shopify decision, another set of opinions emerging from California has made it clear that not every software feature qualifies as a “pen registry” or a “tap and trace device.” Two separate rulings involving TikTok software have drawn a firm line on what constitutes illegal tracking and data collection under California law.

Understanding California’s “Pen Registry” Law

California’s pen registry law was designed with the understanding that certain technologies—specifically those attached to telephones—could capture dialing, addressing, or signaling information without breaching the contents of a communication. However, when it comes to software such as TikTok’s analytics tools, these courts have found that the devices in question do not fall within the scope of the statute.

For example, one California Superior Court reviewed claims that the TikTok software, which collects both non-content identifiers and content images, violated Section 638.51. The court ultimately determined that, while the section might apply to certain types of hardware, it is not applicable when a software tool is used to collect data that falls outside the narrowly defined scope of a “tap and trace device.”

Consent and the Role of Privacy Compliance Testing

Another case in the Central District of California took a slightly different tack. Here, a plaintiff—a privacy compliance tester—argued that the software violated her rights under the pen registry law. The court, however, found that by voluntarily engaging with the website and purposefully testing its privacy compliance, the tester had effectively consented to the disclosed data collection practices.

The rationale was driven by the terms set in the privacy policy and terms of service. The court noted that if a tester willingly enters a website with the intention to verify its compliance, then any data collection that occurs as part of that process does not represent a breach. This conclusion reinforces the concept that consent is a crucial factor in privacy litigation.

Comparative Analysis: Pen Registry Claims Versus Wiretapping

It is useful to contrast these pen registry claims with other privacy issues, such as wiretapping. In both contexts, courts must grapple with what users reasonably expect regarding the monitoring of their communications and online behavior. While the boundaries for wiretapping claims are steadily expanding to include various types of digital data, pen registry claims remain more narrowly defined by statutory language.

To help clarify these differences, consider the following table that juxtaposes the two areas:

Aspect	Pen Registry Claims	Wiretapping Claims
Statutory Definition	Limited to certain telephone devices and technology capturing communication identifiers	Originally focused on telephone conversations; now expanding to digital data such as URLs and user interactions
Key Consideration	Does the technology fit within the narrow definition?	Is the intercepted data considered “content” or just metadata?
Consent Factor	Consent may be argued if the user knowingly engages with the device or service	Consent is critical, as seen in recent decisions favoring dismissal when users accepted privacy policies
Recent Court Trends	Claims based on TikTok software have been limited by a strict interpretation	Decisions now revolve around the boundaries of what constitutes protected “content”

Wiretapping Claims: Consent and the Privacy Policy Debate

Wiretapping claims have been a persistent source of controversy, particularly when examining whether a user’s consent—often given implicitly via a privacy policy or website terms of use—can bar claims of unlawful interception. Recent decisions from two California federal courts illustrate how consent can squash litigation, while another court creates a factual dispute regarding the sufficiency of a privacy policy’s disclosures.

Dismissals Based on Consensual Activity

Two different California federal courts, one in the Northern District and another in the Central District, have dismissed wiretapping claims on the grounds of consent. In one instance, the court found that consent was unequivocally established through several user interactions: clicking the cookies banner, creating an account, and making purchases on a website that clearly displayed its terms of use and privacy policy. The court concluded that once a user has engaged with such features, there is no reasonable expectation of privacy that would justify a wiretapping claim.

In another instance, a different court allowed a plaintiff to amend her complaint. Although the plaintiff argued that the privacy policy’s language about collecting and sharing identifiers did not explicitly mention that certain non-content information would be used for marketing purposes, the court maintained that her prior consent—as evidenced by her actions on the website—precluded her from challenging the practice.

Privacy Policy: Factual Dispute or Clear Consent?

In a contrasting decision, a Northern District of California court recognized a genuine factual dispute surrounding the privacy policy’s disclosures. Here, even though all parties agreed that the user had accepted the privacy policy, the court found that there was ambiguity regarding the scope of the data collection processes—in particular, whether the policy sufficiently informed users that the information gathered could be considered “content” in the legal sense. This decision thus deferred final resolution on the issue, leaving open an important question for future litigation.

This divergence in court opinions highlights the challenges of steering through privacy litigation when subtle details in privacy policies can yield significantly different outcomes. The essential takeaway is that while consent generally offers strong protection against wiretapping claims, the devil is in the hidden complexities of how policies are drafted and what they reveal about data practices.

Arizona’s Take on the “Spy Pixel” Theory

Beyond California, advance in privacy litigation has reached other parts of the country. A recent decision by an Arizona District Court regarding the use of “spy pixels” in marketing emails offers a fresh perspective on another contentious issue. The theory behind spy pixels is that companies covertly attach tracking codes to emails in order to capture sensitive data about when and how recipients engage with the message.

Understanding TUCSRA and Its Application

Arizona’s Telephone, Utility, and Communications Service Records Act (TUCSRA) has often been invoked to address allegations of unauthorized data collection. However, in a decision dated April 16, 2025, a District Court in Arizona determined that TUCSRA was not intended to apply to the kind of electronic tracking performed by the defendant. The act was crafted to regulate the entities that provide the infrastructure for communication, not the companies that deploy marketing strategies.

The court’s reasoning was straightforward: if a company uses pixels in emails to monitor open rates and clicks, it is not engaging in actions that TUCSRA was designed to police. The defendant, known for its California-inspired surfer fashion, was seen as operating well outside the scope of entities meant to be regulated by TUCSRA. Therefore, the plaintiff’s “spy pixel” theory was rejected, setting a persuasive precedent that may curtail similar claims in the future.

Key Points on the Spy Pixel Decision

This decision captures several important themes that are helpful in examining the broader context of digital privacy enforcement:

The intent behind TUCSRA is to regulate communication infrastructure, not marketing tactics.
Not all forms of digital tracking—or “spy pixels”—fall within the ambit of privacy laws designed for traditional telecommunications.
The ruling suggests that claims based on spy pixel theory may be less compelling unless a statute expressly applies to such online tracking methods.

Expanding the Definition of “Content” in Wiretapping Claims

One area where courts continue to evolve the legal framework is in the definition of “content” for the purposes of wiretapping claims. Traditionally, wiretapping laws focused on capturing verbal communication over telephones. However, digital communications have introduced several twists and turns into what can be regarded as protected communication content.

From Telephones to Digital Trails

A landmark decision in 2014 from the Ninth Circuit indicated that “content” referred narrowly to the intended message conveyed, and not to ancillary data such as message characteristics. This decision has since influenced more than 120 subsequent cases. Now, however, recent decisions are pushing the boundaries of what may be considered content.

For instance, in one recent ruling, a Northern District of California court determined that readable versions of personally identifiable information generated when a user fills out a form ought to be considered content. The court also argued that aggregated data about user behavior—such as button clicks, viewing history, and cart contents—could qualify as content because it reveals personal interests and search patterns. Similarly, a Central District court rejected the notion that selections from pre-defined menu options were too trivial, recognizing instead that any user-generated information might be seen as content if it originates from the user.

Implications for Digital Privacy and Wiretapping

This evolving understanding poses several challenges for both plaintiffs and defendants. On one hand, a broader definition of content may provide additional avenues for consumers to claim privacy violations when sensitive data is intercepted. On the other hand, companies may find it increasingly difficult to argue that users have no reasonable expectation of privacy, as even minor user actions are now being scrutinized.

In essence, courts are wrestling with questions that were once confined to telephone communications. These include:

What exactly qualifies as “content” when data is transmitted electronically?
How can we distinguish between mere metadata and information that reveals a user’s private intentions?
What role does the user’s active engagement with digital platforms play in defining reasonable expectations of privacy?

Reactions from the Legal Community

These rulings have ignited a wide spectrum of opinions among legal professionals. There is a palpable sense that courts are increasingly prepared to broaden the definitions underpinning privacy litigation, even as dissenting voices warn that such expansions could lead to an onslaught of lawsuits against digital platforms. Many practitioners now advise their clients to re-examine their privacy policies and website terms of use carefully.

Points Raised by Legal Experts

Among the most frequently articulated concerns are:

The Challenge of Clear Consent: While user consent remains a powerful defense, the fine points of what constitutes an “informed” or “explicit” consent are riddled with tension. Critics argue that vague privacy policies may not suffice, leading to unforeseen claims.
Balancing Innovation and Regulation: Technology companies emphasize that overly broad interpretations of privacy laws could stifle innovation. They warn that a rigid application of traditional statutes to digital age practices might result in unintended legal consequences.
The Fragmented Legal Landscape: With different courts reaching varying conclusions on what constitutes content or valid consent, companies face an off-putting and inconsistent legal terrain.

These opinions are often supported by case studies and statistical data, which serve to illustrate both the growing number of privacy-related litigations and the geographical diversity of court interpretations. For instance, while California courts are currently at the forefront of these disputes, states such as Arizona have taken a more conservative approach in applying laws like TUCSRA.

A Glimpse Into the Future of Privacy Litigation

The recent decisions collectively signal a future where privacy litigation will remain a contentious arena. As digital communication evolves, so too will the legal interpretations of what constitutes a privacy violation. Courts seem poised to continue expanding the boundaries when it comes to what is considered “content” in wiretapping claims and under what circumstances online consent is deemed sufficient.

Predicting Future Trends

Going forward, we can expect several key trends to emerge:

Expanded Liability for Digital Platforms:
Online platforms may increasingly find themselves liable for privacy violations, even if a user’s interaction with their site was consensual. As demonstrated by the Shopify decision, the emphasis is on the platform’s intentional collection and use of data. Companies will need to be extra careful in how they design interactive features and process personal information.

More Detailed Privacy Policies:
Given the mixed verdicts regarding consent and privacy policy transparency, legal experts may soon advise even greater specificity in privacy disclosures. This could mean breaking down data collection practices in very fine detail to avoid future disputes, a move that might engender more transparency but also add another layer of complexity to legal compliance.

Divergence Between States:
As illustrated by the California and Arizona rulings, state-by-state differences in privacy law enforcement are likely to persist. Multinational and multi-state operations may face a patchwork of legal standards, making it essential for companies to figure a path through each jurisdiction’s unique requirements.

Strategies for Legal Practitioners

For attorneys and in-house counsel, the following strategies are recommended when dealing with data privacy litigation:

Review and Revise Privacy Policies: Regularly update the privacy policy documents to ensure they are clear, unambiguous, and comprehensive. This will help mitigate claims based on consent and clarify the extent of data collection.

Monitor Jurisdictional Changes: Stay on top of local rulings—particularly in states like California and Arizona—to adjust legal strategies in response to new interpretations of existing laws.

Adopt Transparent Data Practices: Emphasize transparency in data collection practices, ensuring that users are fully informed about what data is being collected and how it is being used. Clear, detailed disclosures may help avoid future litigation.

Invest in Legal Training: Provide regular in-house training for teams on the evolving privacy landscape to ensure that all stakeholders—from marketing departments to technical teams—are aware of potential legal pitfalls.

Consumer Expectations and the Reality of Digital Privacy

At the heart of these developments is the ongoing conflict between consumer expectations of privacy and the increasingly complex methods by which online platforms collect and use data. While consumers generally expect their personal information to remain private, they are often unaware of the nitty-gritty details concealed within lengthy privacy agreements.

What Consumers Should Know

There is a growing expectation that digital companies should operate in a transparent manner regarding data collection. However, many of the recent court decisions underscore that the onus falls on the consumer to understand the consent they are providing. The following bullet list summarizes the consumer perspective:

Clear Communication: Companies need to ensure their privacy policies are written in plain language, free from the confusing bits that might mislead consumers.

Cookie Banners and Consent Mechanisms: These interfaces are not mere formalities; they represent a binding agreement regarding data collection. Consumers should pay attention to what is disclosed and what they are consenting to.

Right to Information: Consumers have the right to know how their data is being used—not just for commercial purposes but also how it might impact their privacy in the long term.

In many ways, the evolving legal dispute mirrors the broader debate over digital privacy rights. While courts are required to interpret the law as written, the rapid pace of technological change means that legislation and judicial rulings are continuously trying to catch up with modern practices. This tug-of-war between static legal definitions and dynamic digital innovation is likely to fuel more cases that bring these overlapping issues to light.

Final Thoughts on the Evolving Landscape

In summary, the recent decisions discussed in this editorial capture both the promise and the pitfalls of modern privacy litigation. On one level, they offer much-needed clarity in an area riddled with confusing bits and twisted details. On another, they reveal that even seemingly straightforward areas—such as consent, personal jurisdiction, and the definition of “content”—are full of problems that require ongoing legal adjustment and keen attention to fine points.

Digital platforms would do well to take these rulings as super important signals that the law is evolving. For legal professionals, it is a reminder to continuously dig into emerging case law and adjust strategies accordingly. By doing so, they can better prepare their organizations to handle the off-putting and sometimes intimidating challenges that come with operating in the digital age.

Key Recommendations Moving Forward

Based on the recent developments, here are some key recommendations for companies and legal counsel to consider:

Reevaluate Data Collection Practices: Ensure that the collection and use of personal data are in strict compliance with the latest legal standards. The revised interpretation of “express aiming” highlights the risks of blending commercial data practices with aggressive data harvesting.

Refine Consent Mechanisms: Work through every detail of consent forms and privacy banners to ensure that user consent is informed and clearly documented. This step is crucial in defending against wiretapping claims.

Regular Legal Audits: Conduct periodic reviews of privacy policies and terms of service. Doing so can prevent surprises, particularly when new court precedents begin to shift the legal environment.

Enhance Transparency: Foster a culture of transparency not only with regulators but also with consumers. This means going beyond legal minimums to ensure that user expectations align with actual data practices.

These recommendations serve both as a proactive strategy and as a guide for understanding how the intersecting trends of technological innovation and legal reinterpretation shape the digital landscape. It is clear that while the digital age brings many opportunities, it also demands that companies and legal professionals find a way through a maze of twisted issues and complicated pieces.

Conclusion

The recent rulings in privacy litigation—from the expansive reach of personal jurisdiction in the Shopify case to the evolving definitions of “content” in wiretapping claims—underscore a period of dynamic change in digital law. As courts continue to refine and sometimes contradict each other’s interpretations, the overall landscape remains tense and loaded with issues that influence both corporate behavior and consumer rights.

For those who work in or are affected by this field, the message is clear: staying informed, reviewing policies relentlessly, and ensuring clear, transparent communication with users is not just advisable but essential. In an era marked by continuous legal adjustments and widespread digital reliance, embracing these strategies can help all parties steer through the maze of legal requirements while safeguarding privacy and fostering trust.

It is our hope that future rulings will provide even greater clarity, paving the way for a more balanced and fair handling of privacy issues. In the meantime, as the twists and turns of privacy litigation create new challenges daily, we must all remain engaged, informed, and ready to adapt.

Originally Post From https://www.jdsupra.com/legalnews/u-s-privacy-litigation-update-april-2025-9514785/