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Judge Denies Motion to Dismiss Class Action Against C2 Education

July 30, 2024/in Consumer Protection /by taulersmith

Tauler Smith LLP recently filed a trap and trace lawsuit against C2 Education for violating the California Invasion of Privacy Act (CIPA), and now a federal court has ruled: a judge denied the motion to dismiss the class action against C2 Education. The complaint alleges that the leading provider of tutoring services nationwide has unlawfully installed “trap and trace” software on its website and allowed the social media app TikTok to collect private data from site visitors. The Defendant filed a motion to dismiss the lawsuit, but the court rejected all of the Defendant’s pre-trial arguments. This represents a major victory for the California consumer protection lawyers at Tauler Smith LLP.

For more information about the lawsuit against C2 Education for invasion of privacy, and to learn whether you might be eligible to join the class action, keep reading.

Tutoring Company C2 Education Sued for Invasion of Privacy

Tauler Smith LLP represents California consumers who have filed a class action complaint against C2 Educational Systems Inc., a company which markets itself as a leading provider of tutoring, test prep, and college admissions counseling services to K-12 students in California and throughout the United States. The company’s online tutoring programs can be accessed at the website www.c2educate.com. This website is at the heart of the lawsuit against C2 Education because of the company’s partnership with the controversial social media platform TikTok. According to the lawsuit, C2 Education allows TikTok to install a “trap and trace device” on the tutoring website landing page and to secretly collect personal data about consumers who visit the site.

What Are “Trap and Trace Devices”?

What are trap and trace devices? California consumer protection law defines these as devices or processes that record or capture “dialing, routing, addressing, or signaling information” from a “wire or electronic communication.” When a company embeds and uses a pen register or trap and trace device without first obtaining a court order, they are directly violating Section 638.51 of the Trap and Trace Law.

Lawsuit: C2 Education Violated California’s Trap and Trace Law

The California Trap and Trace Law is codified in California Penal Code § 638.51, a provision of the California Invasion of Privacy Act (CIPA). The lawsuit against C2 Education alleges that the tutoring company violated the Trap and Trace Law’s prohibition against the use of pen registers and trap & trace devices: TikTok software embedded on the C2 Education website is utilized to unlawfully collect site visitors’ information without either express or implied consent. Beyond that, site visitors are never informed that their data is being collected and shared with the Chinese government for “fingerprinting” and de-anonymization.

“Fingerprinting”

According to the legal complaint, the TikTok de-anonymization software installed on the C2 Education website uses a process known as “fingerprinting.” This allows the site to collect data from visitors, and the data is then matched with TikTok’s massive user database to uncover visitors’ identities. The personal data that TikTok allegedly collects from website visitors includes device and browser information, geographic information, referral tracking, and URL tracking.

“AutoAdvanced Matching”

The class action lawsuit also alleges that C2 Education enables TikTok’s “AutoAdvanced Matching” feature, which allows TikTok to run codes or “scripts” that capture data from online forms filled out by website users. This form data may include things like the user’s name, date of birth, and physical address.

Defendant Files Motion to Dismiss Class Action Complaint

The complaint against C2 Education was filed in the United States District Court for the Central District of California. The Defendant filed the motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), which calls for a case to be dismissed when a plaintiff fails to state a claim upon which relief can be granted.

The Defendant argued that the complaint should be dismissed because:

Section 638.51 does not apply to website software.
The TikTok Software used by C2 Education merely collects information that is necessary for the basic operation and maintenance of the website.
Consent was given for use of the TikTok Software on the C2 Education website.
The TikTok Software only collects the “contents of a communication,” which is allowed under the statute.
Section 638.51 is a criminal statute and does not provide plaintiffs with a private right of action in civil court.

Federal Judge Denies Motion to Dismiss Trap & Trace Lawsuit Against C2 Education

U.S. District Judge R. Gary Klausner heard arguments from both sides and then issued a ruling denying the Defendant’s motion to dismiss. This means that the case against C2 Education could now proceed to trial. In fact, the court strongly rejected all of the Defendant’s arguments, and may have even set precedent for trap & trace class actions.

The court’s responses to the Defendant’s arguments are addressed below:

CIPA Applies to TikTok Software

C2 Education argued that the claim should be dismissed because California Penal Code § 638.52 uses language about “telephone lines,” not websites. Also, the statute indicates that a pen register or trap and trace device must be a physical device attached to a telephone line. Therefore, argued the Defendant, the TikTok Software embedded in the C2 Education website is not covered by the Trap and Trace Law because the software is not a physical device attached to a phone line. The U.S. District Court disagreed.

In rejecting the Defendant’s motion for dismissal, the court highlighted an important distinction between § 638.52 and § 638.50. Although Section 638.52 refers to trap & trace devices as physically attached to telephone lines, Section 638.50 does not include any such requirement: the statute refers broadly to “devices or processes” that capture information electronically. Additionally, other federal courts have interpreted the statute broadly by focusing on the result of the impermissible data collection and concluded that tracking software can constitute a pen register or trap & trace device under the law.

TikTok Software Collects Consumers’ Personal Data

C2 Education also argued that the complaint should be dismissed because the TikTok Software only records data needed for the operation and maintenance of the tutoring website. Since the Trap and Trace Law includes an exception for the use of pen registers and trap & trace devices to “operate and maintain” an electronic communication service, this kind of use would be allowed under the law. The district court rejected this argument.

In its ruling, the U.S. District Court noted that the plaintiff alleged that the TikTok Software is used by C2 Education to record more than just IP addresses. For example, the complaint alleges that the software also records browser and device data, form data, and other personal information about website visitors. The court found that this type of data collection is probably not necessary for the operation and maintenance of the website, so the statutory exception cited by the Defendant would not apply in this case.

Consumers Did Not Consent to Use of TikTok Software

Under § 638.51 of the Trap & Trace Law, companies are allowed to use pen registers and trap and trace devices if the website user has provided consent. C2 Education argued that the invasion of privacy lawsuit should be dismissed because the main “user” of the website was the Defendant, who consented to the use of tracking software. The court understandably rejected this argument because California law would seem to indicate that the only relevant user of a website is the site visitor, not the site operator – and the user in this instance did not consent to having their personal data collected by the TikTok software. As such, ruled the court, the lawsuit against C2 Education should survive summary judgment and possibly go to trial.

C2 Education Collects Personal Information from Consumers

The California Trap and Trace Law applies to websites that use pen registers or trap & trace devices to record “dialing, routing, addressing, or signaling information.” However, since the statute seemingly does not apply when the “contents of a communication” are recorded, the Defendant in this case argued that the data collected by the TikTok Software on the C2 Education website does not fall within the scope of the statute. Once again, the U.S. District Court rejected the Defendant’s argument.

The court found that the lawsuit clearly alleges that the TikTok Software used by C2 Education gathers “device and browser information, geographic information, and browsing history.” Moreover, the lawsuit describes multiple data points that the TikTok Software allegedly captures, which is sufficient to bring a claim under the Trap & Trace Law.

CIPA Allows Consumers to Sue for Digital Privacy Violations

The Trap and Trace Law is a part of the California Invasion of Privacy Act (CIPA), which is codified as Cal. Penal Code § 638.51. The Defendant argued that the civil lawsuit against C2 Education should be dismissed at the summary judgment phase because the CIPA is a criminal statute with criminal penalties and does not allow individual defendants to seek monetary remedies in a civil suit. The court rejected this argument because the CIPA explicitly confers a private right of action and allows individual consumers to bring lawsuits. The court specifically pointed to § 637.2, which has a broad and unambiguous endorsement of private rights of action for all CIPA violations.

U.S. District Court: C2 Education’s Use of TikTok Software May Have Violated California Consumer Privacy Laws

At the conclusion of its order rejecting the Defendant’s motion to dismiss, the U.S. District Court for the Central District of California stated that the allegations in the class action complaint “demonstrate that the Defendant, through use of the TikTok Software, collected site visitors’ information, thereby constituting an invasion of privacy.” Significantly, the plaintiffs may now have the opportunity to argue their case at trial – which represents another successful pre-trial outcome for the Tauler Smith litigation team.

Contact the California Consumer Protection Lawyers at Tauler Smith LLP

If you are a California resident who visited the C2 Education website for any reason, you may have been the victim of an unlawful invasion of privacy. Contact the Los Angeles consumer protection attorneys at Tauler Smith LLP to find out if you are eligible to join a class action lawsuit to receive financial compensation. Call 310-590-3927 or send an email.

C2 Education Trap and Trace Class Action

Trap and Trace Class Action Against C2 Education

July 8, 2024/in Consumer Protection /by taulersmith

One of the country’s largest tutoring companies has been accused of invading the privacy of customers. The California consumer protection attorneys at Tauler Smith LLP recently filed a trap and trace class action against C2 Education for collaborating with TikTok, the popular but controversial social media platform, by installing a trap & trace device on its website as a means to collect data from consumers. According to the lawsuit, C2 Education has installed a code on their website that automatically sends user details to TikTok. Additionally, the TikTok de-anonymization software secretly installed on the tutoring website makes it possible for the educational services provider to identify site users by using electronic impulses generated from site visitors’ devices. All of these alleged acts constitute clear violations of California’s strong digital privacy laws, which is why the tutoring company now faces a consumer class action lawsuit in federal court.

For additional information about the class action filed against C2 Educational Systems Inc., keep reading this blog.

What Is the Legal Definition of a “Trap and Trace Device”?

The California Trap and Trace law is codified in Section 638.51 of the California Invasion of Privacy Act (CIPA), which specifically limits how companies can use trap & trace devices to gather information about website visitors. Section 638.50(c) defines a trap and trace device as “a device or process that captures the incoming electronic or other impulses that identify the originating number or other dialing, routing, addressing, or signaling information reasonably likely to identify the source of a wire or electronic communication, but not the contents of a communication.” As set forth by the statute, a company must first get a court order before installing a trap and trace device on a website.

Violations of § 638.50(c), or any other part of the California Invasion of Privacy Act (CIPA), could result in the offender being civilly liable for monetary damages.

Class Action Lawsuit: C2 Education Collected Personal Data of Website Visitors

C2 Education markets itself as the nation’s preeminent tutoring, test prep, and college admissions counseling provider. C2 Education provides online tutoring programs for K-12 students, including standardized test preparations, school subjects tutoring, college admission counseling, and education boot camps. The tutoring company serves more than 25,000 students across the country every year, with services offered both online at the C2 Education website and at brick-and-mortar locations throughout the United States, including California.

As part of its marketing regime, C2 Education has partnered with social media app TikTok to install sophisticated software on the tutoring website’s landing page. This software allegedly allows C2 Education to gain access to very personal information about consumers who happen to land on the site, including the individual’s location, source, and identity.

Is C2 Education Using TikTok to Unlawfully Share Customer Data?

The TikTok de-anonymization software allegedly used by C2 Education is designed for the sole purpose of identifying and capturing the source of incoming electronic impulses, which makes it possible to identify dialing, routing, addressing, and signaling information generated by users of the C2 Education website. Significantly, this software is deployed without consumers’ knowledge or consent.

According to the recent lawsuit filed in U.S. district court, visitors to the C2 Education website are not informed that the site is capturing their personal identifying information. The class action suit also alleges that site visitors are not informed that the company is collaborating with the Chinese government. That’s because C2 Education did not obtain consumers’ express or implied consent to be subject to data sharing with Chinese-owned TikTok for the purposes of fingerprinting and de-anonymization.

“Fingerprinting” Technology

The TikTok software allegedly used by C2 Education collects consumer data via a process known as “fingerprinting.” This means that the software gathers and stores as much data as it can about an otherwise anonymous visitor to the website and then matches it with data that TikTok has already acquired and accumulated about hundreds of millions of Americans who use the social media app.

“Advanced Matching” Technology

The TikTok software, which uses “AutoAdvanced Matching” technology, scans the C2 Education website by running code or “scripts.” When the site user provides personal information – such as name, date of birth, or mailing address – the details are sent simultaneously to TikTok so that the social media provider can isolate with certainty the individual to be targeted.

Tutoring Company Sued for Violating California’s Trap and Trace Law

The invasive TikTok software allegedly runs on every page of C2 Education’s website, making it impossible for site visitors to avoid having their data collected. This means that every time a user clicks on a page, the site instantly sends the communications to TikTok. The social media company then adds the data to their massive collection of user behavior and, in turn, assists C2 Education with targeted marketing while keeping a trove of information for itself. These disturbing acts prompted Los Angeles consumer protection law firm Tauler Smith LLP to file a class action lawsuit against C2 Education in the United States District Court for the Central District of California.

C2 Education’s alleged installation of the TikTok tracing software is a violation of California’s Trap and Trace Law, which is codified as California Penal Code Section 638.51. This is part of the California Invasion of Privacy Act (CIPA), which imposes civil liability and significant statutory penalties against companies that install trap and trace software without either user permission or a court order.

Statutory Penalties

The class action lawsuit against C2 Education seeks multiple forms of relief for plaintiffs, including the following:

A court order enjoining C2 Education from continuing its alleged unlawful conduct, as well as an order to disgorge any data already collected through use of the TikTok software.
Statutory damages provided by the CIPA, which may include fines of up to $2,500 for each violation of the statute.

C2 Education Case Sets Precedent for Trap & Trace Software Claims in California

The class action complaint against C2 Education may have already set a new legal precedent for trap & trace class actions in California. In a pre-trial ruling on a motion to dismiss the complaint, the U.S. District Court effectively said that software installed on a website can violate California’s Trap and Trace Law. Moreover, since this was a federal court ruling, it is likely that California state courts will also recognize trap & trace claims based on website privacy violations.

Did You Visit the C2 Education Website? Contact a California Consumer Protection Attorney Today

Did you visit the C2 Education website? If you filled out any online forms or provided any personal information to the tutoring company, you may be eligible to join a class action lawsuit to obtain monetary damages. The California consumer fraud attorneys at Tauler Smith LLP are representing plaintiffs who were victims of consumer privacy violations by C2 Education. To learn more, call 310-590-3927 or email us today.

Nationwide Mutual Insurance CIPA Lawsuit

CIPA Lawsuit Against Nationwide Mutual Insurance

August 24, 2023/in Consumer Protection /by taulersmith

A CIPA lawsuit was recently filed against Nationwide Mutual Insurance for illegal wiretapping and invasion of privacy, and now a federal judge in California has ruled that the case can proceed to trial. The U.S. District Court judge issued the ruling in response to a motion to dismiss the wiretapping claims under Section 631 of CIPA, or the California Invasion of Privacy Act. The civil suit alleges that Nationwide Mutual unlawfully allows a third party to eavesdrop on customer conversations on the insurance company’s website. Chat communications are allegedly monitored in real time, and the sensitive personal data from those conversations is allegedly stored and used for financial gain. These actions would constitute clear violations of California consumer privacy laws.

These days, it is common for many different types of businesses to violate the CIPA and other invasion of privacy laws. If you live in California and used the chat feature on a company’s website, you may be eligible to join a class action lawsuit for invasion of privacy. The Los Angeles consumer protection lawyers at Tauler Smith LLP can help you get financial compensation.

Nationwide Mutual Insurance Sued for Invasion of Privacy

The defendant in the recent invasion of privacy case is Nationwide Mutual Insurance Co., which is a corporation that offers insurance, retirement, investing, and other financial services and products to consumers in the United States, including residents of California. Nationwide operates a website: www.nationwide.com. The website has a chat feature, which customers can use to have online conversations with Nationwide. Sometimes, the customers who use the chat feature may share sensitive personal data with the company.

Third-Party Wiretapping of Customer Conversations

Nationwide Mutual Insurance has been accused of using a third-party company, Akamai or Kustomer, to embed code into the Nationwide website, which allows the third-party company to monitor and store transcripts of the conversations that occur through the chat feature. Akamai specializes in harvesting data from consumer conversations, which is believed to be the reason that Nationwide contracted with them in the first place.

Significantly, Nationwide does not inform customers who use the chat feature on the website that monitoring of conversations, storing of transcripts, or data harvesting occurs. Beyond that, Nationwide does not obtain customers’ consent for any of these activities.

Federal Judge Denies Motion to Dismiss Wiretapping Lawsuit Against Nationwide Mutual Insurance

The plaintiff in the consumer data privacy case is a California resident who used a smartphone to visit the Nationwide Mutual Insurance website and to communicate with Nationwide via the company’s website chat program. She filed her original legal complaint in Los Angeles County Superior Court, and the case was later removed to the U.S. District Court for the Central District of California.

Once the case arrived in federal court, Nationwide filed a motion to dismiss the complaint. The U.S. District Court recently held a hearing on the motion to dismiss. Although the Section 632.7 CIPA complaint was dismissed, the court ruled that the Section 631 CIPA complaint could move forward to trial. The court found that the plaintiff had stated a valid claim under § 631 of the CIPA because she plausibly alleged that Nationwide aided third-party Akamai in violating the consumer privacy statute.

What Are California’s Data Privacy Laws?

On top of having extremely strong consumer protection laws, California also has some of the strongest digital privacy laws in the country. The three most prominent statutes are the California Invasion of Privacy Act (CIPA), the California Consumer Privacy Act (CCPA), and the California Privacy Rights Act (CPRA). All of these data protection laws impose civil liability on companies that invade the privacy of customers. The CIPA imposes a requirement on businesses to obtain permission from customers before recording telephone and internet communications, including online chat conversations. The CCPA specifically prohibits businesses from sharing the personal information of customers with third parties, while the CPRA amended the law to increase the penalties for violating consumer privacy.

What Conduct Is Prohibited by the California Invasion of Privacy Act?

Although Section 631 of the California Invasion of Privacy Act (CIPA) is technically a criminal statute with criminal penalties, the Penal Code authorizes civil liability for violations of the law. This means that consumers whose confidentiality was invaded by a company doing business in California can potentially bring a civil lawsuit for monetary damages.

California courts ruling on CIPA claims have interpreted Section 631 to prohibit three types of conduct:

Intentional wiretapping.
Attempting to learn the contents of a communication in transit over a wire.
Attempting to use information obtained as a result of wiretapping or monitoring of communications.

Additional requirements or elements of a CIPA violation include that the intentional wiretapping was done while the communication was in transit and that the communication was being sent from or received at a location within California. The prohibited conduct includes reading the contents of any message, report, or communication without the consent of all parties to that message, report, or communication. If one of the parties did not know that the chat or other type of communication was being monitored and/or wiretapped, then it would not be possible for them to provide consent or authorization. The bottom line is that eavesdropping on a conversation is a clear violation of Section 631 of the CIPA.

“Aiding” a Violation of the CIPA

Section 631 of the California Invasion of Privacy Act (CIPA) also imposes liability on any company that “aids” or assists another in violating the statute. The plaintiff in this case alleges that Nationwide Mutual Insurance “aided, abetted, and even paid third parties to eavesdrop” on her conversations. Moreover, she alleges that these privacy breaches happened not only with her communications, but also with other consumers’ communications on the Nationwide website.

Party Exception to § 631

There is a “party exception” to Section 631 of the CIPA. Courts have found that a party to a conversation cannot be liable for “eavesdropping” on that conversation. But this gets complicated when the conversation involves a third party. For example, if computer code on a website automatically directs a communication to a third party, the party exception won’t shield the third party from civil liability under the CIPA.

U.S. District Court: Nationwide Mutual Insurance May Have Violated California Invasion of Privacy Law

The plaintiff in the Nationwide Mutual Insurance data privacy case alleged that Nationwide violated the California Invasion of Privacy Act (CIPA) pursuant to California Penal Code § 631. Now, the U.S. District Court for the Central District of California has found that the plaintiff plausibly alleged that Akamai read the contents of her messages, which would constitute a violation of Section 631 by Nationwide for “aiding” in the wiretapping offense. Moreover, the court agreed that it is conceivable that Nationwide hired Akamai specifically to intercept messages and use them for Nationwide’s financial benefit. This would constitute “aiding” the illegal wiretapping by Akamai, which would lead to Nationwide itself being liable for violating the CIPA.

One theory put forward in the case is that Nationwide paid Akamai to “embed code” into the website that “enables Akamai to secretly intercept in real time, eavesdrop upon, and store transcripts” of messages sent via the website chat feature. In fact, it has been alleged that Akamai’s business model is to harvest data from transcripts of communications. Significantly, the federal court said that one inference from the plaintiff’s legal claim is that the personal information being harvested goes beyond mere “record information” like the consumer’s name, address, and subscriber number.

Akamai has been accused of intercepting customers’ messages as they are sent and received on the Nationwide website. The court found that these allegations are “plausible” based on Akamai’s public statements about their conduct. Additionally, the court said that the plaintiff clearly alleged that neither Akamai nor Nationwide Mutual Insurance had her consent to harvest personal data from communications on the Nationwide website.

Contact the California Consumer Protection Lawyers at Tauler Smith LLP

Anyone who used the chat feature on a company’s website may have been the victim of illegal wiretapping and privacy violations. If you are a California resident who visited a website, the Tauler Smith LLP legal team can help you. Contact our Los Angeles consumer fraud and false advertising attorneys today. You can call 310-590-3927 or email us.

Tom Girardi Indicted for Embezzlement

February 16, 2023/in Arbitration /by taulersmith

Disgraced California lawyer Tom Girardi was indicted for embezzlement by a federal grand jury. The charges stem from allegations that Girardi engaged in highly unethical and illegal behavior, which included using private judges affiliated with the national arbitration company JAMS to steal millions of dollars from his clients. The U.S. Department of Justice (DOJ) announced the felony charges against Girardi after the grand jury formally indicted him. U.S. Attorney Martin Estrada observed that Girardi “preyed on the very people who trusted and relied upon him the most—his clients—and brought disrepute upon the entire legal profession.”

For more information about Tom Girardi’s indictment and his connection with JAMS, keep reading this blog.

Who Are Tom Girardi and Erika Jayne?

Tom Girardi used to be a well-respected attorney. For many years, the prominent Los Angeles lawyer was known for being a dogged defender of the powerless as they filed class action lawsuits against corporations. As the founder of California law firm Girardi & Keese, he represented plaintiffs in a number of high-profile cases, including Brian Stow’s civil suit against Major League Baseball. Stow was the San Francisco Giants fan who sustained severe injuries during an attack at a Los Angeles Dodgers game. Girardi also represented the plaintiffs in the case against Pacific Gas & Electric Co. dramatized in the Julia Roberts movie Erin Brockovich.

Outside of the courtroom, Girardi became known for being the husband of “Real Housewives of Beverly Hills” star Erika Jayne, who eventually filed for divorce from Girardi. They were married for 21 years. After the split, the couple listed their Pasadena home for sale at a price of $13 million. Jayne has also been accused of illegally using funds meant for Girardi’s clients to cover her own personal expenses, including the purchase of expensive diamond earrings.

Federal Grand Jury in California Indicts Tom Girardi on Wire Fraud Charges

As a plaintiff’s attorney in California, Tom Girardi was responsible for negotiating settlements in mass tort lawsuits. Instead of sending the settlement funds to his clients, however, Girardi allegedly deposited the money into law firm accounts that he later accessed for his own personal use. A federal grand jury in California has now indicted Girardi on charges that he embezzled $15 million from clients over a period of 10 years, resulting in the DOJ bringing formal charges against him for five counts of wire fraud. If Girardi is convicted of wire fraud, he could be sentenced to 20 years in federal prison.

Martin Estrada, the United States Attorney for the Central District of California, issued a statement about the case after the grand jury indictment was announced. Estrada said that Girardi is “accused of engaging in a widespread scheme to steal from clients and lie to them to cover up the fraud.”

FBI Acting Assistant Director in Charge Amir Ehsaei also weighed in on the charges against Girardi. Ehsaei said that the disgraced attorney “created a mirage over several years in order to disguise the fact that he was robbing clients of large sums of money…to fund his lavish lifestyle.” Ehsaei observed that Girardi’s alleged theft came at the expense of clients who were enduring significant hardships of their own as they desperately awaited settlement funds to cover medical bills and other expenses. The clients’ unfamiliarity with the legal process made it possible for Girardi to take advantage of them.

What’s Next in the Criminal Case Against Tom Girardi?

Last year, Tom Girardi was reportedly diagnosed with Alzheimer’s and dementia. At his initial appearance in federal criminal court, United States Magistrate Judge Karen L. Stevenson ordered a mental competency hearing to determine whether Girardi is fit to stand trial on the criminal charges. In the meantime, Girardi’s bond was set at $250,000 and he was released to the custody of his brother Robert Girardi. The next hearing will occur in the U.S. District Court for the Central District of California.

The Girardi Keese law firm is no longer operational, having declared bankruptcy with more than $100 million in total debt. Additionally, Girardi was disbarred as a result of the alleged embezzlement and cannot act as an attorney in California. He has been living at the Belmont Village Senior Living Facility in Burbank, CA.

Erika Jayne and Others Accused of Business Fraud with Tom Girardi

Also criminally charged along with Tom Girardi is Christopher Kamon, who served as the chief financial officer of Girardi’s law firm for more than a decade. According to law enforcement officials, Kamon was the person who handled financial accounting for the firm. Federal prosecutors believe that Kamon committed wire fraud offenses by embezzling client funds for personal expenses.

Additionally, Girardi’s son-in-law David Lira has been accused of fraud in connection with the Girardi & Keese firm. A federal grand jury in Chicago issued an indictment against both Girardi and Lira on charges filed by the U.S. Attorney’s Office. They have been accused of stealing more than $3 million in settlement funds from clients whose families were killed in the 2018 Boeing Lion Air Flight 610 crash in Indonesia.

Erika Jayne Sued for Fraud

A civil suit has also been filed that accuses Tom Girardi’s estranged wife, reality TV star Erika Jayne, of participating in the illegal fraud scheme. The trustee overseeing the bankruptcy of Girardi’s law firm filed the lawsuit against the Real Housewives star after reportedly discovering that Jayne received $25 million in transfers from the law firm to her company, EJ Global LLC. She then allegedly used the money to pay personal expenses, such as her credit card bill, personal assistant salaries, and a fashion and makeup team. Jayne has denied having any knowledge of Girardi’s alleged embezzlement of client funds.

JAMS Mediators Allegedly Helped Tom Girardi Embezzle Money from Clients

According to the Department of Justice, Tom Girardi was able to get away with embezzling client funds by placing onerous requirements on clients to access their settlement money. For example, Girardi often told clients that they needed to get authorizations from JAMS judges in order to receive the funds. The JAMS private judges were overseeing the lawsuit settlements and had control over how and when the funds were distributed. Many of these judges had personal relationships with Girardi, creating an obvious conflict of interest for the alternative dispute resolution company.

Over the years, there have been many other instances of JAMS judges being biased in favor of certain litigants and showing favoritism in their rulings. In fact, several JAMS mediators and arbitrators benefited financially from their involvement in Girardi’s fraud by charging as much as $1,500 per hour for their work on his cases. Beyond that, JAMS reportedly made millions of dollars by providing mediators to oversee Girardi’s settlements.

Contact the Los Angeles Arbitration Attorneys at Tauler Smith LLP

Tauler Smith LLP is a California law firm that helps individuals, small business owners, and others bring class action lawsuits against JAMS. If you were involved in an arbitration or mediation that was administered by JAMS, you may have a legal claim against the company for the way they handled your case. Call 310-590-3927 or email us today to discuss your options with one of our experienced Los Angeles arbitration attorneys.

Goodyear Tires Wiretapping Lawsuit to Proceed

February 8, 2023/in Consumer Protection /by taulersmith

In a highly anticipated ruling, a federal judge in California recently denied Goodyear’s motion to dismiss wiretapping claims based on their use of third-party chat applications hosted on their website. This ruling allows the Goodyear Tires wiretapping lawsuit to proceed. The complaint alleges that when users visit www.goodyear.com/ and use the website chat feature, they share personal data in communications that are unlawfully recorded and transcribed. The plaintiff alleged that Goodyear was allowing a third-party company to intercept, eavesdrop, and store transcripts of the conversations, which is prohibited by the California Invasion of Privacy Act (CIPA).

Do you live in California? Did you use a chat feature on a commercial website? You may be eligible to file a civil suit for invasion of privacy and get financial compensation. Contact us now.

CIPA Claim: Judge Denies Motion to Dismiss Goodyear Wiretapping Lawsuit

The California Central District Court recently issued a ruling in a case involving allegations that Goodyear Tires violated the California Invasion of Privacy Act (CIPA) by wiretapping user chats on the company’s website. The federal court agreed with the plaintiff that the chat feature violated the CIPA, ruling that the plaintiff contends that Goodyear used a third-party service to “intercept in real time” website visitors’ chat conversations. The court added that the allegation that user messages were unlawfully intercepted “is to be taken as true at this stage of the case.”

In her CIPA claim, the plaintiff alleged that visitors to the Goodyear Tires website share “sensitive personal information” when they use the chat conversation. Significantly, the court ruled that the plaintiff pled sufficient facts for a claim under § 631(a) of the CIPA by showing that chat communications were intercepted, and those communications plausibly contained “more than mere record information” such as her name and address.

Wiretapping of Smartphone Communications

The California Central District Court also addressed the fact that the plaintiff accessed the Goodyear Tires website on her smartphone, which is considered a cellular phone with web capabilities. The federal court noted the precedent set by other courts that have applied § 632.7 of the CIPA to internet-based communications, ruling that the plaintiff has sufficiently alleged that users of Goodyear’s chat feature have a reasonable expectation of privacy because they share highly sensitive personal data.

California Has the Strongest Data Privacy Laws in the Country

California’s consumer protection laws include the California Invasion of Privacy Act (CIPA), the California Consumer Privacy Act (CCPA), and the California Privacy Rights Act (CPRA). The CIPA requires companies to get permission before recording any online chats, while the CCPA gives customers the right to prevent companies from sharing their personal data and the CPRA bolsters those digital privacy protections. California’s data privacy laws go even further by placing the onus on companies to make efforts to warn customers if their phone conversations or online chats are being monitored or recorded. In fact, California has some of the strongest such laws in the country. This may be why Goodyear’s terms of use include a forum selection clause requiring claims to be filed in another state: Ohio.

Goodyear Website Terms of Use

The Goodyear Tires website has a “Terms of Use and Privacy Policy” hyperlink at the bottom of the homepage. Site visitors can only see this link by scrolling all the way down on the website. When a user clicks on this link, they are directed to a “Terms, Conditions & Privacy Policy” page that includes another link for Terms of Use. There is no option for the user to click a button acknowledging that they have read the terms of use. Buried deep on this page is a section on “Applicable Laws,” which includes a forum selection clause stating that anyone who uses the Goodyear website automatically consents to litigating any legal disputes in an Ohio courtroom.

Goodyear Forum Selection Clause

In a recent lawsuit filed in California by Los Angeles false advertising attorney Robert Tauler against Goodyear, the tire company attempted to get the case moved to a jurisdiction with less stringent consumer protection laws. Goodyear specifically requested that the venue be changed from the U.S. District Court for the Central District of California to the District Court for the Northern District of Ohio.

Goodyear Tires argued that the plaintiff already agreed to having any legal proceedings handled in Ohio because she used the Goodyear website and automatically consented to the forum selection clause contained in the website’s “Terms of Use.” Robert Tauler responded on behalf of the plaintiff and persuasively argued that it was not possible for the plaintiff to legally consent to the forum selection clause because there was neither actual nor constructive notice of the “Terms of Use.”

The California federal trial court hearing the case ultimately rejected Goodyear’s motion to change venue, which means that the case will be adjudicated in the California Central District Court and decided under California’s very strong invasion of privacy and consumer protection laws. The court gave several reasons for ruling in favor of the consumer-plaintiff and against Goodyear, including contract formation laws which require mutual assent in order for a contract to be binding on both parties.

Are Internet Contracts Legally Enforceable?

The Ninth Circuit Court of Appeals previously identified two categories of internet contracts like the Goodyear terms of use:

Clickwrap Agreements: Site visitors must check a box to confirm that they agree with the website’s terms and conditions of use.
Browsewrap Agreements: Site visitors are able to click on a hyperlink that will take them to a page with the website’s terms and conditions of use.

An important aspect of browsewrap agreements is that it is possible for a site visitor to continue using a website without knowing that the agreement even exists. That’s because browsewrap agreements like the one on the Goodyear Tires website do not require site visitors to take any affirmative action. This creates a legal issue for internet contracts that rely on browsewrap agreements since users might not have an opportunity to assent to the terms of use. Courts have held that such a contract can only be valid if the website user had either actual or constructive notice of the terms and conditions.

Goodyear Browsewrap Agreement

The Goodyear browsewrap agreement does not qualify as a valid, legally binding internet contract because the website terms of use are inconspicuous: the hyperlink can only be seen when the user scrolls to the bottom of the page, and the text does not stand out against the background colors. This does not provide the user with sufficient notice. In Wilson v. Huuuge, Inc., the Ninth Circuit Court of Appeals held that courts should not enforce a similar smartphone app agreement “where the terms are buried at the bottom of the page or tucked away in obscure corners of the website.”

Additionally, there is nothing on the Goodyear Tires website that requires the consumer to click a button, check a box, or take any other action that would unambiguously convey their assent to the terms of use. This also means that site visitors are not provided with constructive notice of the website terms of use which they are supposedly agreeing to abide by.

Class Action Lawsuit Against Goodyear Tires for Violating California’s Wiretapping Law

When you visit a website, you have an expectation that your personal data will be protected and that any conversations you have on the website will remain confidential. The Los Angeles consumer protection attorneys at Tauler Smith LLP help clients file CIPA claims both individually and in class action lawsuits against companies that violate California’s data privacy laws. For example, our attorneys have represented individuals whose data was compromised due to illegal wiretapping and eavesdropping, including chat conversations on company websites.

The CIPA is a criminal statute that subjects companies to criminal penalties, including jail time and substantial fines. Victims can also bring civil lawsuits to recover statutory damages of $5,000 for each illegally recorded conversation. In some cases, it may be possible to recover treble damages, meaning that plaintiffs are eligible for up to three (3) times the total economic damages caused by the invasion of privacy.

Contact the California Consumer Protection Attorneys at Tauler Smith LLP Today

Did you use the chat feature on the Goodyear Tires website? Did you use a chat feature on any other commercial website? If so, your personal data may have been unlawfully recorded without your consent and in violation of both state and federal wiretapping laws. The California consumer protection lawyers at Tauler Smith LLP can help you. Call 310-590-3927 or send an email to learn more and find out if you are eligible to file a CIPA claim.

Firm Wins Summary Judgment in Qui Tam Employment Claim

July 2, 2022/in Successes /by taulersmith

The California employment defense attorneys at Tauler Smith LLP recently served as co-counsel with Greenberg Traurig to represent TruConnect in a retaliation and wrongful termination case. The firm secured a decisive victory in the case by persuading a U.S. District Court to grant a motion for summary judgment. This means that the workplace retaliation & wrongful termination claims were thrown out at the summary judgment stage without the need for oral argument.

The court’s decision can be read in its entirety here. To learn more about Tauler Smith’s victory in the qui tam employment claim, keep reading this blog.

Los Angeles Employment Attorney Robert Tauler Serves as Co-Counsel for TruConnect

TruConnect Communications, Inc. is a wireless and telecommunications company that provides cell phone service and mobile data plans in the United States, including a partnership with the federal government on the Lifeline Program that subsidizes low-income families with free wireless service. Los Angeles employment attorney Robert Tauler of Tauler Smith LLP worked with the lawyers at Greenberg Traurig to represent TruConnect at several different stages of a qui tam employment retaliation action.

The legal action began when two former employees of Sage Telecom, Inc. filed a qui tam whistleblower claim with the federal government after their positions at the company were eliminated due to significant market contractions. Attorney Robert Tauler was initially hired to defend two of TruConnect’s individual CEOs against the ex-employees’ allegations of qui tam whistleblower retaliation, and he successfully got that part of the case dismissed within a few months. Mr. Tauler was subsequently brought on as co-counsel in the larger employment action involving TruConnect, and now that case has also concluded with Mr. Tauler helping to win a court ruling on behalf of the telecom company.

District Court Grants Motion for Summary Judgment in California False Claims Act Case

The employment retaliation case was heard in the United States District Court for the Central District of California. Despite having already lost their qui tam whistleblower claim involving TruConnect, the former employees still argued that they were entitled to damages for retaliation and wrongful termination. These claims were filed under three statutes:

False Claims Act (alleging retaliation)
California False Claims Act (alleging retaliation)
California Labor Code (alleging wrongful termination)

On June 21, 2022, U.S. District Court Judge Philip S. Gutierrez granted a motion for summary judgment that effectively ended the case by dismissing all of the plaintiffs’ claims of retaliation and wrongful termination. The court stated that TruConnect was entitled to judgment “as a matter of law,” which meant that there was no need to proceed to trial.

Los Angeles Litigator Robert Tauler Wins Cases for Clients in California State and Federal Courts

The TruConnect qui tam retaliation case represents another huge victory for Tauler Smith LLP. Attorney Robert Tauler and the other skilled members of the firm’s litigation team have earned the respect of their peers in the legal community, including judges, opposing attorneys, and legal experts. Whether it’s an employment matter, an intellectual property claim, or a business dispute, our lawyers always prepare every case with the expectation that it will go to trial. This gives us a significant advantage during the pre-trial stages, and it puts our clients in the best possible position to win.

Contact the California Employment Defense Attorneys at Tauler Smith LLP

The attorneys at Tauler Smith LLP have extensive experience handling California employment claims. We represent both plaintiffs and defendants, and our litigators know how to file successful motions for summary judgment in federal and state courts. If you are involved in litigation, the Tauler Smith LLP legal team can help you. Call 310-590-3927 or fill out the online contact form to schedule a free consultation.

Tauler Smith Obtains Judgment for Fraud Against PPE Scam

February 9, 2022/in Successes /by taulersmith

The California business fraud lawyers at Tauler Smith LLP recently helped a client obtain a judgment for fraud against a PPE scam. After a two-day bench trial, a U.S. District Court granted 100% of the compensatory damages sought by plaintiff Solmark International in the case.

L.A. Law Firm Tauler Smith LLP Secures Victory for Client in PPE Fraud Case

On February 4, 2022, federal judge Hon. Stanley Blumenfeld, Jr. for the United States District Court for the Central District of California entered Judgment for Fraud on behalf of Tauler Smith client Solmark International against PPE scammers.

Solmark International is a major supplier of personal protective equipment to companies in the United States. The defendants in the case were PPE scammers who had engaged in a scheme to sell non-existent PPE (personal protective equipment) to national distributors like Solmark. The PPE fraud scheme began with the defendants falsely representing that they had acquired millions of masks to service Solmark International’s clients who were looking to return to work more safely during the COVID-19 pandemic. Once the defendants received a bank wire transfer for the PPE products, they effectively vanished. This resulted in a series of defaults from the defendants.

Solmark International then filed suit in 2020 with predecessor counsel, and the case was scheduled for trial in late-2021. Los Angeles law firm Tauler Smith LLP ultimately helped the plaintiff secure a favorable judgment and recover significant compensation.

Federal Court Issues Final Judgment in Favor of Solmark International

A final judgment was issued by United States District Judge Stanley Blumenfeld, Jr. on February 4, 2022. The specifics of the federal court’s ruling were as follows:

Compensatory Damages: The defendants were ordered to pay plaintiff Solmark International the sum of approximately $100,000.
Counterclaims Dismissed: The defendants’ counterclaims against Solmark International were dismissed.

Attorney Robert Tauler Fights for Victims of Business Fraud in California

“I am very pleased our team was able to obtain a fraud judgment against dishonest people who thought only about themselves at the expense of others during such a sensitive time in our history,” said L.A. business fraud attorney Robert Tauler. “I am fortunate to have clients like Solmark International that believe justice is worth fighting for.”

Tauler Smith LLP is a law firm with a history of success in California business fraud cases. Our experienced litigators have successfully represented clients in business disputes and fraud matters in both local California courts and federal courts. We understand the nuances of this complicated area of the law, and we have the institutional expertise needed to guide you through the legal system and get you the compensation you deserve.

Contact the Los Angeles Business Fraud Lawyers at Tauler Smith LLP

If you were a victim of business fraud, corporate fraud, or consumer fraud, the litigators at Tauler Smith LLP can help you. Call 310-590-3927 or fill out the online contact form to schedule a free consultation.