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Goodyear Tires Wiretapping Lawsuit to Proceed

February 8, 2023/in False Advertising /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.

Shipping Insurance Claims and the UCL

February 4, 2023/in False Advertising /by taulersmith

Many companies that offer shipping insurance on e-commerce sites are violating California insurance laws, which have strict requirements about who is allowed to offer insurance and how that insurance can be offered. Moreover, California’s insurance laws can serve as a predicate for civil lawsuits brought under other statutes, including the California Unfair Competition Law (UCL). When it comes to shipping insurance claims and the UCL, there is strong legal precedent in favor of consumers who are charged for insurance by an unlicensed agent. Additionally, the shipping insurance offered by online sellers is often just a surcharge on services already being provided, which is business fraud that can also be the basis for a civil suit.

To learn more about how California consumer protection laws can be used to file a shipping insurance lawsuit against e-commerce sellers, keep reading.

Filing a Shipping Insurance Lawsuit Under California’s Unfair Competition Law (UCL)

Some companies that offer shipping insurance on their e-commerce websites expressly label it as “insurance,” while other companies call it “safe ship” or use another term. In fact, it is common for online sellers to refer to an insurance fee by some other name. For example, the plaintiff in Miller v. Travel Guard Group alleged that the company mislabeled the travel insurance fee on their website in order to get around the state prohibition against unlicensed agents selling insurance. Regardless of what term is used, however, both the California Insurance Code and the Unfair Competition Law (UCL) protect consumers against unlawful offers of insurance.

Section 1631 of the California Insurance Code imposes licensing requirements on any entity that seeks to sell insurance in the state. If a company violates the California Insurance Code by attempting to sell insurance as an unlicensed agent, consumers may be able to bring a UCL claim. Additionally, companies that hide a shipping insurance charge on a purchase could be exposed to lawsuits under the UCL for false, misleading, deceptive, and unlawful marketing and sales practices.

Section 17200 of the UCL

The California Unfair Competition Law (UCL) is set forth in Cal. Bus. & Prof. Code § 17200. The statute defines “unfair competition” as:

Any unlawful, unfair, or fraudulent business act or practice.
Unfair, deceptive, untrue, or misleading advertising.

The UCL is a sweeping law that is meant to protect both consumers and businesses. In fact, the statute has been interpreted broadly by California courts to cover a wide variety of business acts and consumer transactions, including antitrust violations, intellectual property claims, employment claims, misbranded drug products, and disputes over shipping insurance charges.

Both federal and California courts have held that companies may be sued for breach of contract and unfair competition when they violate state insurance laws. In fact, the U.S. Court of Appeals for the Ninth Circuit said that the California Insurance Code can serve as a predicate for a claim brought under the California Unfair Competition Law (UCL) even though the UCL does not explicitly provide for a private right of action for shipping insurance claims. In Miller v. Travel Guard Group, the California Northern District Court went even further by ruling that consumers may bring a claim under the UCL based on both an illegal agent theory and an illegal premium theory when the insurance fee is automatically included in the total price and the customer is not given an opportunity to opt out of paying it.

Only Licensed Agents Can Sell Insurance in California

California has strict laws regulating exactly who can sell insurance. Whether it’s auto insurance, property insurance, health insurance, general liability insurance, or shipping insurance, only licensed agents are allowed to offer insurance to customers. One way that California law protects consumers against insurance fraud is by requiring many types of insurance agents (e.g., home and auto insurance) to file bonds with the state insurance commission.

In order to charge customers for shipping insurance, a company must comply with California’s insurance laws. This means that insurance agents need to be registered with the state. Beyond that, owners, insurance agents, and even non-licensed employees must provide fingerprints that are kept on file with the state. All of this is in addition to standard business certification requirements, such as securing a certificate of good standing if the company is a corporation and a certificate of organization if the company is an LLC.

Friedman v. AARP Established Precedent for Shipping Insurance Claims in California

In Friedman v. AARP, Inc., the Ninth Circuit Court issued an important ruling that set precedent for subsequent cases involving offers of insurance to California consumers. The plaintiff in Friedman was a Medicare recipient who purchased UnitedHealth supplemental health insurance coverage through the AARP (previously known as the American Association of Retired Persons). Since AARP earned a 5% commission on the sale, they were essentially acting as an insurance seller without a license. This would be in direct violation of California Insurance Code § 1631. That statute prohibits anyone from soliciting, negotiating, or effecting an insurance contract unless the person holds a valid license from the California Commissioner of Insurance. California Insurance Code § 1633 goes even further by explicitly prohibiting an unlicensed company from “transacting” insurance regardless of whether the company reports itself as an insurance agent.

Facts of the Case

The plaintiff in the case was Jerald Friedman. He was one of several AARP members who filed a class action against AARP because the organization allegedly charged inflated insurance rates for Medigap coverage. (Medigap policies provide supplemental health insurance for costs that are not already covered by Medicare.) These exaggerated charges allegedly stemmed from a hidden commission that AARP was collecting.

The lower court in Friedman dismissed a class action brought by the plaintiff under the UCL. The Ninth Circuit then reversed that decision because the federal appellate court determined that AARP’s fee arrangement qualified as a commission on every insurance sale. In other words, AARP was acting as an insurance agent by selling insurance.

UCL Violation

Section 17200 of the California Unfair Competition Law (UCL) explicitly prohibits companies from engaging in “any unlawful, unfair, or fraudulent business act or practice.” AARP was accused of violating the UCL by committing the unlawful act of selling insurance without a license.

Since AARP is not licensed to sell insurance in California, it is unlawful for the group to offer insurance to its California members. AARP marketed the Medigap policy to its members in a number of ways, including television ads, websites, and materials sent directly through the mail. A lot of these advertisements included text reading, “This is a solicitation of insurance.” Although AARP later tried to describe its insurance commission as a “royalty,” the federal government determined that it was still a commission being charged on top of the typical monthly premium. This meant that AARP was essentially acting as an insurance agent despite not having a license to do so in California.

Unlawful to Conceal a Shipping Insurance Charge in California

Under California law, there is an expectation that consumers will be able to provide informed consent for purchases they make online. Unfortunately, some businesses trick customers into paying more for shipping insurance with hidden or confusing features on their e-commerce websites, particularly when it comes to placing and finalizing orders. The businesses generate additional revenues by offering a service that they are not legally allowed to offer without a valid, state-issued license.

Companies that do business in California and use deceptive marketing and sales tactics could be subject to civil suits for violating the UCL. That’s because the statute prohibits false, misleading, deceptive, and fraudulent acts or practices, which may include attempts by the business to deceive customers about hidden shipping insurance fees. An experienced Los Angeles insurance claim lawyer can help consumers bring a lawsuit against companies that violate the UCL by making an unlawful offer of shipping insurance.

UCL Claims

When consumers unknowingly purchase shipping insurance on a website due to misleading and/or deceptive information, they suffer an injury. The Unfair Competition Law can be used as the basis for a shipping insurance lawsuit if the defendant violated the “fraudulent” prong of the statute by misleading customers about the additional charge. In these cases, the plaintiff will need to establish two elements to bring a successful claim: (1) that the company deceived the public in some way either in an advertisement or during the checkout process; and (2) that the consumer relied upon the company’s statements or advertisement.

There are several ways that a company could violate the UCL by attempting to charge customers for shipping insurance:

Confusing Language: The company might use ambiguous and confusing language to describe the insurance charge, which means that consumers won’t necessarily understand what it is that they are purchasing.
Hiding the Insurance Charge: It’s also possible that the company might hide the total purchase price from the consumer by failing to clearly inform them of the total cost when shipping insurance is included, or by failing to allow the consumer to edit their order once a shipping insurance charge has been added.
Lack of Consent: In the most egregious cases, the company might not even give the consumer an opportunity to consent to the shipping insurance charge. There have been cases in which a company automatically charges for shipping insurance unless the purchaser clicks on a random and inconspicuous “decline” button before completing the order.

When a company fails to disclose information that consumers need in order to make informed decisions about a purchase, it could be a violation of the UCL. Whether it’s a misleading advertisement or a concealed charge on a company’s website order form, California consumers may be able to bring a shipping insurance claim under the UCL.

CLRA Claims

This type of conduct by a business might also violate the California Consumers Legal Remedies Act (CLRA), which prohibits certain unlawful acts involving consumers. For example, the CLRA explicitly forbids companies from “advertising goods or services with intent not to sell them as advertised.”

The ordering and check-out processes on some e-commerce websites are confusing and possibly even deceptive. As a result, it’s very possible that consumers are unknowingly purchasing shipping insurance as an upcharge or add-on because websites don’t make the additional charge immediately apparent to site visitors. Moreover, it’s possible that some consumers would not have purchased the product at all if they had known about the shipping insurance charge. Worse yet, many consumers might not become aware of the additional charges until much later when their bank account or credit card is debited for the order.

Contact the Los Angeles False Advertising Lawyers at Tauler Smith LLP

Were you charged for shipping insurance while making a purchase on an e-commerce website? The Los Angeles false advertising lawyers at Tauler Smith LLP represent clients in civil lawsuits and class action lawsuits against companies that commit business fraud, including litigation involving shipping insurance claims against companies that illegally offer shipping insurance in online transactions. Call 310-590-3927 or email us to schedule a free initial consultation.