California Legislature Votes to Curb CIPA Claims

California’s legislature had an interesting August session. Lawmakers passed a number of new AI-focused bills (more on that later this week) as well as amendments to several AI and technology-focused laws. One of the amendments passed this session is SB 690. SB 690 attempts to curb CIPA claims arising from website data collection. Inventive plaintiffs have recently resorted to using the pre-internet wiretapping law to pursue settlements against companies that collect certain data in the regular course of running their websites or providing applications. According to a recent Venable memo, SB 690 would:

“amend California’s invasion of privacy law by limiting private litigation claims involving pen registers or trap-and-trace devices on internet websites, online applications, or mobile applications. The bill also states that this limitation would apply retroactively to certain pending claims filed within two years before the bill’s operative date. SB 690, however, would not limit claims under California’s wiretap (Cal. Penal Code § 631) or call recording (Cal. Penal Code § 632) statutes. If signed, SB 690 would take effect on January 1, 2027.”

A California judge recently dismissed a CIPA case, finding that the law’s protections only applied to telephone communications. Most CIPA cases attempt to extract quick settlements for innocuous violations. They often target companies that use technology such as pixel capture, which is commonly used to detect user clicks and improve the end-user experience. The legislature’s intervention could bypass potential years of further litigation and appeals and may prove a more efficient method to curb CIPA claims. SB 690 now heads to the California Governor’s desk for his signature.