By Gregory S. Taylor
Class action lawyers care deeply about the public’s privacy rights. Except when they don’t, like when the right to privacy interferes with their ability to generate lawsuits against California businesses.
A California Supreme Court decision handed down last month in a case involving Pioneer Electronics sided with plaintiffs’ lawyers and against businesses. It made it easier for lawyers to access business records so they can identify and contact consumers in the hope they’ll agree to serve as class plaintiffs.
The ruling goes a long way towards legitimizing “fishing expedition” discovery for the express purpose of drumming up litigation against California businesses.
The plaintiff in the Pioneer case bought a DVD player made by the electronics maker and sued, claiming the player was defective.
He also claimed to be representing a class of all buyers of the DVD player. His lawyers requested customer service records from Pioneer to enlist the help of other customers as witnesses or plaintiffs.
Pioneer, part of Japan’s Pioneer Corp., turned over customer service records but wouldn’t disclose records revealing personal information about customers, claiming the right to privacy clause in the California Constitution prevented it from doing so.
The specific issue in Pioneer was whether the notification letter to the consumers asking them whether they wanted plaintiffs’ lawyers to have their information was a matter of “opt in” or “opt out.”
The court upheld the use of the “opt out” letter,if the consumer doesn’t affirmatively respond to a letter asking if they want their information to remain private, it goes to the plaintiffs’ lawyers.
The takeaway point for California consumers: Read every piece of mail sent to you by anybody you’ve bought something from.
That piece of apparent junk mail you throw away might be your one opportunity to keep your private information private.
In Pioneer, the court accepted the plaintiffs’ lawyers’ view that the privacy invasion was not “serious.” The next time you hear a plaintiffs’ lawyer claim to be a consumer advocate, remember they successfully fought to establish this constitutional principle of diminished consumer privacy in this case.
From the plaintiffs’ lawyers’ perspective, the case is about “leveling the playing field.” The business defendant has access to the names and addresses of their customers, so why shouldn’t the plaintiff’s lawyers?
Furthermore, why should consumers care if their information is given to their greatest advocates, the class action lawyers?
The first question ignores the fact that the consumers voluntarily gave their private information to the defendant,in this case, Pioneer. It breached no privacy laws to get that information. The information was exchanged in an arm’s-length business transaction.
If consumers want to voluntarily give that same information to plaintiffs’ lawyers, they can.
Moreover, defendant businesses that aren’t careful custodians of private information are subject to liability from consumers suing for breach of privacy under the California Constitution.
Another classic no-win situation for California businesses.
The second question assumes too much. Just because a lawyer says he’s on your side doesn’t make it so.
Before a judge has certified the class by ruling that there is a valid group of plaintiffs with common claims, the plaintiff’s lawyers only represent the actual named plaintiff and not the unnamed consumers whose information they are seeking.
And even if a class is certified, members of the class can “opt out” and hire their own lawyer to pursue their claims, if they like.
So at the time the plaintiff’s lawyers are seeking this information, the consumers have no idea who these lawyers are, haven’t decided whether they like them or trust them, and certainly haven’t hired them.
But the lawyer’s assertion that he’s acting in their interest is apparently enough to overcome the constitutional privacy expectations of the consumers.
Among the more discouraging parts of the Pioneer decision is the court’s explicit recognition that plaintiffs’ lawyers will use the decision to identify potential plaintiffs.
In any other context, if a lawyer contacts a person for the purpose of inciting them to sue, it is called barratry, which is not only a professional ethics violation, but in many jurisdictions a crime.
Class actions, however, depend on it.
Class actions are often lawsuits in search of a plaintiff, given that they are aggregations of often small disputes where an individual plaintiff may have only a few dollars at stake but lawyers can make a fortune. Pioneer could be ready to stand for the proposition that if solicitation of plaintiffs is wrong in class actions, it can only be wrong for the first plaintiff,solicitation of additional or replacement plaintiffs is fair game.
Is there any good news for California businesses in the Pioneer decision?
Not much. Future defendants will try to distinguish employee records from the consumer records at issue in Pioneer. Employers hold more sensitive private information about employees than a retailer may have about consumers, including financial and medical information, which should be subject to heightened privacy expectations.
But I wouldn’t bet on plaintiffs’ lawyers joining the fight to keep it private.
Taylor is a class action defense lawyer with Hansen & Taylor LLP in Irvine.
