Hagens Berman: Judge Denies Motion to Compel Arbitration in Alleged Wiretapping Case

SEATTLE – National consumer-rights law firm Hagens Berman Sobol Shapiro LLP today announced that a recent court’s order denying mobile device manufacturer defendants, Carrier IQ Inc. (CIQ), Motorola Mobility LLC (NYSE: MMI) and Samsung (NYSE: SSNLF) among others, arbitration allows class members to continue the alleged wiretapping case.

The class-action lawsuit claims that smartphone manufactures including HTC Corporation and HTC America, Inc. (TPE: 2498), Samsung Electronics Co., Ltd. (KSE:005930), Pantech Wireless, LG Electronics, Motorola Mobility and Huawei Device use software developed by CIQ used on mobile devices that illegally records users’ key strokes—including email and text messages—without consumers’ knowledge or permission.

The order, handed down by U.S. District Judge, Edward Chen on March 28, 2014, denied the defendants’ motion to compel arbitration within an agreement held by wireless carriers, including AT&T, Sprint and Cricket with their own customers.

“Defendants were trying to shut down this case in one sweep with a customer agreement that has been found wholly inapplicable in this situation,” said Steve W. Berman, Hagens Berman managing partner and lead attorney representing the plaintiffs. “This order from Judge Chen means class members retain the opportunity to rightfully fight for the privacy of their data in this case.”

According to CIQ, its software is embedded on smartphones to allow the company to collect data important to improving the customer experience, such as logging information related to dropped calls, but does not store or resell the information.

“Had these companies succeeded in applying this tactic to this case, consumers would have had to individually litigate their grievances against these mobile device manufacturers and CIQ,” Berman added. “This motion has held up the rights of this whole class.”

The lawsuit alleges that, in reality, the program does record keystrokes, and could transmit the information to third parties, possibly including information sent to secure websites using HTTPS security protocols used in e-commerce and other security-sensitive sites such as banking.

The suit, filed in the U.S. District Court for the Northern District of California, accuses the companies of violating the Federal Wiretap Act and California’s Unfair Business Practice Act. The Federal Wiretap Act prohibits unauthorized or illegal use of electronic communications.

The lawsuit asks the court to award damages under the Federal Wiretap Act, and prevent companies from including similar software in future smartphones.

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About Hagens Berman
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with offices in ten cities. The firm has been named to the National Law Journal’s Plaintiffs’ Hot List eight times. More about the law firm and its successes can be found at www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.

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