Google takes a gamble in class action jury trial over cell phone data use

HighlightsGoogle is facing an $800 million lawsuit in Santa Clara County, California, from Android smartphone users who claim the company misappropriates their cellphone data, affecting an estimated 14 million Californians. The plaintiffs allege that Google secretly transmits data over cellular networks even when devices are turned off, which they argue improperly consumes purchased data from mobile carriers without user consent. Despite Google's history of settling class actions, the company is opting for a trial, disputing the plaintiffs' claims that they have a property interest in cellular data allowances and arguing that no actual losses were incurred.
Class actions rarely go to trial, which is why a case against
Google
is proving to be an outlier. The tech giant is defending itself before a jury in Santa Clara County, California, superior court in an $800 million lawsuit by
Android smartphone users
who say Google misappropriates their cellphone data.
A jury of eight women and four men was seated on Tuesday in what lawyers say is expected to be a three-to-four-week trial, with opening statements kicking off on Wednesday.
The stakes are high, but the class, which includes an estimated 14 million Californians whose mobile devices use Google's Android operating system, is in some ways just an appetizer. The same plaintiffs lawyers from Korein Tillery; Bartlit Beck and McManis Faulkner are litigating a parallel case in San Jose federal court covering Android users in the other 49 states, with billions of dollars in alleged damages.
The plaintiffs in court papers say that even when their phones are turned off, Google causes Android devices to surreptitiously send information over cellular networks "for Google's own purposes," including targeted digital advertising. These transfers improperly eat up data that users purchase from their mobile carriers, the plaintiffs allege.
Google spokesperson Jose Castaneda said the claims "mischaracterize standard industry practices that help protect users and make phones more reliable," he told me. "We look forward to making our case in court."
A unit of Mountain View, California-based Alphabet, Google has a well-used playbook for settling class actions.
Earlier this week, for example, the company agreed to pay $500 million to resolve shareholder litigation - a move that comes on the heels of a $50 million deal in May to resolve class-wide allegations of racial bias against Black employees and a $100 million payout in March to a proposed class of advertisers who claimed they were overcharged for clicks on ads.
So why is Google taking this case to trial?
In court papers, Google's outside counsel from Cooley argue that Android users incurred no actual losses, and that consumers consented to Google's so-called "passive" data transfers via terms of service agreements and device settings. The lawyers also dispute the fundamental premise of the case: that cellular data allowances can be considered "property" under California law and subject to conversion, a civil cause of action that involves taking a person's property without permission.
When the "rhetoric and hyperbole are set aside, Plaintiffs' theory is revealed as little more than a (misguided) product design claim - not wrongful conversion," defense counsel wrote.
The Cooley team, which includes Whitty Somvichian, Michael Attanasio, Max Bernstein and Carrie Lebel, declined comment.
The plaintiffs sued Google in Santa Clara County Superior Court in 2019, asserting that they have a property interest in their cellular plans' data allowances, and that each quantum they pay for has a market value.
They don't object to data transmissions when they're actively engaged with Google's apps and properties, like checking email or playing a game. But they say Google never told them it would avail itself of their cellular data when they weren't using their phones to send and receive a range of information on their usage.
"The upshot is that these phone users unknowingly subsidize the same Google advertising business that earns over $200 billion a year," plaintiffs lawyer George Zelcs of Korein Tillery said via email.
In addition to injunctive relief, the plaintiffs want Google to reimburse them for the value of the cellular data the company consumed. Per person, the amount is modest - 1 to 1.5 megabytes of data each day, the plaintiffs estimate. To put that in context, Americans used just over 100 trillion megabytes of wireless data in 2023, my Reuters colleagues reported.
But with a class period dating back to 2016, the totals add up quickly. In court papers, Google lawyers sound almost incredulous at the amount of the claimed nationwide damages, which they say runs in the tens of billions - more than the $7.4 billion Perdue Pharma settlement for the opioid crisis, they note. "Plaintiffs cannot show remotely commensurate harm to the class," they wrote.
In denying Google's motion for summary judgment in May, Judge Charles Adams allowed the plaintiffs' claim for conversion to go forward, ruling there are triable issues of material fact for jurors to decide.
While Adams said no direct state law precedent exists as to whether cell phone data is property, he pointed to a decision by the 9th U.S. Circuit Court of Appeals last year in the parallel federal class action, Taylor v Google.
In that case, U.S. Magistrate Judge Virginia DeMarchi in San Jose sided with Google and dismissed the complaint with prejudice in 2022, only to be reversed and remanded on appeal.
The appellate panel in an unpublished decision ruled that the plaintiffs plausibly alleged they incurred damages when Google used their cellular data.
Adams in a pre-trial order set some limits on what the lawyers will be allowed to argue to the jury.
Plaintiffs may not suggest Google engages in "surveillance" of Android users, he wrote, or that the data transfers are a privacy violation.
As for Google, Adams said, it "must not present evidence or argument suggesting that this case is 'lawyer driven' or was 'invented' by Plaintiffs' counsel."

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