Evolving US Privacy Litigation Trends April 2025 ~ The Lawyers Clock

US Privacy Litigation in 2025: A New Era of Online Jurisdiction and Consumer Data Protection

The legal landscape of data privacy and online jurisdiction is evolving at a nerve-racking pace. Recent decisions in U.S. courts—particularly those involving major tech players like Shopify and TikTok—have underscored the challenging bits and tangled issues that online companies face when operating across state lines. This opinion editorial aims to take a closer look at these developments, offering insights for both legal professionals and the lay public as we figure a path through the evolving terrain of privacy litigation.

California Jurisdiction Over Online Retail Platforms: The Shopify Controversy

One of the most talked-about decisions in recent times was rendered by the Ninth Circuit in April 2025. In a case that has become emblematic of the twists and turns in privacy litigation, the court held that Shopify, an online retail platform, could be sued in California for alleged privacy violations—even when its operations were conducted nationwide, if not globally. This decision overturns earlier rulings from 2022 and 2023, and highlights that even companies that treat all users equally may suddenly find themselves facing legal challenges if a consumer in California believes their data rights were compromised.

Understanding the Case Background

The facts of the Shopify case are familiar to anyone who has visited an online retailer: a consumer visits a website, enters personal and payment information with the expectation that such details will remain between themselves and the merchant, but discovers that the data is sent to a third party for commercial purposes. In this instance, the defendant—Shopify—was found to have exploited customer data, thus meeting the criteria for an intentional act when it comes to personal jurisdiction.

The procedural history of the case was not only long but also marked by confusing bits and tangled issues. Initially filed in August 2021, the complaint was dismissed in May 2022 by a district court in California, which found Shopify did not aim its conduct at California consumers deliberately. Even though a previous three-judge panel of the Ninth Circuit had reaffirmed the district court's decision in November 2023, an en banc review in May 2025 reversed that determination based on a revised interpretation of the “effects test.”

A Fresh Take on the Calder Effects Test

The Ninth Circuit’s decision in the Shopify case is notable for its detailed application of the Calder “effects test,” a legal standard intended to determine if a company’s actions can be pegged to a particular forum. The test focuses on three factors:

An intentional act committed by the defendant;
Expressly aimed conduct at the forum state (in this case, California);
A harm the defendant knew would be suffered in that forum.

While earlier opinions concluded that Shopify’s nationwide activity did not specifically target California, the most recent decision scrutinized the company’s business model more closely. The court asserted that Shopify’s dual role in processing payments and collecting personal data for its own commercial benefit effectively mirrored a physical intrusion—a fact that, if done in a person’s physical home, would surely warrant liability. Such an argument forces us to rethink the fine points of the “express aiming” requirement.

Key Implications for Online Business Operations

The Shopify decision is not just a victory for privacy advocates but also a cautionary tale for online businesses. It casts a wide net over internet companies that rely on a nationwide audience for commercial gain. The ruling makes it clear that the decision to treat customers uniformly across all states does not immunize a company from jurisdictional challenges in states where customers discover their data rights may have been breached.

As businesses increasingly rely on vast swathes of consumer data to drive advertising and personalization efforts, companies must be ever more mindful of the legally nerve-racking twist that complying with one state’s privacy laws might inadvertently lead to vulnerabilities in another. The ruling sets a precedent that could see many digital platforms grasping at how best to steer through these legal waters without sacrificing their business imperatives.

Limiting Pen Registry Claims: The TikTok Example

In another development that highlights the subtle distinctions in data privacy law, two separate California courts—the Los Angeles Superior Court and a federal judge in the Central District—dismissed pen registry claims arising from the integration of TikTok software within a website’s infrastructure. These decisions show that not all uses of digital tracking software meet the bar for legal scrutiny under existing privacy statutes, especially when statutory definitions are interpreted strictly.

What Is a Pen Registry Claim?

A pen registry claim typically arises when a website is alleged to have used its electronic tools as a substitute for more invasive surveillance methods akin to a tap and trace device, traditionally limited to telephones. California law carefully defines what constitutes a “tap and trace device,” specifying that the process must only capture non-content dialing, addressing, or signaling information. In the cases at hand, the software in use transmitted both non-content and content information, a combination the courts found incompatible with the legal definition.

Legal Reasoning Behind the Dismissals

The courts determined that the TikTok software could not be classified as a pen registry or tap and trace device due to the inclusion of content data—a move that stands in contrast to the statutory definition. Furthermore, in one instance, the court ruled that a consumer who visits a website with the intent of evaluating its privacy compliance cannot later claim a violation if they have already consented to the data practices disclosed in the privacy policy.

Practical Takeaways for Businesses and Consumers

These dismissals emphasize the importance of clear and accurate disclosures in privacy policies. For companies, this means that transparency about their data practices is not only super important for consumer trust but can also be a decisive factor in quashing legal challenges. For consumers, the decisions underscore the need to understand that by engaging with a website, they might be consenting to certain data collection practices—even those that involve powerful tracking software like TikTok’s.

Privacy Policies and Consent in Wiretapping Claims: Conflicting Court Views

A pair of similar yet independently reasoned cases from the Northern and Central Districts of California have further complicated the landscape. In these cases, courts looked at whether a user’s interaction with a website’s privacy policy constitutes consent to what might otherwise be considered intrusive wiretapping.

Consent Through Online Interactions

In one case, the court concluded that users had effectively consented to the collection and sharing of their data by interacting with the cookies banner, agreeing to the terms of use, and proceeding with using the site. This perspective emphasizes that when a consumer engages with all the provided disclosures, they are essentially waiving certain privacy claims. The court’s pragmatic view is that consent obtained in this way defeats any claim of an unauthorized wiretap.

A Divergent Perspective on Privacy Policy Disclosures

However, not all courts agree with this blanket approach. In a contrasting decision, another Northern District of California judge identified a factual dispute concerning whether the privacy policy explicitly disclosed all the activities that later translated into alleged wiretapping claims. In this case, the dispute centered on whether passing information through cookies and beacons adequately informed the consumer about third parties using their data for separate commercial purposes.

Key Points to Consider

Aspect	Consent Argument	Factual Dispute Argument
Cookies Banner	Assumed consent via explicit interaction	May not cover third-party usage for marketing
Terms of Use	Present throughout the user journey	Ambiguously worded regarding non-site activities
Privacy Policy	Consumer agrees to data collection	Insufficient clarity on the scope of data sharing

The divided opinions highlight sufficient room for future litigation. In essence, while some courts feel that the mere act of clicking “Accept” on a privacy policy should negate any claim that data were intercepted without consent, others argue that superficial acceptance may not be enough if critical details are absent. This is an example of the fine shades of interpretation that continue to make privacy law so full of problems.

Arizona’s Rejection of the “Spy Pixel” Theory

The trend in privacy litigation is not confined to California alone. In Arizona, state courts recently turned down a “spy pixel” theory that alleged marketing emails embedded with tracking pixels infringed on privacy rights under the Telephone, Utility, and Communications Service Records Act (TUCSRA). This decision is particularly instructive given the way state laws are interpreted for technology-related claims.

Understanding the “Spy Pixel” Argument

Plaintiffs argued that the inclusion of tracking pixels in marketing emails allowed companies to capture sensitive information—including the time, location, and interaction details of the email opening—akin to intercepting private communications. They claimed that this constituted a breach of privacy akin to unauthorized wiretapping.

Why TUCSRA Didn’t Apply

The Arizona district court, however, found that TUCSRA is meant to regulate the providers of communication infrastructure—not companies that simply use communication channels for marketing. In other words, the court reasoned that the defendant in this case was not responsible for sending or receiving communications in a capacity that TUCSRA was designed to oversee. The decision, while not binding outside Arizona, offers a persuasive argument that may influence similar cases across the country.

Implications for Marketing and Surveillance Technology

For businesses, the ruling is a relief on one level. It sends a message that employing marketing pixels—as long as they’re used in compliance with clearly defined disclosure norms—is unlikely to lead to claims under TUCSRA. For the legal community, the decision illustrates the importance of understanding the targeted scope of various state-level statutes. Organizations that rely on electronic tracking must stay alert to ensure that their practices do not inadvertently cross legal thresholds.

Expanding the Scope of “Content” in Wiretapping Claims

A particularly contentious issue in privacy litigation is the definition of “content” in wiretapping claims. Traditionally, wiretapping was associated with eavesdropping on telephone conversations. However, modern digital communication presents new challenges for courts in identifying what should be considered the central substance of a communication.

Redefining Content Beyond Voice

Historically, wiretapping laws were tailored to protect the spoken word. The Ninth Circuit's decision in the 2014 In re Zynga Privacy Litig. case defined “contents” as the “intended message” of a communication. That decision clarified that ancillary data—such as call records or metadata—were outside the scope of conventional wiretapping claims. However, subsequent litigation suggests that this distinction is no longer clear-cut.

Evidence from Recent Cases

Two separate decisions, one from the Northern District and another from the Central District of California, have pushed the boundaries of what qualifies as content. In one decision, a court ruled that data generated from user inputs into online forms—such as names, addresses, and telephone numbers—should be considered content because of the intrinsic personal nature of the information. Additionally, detailed logs that include a user's URL interactions, button clicks, and shopping cart history were deemed to potentially convey personal interests and queries, which in turn qualify them as content.

What Does This Mean for Future Cases?

The expanding interpretation of “content” could make it easier for plaintiffs to argue that modern digital communications are subject to legacy wiretapping laws.
Court decisions increasingly indicate that the fine details around how information is formatted, stored, or transmitted are being re-evaluated in light of emerging technologies.
Future litigation may see a convergence between traditional electronic eavesdropping and modern data tracking techniques, leading to a recalibration of what legal protections are offered to consumers.

This trend demands that both legal practitioners and tech companies get into the nitty-gritty of how “content” is defined. The potential reclassification of various user interaction data as protected content sends a clear message: the legal environment is adapting and expanding to cover new forms of digital communication.

Implications and Future Directions for Privacy Litigation

The recent legal developments—from the Shopify case to the evolving interpretations of consent and content—are not isolated legal curiosities but indicators of the direction in which privacy litigation is headed. For companies engaged in online operations and consumers alike, the decisions underscore a broader shift in how legal liability is assigned in the digital age.

For Online Businesses

Online businesses need to be more vigilant about how they collect, use, and share customer data. Several key lessons emerge from the recent cases:

Review Your Privacy Policies: Ensure that your disclosures are clear, complete, and fully inform consumers of how their data may be used. Courts have shown they will scrutinize even small twists in the language when determining whether consent was present.
Consider Your Data Collection Practices: As definitions of what constitutes “content” evolve, companies must rethink their data collection mod-ernizations to avoid unwittingly stepping over legal boundaries.
Jurisdictional Awareness: Businesses must appreciate that a nationwide operation does not protect them from state-specific legal challenges. Every state’s legal environment can add a layer of complicated pieces that may expose the business to unexpected lawsuits.
Tech and Compliance Integration: The interplay between evolving technology (like tracking pixels) and legacy statutes (like TUCSRA) makes it essential to have both tech and legal teams work together to spot the small distinctions that might raise issues.

For Consumers

Consumers are increasingly paying attention to how their data is used. These recent rulings show that while privacy policies may provide some reassurance, they are not an absolute shield against all types of data collection and sharing practices. When you interact with a website, be sure to:

Review the terms and conditions carefully to understand what you are consenting to, even if the wording seems straightforward.
Be aware that clicking “Accept” can sometimes mean relinquishing a degree of privacy regarding your online behavior.
Realize that despite certain website claims, the legal system is actively reshaping the parameters of privacy rights in the digital domain.

Broader Impact on Privacy Law

The recent decisions have far-reaching implications that extend well beyond the immediate facts of each case. They highlight the need for the law to keep pace with rapidly evolving online practices. The judicial system is increasingly called upon to interpret older statutes in light of modern technology—a process that is by nature full of problematic bits and unexpected twists.

In many instances, these legal rulings serve as a reminder that judicial interpretations can lag behind technological advancements, creating a patchwork of decisions that companies and consumers alike must constantly monitor. While these challenges can be off-putting, they also provide an opportunity for legislators to modernize existing laws to meet the demands of the digital era.

Legal Theory Versus Business Practice: Balancing Innovation and Regulation

One of the enduring challenges in data privacy litigation is the gap between innovative business practices and the legal frameworks designed to regulate them. As courts refine their standards for consent, content, and jurisdiction, businesses are forced to consider these changes in their day-to-day operations. The Shopify decision is just one example where an online platform’s standard business model has suddenly been cast in a different legal light.

Reconciling Online Innovation with Traditional Legal Doctrines

At its heart, the debate pits the rapid pace of online innovation against older legal doctrines that were primarily designed for an analog world. For instance, the Calder “effects test,” which was originally intended to address cross-border harm from physical actions, now finds application in digital spaces. Courts are being challenged to apply this test to circumstances where the lines between intentional and incidental data collection blur.

This reapplication of traditional tests to modern technology is not without its challenges. Some courts have taken a strict view, while others have been more flexible—influenced by the particularities of each case. The inconsistent application of legal principles creates an environment where businesses might inadvertently find themselves caught in a web of rules that are as intimidating as they are confusing.

A Balancing Act for Regulators

Regulators face the formidable task of working through these twisted issues while supporting innovation. Effective regulation in this realm must strike a balance: it should protect consumers from exploitative practices without stifling the digital economy. To accomplish this, lawmakers must:

Engage with tech experts to understand the underlying mechanics of data collection and transmission.
Consult widely within the legal community to capture the small distinctions and subtle parts that define contemporary online practices.
Continuously review and update laws concerning privacy, consent, and data sharing to reflect current technological capabilities.

The Road Ahead: Emerging Trends and Ongoing Debates

Looking forward, there are several areas where the legal landscape is likely to see even more changes. The Shopify decision, the evolving interpretations of content in wiretapping claims, and the debates over consent in privacy policies are just the beginning.

Anticipated Areas of Litigation

As technology continues to advance, expect litigation trends to focus on several key areas:

Third-Party Data Sharing: With companies increasingly monetizing customer data through third-party partnerships, disputes over what constitutes informed consent will likely escalate.
Cross-Jurisdictional Challenges: As seen in the Shopify case, businesses may encounter lawsuits in unexpected states, demanding a more sophisticated approach to jurisdictional risk management.
Expanded Definitions of Electronic Content: As courts expand what is considered the “content” of a communication, previously benign data can become the subject of litigation. This will require companies to be more cautious about how they log and use user interactions on their websites.

Potential Legislative Responses

Given the spate of judicial decisions, legislators might step in to clarify many of these problematic areas. Possible legislative initiatives could include:

Updating definitions of key terms such as “content,” “wiretapping,” and “consent” for greater clarity in the digital context.
Establishing clear guidelines for online use of tracking technologies such as pixels, beacons, and cookies.
Implementing uniform standards across states to prevent a patchwork of laws that complicate national and international e-commerce.

Conclusion: Embracing the Twists and Turns of Privacy Litigation

In conclusion, the recent decisions emanating from California, Arizona, and other jurisdictions illustrate a legal landscape that is both challenging and dynamic. The evolution of privacy litigation brings with it a host of tricky parts, tangled issues, and confusing bits that demand careful scrutiny by legal professionals, businesses, and consumers alike.

The Shopify decision serves as a reminder that even well-established online businesses must keep an eye on how their operational practices intersect with state-specific privacy laws. Meanwhile, the mixed rulings on pen registry and privacy policy consent claims underscore the importance of crystal-clear disclosures and robust legal defenses in the face of uncertain judicial interpretations.

For online businesses, the message is clear: Take the wheel when it comes to compliance and ensure that your data collection and sharing practices are as transparent as possible. For consumers, remain vigilant and informed about the ways in which your data might be used—even when you believe you have given your consent.

Ultimately, the current legal developments represent a critical juncture in which the traditional legal doctrines are being reinterpreted to meet the needs of a digital age. While the twists and turns of privacy litigation may be intimidating, they also pave the way for a more nuanced and effective regulatory framework—one that better balances the needs of innovation with the protection of individual rights.

As we move forward, continuous dialogue between tech innovators, legal experts, and policymakers will be super important. Only through a mutual understanding of both the small distinctions and the hidden complexities can we ensure that the legal system adapts in a way that safeguards consumer privacy while promoting a vibrant digital economy.

Looking back over these cases reminds us that the digital realm is not a lawless frontier. Instead, it is a space where legal rules—albeit in a state of constant evolution—impose structure and accountability, even if they sometimes do so in a nerve-racking, off-putting manner.

In this era of rapid technological progress, the law must continue to poke around, dig into, and take a closer look at each new development. As courts review what it means to “consent” in the digital context, and as they unpack the nitty-gritty of data collection practices, one thing is abundantly clear: the path forward will require both caution and innovation. For it is only through such balanced approaches that we may hope to find our way through the twisted issues and overlapping jurisdictions that define modern privacy litigation.

As these legal battles unfold, industry leaders and legal experts alike are reminded that clear communication, robust policy frameworks, and vigilant oversight are not just regulatory obligations—they are foundational to building trust in a digital environment where every click may carry significant legal ramifications.

Thus, while the legal world continues to sort out its way through these complicated pieces, one can be confident that these judicial decisions will ultimately foster a more secure and predictable online ecosystem. In acknowledging and addressing the challenges of digital privacy, we are, in essence, laying the groundwork for a future where innovation and regulation can coexist—each strengthening the other in an era that is as exhilarating as it is legally charged.

Originally Post From https://www.jdsupra.com/legalnews/u-s-privacy-litigation-update-april-2025-9514785/