In long-awaited news, Governor Newsom has signed SB 690, meaning that any Section 638.51 claims that were filed against a company after January 1, 2025 and based on conduct occurring on an internet website or online/mobile application have been rendered nonviable because the statute does not provide a private right of action, as we previously reported.
In the meantime, plaintiffs’ firms are already shifting to new causes of action in demand letters and newly filed complaints such as CIPA’s wiretapping provision (Section 631), the federal Wiretap Act, the California Comprehensive Data Access and Fraud Act (CDAFA), and fraud-based causes of action. We also expect plaintiffs to seek to amend pending Section 638.51 claims into Section 631 wiretapping claims by alleging that third-party vendors intercept communications sent to a website. Plaintiffs face a steeper pleading hurdle to state a viable wiretapping claim because Section 631 requires multiple elements, such as that the information at issue be contents of communications and it be intercepted in transit. Even so, we expect to see claims under Section 631, especially in arbitration where defendants have fewer Rule 11-style mechanisms.
Other plaintiffs have advanced new fraud- and deception-based theories of website privacy violations, where a website uses a cookie banner or settings tool that allegedly fails to honor a user’s rejection of cookies, or immediately drops cookies despite claiming that it will first obtain consent. This remains a risk area for businesses that implemented cookie banners in response to CIPA claims or provide cookie-preference tools to comply with state privacy laws. These claims have largely survived motions to dismiss, though a few district courts have recently issued helpful decisions.
Governor Newsom’s signing letter called on the Legislature to revisit other parts of CIPA—clearly a reference to the wiretapping provision. When the Legislature in 2025 originally discussed amending both Section 631 and 638.51, however, that effort stalled. Your ZG Team will be tracking the latest.