The Children’s Online Privacy Protection Act (COPPA) does not preempt state law claims based on underlying conduct that also violates COPPA’s regulations, a Ninth Circuit Court of Appeals panel said on Wednesday. The precedential ruling allows the case brought by several children alleging that Google-owned YouTube used persistent identifiers to collect data and track their online behavior surreptitiously and without their consent, to proceed, overturning the lower court’s two dismissal rulings.
As previously reported, the case concerns YouTube, described in the opinion as “a widely used online video-sharing platform that is popular among children,” which benefits from Google’s targeted advertising. It also names several content creators or YouTube “channel owners,” including Cartoon Network and Dreamworks Animation, who it says “lured children to their channels, knowing that the children who viewed content on YouTube would be tracked, profiled, and targeted by Google for behavioral advertising.”
The suit asserts that YouTube did not comply with COPPA until January 2020, after reaching a settlement with the Federal Trade Commission and before that, the New York Attorney General. The children seek damages and injunctive relief, asserting only state law claims for invasion of privacy, consumer protection violations, and unfair business practices, arising under the constitutional, statutory, and common law of six states including California.
The opinion noted that the parties agree that all allegations specify conduct that would violate COPPA’s requirement that “child-directed online services give notice and obtain ‘verifiable parental consent’ before collecting persistent identifiers.”
The district court dismissed the case finding the claims squarely preempted by COPPA. This week’s opinion by Circuit Judge M. Margaret McKeown considered the express preemption holding and Google and the channel owners’ argument that, in the alternative, the claims are conflict-preempted.
The court first explained that state laws that “supplement,” or “require the same thing,” as federal law, do not antagonize Congress’s objectives, and thus are not “inconsistent” with federal law. Given this context, the Ninth Circuit said it was unconvinced that there was “clear congressional intent to create an exclusive remedial scheme for enforcement of COPPA requirements.”
Instead, Judge McKeown ruled that because the bar on “inconsistent” state laws impliedly preserves “consistent” state substantive laws, “it would be nonsensical to assume Congress intended to simultaneously preclude all state remedies for violations of those laws.” In turn, the court let the state law claims stand as they did not pose an obstacle to COPPA in purpose or effect.
The court quickly disposed of the appellees’ conflict preemption arguments for the same reasons. In so finding, the court said that although express and conflict preemption “are analytically distinct inquiries, they effectively collapse into one when the preemption clause uses the term ‘inconsistent.’”
The case will now proceed before the district court, which is to consider any alternative dismissal arguments that were properly preserved.
The channel owners are represented by Gibson, Dunn & Crutcher LLP, ZwillGen Law LLP, Munger, Tolles & Olson LLP, Jacobson, Russell, Saltz, Nassim & De La Torre LLP, Frankfurt Kurnit Klein & Selz P.C., and Venable LLP.