Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Internet ‘cookie’ deception allegations against Dollar Tree mostly dismissed, (Oct 22, 2025)

By Kenneth H. Ryesky, M.B.A., J.D.

The retailer's sharing of personal information with other parties despite Internet shoppers' affirmative rejection of advertising cookies alleged to be "an egregious privacy violation and total breach of consumer trust."

The federal district court in San Jose, California has mostly granted dismissal of a putative class action lawsuit alleging that Dollar Tree Stores's websites placed Internet advertising "cookies" on the website accessors' computers despite the accessors' affirmative rejection of such "cookies." Two of the three individual lead plaintiffs were dismissed as such for improper venue. The wiretapping, contracts, fraud, and trespass claims were dismissed with leave to amend (Walsh v. Dollar Tree Stores, Inc., No. 5:25-cv-01601-SVK (N.D. Cal. Oct. 16, 2025)).

Background. Three individuals brought a putative class action lawsuit against Dollar Tree Stores, Inc. (Dollar Tree), alleging that personal information gathered by Dollar Tree from their respective accessions to the Dollar Tree websites was improperly misused to invade the individuals' privacy and track their subsequent Internet accessions to other websites, despite each individual having followed the website instructions for opting out of accepting Internet "cookies." The lawsuit was filed in the Northern District of California, where one of the individuals, Walsh, resides. The other two individuals, Yosha and Maldonado respectively resided in the Central District and Southern District of California.

The complaint alleged violations of the California Invasion of Privacy Act (CIPA) and also alleged common law causes of action for (1) invasion of privacy; (2) intrusion upon seclusion; (3) fraud; (4) unjust enrichment; (5) breach of contract; (6) breach of implied good faith and fair dealing covenant; and (7) trespass to chattels.

Dollar Tree moved to have the case transferred to the Eastern District of Virginia, and also moved to have the case dismissed.

Venue issues. The court denied Dollar Tree's motion to transfer the case to the Eastern District of Virginia. Here, Dollar Tree's Terms and Conditions on its website contained a provision designating the Eastern District of Virginia as the forum for resolution of disputes, while the Dollar Tree Privacy Policy had no such provision. The court therefore did not perfunctorily grant the transfer motion based upon a forum selection clause, but weighed all of the factors used to determine transfer motions. Finding that such factors in the aggregate weighed, at best, neutral, the court found that Dollar Tree had not made the requisite showing to transfer the case, and denied Dollar Tree's transfer motion.

Because the named plaintiffs did not reside in the Northern District of California, they were dismissed as lead plaintiffs, but permitted to be included in the putative class of "[a]ll persons who browsed either of the Websites in the State of California after clicking the 'Reject Advertising Cookies' button in the popup cookies consent banner" during the class period.

Privacy claims. The court denied Dollar Tree's motion to dismiss the plaintiffs' privacy claims. While those who browse the Internet on their own volition cannot have broad privacy expectations, here, the expectations of privacy were created by Dollar Tree itself when Dollar Tree's website proffered an option to reject advertising cookies and the plaintiffs so opted with a mouse-click.

Moreover, the plaintiffs plausibly pleaded that the alleged privacy invasion was highly offensive; there was sharing, without consent, of information including but not limited to the plaintiffs' Internet browsing history, user input data, geolocation data, demographic information, and shopping behaviors. This, the magistrate judge found, was sufficiently offensive to support an invasion of privacy claim, and dismissal was denied.

As for the CIPA claims, the magistrate judge found that the plaintiffs did not plausibly allege a wiretapping claim. The complaint lacked allegation that Walsh, the remaining plaintiff, "actually generated any user input data or that such data was read, attempted to be read, learned, or communicated in any way by or to third parties." As for the intent requirement, the complaint could be reasonably inferred to allege "that Dollar Tree entered into agreements with the identified third parties to place cookies on the devices of consumers who visit Dollar Tree’s website." The CIPA wiretapping allegation was thus dismissed, with leave to amend.

The CIPA pen register statute, however, was found to have been sufficiently pleaded; dismissal of that count was accordingly denied. The magistrate judge found that the statutory language is "specific as to the type of data collected but vague and inclusive as to the form of the collection tool." The actions alleged in the complaint therefore have the possibility of being a pen register violation.

Damages. The magistrate judge ruled that the complaint does not adequately plead damages. This was fatal to the contract claims, the fraud claim, and the trespass to chattels claim; those claims were dismissed with leave to amend. Inasmuch as the privacy claims were dismissed, the unjust enrichment claim could stand as an alternative; dismissal of that claim was thus denied at this stage.

The Case is No. 5:25-cv-01601-SVK.

Judge: Keulen, S.

Attorneys: Hayley A. Reynolds (Gutride Safier LLP) for Marco Walsh. Jason David Russell (Meagher & Flom LLP) for Dollar Tree Stores, Inc.

Companies: Dollar Tree Stores, Inc.

Cases: Advertising Privacy CyberPrivacyFeed DataPrivacy CaliforniaNews