Antitrust Law Daily Wrap Up, PRIVACY—N.D. Ga.: Common law invasion of privacy claims against computer store and franchisor survive dismissal, (Jun 8, 2015)

By Michael Menzhuber, J.D., LL.M.

A motion to dismiss state law claims against a computer store franchisor and franchisee, for violating the Georgia Computer Systems Protection Act (GCSPA) and common-law invasion of privacy, was granted in part and dismissed in part by the federal district court in Atlanta (Peterson v. Aaron’s Inc., June 3, 2015, Thrash, T.).

Background. Aspen Way Enterprises, Inc. (Aspen), a Montana-based franchisee of Aaron’s, Inc. (Aarons), leased and sold personal computers. A software (PC RA), which was installed on Aspen’s lease-purchase computers allowed Aspen to remotely access private information stored on the computers.

Michael Peterson and Matthew Lyons (plaintiffs), residents of Colorado and Oklahoma respectively, leased-purchased computers from Aspen’s Colorado retail store. They claimed that Aspen, through the installed PC RA, remotely accessed their computers and retrieved personal information.

The plaintiffs brought suit against Aspen and Aarons asserting state law claims for: (1) violation of the GCSPA; and (2) common-law invasion of privacy. In response, Aspen and Aarons filed a motion to dismiss

Georgia Computer Systems Protection Act (GCSPA). Aspen and Aarons argued that the plaintiffs’ GCSPA claims should be dismissed because all of the alleged unlawful acts took place outside of Georgia. The court agreed. It noted that: (1) no part of the GCSPA indicates that it applies extra-territorially; (2) neither of the plaintiffs were residents of Georgia; (3) Aspen was a Montana-based franchise that leased computers to the plaintiffs out of its Colorado store; and (4) there were no allegations that Aspen conducted any of its alleged unlawful acts from Georgia. The court, after noting the distinction between conflict of law principles and statutory, dismissed the plaintiffs’ arguments that, based on Georgia’s choice of law rules, the GCSPA applied.

The plaintiffs also argued that the GCSPA applied because there might be class members, in the class they sought to represent, who lived in Georgia. However, the court noted that the question was whether the plaintiffs stated a plausible claim under the GCSPA and, because they did not, dismissed their argument.

Common-Law Invasion of Privacy. The plaintiffs asserted a claim for unreasonable intrusion of seclusion, an aspect of the invasion of privacy involving prying or intrusions into a person’s private concerns. The court denied Aspen’s motion to dismiss because the plaintiffs alleged that the Aspen installed surveillance software, PC RA, on the computers that they leased-purchased. Aspen argued that the PC RA software was installed to track down lost or stolen computers. However, the plaintiffs alleged that Aspen used the software to collect private information and this was sufficient to sustain their claim against Aspen.

The plaintiffs alleged that Aarons engaged in a common-law invasion of privacy by: (1) conspiring with Aspen to access their computers and collect private information; and (2) “aiding and abetting” Aspen’s surveillance of its customers. The court disagreed that Aarons conspired with Aspen because there was no evidence to support the allegation.

The court, however, found that the plaintiffs adequately alleged that Aarons knew that Aspen was invading its customers’ privacy and provided substantial assistance which aided Aspen’s unlawful acts. Specifically, the court found that Aarons: (1) promoted PC RA to Aspen; (2) trained Aspen personnel to use PC RA; (3) granted Aspen permission to use PC RA websites; and (4) provided Aspen with the use of anti-virus software in relation to PC RA.

Aarons argued that Georgia law does not recognize “aiding and abetting” liability for a common-law invasion of privacy claim. However, the court determined that the “aiding and abetting” was a means by which Aarons might be found “jointly liable” for the invasion of privacy claim asserted against Aspen and the plaintiffs were not required to establish an independent “aiding and abetting” claim.

The case is No. 1:14-CV-1919-TWT

Attorneys: Andrea Solomon Hirsch (Herman Gerel, LLP) for Michael Peterson. Kristine McAlister Brown (Alston & Bird) for Aaron's, Inc. Anthony Joseph Williott (Marshall, Dennehey, Warner, Coleman& Goggin) for Aspen Way Enterprises, Inc.

Companies: Aaron's, Inc.; Aspen Way Enterprises, Inc.

Cases: Privacy GeorgiaNews