Class-action lawsuits have become a clever way for plaintiffs to dust off decades-old statutes and apply them to cutting-edge problems, like data interception in digital ads or AI models gobbling up copyrighted works. Laws such as the Electronic Communications Privacy Act (ECPA) from 1986, originally aimed at wiretaps, are now weapons against sneaky online tracking. Similarly, the Copyright Act and Illinois’ Biometric Information Privacy Act (BIPA) are getting fresh workouts in the AI era. These cases show how creative lawyering can bridge the gap between outdated rules and modern tech risks. In this deep dive, we’ll unpack the key battles, from national security twists on ad tech to blockbuster settlements in biometrics and generative AI, plus a growing front in healthcare where ECPA is clashing with patient data tracking.
ECPA’s ‘Party Exception’ Gets a National Security Check: The Bulk Data Transfer Angle
At the heart of many wiretapping claims under ECPA is the “party exception,” which shields someone from liability if they’re part of the conversation and consent to the interception. But there’s a catch: if that interception is done to commit a separate crime or tort, immunity vanishes. Enter the U.S. Department of Justice’s Bulk Data Transfer Rule, finalized in April 2025, which bans U.S. entities from bulk-sharing sensitive personal data—like genomic info, health records, or precise geolocation—with “countries of concern” such as China, Russia, Iran, North Korea, Cuba, and Venezuela. Violations? Civil penalties up to $377,700 or twice the transaction’s value, plus criminal risks.
This rule is fueling a wave of ECPA suits against ad platforms, arguing that data handoffs to foreign-tied players like Temu (a Chinese e-commerce giant under Beijing’s National Intelligence Law) cross into criminal territory, nuking the party exception.
Baker v. Index Exchange: Tracking Cookies as Espionage Tools?
Filed on September 2, 2025, in the U.S. District Court for the Northern District of Illinois (Case No. 1:25-cv-10517), this suit targets Index Exchange, a Canadian-based supply-side ad platform. Plaintiff John Baker claims the company deploys tracking pixels and cookies on U.S. websites to snag users’ browsing data—think URLs visited, device info, and inferred interests—then syncs it via “cookie syncing” to build rich profiles. That data allegedly flows to Temu, enabling hyper-targeted ads but also risking weaponization for profiling, coercion, or blackmail under China’s data laws.
Baker argues this setup violates ECPA’s interception ban (18 U.S.C. § 2511) because Index Exchange’s consent as a “party” doesn’t count—it’s all in service of breaching the Bulk Data Transfer Rule, a qualifying “crime.” The complaint details how syncing merges IDs across platforms, creating a “shadow profile” of over 100,000 U.S. users’ sensitive behaviors, from shopping habits to political leanings. Index Exchange moved to dismiss on October 31, 2025, calling the claims speculative and the rule inapplicable to ad tech. An amended complaint filed recently sharpened the allegations, emphasizing Temu’s ties to Chinese intelligence mandates.
Challenges ahead: Proving intent to violate the rule and linking it to ECPA harm. But if it sticks, this could open floodgates for ad-tech liability, forcing platforms to audit foreign data flows. As of November 2025, the case is in early motions, with discovery looming.
Porcuna v. Xandr: Microsoft’s Ad Arm in the Crosshairs
Hot on Baker’s heels, Porcuna v. Xandr, Inc. (filed the same day in the same court, Case No. 1:25-cv-10516) mirrors the playbook against Microsoft’s ad subsidiary. Plaintiff Maria Porcuna alleges Xandr’s infrastructure—pixels embedded on third-party sites—captures communications like HTTP requests and headers, then pipes them to Temu through similar syncing tech. The suit claims over 100,000 users’ data was funneled, violating ECPA by dodging the party exception via the Bulk Data Transfer Rule.
Deeper wrinkles: Xandr’s scale (handling billions of ad impressions daily) amplifies the breach’s scope, with the complaint citing specific “segments” like health interests or financial status that could be bulk-transferred. Microsoft defends Xandr’s practices as standard industry fare, not criminal, and argues no “interception” occurs since data is anonymized. Yet plaintiffs counter that China’s laws compel Temu to share with the state, turning ad data into a national security vector.
Like Baker, a dismissal bid is pending, but these twin suits signal regulators and plaintiffs eyeing ad ecosystems for Bulk Rule enforcement. Outcomes could reshape cross-border data pacts, urging companies to geofence sensitive shares.
ECPA in the Healthcare Arena: Pixels, Portals, and Patient Secrets
ECPA’s reach extends deep into healthcare, where tracking tools like Meta’s Pixel or Google Analytics on provider websites are accused of snagging protected health information (PHI) mid-transmission—think appointment requests or portal logins—without consent. These suits often invoke ECPA’s crime-tort exception by tying interceptions to HIPAA violations, arguing that sharing PHI for ads turns routine site visits into unlawful wiretaps. With telehealth booming, courts are split: some greenlight claims with solid allegations, others toss vague ones. Here’s a look at standout 2025 battles.
In re Meta Pixel Healthcare Litigation: The Pixel Plague on Patient Portals
Launched June 17, 2022, in the U.S. District Court for the Northern District of California (Case No. 3:22-cv-03580), this sprawling multidistrict litigation consolidates suits against Meta Platforms for embedding its Pixel code on over 664 healthcare sites—from hospitals to clinics. Plaintiffs, led by interim co-lead counsel including Cohen Milstein, allege the JavaScript snippet hijacks HTTP communications, relaying PHI like patient registrations, appointment queries, and treatment searches to Meta for ad targeting on Facebook and Instagram. No user consent? Check. HIPAA breach? Allegedly yes, as Meta profits from unencrypted PHI without Business Associate Agreements.
Key twists: A September 2023 ruling by Judge William H. Orrick denied Meta’s motion to dismiss ECPA claims, finding plausible “interception” of electronic communications. January 2024 saw more claims (invasion of privacy, California’s CDAFA) survive, rejecting Meta’s “public website” defense. Drama peaked in April 2025 when Magistrate Judge Virginia K. DeMarchi ordered CEO Mark Zuckerberg deposed for his role in privacy calls—upheld in May despite Meta’s pushback. By August 2025, Meta appealed to the Ninth Circuit, stalling discovery. As of November, the case churns toward class certification, with experts estimating billions in potential exposure if PHI monetization sticks. For providers: This flags the need for pixel audits and HIPAA-compliant consents.
Arnold Stein et al. v. Edward-Elmhurst Health: Negligence Joins the Fray
Filed in late 2023 and ruled on February 21, 2025, in the U.S. District Court for the Northern District of Illinois (Case No. 23-cv-14515), this suit by patients Arnold Stein and others blasts Edward-Elmhurst Health for deploying Meta Pixel on its site, allegedly piping PHI—like login details and search histories—to Facebook sans permission. Plaintiffs claim ECPA violations via unauthorized interception, plus negligence for skimping on data safeguards under Illinois law.
Judge Steven C. Seeger’s order let ECPA and negligence claims advance, ruling the allegations plausibly showed “intentional” disclosure of communications in transit. He axed other counts (like unjust enrichment) for thin damages ties but stressed HIPAA’s overlap: If PHI hit Meta, it’s a tort unlocking ECPA liability. Edward-Elmhurst argued standard disclosures covered it; the court disagreed, noting pixels’ opacity. Now in discovery as of November 2025, this could set precedents for negligence add-ons, pushing providers to firewall tracking from patient zones.
Recent Rulings: Wins and Warnings from August 2025
Four federal decisions in August 2025 sharpened the ECPA-HIPAA blade, mostly from Illinois and Washington courts, dissecting tracking on health sites.
In an unnamed urgent care case (N.D. Ill.), plaintiffs survived dismissal by detailing Pixel transmissions of PHI (e.g., conditions, locations) to Meta/Google, plausibly breaching HIPAA and voiding ECPA’s party exception—despite profit motives.
Contrast: A hospital suit (N.D. Ill.) got bounced for vagueness; claims of general browsing didn’t specify PHI disclosed, failing to link to actionable HIPAA harm.
Similarly, a medical device manufacturer’s case (N.D. Ill.) flopped—trial requests for info were too far from patient-provider exchanges to trigger HIPAA.
But in a Washington addiction treatment provider suit (W.D. Wash.), ECPA claims marched on: Online assessments and appointment forms sent to Meta counted as PHI, greenlighting the tort exception. Negligence fell short on damages, though. Takeaway: Detail is king—providers, segment sites and consent explicitly.
Biometrics Gone Wild: Clearview AI’s Equity Twist
Clearview AI’s facial recognition empire—built by scraping billions of public photos into a biometric database—drew fire under BIPA, which bars non-consensual collection, use, or sale of Illinoisans’ biometrics without notice and opt-in. Multiple class actions consolidated in 2020 (In re Clearview AI, Inc., Consumer Privacy Litigation, N.D. Ill. Case No. 1:21-cv-00135) accused the startup of profiting from unauthorized scans, selling access to law enforcement without safeguards.
After years of battles—including Clearview’s wins on standing and extraterritoriality—the parties inked a groundbreaking March 20, 2025, settlement approved by Judge Sharon Johnson Coleman. Instead of cash (which might bankrupt the firm), class members—any U.S. resident with a public photo scraped—get a 23% equity stake, potentially worth $51.75 million if contingencies like funding rounds hit. Claims deadline: October 25, 2025. Objections poured in from 22 state AGs and D.C., slamming the deal for weak accountability and ongoing risks to marginalized groups.
Plaintiffs hailed it as innovative redress; critics say it incentivizes Clearview’s growth, ironically boosting the very surveillance they fought. Implications: BIPA suits may pivot to equity remedies for cash-strapped defendants, but watch for appeals testing the settlement’s fairness under Rule 23.
Genetic Goldmine Breached: 23andMe’s $30 Million Reckoning
A October 2023 credential-stuffing attack exposed 6.9 million 23andMe users’ data—names, birthdates, ancestry, and DNA relatives—via recycled passwords. Class actions (e.g., In re 23andMe Data Breach Litigation, N.D. Cal.) alleged negligence: lax security for ultra-sensitive info, delayed notices, and failure to warn high-risk groups like those with Chinese or Ashkenazi Jewish ancestry, whose profiles were cherry-picked by hackers for potential extortion or discrimination.
Settlement: $30 million in September 2024, plus three years of free monitoring. U.S. class members get $5–$500 base (pro rata), up to $10,000 for proven harms like identity theft. A separate $50 million deal for states like California covers attorneys’ fees. 23andMe blamed users’ weak passwords but pledged multi-factor authentication and breach alerts. Final approval pending, but it underscores biotech’s duty to match safeguards to data’s “gold dust” value—genomics that could fuel eugenics or blackmail.
AI’s Copyright Crunch: Bartz v. Anthropic’s Billion-Dollar Buyout
Authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson sued Anthropic in August 2024 (N.D. Cal. Case No. 3:24-cv-05417) for scraping 500,000+ books via shadow libraries like LibGen to train Claude AI, alleging infringement beyond fair use. At summary judgment, training on copies likely cleared fair use, but storing them in a “central library” didn’t unless legally sourced.
Class certified, the August 2025 $1.5 billion settlement—U.S. history’s largest—pays per qualifying work, with opt-out rights. But Judge denied preliminary approval in September, citing fuzzy allocation for multi-claimant books. Revised terms seek nod by year-end. For AI firms: License data proactively; for creators: This tests fair use’s limits, potentially hiking training costs 20–50%.
From Infringement to Infinite Logs: NYT v. OpenAI’s Privacy Clash
The New York Times’ December 2023 suit (S.D.N.Y. Case No. 1:23-cv-11195) blasts OpenAI and Microsoft for ingesting millions of articles to train ChatGPT, outputting near-verbatim copies. A May 13, 2025, preservation order by Magistrate Judge Ona T. Wang mandates retaining all 400 million+ users’ chat logs indefinitely—segregating deletes—to probe infringement evidence.
OpenAI appealed June 2025, arguing it guts privacy (GDPR/CCPA mandates minimization) and user trust; CEO Sam Altman tweeted for AI-chat privilege like attorney-client. NYT insists logs show regurgitation. Ongoing: Motion to reconsider denied; full trial eyes 2026. Lesson: AI providers, bake in litigation holds—deletion policies could boomerang.
Navigating the Surge: Tips for Businesses in the Hot Seat
These suits spotlight how AI and data flows invite repurposed liability under ECPA, BIPA, and copyrights—now with healthcare pixels adding HIPAA heat. Trends: Equity settlements for viability, heightened national security scrutiny, data retention mandates clashing with privacy, and pixel-specific consents. To shield up:
- Audit ad tech for Bulk Rule risks—geoblock sensitive shares.
- License AI training data; document fair use rigorously.
- Fortify breach defenses with ancestry-aware alerts.
- Embed holds in AI logs for e-discovery.
- For health sites: Scrub trackers from PHI zones, layer HIPAA consents.
As tech races ahead, these “zombie laws” keep pace. At Captain Compliance, we help map your exposures—reach out for a tailored audit and turn privacy compliance into your moat.
