Privacy Complaint Should Be Dismissed for Failure to State a Claim: X-Mode

Plaintiff Norma Egan’s claims in a privacy suit must be dismissed, said defendant X-Mode Social Friday in a memorandum of reasons (docket 1:23-cv-11651) in support of its motion to dismiss her July lawsuit (see 2307260030) in U.S. District Court for Massachusetts in Boston.

Egan, a Massachusetts resident, sued X-Mode for allegedly violating state law by acquiring and tracking consumers’ “precise geolocation data and other data through the use of XDK spyware and then profiting from the data by selling it to others without obtaining consent.” In her first amended complaint in October (see 2310300054), Egan “speculates that downstream purchasers could use that location data to identify vulnerable populations like abortion recipients or mosque worshippers -- none of which has allegedly happened to her,” said the memorandum.

The Massachusetts court lacks personal jurisdiction over X-Mode, a Herndon, Virginia-based company with “no forum-specific contacts,” said the memorandum. Egan alleges X-Mode targeted Massachusetts because it is one of “the most prosperous states in the United States,” and X-Mode purportedly “derived substantial revenue” from Massachusetts residents.

That assumption is “unfounded and untrue,” said the memorandum, saying during the time period alleged in the complaint, location data from mobile devices seen in Massachusetts accounted for just 0.15% of X-Mode’s acquired location data. The venue in Massachusetts is “improper,” it said, because “no alleged events or omissions occurred” in the state, except for Egan’s “unilateral activities in downloading an unnamed app.” Any “supposed effects” of X-Mode’s e-commerce business “felt in Massachusetts are indistinguishable from those allegedly felt in any other state, meaning that a ‘substantial’ part of X-Mode’s alleged events or omissions did not occur here,” it said.

Egan lacks standing to pursue her claims because she has not alleged any actual injury to herself, said the memorandum. Egan has not suffered an injury in fact “because she has not alleged that her information has actually been used by any third party, much less in an injurious way,” it said. She alleges a “theoretical possibility of privacy invasion -- based on a theoretical possibility of a third party cross-referencing her X-Mode location data with personal identifiers -- all of which is too speculative to state a claim,” it said.

Egan fails to state any claim, said the memorandum, saying her unjust enrichment claim is “foreclosed as a matter of law.” Because the plaintiff didn’t provide any information, or benefit, to X-Mode directly, her unjust enrichment claim against X-Mode must be dismissed, the defendant said.

X-Mode had no dealings with end users of mobile apps, including end users in Massachusetts, and it did not use location data to identify or interact with them, said the memorandum. The location data that X-Mode acquired was correlated to a unique Mobile Advertising IDs tied to the device that generated it, “without any information that specifically identified the device’s user,” it said; also, end users “were not identifiable using X-Mode’s data alone,” it said.

Egan said she downloaded an unnamed app to her cellphone in January 2021 to track the locations of family members, said the memorandum. The app “obtained her consent to collect and share her data,” then sold the data to X-Mode when Egan used the app, said the memorandum. Egan didn’t allege that her location has ever been used to identify or track her or that her location data was even purchased from X-Mode or put to any use, it said.

Instead, Egan “speculates that, if a theoretical purchaser of X-Mode’s data manually coupled it with information from other sources (e.g., data from unscrupulous third parties that attempt to link Mobile Advertising IDs to 'offline' information), that data ‘could be used’ to identify users and reveal their locations,” said the memorandum. “Plaintiff does not allege -- and could not plausibly allege -- that X-Mode provided location data to any purchaser that has done so,” it said.

If any portion of Egan’s lawsuit survives the motion to dismiss, the case should be transferred to U.S. District Court for Eastern Virginia, “where X-Mode is headquartered and its core employees reside,” said the memorandum.