Safelite sued for alleged privacy violations, calls plaintiffs’ settlement demand unrealistic

A class action lawsuit filed against Safelite Group, owner of Safelite Auto Glass, in California, alleging “agregious violations of consumer privacy and breach of consumer trust,” may not be moving into mediation any time soon.

Plaintiffs Michael Winston and David Buehler allege the aggregate amount in controversy exceeds $5 million, exclusive of interest and costs, and that Safelite has violated the:

• • California Invasion of Privacy Act
  • California Constitution
  • California wiretap acts
  • California Penal Code § 484(a), which prohibits the knowing theft or defrauding of property “by any false or fraudulent representation or pretense;”
  • Fourth Amendment right to privacy.

They also allege intrusion upon seclusion; common law fraud, deceit and/or misrepresentation; and unjust enrichment.

According to a May 28 statement filed with the court, the plaintiffs are “‘willing to participate in mediation’  and have begun preparing for it.”

Safelite states in the document that it has “received plaintiffs’ settlement demand and is conducting a thorough evaluation of its merits. While Safelite does not oppose ADR [alternative dispute resolution] in principle, it believes that mediation should proceed only when the parties have a realistic basis for reaching agreement, and Safelite is not yet in a position to determine whether that threshold has been met.”

In their complaint, the plaintiffs requested that the court grant:

• • Compensatory damages, including statutory damages where available, to plaintiffs and class members, including pre- and post-judgment interest;
  • Punitive damages;
  • Nominal damages;
  • Full restitution;
  • An order requiring Safelite to disgorge revenues and profits allegedly wrongfully obtained;
  • An order temporarily and permanently enjoining Safelite from continuing the “unlawful, deceptive, fraudulent, and unfair business practices” alleged in the complaint; and
  • Reasonable attorneys’ fees and the costs of suit incurred.

“When consumers visit defendant’s e-commerce website (www.safelite.com, the ‘website’), defendant displays to them a pop-up cookie consent banner,” the Jan. 23 complaint states. “Defendant’s cookie banner discloses that the website uses cookies but expressly gives users the option to control how they are tracked and how their personal data is used. Defendant assures visitors that rather than accepting cookies, they can choose to adjust the website’s ‘cookie settings’ by clicking or selecting the link to do so…

“Even after users elect to adjust the website’s “cookie settings” to decline or reject all cookies, other than those “strictly necessary cookies,” which defendant represented were ‘cookies needed for the [w]ebsite to function,’ defendant nonetheless caused multiple third parties —including Meta Platforms, Inc. (Facebook), Google LLC (DoubleClick and Google Analytics), Microsoft Corp. (Microsoft Bing), ByteDance Ltd. (TikTok), Salesforce, Inc. (force.com), and LinkedIn Corp. (a subsidiary of Microsoft Corp.) (‘the third parties’) — to place and/or transmit cookies that track users’ website browsing activities and intercepted their private communications on the website.”

The suit further alleges that without user consent, cookies and tracking technologies, including from the above-named third parties, were sent to plaintiffs and other visitors’ browsers, stored on their devices, and transmitted to the third parties along with user data. Real-time data that was allegedly tracked and collected includes website visitors’ browsing history, visit history, website interactions, user input data, demographic information, interests and preferences, shopping behaviors, device information, referring URLs, session information, user identifiers, and/or geolocation data, including whether a user is located in California.

“The third parties analyze and aggregate this user data across websites and time for their own purposes and financial gain, including creating consumer profiles containing detailed information about a consumer’s behavior, preferences, and demographics; creating audience segments based on shared traits (such as Millennials, Californians, tech enthusiasts, etc.); and performing targeted advertising and marketing analytics,” the suit states.

“Further, the third parties share user data and/or user profiles to unknown parties to further their financial gain. This type of tracking and data sharing is exactly what website visitors sought to avoid when they adjusted their cookie settings to decline or reject cookies. Defendant falsely told website users that it respected their privacy choices and would refrain from tracking and data sharing when users rejected cookies. Despite receiving clear notice of users’ lack of consent, defendant ignored those choices and violated state statutes and tort duties owed to plaintiffs and those similarly situated website users.”

Safelite filed a May 11 reply with the court arguing that the “entire lawsuit rests on an alleged misrepresentation.”

“[T]hey argue they need not plead any specifics surrounding their visits to Safelite’s website to establish standing, plausibly state their claims, or establish timeliness. Their arguments are contrary to Ninth Circuit authorities, and the complaint should be dismissed with prejudice for multiple reasons.

“First, on their face, plaintiffs’ claims are time-barred, and their allegations supporting application of the discovery rule, fraudulent concealment rule, and equitable tolling lack the factual specificity required by Rule 9(b) or applicable law. Second, plaintiffs lack Article III standing because their allegations do not show a highly offensive intrusion. Third, because each cause of action is premised entirely on fraud, plaintiffs’ failure to satisfy Rule 9(b) is fatal. Fourth, plaintiffs have not plausibly pled the required elements of their intrusion upon seclusion or CIPA claims. Fifth, plaintiffs’ unjust enrichment claim is based on pure speculation untethered to any well-pled facts.”

Safelite also argued Buehler’s assertion that the discovery rule postponed accrual of his claims and the fraudulent concealment rule fail because he didn’t plead facts “plausibly supporting the application of either rule.”

“As an initial matter, Buehler’s argument that Rule 9(b) does not apply is legally incorrect… Buehler fails to allege any facts that plausibly support an inference of reasonable, good faith conduct required for equitable tolling.”

Safelite filed for dismissal of the case, which Judge James Donato denied.

In March, Safelite settled two alleged insurance fraud lawsuits filed by a former Safelite AutoGlass employee for $31 million.

According to the second amended California complaint, Safelite allegedly produced false and misleading bills to insurance companies regarding a replacement part it uses to repair automobile glass, and for services provided to only a small number of customers.

Both complaints, the other filed in Illinois, were filed in January 2023 by Brian Williams, former Safelite product development and strategy manager. According to the complaints, Safelite violated each state’s insurance claims fraud prevention laws by allegedly billing for windshield molding parts and vehicle cleaning services provided during the COVID-19 pandemic.

The Illinois complaint adds, “Together, these schemes resulted in tens — if not hundreds — of millions of dollars in overcharges to private insurers for claims filed in Illinois alone; overcharges which have undoubtedly been passed on to all Illinois citizens through increased premiums.”

It also states that, in many cases, Safelite used neither OEM nor vehicle-specific aftermarket window moulding to replace the damaged moulding.

Earlier this year, the Independent Auto Glass Association (IGA) filed an antitrust complaint against Safelite Group with the Office of Policy and Coordination Bureau of Competition following an announcement that State Farm would switch from LYNX Services to Safelite Solutions as its third-party administrator (TPA) on July 1.

IGA calls State Farm’s shift to Safelite Solutions for claims administration a “concerning” development.

The complaint also raises concerns with the National Council of Insurance Legislators’ (NCOIL) Motor Vehicle Glass Model Act, which says Safelite participated in creating the draft without input from the industry as a whole.

The IGA recently released a formal rebuttal to the Vehicle Glass Model Act adopted by NCOIL in March.

As of April 2, more than 400 glass shops had signed up for IGA to send letters on their behalf to state and federal politicians regarding Safelite Solutions, according to an IGA Facebook post.

The letter states the ramifications of unchecked market dominance by Safelite are far-reaching and detrimental and include:

• • Erosion of fair competition
  • Restricted consumer choice
  • Inherent conflicts of interest
  • Potential for inflated costs
  • Compromised quality and safety
  • Undue influence on market standard

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