LOS ANGELES—The parent companies of Pornhub.com and Bellesa must face trial in two separate but similar legal complaints filed against them for allegedly violating provisions of key state and federal online privacy laws, including the California Invasion of Privacy Act.
As AVN has previously reported, adult industry companies like Aylo, Pornhub's parent, and Bellesa were sued in federal district courts by consumers who argue their collective privacy rights were violated because the platforms utilized otherwise commonly used digital marketing software developed by Google and found in marketing stacks across industries.
Plaintiffs Scott Adair, Kent Henderson and Tarris Wallace—represented by attorneys out of the San Diego and Los Angeles offices for Miller Shah LLP and a partner of the Chicago, Illinois-based Carroll Shamberg LLC—sued Aylo and its affiliated companies, including its Canadian and Cypriot headquartered entities.
They filed a proposed class action before the Los Angeles Superior Court, but Aylo removed the case to the Central District of California, and it is before U.S. District Judge Wesley L. Hsu. These plaintiffs alleged that Aylo violated its terms of service by using "third-party tracking technologies" on its websites, despite disclosure of such software by Aylo.
These "third-party tracking technologies" are commonplace, as noted in prior reporting, and include Google Analytics and trackers built by Aylo for the collection of user experience data and algorithmic recommendations for preferred content. Any disputes related to this information sharing require arbitration, according to filings and Aylo's terms of service.
But Judge Hsu issued a civil minutes order on July 17 saying that Aylo must face a "mini-trial" to determine whether the claims made by plaintiffs Adair, Henderson and Wallace could be appropriately resolved in a private arbitration setting. Aylo's terms require users of their platforms to engage in binding arbitration if disputes arise.
"The Federal Arbitration Act and federal arbitration law apply to this agreement," notes the terms and conditions disclosure on Pornhub.com.
The disclosure adds, "However, the Arbitrator, and not any federal, state, or local court or agency, shall have the exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability, or formation of these Terms of Service including, but not limited to, a claim that all or any part of these Terms of Service is void or voidable."
Hsu's order simply denies a motion to compel arbitration in the lawsuit only because there is a factual dispute over whether the plaintiffs created user accounts and were therefore in agreement with Aylo's terms and conditions, which contain the private arbitration clause. Attorneys for Aylo have argued that simply visiting Pornhub.com and its websites is usage.
"On this record, therefore, the court cannot conclude that plaintiffs’ evidence is insufficient to raise a genuine dispute of material fact regarding whether plaintiffs intentionally created the accounts," Hsu ordered. "Thus, the court finds a trial on this limited issue is necessary to determine this dispute and whether plaintiffs can be bound by the terms of the arbitration agreement in the 'Terms and Conditions' link on the website. ... The court orders a trial on the narrow question of whether plaintiffs intentionally created the ... accounts in question."
Corey Silverstein, an adult industry attorney, explained to AVN that Aylo could win in a trial due to existing legal doctrine determined by the 2012 federal case In re Zappos.com, Inc., Customer Data Security Breach Litigation. The Zappos.com case deals with similar claims made by the plaintiffs in both of the complaints against Aylo and Bellesa. In 2012, the U.S. District Court for the District of Nevada addressed claims against e-commerce platform Zappos and determined that the website's terms and conditions were not legally binding because they were difficult for users to locate and read. Similarly, the court found that the Zappos terms were unfair because the company could change them without telling users.
The judge ruled that businesses must clearly present their website terms and cannot give themselves unlimited power to change those terms without notice. Such a determination in this case gave way to the further development of existing internet law concepts like "browsewrap agreements" versus "clickwrap agreements." Both "wraps" are legal agreements that specify the rights and duties of the platform's ownership and the terms and conditions users are subject to while using the functions and features of the websites in question.
Hsu's order for the "narrow" trial is to determine whether the plaintiffs agreed to the terms of service by simply using the website or by creating an account and agreeing to the terms and conditions, and whether Aylo has a clearly defined browsewrap or clickwrap agreement. Browsewraps simply feature the agreements and legal disclosures at the bottom of the webpage. Clickwraps carry more weight in arbitration and legal settings because users must physically "click" a checkmark or engage in a page action consenting to the agreements.
A case can be made that the plaintiffs suing Aylo agreed to Pornhub's terms and conditions by logging on to the website and even furthering that agreement by creating accounts tied to email accounts and the personal device IP addresses used by the plaintiffs. Silverstein simplified this analysis, saying, "A court determining whether a user is bound by a website’s terms of use focuses on ordinary contract principles: Did the user receive reasonably conspicuous notice of the terms, and did the user clearly manifest agreement to them?
"The practical lesson is that merely posting terms somewhere on a site is not enough," Silverstein continued. "The link and notice should be prominent and placed next to the registration, purchase or access button, and the user should be required to take an affirmative step—ideally checking a box or clicking a button stating that the user agrees.
"Courts also examine whether the site can prove what the user saw and accepted, and whether the terms unfairly permit the operator to change its obligations unilaterally," he added.
Such agreements include disclosure of the use of marketing software to improve digital presence and user experience, including popular Google marketing tools.
A spokesperson for Aylo declined to comment, citing ongoing litigation. No date has been set for the "narrow" trial in the Aylo case.
Similar claims against Bellesa made by plaintiffs under their initials are following a different trajectory. Bellesa must face claims filed against its enterprises, despite motions attempting to shift the case outside of court.
U.S. District Judge John A. Kronstadt of the Central District of California ruled that Bellesa Productions and its U.S. affiliate must face claims in a proposed class action that alleges that users' personal data and porn viewing behaviors were shared through Google's marketing pipelines without consent.
Like the Aylo case, the plaintiffs allege violations of federal and state online privacy laws. Kronstadt determined that the plaintiffs were able to effectively plead claims of negligence, unjust enrichment, invasion of privacy and other violations, including violations of the federal Electronic Communications Privacy Act (ECPA) of 1986.
Additionally, the decision by the judge narrows the use of the federal Video Privacy Protection Act in similar litigation.
"This decision represents a meaningful defense victory on the Video Privacy Protection Act (VPPA) claim—the most often weaponized federal statute in data-privacy class actions targeting adult websites," observed Lawrence Walters, another adult industry attorney, in an email to AVN.
The VPPA was adopted by U.S. Congress during the administration of President Ronald Reagan to prohibit video rental businesses from sharing their customer data with third parties without the consent of their customers. Walters added, "Judge Kronstadt adopted the stricter 'nexus' interpretation of 'consumer' status (aligning with other recent decisions) and held that registration alone does not suffice when some video content remains freely accessible to unregistered visitors."
But the judge did rule that Bellesa still must face ECPA and state claims.
"For adult platforms, the opinion reinforces that user privacy expectations are heightened with sexually explicit content," Walters noted.
"Clear, conspicuous and accurate disclosures about tracking technologies are not merely best practices—they are increasingly the difference between early dismissal and costly discovery or settlement pressure," he concluded. "Platforms should audit their current pixel implementations, revise privacy policies and terms accordingly, and consider whether data-sharing arrangements can be narrowed or better documented. ... [P]latforms should monitor these developments closely and update compliance programs in the interim."
An attorney for Bellesa in this case, Christopher A. Lisy of the Boston office of Mintz Levin Cohn Ferris Glovsky & Popeo PC, did not respond to a request for comment by post time.
In addition to the suits against Aylo and Bellesa, separate federal class action lawsuits were filed against at least two other adult entertainment platforms last summer alleging user data privacy rights violations at the state and federal level. The companies sued in those two cases are the parents of Kink.com and RedGIFs.
Collectively, the lawsuits allege that these companies have violated federal and state law due to sharing viewing and web behaviors of users on the sites with Google's tracking and marketing behavior tools. Neither Google nor the search engine giant's parent company, the publicly traded Alphabet, is listed as a defendant. Litigation is ongoing in all four cases.
