CHRISTOPHER KARWOWSKI v. GEN DIGITAL INC (2025)

ORDER DENYING MOTION FOR ATTORNEYS' FEES

On December 19, 2022, Plaintiffs brought this lawsuit against Defendants, alleging that Defendants electronically surveilled their customers and invaded their customers' privacy “by intercepting, collecting, and storing customers' Internet search engine keyword searches, search results, and email inbox searches” through the use of browser extension products. (Dkt. No. 1 at 3.) After Defendants' first motion to dismiss was denied in part and granted in part with leave to amend (Dkt. No. 45), Plaintiffs filed an amended complaint, which added a new theory relating to Defendants' use of cookies to provide third-party advertisers with users' browser data. The Court granted in part Defendants' second motion to dismiss (Dkt. No. 64), but preserved Plaintiffs' privacy claims relating to the transmission of data via users' cookie data. In pursuit of their claims, Plaintiffs sent numerous discovery requests, including to third parties, relating to Defendants' use of cookie data. After the close of discovery, Plaintiffs moved to voluntarily dismiss their case with prejudice, which the Court granted on October 23, 2024. (Dkt. No. 137.) Now, Defendants move for attorneys' fees under Section 1927 and the Court's inherent authority, on the theory that Plaintiffs' conduct was in bad faith, or at the very least, demonstrated a reckless pursuit of meritless claims, and under Rule 37, on the theory that Plaintiffs' discovery motions were not substantially justified. For the reasons stated below, the motion is DENIED. This ruling assumes the reader is familiar with the facts, the applicable legal standards, and the arguments raised by the parties.

Section 1927 sanctions. Plaintiffs' conduct does not appear to be reckless or in bad faith such that sanctions are warranted. Plaintiffs' expert declaration establishes that some circumstantial evidence existed for their cookie theory, meaning that Plaintiffs had a good-faith basis for pursuing their allegations. (Dkt. No. 141 at 9; see generally Dkt. No. 144.) Accordingly, Plaintiffs were entitled to test their theory in discovery, rather than just accepting Defendants' representations on their face that they were not using cookies to collect users' data. Although Plaintiffs' discovery requests may have been overbroad and more burdensome than necessary, and Plaintiffs may have engaged in more motions practice than was reasonable, Plaintiffs' conduct was not so egregious as to be in bad faith or reckless. And once Plaintiffs failed to obtain the information in discovery necessary to sufficiently support their claims, they voluntarily dismissed with prejudice. Therefore, sanctions are not warranted.

Rule 37 sanctions. Similarly, Plaintiffs' requests to third parties were not without substantial justification, and attorneys' fees are not warranted under Rule 37. As previously stated, Plaintiffs were entitled to test their theory in discovery rather than accept Defendants' representations on their face, including through investigation via third-party requests.

Accordingly, Defendants' motion for attorneys' fees is denied.

Motion to seal. Finally, Plaintiffs filed an administrative motion to consider whether another party's material should be sealed (Dkt. No. 145). Based on Defendant's statement of non-opposition to unsealing the material (Dkt. No. 148), this administrative motion is denied.

IT IS SO ORDERED.

RITA F. LIN United States District Judge