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The federal court in San Francisco is arguably the nation’s epicenter for litigation over the unauthorized gathering and use of consumer data by tech companies.
On Monday, U.S. District Judge James Donato gave the green light for plaintiffs to proceed in their high-stakes lawsuit against a leader in educational technology or “EdTech” space, asserting an invasion of privacy from the defendant’s collection and use of student data.
The court’s decision recognized that students have an interest in the privacy of the data that they share with their schools, and it is reasonable for students to expect that their data be used only for bona fide educational purposes.
The suit
In May of 2024, a Contra Costa parent sued PowerSchool Holdings Inc, a for-profit provider of information services to school districts in California and around the country. The suit alleged that PowerSchool gathered extensive data on children without effective consent from their parents and that it monetized the data by sharing it with other companies for a fee.
The plaintiffs alleged that the practice violated a variety of federal and state statutes but, most centrally, violated California’s constitutional protection against invasion of privacy. The plaintiffs sought to represent both national and California classes of students and their parents.
PowerSchool’s basic business model is “software as a service,” or “SaaS.” It markets to school districts a “Student Information System” or “SIS” that is used to collect and store comprehensive student and school information in a cloud-based system. The company says its platform is used in 90 out of a 100 of the country’s largest school districts and is “embedded in school workflows… used by educators, students, administrators, and parents on a daily basis.”
The plaintiffs say that education is “the world’s most data-mineable industry by far,” and PowerSchool is in a unique position to do so because when school districts use its SIS platform, “PowerSchool gains virtually unfettered access to the data of the children who attend those schools.”
The data it collects includes demographic, disciplinary, medical device, college and career information, as well as all the data included in traditional school records. Not only is much of the data personal and sensitive, according to the plaintiffs, but it enables PowerSchool “to build dynamic, robust, and intimate dossiers of users, including children and their parents.”
The plaintiffs say that education is ‘the world’s most data-mineable industry by far,’ and PowerSchool is in a unique position to do so because when school districts use its SIS platform, ‘PowerSchool gains virtually unfettered access to the data of the children who attend those schools.’
The complaint alleges that PowerSchool “uses, markets, and sells those dossiers to third parties — including the licensing school district — to identify and target those users with precision.”
Plaintiffs contend that data activities in the EdTech space are more egregious than in other consumer settings, both because PowerSchool targets children and because the giving of their data is not a free choice of a consumer, as for example when a customer accepts tracking in order to buy a product on a website. Here, most of the class members attend public school and if their school district uses the system, the collection of their data is mandated.
The ruling
The judge disagreed with Power School’s move to dismiss the case and instead agreed that the case should have its day in court, shooting down the tech company’s complaint that the plaintiffs had failed to make a valid claim against them.
Here Judge Donato found that plaintiffs plausibly alleged that PowerSchool collects data about public school students through its apps and software both on and off campus.
Also plausible were the allegations that PowerSchool gathers “user-device information” and embeds “tracking technologies” on the student’s computer or tablet that allows PowerSchool to track the student on the internet “even after they have navigated away from PowerSchool’s application or website.”
The judge also found it plausible that “all this allegedly happens in connection with public-school children without their parents’ or guardians’ knowledge or consent.”
He concluded that plaintiffs plausibly alleged that PowerSchool is “misappropriating sensitive information about students, including their identities, academics, health, behavior, and web-browsing habits, in which students have an objectively reasonable expectation of privacy.”
According to the judge, collecting student data for commercial benefit without parental notice or consent plausibly describes conduct that is “highly offensive to a reasonable person and . . . constitutes an egregious breach of the social norms.”
PowerSchool argued that federal law allows the school district to share data with contractors or consultants working for the school district and therefore the students could have no reasonable expectation of privacy at least with respect to the data that the students provided to the school.
Judge Donato was not persuaded by that that rationale. He said privacy depends on the circumstances. Students have a reasonable expectation, grounded in privacy, of who will use their information and that the “that information will be used for bona fide educational purposes…”
Based on those determinations, the judge denied the motion to dismiss the California constitutional privacy claim and several statutory ones. He dismissed a few related counts, though he allowed the plaintiffs to amend their complaint to cure the defects he noted.
The decision allows plaintiffs to press their claims forward, and although many hurdles remain, gives them additional leverage in any future settlement discussions.
PowerSchool did not immediately respond to a request for comment on the decision.
Julie Liddell, co-counsel for the plaintiffs and the driving force in developing their arguments, was elated by the decision. She said, “this was a pretty big ruling to come down… to say kids do still have a right of privacy at school.”
She was particularly pleased that the judge “greenlit” the privacy claims that were at the heart of the case, “with full-throated language about kid’s rights to privacy.”
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