On April 29, Michigan Attorney General (AG) Dana Nessel filed a lawsuit against Roku, Inc. (Roku), the smart TV and device provider and streaming service, alleging Roku violated the Children’s Online Privacy Protection Act (COPPA), federal and state privacy laws, the Michigan Consumer Protection Act, and other laws by collecting children’s personal data and selling it without proper parental consent. The lawsuit sought damages and equitable relief on behalf of Michigan consumers who subscribed to Roku’s streaming service. More information regarding this lawsuit can be found here.

On July 14, Roku responded by filing a motion to dismiss, seeking to dismiss the state’s claims except for the COPPA claims. Roku argued that the AG did not have standing to pursue the non-COPPA claims and that those claims fail as a matter of law because they are not sufficiently pled. Roku did not seek dismissal of the COPPA claims through a pre-answer motion.

Roku Contests Alleged Collection and Sharing of Children’s Data

The Michigan AG’s lawsuit alleged Roku systematically collected children’s personal data and allowed third parties to collect such data. Roku’s motion contested the basis of these allegations and asserted that the claims were not sufficiently pled. Roku argued that the state misrepresents how its services operate and how the company works to protect user privacy. Roku further argued it does not use or disclose children’s personal information for targeted advertising or other prohibited purposes and does not partner with third-party trackers or data brokers to sell children’s data.

Roku asserted that the company only allows Roku devices or mobile applications to be used through accounts created by registered users who are 18 or older and who have agreed to Roku’s terms of use. Roku also emphasized that it “does not currently offer options for sub-accounts or profiles,” so it relies on an adult parent or guardian to manage and control how their children use Roku accounts. Roku argued that it is impossible for it to have actual knowledge of whether activities and data generated within an account are attributable to a child because it “does not use individual user profiles or know the identity of those users outside of the registered [adult] account holder.” Roku further argued that it is not reasonably foreseeable that an ordinary person could identify an individual from the user data it currently processes.

Finally, Roku refuted the Michigan AG’s allegations that it violated the Michigan Consumer Protection Act because it provided clear explanations about its data sharing practices to adult account holders. Roku further argued that its “Do not share or sell my personal information” setting, a feature required by California law, was not misleading for Michigan users. It argued that the accompanying explanatory text clarified that this setting’s scope was limited to restricting “cross-context behavioral advertising” or “targeted advertising,” which was sufficient to prevent a reasonable user from assuming a broader limitation on data sharing as alleged by the Michigan AG.

Roku Also Refuted the Michigan AG’s Standing

Roku also challenged the Michigan AG’s standing to pursue a lawsuit under the doctrine of parens patriae. The doctrine of parens patriae authorizes AGs to pursue civil actions on behalf of the residents of their states in cases where those individuals cannot protect themselves.

Roku argued that while states can assert parens patriae in certain situations, it is a limited exception to the rule that a litigant must bring their own claims. Roku claimed that the specific circumstances of the AG’s claims did not justify the use of parens patriae because the Michigan AG’s office was seeking individual claims for damages.

Roku argued that a “quasi-sovereign” interest, such as the physical or economic interest of the state’s residents, must be involved for a state to utilize its parens patriae authority to bring claims on behalf of its residents. Roku asserted that the Michigan AG’s lawsuit, which focused on the alleged disclosure of Roku users’ personal video watching history, failed to identify a quasi-sovereign interest. Therefore, Roku contends that AGs are generally not permitted to bring damage claims for their residents in the manner the Michigan AG attempts in this case.

Roku also cautioned against potential issues if states were broadly allowed to utilize their parens patriae authority in the manner proposed by the Michigan AG. Roku alleged that this approach is tantamount to consolidating numerous individual plaintiffs into a class action suit without adhering to the inherent safeguards and due process requirements of a formal class action. In a formal class action, a representative plaintiff brings a claim on behalf of many others while providing notice and the opportunity to be heard to other potential class members; whereas, in the parens patriae claim, Michigan residents do not have the opportunity to be heard or to allege their harms with any particularity as the AG’s office is pursuing the claims. Pursuant to the briefing schedule stipulated by the parties, the AG’s opposition to the motion to dismiss is scheduled to be filed on or before August 18.

Troutman Pepper Locke State Attorneys General Team

	Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation.
	Clay Friedman – Co-leader Clay co-leads the firm’s State Attorneys General practice and is nationally ranked by Chambers USA for AG Government Relations and in Best Lawyers for Advertising Law. He has dedicated his entire career to state attorney general and federal work, serving for nearly a decade in a senior role and more than 25+ years in private practice. Clay focuses his practice on helping industry-leading companies mitigate the risks associated with state and federal regulatory investigations and associated litigation.
	Chris Carlson Chris advises clients on regulatory, civil, and criminal investigations and litigation. With a background as an assistant attorney general, he provides practical guidance to clients with matters involving state attorneys general and federal regulatory agencies.
	Lauren Fincher Lauren has vast experience handling state attorneys general investigations, navigating complex regulatory compliance matters, and providing strategic counsel in enforcement actions across various industries. She helps clients manage high-stakes regulatory matters and guides them through complex legal landscapes.
	Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, representing clients in single and multistate enforcement actions, including inquiries and investigations, as well as litigation involving state attorneys general and other state and federal governmental enforcement bodies. He has significant experience handling actions with federal agencies, including the CFPB and FTC, as well as single plaintiff and class action litigation for clients in highly regulated sectors such as financial services, health care, pharmaceutical, and education.
	Michael Yaghi Mike handles high-profile state attorneys general, FTC, and CFPB investigations by advising clients through these complex government inquiries. He assists clients through the entire life cycle of investigations, from regulatory enforcement through formal litigation.
	Samuel E. “Gene” Fishel Gene is a former regulator with two decades of experience who has overseen state privacy and cybersecurity regulation enforcement, led national, multistate attorneys general privacy investigations, and prosecuted computer crimes at the state and federal levels. He has served at the forefront of state attorney general and federal enforcement, and utilizes this experience to proficiently represent client interests.
	Jay Myers Jay assists clients in heavily regulated industries, including health care, energy, insurance, emerging industries, and data privacy. He provides both regulatory legal advice and government relations strategies. Jay’s past and current clients include Fortune 10 companies, startups, nonprofits, industry associations, and advocacy groups. Recognizing that state government matters are often complex and multifaceted, he utilizes regulatory guidance, government advocacy, or both in tandem to deliver tailored solutions for each client’s unique needs.
	Jessica Birdsong Jessica is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, magna cum laude, where she served as associate articles editor of the Journal of Law & Technology.
	Blake R. Christopher Blake collaborates with clients on matters related to government contracting, investigations, and disputes. His senior-level government experience generates valuable insights and strategies for clients across a variety of industries.
	Nick Gouverneur Nick is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. He received his J.D. from the University of Illinois College of Law, where he served as a member of the Journal of Law, Technology & Policy.
	Troy Homesley Troy is an accomplished litigator who has represented and defended clients across a wide range of complex, high-stakes disputes at both the trial and appellate levels. He has represented technology companies, business executives, law firms, investment funds, high-ranking federal officials, international non-profits, and asylum seekers. Troy draws on his broad litigation experience to advise clients before litigation arises, while claims are pending or threatened, and leading up to and through trial and appeals.
	Natalia Jacobo Natalia is an associate in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice, based on the West Coast. She routinely counsels clients on a variety of state and federal regulatory matters, with a particular emphasis on consumer protection and data privacy matters.
	Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising. Nam’s experience transcends multiple industries, including financial services, telecommunications, media, and sports betting.
	Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general.
	Philip Nickerson Philip represents clients in sectors such as financial, tech, real estate, and energy in a range of litigation matters. He is experienced in matters involving trade secrets, government investigations, commercial contracts, construction and product defect.
	Lane Page Lane specializes in federal and state regulatory investigations and complex civil litigation. He focuses on representing financial institutions and other businesses, with a particular emphasis on consumer protection and fair lending issues.
	Dascher Pasco Dascher is an attorney within the Regulatory Investigations, Strategy, and Enforcement practice, based in the Richmond office. She joined our firm after working in personal injury and medical malpractice for a Virginia trial law firm. Dascher brings varied legal experience to the firm with strong litigation and regulatory strategy capabilities.
	Kyara Rivera Rivera Kyara is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, cum laude, where she served as publications and online editor of the Public Interest Law Review.
	Timothy Shyu Timothy is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group.
	Trey Smith Trey focuses his practice on representing and advising regulated utilities before state public utility commissions. He routinely helps clients obtain certificates of public convenience and necessity for transmission infrastructure. In this role, Trey works with his clients’ subject-matter experts to manage administrative proceedings, including by preparing initial filings; responding to discovery requests; drafting rebuttal testimony; and litigating any disputed issues.
	Daniel Waltz Dan helps clients navigate all aspects highly regulated relationships between industry participants and federal, state and local governments. Whether engaging with regulators, negotiating transactions or representing clients in the courtroom, he delivers solutions that help his clients achieve their strategic goals.
	Cole White Cole is a member of the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) group. He has a decade of experience working in the attorney general community, having joined the firm from the Wyoming Office of the Attorney General, where he was assistant attorney general.
	Stephanie Kozol Stephanie is Troutman Pepper Locke’s senior government relations manager in the state attorneys general department.