This post was also written by Frederick Lah.

Recently, Facebook announced a proposed settlement of a national class action in the United States District Court for the Northern District of California. Fraley, et al. v. Facebook, Inc., 5:11-cv-01726. This settlement has been described by some as settlement of a “privacy lawsuit.” See, e.g., “Facebook to Settle Privacy Lawsuit Over Ads” by Ann Miller in The Recorder (subscription required), and “Facebook Settling ‘Sponsored Stories’ Privacy Lawsuit” by David Kravets. But is the issue really privacy? For reasons from public relations to legal analysis to insurance coverage, knowing how to characterize this type of dispute is crucial.

The Fraley Complaint challenged an alleged Facebook practice in connection with sponsored ads. Per the Complaint, Facebook would not only display such ads, but would also use the “names, photographs, likenesses, and identities” of Facebook users to help promote the product to friends of those users. The Complaint alleges that a user would be associated with a product by choosing to click a “Like” button, and would then be automatically associated with the corresponding ad campaign. The company hit back with a Motion to Dismiss contesting the existence of any claimed “right of identity,” which would be inconsistent with the operation of the campaign. Thereafter, the parties reached a settlement according to a recent court filing, although details of the settlement were not available. A separate but related lawsuit alleging Facebook violates California state law by including minors in the sponsored stories program is still pending before the court.

While the proposed settlement, if approved, will avoid the need to decide these issues in this case, the ambiguities at issue have been in play in United States law for at least 50 years. Dean Prosser, in his 1960 article “Privacy” for the California Law Review, surveyed what was, even in 1960, a haphazard patchwork of legal authority on this point. He concluded:

“What has emerged from the decisions is no simple matter. It is not one tort, but a complex of four. The law of privacy comprises four distinct kinds of invasion of four different interests of the plaintiff, which are tied together by the common name, but otherwise have almost nothing in common except that each represents an interference with the right of the plaintiff…to be let alone.” Dean Prosser, Privacy, 48 Cal. L. Rev. 388, 389 (1960).

Each of the so-called Prosser torts has since found its way into privacy class action allegations in the Internet age.

“Without any attempt to exact definition, these four torts may be described as follows: 1. Intrusion upon the plaintiff’s seclusion or solitude, or into his private affairs; 2. Public disclosure of embarrassing private facts about the plaintiff; 3. Publicity which places the plaintiff in a false light in the public eye; and 4. Appropriation, for the defendant’s advantage, of the plaintiff’s name or likeness.” Id.

Prior suits regarding, for example, disclosure of Internet search histories or video rental habits, focused on the first two of these Prosser torts: intrusion upon the plaintiff’s seclusion or solitude, or into his private affairs and public disclosure of embarrassing private facts about the plaintiff. In addition, FTC consent orders such as those entered into by Google in connection with the launch of Google Buzz, or more recently by MySpace, also involve contested claims about supposedly private affairs or private facts improperly disclosed. The Facebook settlement in Fraley is significantly different, and draws directly on the third and fourth of the Prosser torts: publicity that places the plaintiff in a false light in the public eye; and appropriation, for the defendant’s advantage, of the plaintiff’s name or likeness. The information at issue – that someone “Likes” a certain product – would have already been displayed on that individual’s profile, available to all of his or her friends. The combination of that freely available information with the sponsored ad makes no new information available. This is a “privacy” claim, if at all, under the aegis of the latter Prosser torts. Friends will falsely believe that a user has taken an endorsement role, the theory goes; name and likeness have been misappropriated.

In an age when brands live or die by their ability to leverage social media to improve customer engagement, including by user-generated content, understanding how all the Prosser torts may impact the use of consumer information is more critical than ever.