• by Wendy Davis , Staff Writer @wendyndavis, June 27, 2016

Handing a partial defeat to Viacom, a federal appellate court has revived a lawsuit accusing the company of violating New Jersey privacy standards by allowing Google to set tracking cookies on the kids' site Nick.com.

But the 3rd Circuit Court of Appeals rejected claims that Viacom also violated the federal Video Privacy Protection Act -- a federal law that prohibits video providers from disclosing certain information about consumers without their permission. In addition, the appeals court sided with Google on all claims.

The court's decision, issued today, stems from a series of lawsuits filed against Viacom and Google in 2012, when attorneys for a group of children alleged that the companies violated their privacy by setting tracking cookies.

Attorneys for the children alleged that Viacom violated the Video Privacy Protection Act by disclosing information about users. Google allegedly “illegally received” the data, the lawsuits said.

The lawsuits also alleged "intrusion upon seclusion" -- a broad privacy concept that the appeals court described as "a type of invasion of privacy involving encroachment on a person’s reasonable expectations of solitude."

U.S. District Court Stanley Chesler in New Jersey threw out the cases. He ruled that placing cookies on people's computers doesn't violate the video privacy law because cookies don't contain "personally identifiable" information. Chesler also ruled that the allegations didn't amount to invasion of privacy under New Jersey law.

Today, a three-judge panel of the appellate court reversed Chesler's decision regarding the invasion of privacy claim against Viacom.

The judges wrote in the opinion that Nick.com allegedly told visitors it doesn't collect personal information about kids. "We think that a reasonable fact-finder could conclude that Viacom’s promise not to collect 'ANY personal information' from children itself created an expectation of privacy with respect to browsing activity on the Nickelodeon website," the panel wrote.

The ruling doesn't mean that Viacom will ultimately lose, but the decision paves the way for the case to continue. In that sense, it marks a loss for Viacom -- which is now in a worse position than it was before the ruling came out.

For its part, Viacom said in a statement that it is "confident that once the facts of the case are heard we will prevail on the one remaining claim."

At the same time, the appellate court's decision rejecting the federal video privacy claims marks a victory for Viacom and Google -- and could influence the outcome of privacy lawsuits against a slew of other companies, including CNN, Gannett and ESPN.

Congress passed the Video Privacy Protection Act in 1988 after a Washington, D.C. newspaper obtained Supreme Court nominee Robert Bork's video rental history from a local store. The law prohibits video rental services from disclosing personally identifiable information about customers' video-watching history, without their permission.

The 3rd Circuit said in its ruling today that persistent cookies -- at least in themselves -- aren't personally identifiable information. "In our view, personally identifiable information under the Video Privacy Protection Act means the kind of information that would readily permit an ordinary person to identify a specific individual’s video-watching behavior," the appellate judges wrote. "The classic example will always be a video clerk leaking an individual customer’s video rental history. Every step away from that 1988 paradigm will make it harder for a plaintiff to make out a successful claim."

The judges elaborated that disclosing users' precise GPS data -- as Gannett allegedly did -- may violate the law. But they said other types of disclosures "are simply too far afield from the circumstances that motivated the Act’s passage to trigger liability."

The court also warned tech and media companies to tread carefully when disclosing information about online video viewers.

"Our decision necessarily leaves some unanswered questions about what kinds of disclosures violate the Video Privacy Protection Act," the opinion states. "Companies in the business of streaming digital video are well advised to think carefully about customer notice and consent. Whether other kinds of disclosure will trigger liability under the Act is another question for another day."