Arity Lawsuit: Texas AG, Class Action, and March 2026 Ruling

The Arity lawsuit is actually two parallel cases: a January 2025 enforcement action by the Texas Attorney General against Allstate and its data analytics subsidiary Arity, and a consolidated federal class action in Illinois combining 15 private suits. Both allege that Arity secretly collected driving data from tens of millions of Americans through popular mobile apps and sold it to insurance companies. In March 2026, a federal judge allowed 35 of the 38 claims in the class action to move forward toward trial.¹

What Arity Is Accused of Doing

Allstate created Arity in 2016 to support usage-based insurance products like Drivewise. It grew into a data broker claiming ties to more than 200 million U.S. drivers and more than a billion miles of driving data collected each day.²

The collection method at the heart of both lawsuits is a software development kit called the Driving Engine. Arity embedded the SDK into third-party mobile apps, and once installed it ran in the background on users’ phones. It captured GPS coordinates as often as every 15 seconds, along with speed, acceleration, braking events, phone usage while driving, and trip start and end locations. It also pulled accelerometer, magnetometer, and gyroscopic sensor readings from the device.³

The apps identified as carrying the code include GasBuddy, Life360, MyRadar, Routely, Fuel Rewards, and formerly WeatherBug.² According to the Texas complaint, Arity deliberately targeted apps that already asked users for location permissions, which meant no additional consent prompt would appear when its SDK started collecting geolocation data.⁴ Arity allegedly paid app developers millions of dollars to integrate the kit.⁵

The data went into ArityIQ, a database of driving behavior linked to more than 40 million drivers, which Arity sold to insurance companies for pricing, risk assessment, and underwriting.² The lawsuits allege insurers used these scores to raise premiums, deny coverage, or drop customers. The Texas complaint also notes a reliability problem: because the data came from a phone’s location rather than the vehicle, the system frequently could not tell whether the user was driving or riding as a passenger, so people may have received poor driving scores based on someone else’s driving.³

The Texas Attorney General Case

Texas Attorney General Ken Paxton filed suit against Allstate and Arity on January 13, 2025, alleging the companies unlawfully collected, used, and sold the location and movement data of over 45 million Americans without adequate notice or informed consent. It was the first enforcement action ever brought by a state attorney general under a comprehensive state data privacy law.⁵

The complaint’s core claims sit under the Texas Data Privacy and Security Act, which took effect in July 2024. It alleges Arity failed to provide a reasonably accessible privacy notice, failed to include the mandatory disclosure that it may sell sensitive data, failed to obtain affirmative consent before processing precise geolocation information, and failed to offer consumers a way to opt out of data sales and targeted advertising.⁶ The Attorney General had opened a 30-day cure period on November 29, 2024; when it closed on December 29 without a fix, the suit followed.³

The suit also charges Arity with violating the Texas Data Broker Law by not registering with the Secretary of State by the March 1, 2024 deadline, despite handling data from more than 45 million app users, and raises additional claims under the Texas Insurance Code for unfair and deceptive practices.⁶

The Federal Class Action

Consumer lawsuits began piling up in early 2025. By April 10, 2025, fifteen separate cases had been consolidated into In re: Allstate & Arity Consumer Privacy Litigation, Case No. 1:25-cv-00407, in the U.S. District Court for the Northern District of Illinois before Judge Jeremy C. Daniel. A consolidated class action complaint followed on May 27, 2025.⁷

The consolidated complaint brings 38 claims under federal law and the laws of 20 states, filed on behalf of dozens of named plaintiffs from across the country, and seeks damages, injunctive relief, and a jury trial.⁸ The federal claims include violations of the Federal Wiretap Act and the Stored Communications Act, plus common law invasion of privacy and unjust enrichment.⁹ The state-law claims reach into consumer fraud statutes, wiretapping laws, electronic tracking device prohibitions, and unfair competition laws across California, Illinois, Alabama, Kentucky, Michigan, New York, Ohio, Pennsylvania, Texas, and others.¹⁰ Plaintiffs also allege Arity violated the Fair Credit Reporting Act by inaccurately reporting driving behavior data used in insurance decisions.

How Allstate and Arity Are Defending Themselves

Allstate and Arity moved to dismiss the consolidated complaint on July 10, 2025. They argued the plaintiffs had not adequately alleged that the companies collected their specific data or raised their individual insurance rates, and they said users went through an “explicit opt-in process” in the apps powered by Arity’s technology.⁸

Allstate also invoked the filed rate doctrine, arguing its insurance rates were approved by state regulators and therefore presumptively reasonable and not open to challenge in court. On the wiretapping claims, the defendants pointed to the Federal Wiretap Act’s party exception, saying the third-party apps consented to the disclosures when they agreed to integrate the SDK. And they argued that FCRA preempts the state law claims, offering app user agreements and phone screenshots to show that users had consented to the collection.¹¹

The March 2026 Ruling

On March 3, 2026, Judge Daniel denied the vast majority of the motion to dismiss. Thirty-five of the 38 claims were allowed to proceed; only three counts were dismissed.¹⁷

On the filed rate doctrine, the judge accepted that claims directly challenging how rates were calculated could implicate the doctrine, but he noted the plaintiffs also sought statutory damages that do not depend on challenging the rate itself. Because the defendants did not address that point in their reply brief, most counts survived.¹⁰

On the wiretapping claims, the court rejected the argument that app developers’ consent to the SDK integration shielded Allstate from liability. Judge Daniel ruled that a monetary motive for the interception does not preclude the Wiretap Act’s “crime or tort” exemption, so those claims move forward.¹¹ The court also declined to consider the user agreements and app screenshots Allstate wanted to introduce, finding it was premature to resolve factual disputes about which privacy policies were in effect and whether each plaintiff had actually accepted them.¹⁰

On FCRA preemption, the court largely sided with the plaintiffs. Judge Daniel held that FCRA does not preempt state law requirements for companies to notify consumers before pulling their data, though he did find FCRA preempts certain state claims against Arity specifically involving consent to furnish consumer reports for insurance underwriting.¹⁰

Where the Cases Stand

The defendants filed their answer to the surviving claims on April 24, 2026. No trial date has been set, and both the Texas Attorney General case and the federal class action remain pending as of mid-2026.⁷

1
Missouri Lawyers Media. Allstate Rules Lawsuit Cellphone Tracking Drivers
2
U.S. PIRG. Allstate Arity Selling Data
3
Office of the Texas Attorney General. Allstate and Arity Petition Filed
4
ClassAction.org. Allstate App Data Collection Privacy Lawsuits
5
Office of the Texas Attorney General. Attorney General Ken Paxton Sues Allstate and Arity
6
Electronic Frontier Foundation. Texas Is Enforcing Its State Data Privacy Law. So Should Other States
7
Keller Rohrback LLP. Allstate Driving Data Privacy Litigation
8
Fox Business. Allstate Ordered to Face Privacy Lawsuit Over Alleged Cellphone Tracking of Drivers
9
U.S. District Court, N.D. Ill. Mahoney et al. v. Allstate et al., Case No. 25-cv-01465
10
Justia. Sims v. The Allstate Corporation et al.
11
Repairer Driven News. Court Allows Suit Alleging Allstate Collected and Sold Consumer Data to Move Forward, Dismisses Portion