• by Wendy Davis  @wendyndavis, June 23, 2014

A judge has rejected an attempt by Carrier IQ and a group of phone manufacturers to delay proceedings in a privacy lawsuit.

U.S. District Court Judge Chen in the Northern District of California said in a written ruling that he was “not convinced” that allowing the case to proceed would cause “irreparable injury” to Carrier IQ and the other companies.

The litigation stems from allegations that Carrier IQ's software -- which was installed on millions of mobile devices -- could record users' keystrokes. The software's capabilities emerged in November of 2011, when a researcher posted a video clip that appears to show the company logging keystrokes.

Carrier IQ later said in a written report that its software sometimes logs the contents of messages, but also said the data isn't readable. The company has always maintained that its software was intended to help mobile carriers to discover the source of network problems, like dropped calls.

News of the software's capabilities sparked litigation against Carrier IQ and six device manufacturers, including HTC, Samsung and LG Electronics. Carrier IQ and the manufacturers argued that the lawsuit should be decided by an arbitrator, not a jury, on the ground that the software was installed at the request of three wireless carriers.

All of those carriers required consumers to agree to take disputes to an arbitrator. Chen rejected that argument in March, ruling that the arbitration agreements were between the consumers and carriers -- not between consumers and either Carrier IQ or manufacturers.

Carrier IQ and the other companies are appealing that decision to the 9th Circuit Court of Appeals. They also asked Chen to put the lawsuit on hold pending an appellate decision.

Chen denied that request this month. He suggested in his decision that Carrier IQ and the other companies should “seek expedited resolution of their appeal.”

Chen also indicated that the lawsuit could be resolved through mediation. He directed the consumers, Carrier IQ and the carriers to proceed with “discovery” -- meaning they will exchange evidence -- but limited it to material that's “essential” to a mediation process.

Chen has scheduled the next conference in the matter for mid-November.