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Can a mobile app track a user using GPS/location services running in the background, and do something when a user is found in a particular location? Assuming that the app clearly tells the user that it will do this?

A colleague said that this is illegal because there is a court ruling that no one (software/app) can track a user's location in the background, but rather can only use location when the user is actively using the app. Is this correct?

After googling I found one ruling that "warrantless tracking is not allowed." Is this applicable?

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It is hard to prove a negative, but no - there is not rule that an app cannot track a user while the app is in the background.

Almost every GPS-function app on every smart phone does the very thing you are talking about.

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The "warrantless tracking" ruling you found applies to the admissibility of evidence collected by those means in a trial. Unless your client is a law enforcement agency it has no bearing on the use of an app.

As jqning said, there is no law against a background app using location data, and many smartphone apps do this.

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    Definitely if it was with the knowledge of the owner. If I want an app that can draw a map of my movements, I can't see why that could be illegal. Without my knowledge and giving that data to someone else is something different. – gnasher729 Sep 22 '15 at 18:35

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