JAMES WARE, Chief Judge.
Plaintiffs
Presently before the Court is Defendant's Motion to Dismiss.
In a Consolidated Class Action Complaint
On the basis of the allegations outlined above, Plaintiffs assert eight causes of action: (1) Violation of the Electronic Communications Privacy Act ("ECPA"), 18 U.S.C. §§ 2510, et seq.; (2) Violation of the Stored Communications Act, 18 U.S.C. §§ 2701, et seq.; (3) Violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof.Code §§ 17200, et seq.; (4) Violation of California's Computer Crime Law, Cal.Penal Code § 502; (5) Violation of the Consumers Legal Remedies Act ("CLRA"), Cal. Civ.Code §§ 1750, et seq.; (6) Breach of Contract; (7) Violation of Cal. Civ.Code §§ 1572, 1573; and (8) Unjust Enrichment.
Presently before the Court is Defendant's Motion to Dismiss pursuant to Rule 12(b)(1) and Rule 12(b)(6).
Rule 12(b)(1) of the Federal Rules of Civil Procedure provides for a motion to dismiss for lack of subject-matter jurisdiction. A Rule 12(b)(1) motion may be either facial, where the inquiry is confined to the allegations in the complaint, or factual, where the court is permitted to look beyond the complaint to extrinsic evidence. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir.2004). On a facial challenge, all material allegations in the complaint are assumed true, and the question for the court is whether the lack of federal jurisdiction appears from the face of the pleading itself. See Wolfe, 392 F.3d at 362; Thornhill Publishing Co. v. General Telephone Electronics, 594 F.2d 730, 733 (9th Cir.1979). When a defendant makes a factual challenge "by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject-matter jurisdiction." Safe Air For Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir.2004). The court need not presume the truthfulness of the plaintiff's allegations under a factual attack. White
Pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint may be dismissed against a defendant for failure to state a claim upon which relief may be granted against that defendant. Dismissal may be based on either the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.1990); Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 533-534 (9th Cir.1984). For purposes of evaluating a motion to dismiss, the court "must presume all factual allegations of the complaint to be true and draw all reasonable inferences in favor of the nonmoving party." Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir.1987). Any existing ambiguities must be resolved in favor of the pleading. Walling v. Beverly Enters., 476 F.2d 393, 396 (9th Cir. 1973).
However, mere conclusions couched in factual allegations are not sufficient to state a cause of action. Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986); see also McGlinchy v. Shell Chem. Co., 845 F.2d 802, 810 (9th Cir.1988). The complaint must plead "enough facts to state a claim for relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Courts may dismiss a case without leave to amend if the plaintiff is unable to cure the defect by amendment. Lopez v. Smith, 203 F.3d 1122, 1129 (9th Cir.2000).
Defendant moves to dismiss on the grounds that: (1) Plaintiffs fail to allege injury-in-fact that would give them standing to maintain an action in federal court; (2) Plaintiffs fail to state a claim under the Wiretap Act, because they do not allege disclosure of the "contents of a communication"; (3) Plaintiffs fail to state a claim under the Stored Communications Act, because they do not allege disclosure of the "contents of a communication" and because the same conduct cannot be a violation of both the Wiretap Act and the Stored Communications Act; (4) Plaintiffs fail to state a claim under the UCL because they lack standing, since they have not alleged that they have lost money or property; (5) Plaintiffs fail to state a claim under Cal.Penal Code § 502 because Defendant's activities do not amount to the type of "hacking" or "breaking into a computer" that the law was intended to prohibit; (6) Plaintiffs fail to state a claim under the CLRA, because such claims can only be brought by consumers; (7) Plaintiffs fail to state a claim for Breach of Contract, because they do not allege that they suffered appreciable or actual damage; (8) Plaintiffs fail to state a claim under Cal. Civ. Code §§ 1572 and 1573, because they do not allege that they relied upon Defendant's representations or were damaged by them; and (9) Plaintiffs fail to state a claim for Unjust Enrichment, because Plaintiffs cannot assert unjust enrichment while simultaneously alleging a breach of contract. (Motion at 6-24.)
Plaintiffs respond that: (1) Plaintiffs have alleged a violation of their statutory rights, which is a sufficient allegation of injury-in-fact to give them standing; (2)
At issue is whether Plaintiffs have alleged injury-in-fact sufficiently to establish standing.
To satisfy the standing requirements of Article III, a plaintiff must show that he has suffered an "injury in fact" that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical. Gest v. Bradbury, 443 F.3d 1177, 1181 (9th Cir.2006) (citing Friends of the Earth v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 180-81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000)). The injury required by Article III can exist solely by virtue of "statutes creating legal rights, the invasion of which creates standing." Edwards v. First Am. Corp., 610 F.3d 514, 517 (9th Cir.2010) (quoting Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)). In such cases, the "standing question ... is whether the constitutional or statutory provision on which the claim rests properly can be understood as granting persons in the plaintiff's position a right to judicial relief." Id. (quoting Warth, 422 U.S. at 500, 95 S.Ct. 2197).
Here, Plaintiffs allege as follows:
Based on the allegations above, and without addressing the merits of the claim, the Court finds that Plaintiffs allege a violation of their statutory rights under the Wiretap Act, 18 U.S.C. §§ 2510, et seq. The Wiretap Act provides that any person whose electronic communication is "intercepted, disclosed, or intentionally used" in violation of the Act may in a civil action recover from the entity which engaged in that violation. 18 U.S.C. § 2520(a). Thus, the Court finds that Plaintiffs have alleged facts sufficient to establish that they have suffered the injury required for standing under Article III.
Defendant's contention that at the pleading stage of a class action, each individual plaintiff must include allegations sufficient to establish injury-in-fact as to each of them is mistaken. (Motion at 6-7.) In Hepting v. AT & T Corp.,
Accordingly, the Court DENIES Defendant's Motion to Dismiss on the ground that Plaintiffs have failed to allege injury-in-fact sufficient to establish standing.
At issue is whether Plaintiffs state a claim under the Wiretap Act.
The Wiretap Act states that an entity "providing an electronic communication service to the public shall not intentionally divulge the contents of any communication (other than one to such entity, or an agent thereof) while in transmission on that service to any person or entity other than an addressee or intended recipient of such communication or an agent of such addressee or intended recipient." 18 U.S.C. § 2511(3)(a).
Here, Plaintiffs allege as follows:
Based on the allegations above, the Court finds that there are two possible ways to understand Plaintiffs' allegations. On the first view, Plaintiffs allege that when a user of Defendant's website clicks on an advertisement banner displayed on that website, that click constitutes an electronic communication from the user to Defendant.
The Court finds that as a matter of law, Plaintiffs cannot state a claim under the Wiretap Act under either interpretation. Under the first interpretation, the communication is sent from the user to Defendant. However, the Wiretap Act states that an "entity providing an electronic communication service to the public shall not intentionally divulge the contents of any communication (other than one to such person or entity, or an agent thereof) ..." 18 U.S.C. § 2511(3)(a) (emphasis added). Because, under the first interpretation, the communication at issue is one from a user to Defendant, Defendant cannot be liable under the Wiretap Act for divulging it. Under the second interpretation, the communication is sent from the user to an advertiser. However, the Wiretap Act states that an "entity providing an electronic communication service to the public shall not intentionally divulge the contents of any communication ... to any person or entity other than an addressee or intended recipient of such communication." Id. (emphasis added). Because, under the second interpretation, the communication at issue is a communication from a user to an advertiser, the advertiser is its "addressee or intended recipient," and Defendant cannot be liable under the Wiretap Act for divulging it. Thus, because Plaintiffs cannot state a claim under the Wiretap Act on their own allegations, the Court dismisses Plaintiffs' Wiretap Act claim.
Accordingly, the Court GRANTS Defendant's Motion to Dismiss Plaintiffs' Cause of Action under the Wiretap Act without prejudice, with leave to amend to allege specific facts showing that the information allegedly disclosed by Defendant was not part of a communication from Plaintiffs to an addressee or intended recipient of that communication, if so desired.
At issue is whether Plaintiffs state a claim under the Stored Communications Act.
Under the Stored Communications Act, an entity providing an electronic communication service to the public "shall not knowingly divulge to any person or entity the contents of a communication while in electronic storage by that service." 18 U.S.C. § 2702(a)(1). However, a provider
As discussed previously, Plaintiffs either allege that the communications at issue were sent to Defendant or to advertisers. Under either interpretation, Plaintiffs fail to state a claim under the Stored Communications Act. If the communications were sent to Defendant, then Defendant was their "addressee or intended recipient," and thus was permitted to divulge the communications to advertisers so long as it had its own "lawful consent" to do so.
Accordingly, the Court GRANTS Defendant's Motion to Dismiss Plaintiffs' Cause of Action under the Stored Communications Act without prejudice, with leave to amend to allege specific facts showing that the information allegedly disclosed by Defendant was not part of a communication from Plaintiffs to an addressee or intended recipient of that communication, if so desired.
At issue is whether Plaintiffs state a claim for violation of the UCL.
To assert a UCL claim, a private plaintiff needs to have "suffered injury in fact and ... lost money or property as a result of the unfair competition." Rubio v. Capital One Bank, 613 F.3d 1195, 1203 (9th Cir.2010). A plaintiff's "personal information" does not constitute property under the UCL. Thompson v. Home Depot, Inc., No. 07cv1058 IEG, 2007 WL 2746603, at *3 (S.D.Cal. Sept. 18, 2007).
Here, Plaintiffs do not allege that they lost money as a result of Defendant's conduct. Instead, Plaintiffs allege that Defendant unlawfully shared their "personally identifiable information" with third-party advertisers. (Complaint ¶¶ 1-3.) However, personal information does not constitute property for purposes of a UCL claim. Thompson, 2007 WL 2746603, at *3.
Plaintiffs' reliance on Doe 1 v. AOL, LLC
Accordingly, the Court GRANTS Defendant's Motion to Dismiss Plaintiffs' Cause of Action under the UCL with prejudice.
At issue is whether Plaintiffs state a claim under Cal.Penal Code § 502.
Cal.Penal Code § 502, the Comprehensive Computer Data Access and Fraud Act, was enacted to expand the degree of protection to individuals, businesses and government agencies from "tampering, interference, damage, and unauthorized access to lawfully created computer data and computer systems." Cal.Penal Code § 502(a). With one exception, the subsections of Section 502 that potentially apply in this case require that the defendant's actions be taken "without permission." See Cal.Penal Code §§ 502(c)(1), (2), (3), (6), & (7). Individuals may only be subjected to liability for acting "without permission" under Section 502 if they "access[] or us[e] a computer, computer network, or website in a manner that overcomes technical or code-based barriers." Facebook, Inc. v. Power Ventures, Inc., No. C 08-05780-JW, 2010 WL 3291750, at *11 (N.D.Cal. July 20, 2010). Additionally, Section 502 creates liability for any person who "knowingly introduces any computer contaminant into any computer, computer system, or computer network." Cal.Penal Code § 502(c)(8).
In a recent case, this Court considered the meaning of the term "without permission" in Section 502. See Power Ventures, 2010 WL 3291750, at *6. In Power Ventures, the Court found that the statutory language of Section 502, caselaw, and legislative intent all failed to provide clear guidance as to how to interpret this term. Id. at *6-10. The Court found that the statute would be unconstitutionally vague unless it was read narrowly, so as to provide adequate notice of the conduct which
Here, Plaintiffs' allegations under those subsections of Section 502 which require a defendant to act "without permission" allege that Defendant acted "without permission" under that statute.
Accordingly, the Court GRANTS Defendant's Motion to Dismiss Plaintiffs' Cause of Action under Section 502 with prejudice as to Cal.Penal Code §§ 502(c)(1), (2), (3), (6), & (7), and without prejudice as to § 502(c)(8), with leave to amend to allege specific facts in support of their claim under § 502(c)(8), if so desired.
At issue is whether Plaintiffs state a claim under the CLRA.
The CLRA provides protection to a specific category of consumers from damages suffered in connection with a consumer transaction. Robinson v. HSBC Bank USA, 732 F.Supp.2d 976, 987
Here, Plaintiffs allege that Defendant "allows anyone ... to register for its services free of charge." (Complaint ¶ 12.) As discussed previously, Plaintiffs' contention that their personal information constitutes a form of "payment" to Defendant is unsupported by law. Since it is not possible for Plaintiffs to state a claim pursuant to the CLRA under Plaintiffs' own allegations, the Court dismisses Plaintiffs' CLRA claim with prejudice.
Accordingly, the Court GRANTS Defendants' Motion to Dismiss Plaintiffs' Cause of Action under the CLRA with prejudice.
At issue is whether Plaintiffs state a claim for breach of contract.
Under California law, to state a cause of action for breach of contract a plaintiff must plead: "the contract, plaintiffs' performance (or excuse for nonperformance), defendant's breach, and damage to plaintiff therefrom." Gautier v. General Tel. Co., 234 Cal.App.2d 302, 305, 44 Cal.Rptr. 404 (Cal.Ct.App.1965). California law requires a showing of "appreciable and actual damage" to assert a breach of contract claim. Aguilera v. Pirelli Armstrong Tire Corp., 223 F.3d 1010, 1015 (9th Cir.2000). Nominal damages and speculative harm do not suffice to show legally cognizable damage under California contract law. Ruiz v. Gap, Inc., 622 F.Supp.2d 908, 917 (N.D.Cal.2009).
Here, in regard to damages, Plaintiffs allege only that as a result of the alleged breach of contract, Plaintiffs "suffered injury." (Complaint ¶ 109.) However, Plaintiffs fail to allege any actual damages in their Complaint. Thus, under California law Plaintiffs fail to state a claim for breach of contract.
Accordingly, the Court GRANTS Defendant's Motion to Dismiss Plaintiffs' Cause of Action for breach of contract, with leave to amend to allege specific facts showing appreciable and actual damages in support of their claim, if so desired.
At issue is whether Plaintiffs state a claim under Sections 1572 and 1573 of the California Civil Code.
Sections 1572 and 1573 deal with actual and constructive fraud. See Cal. Civ.Code §§ 1572, 1573. In California, the elements of a cause of action for fraud are: "(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or `scienter'); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage." Engalla v. Permanente Med. Group, 15 Cal.4th 951, 974, 64 Cal.Rptr.2d 843, 938 P.2d 903 (1997).
Here, Plaintiffs fail to allege that they relied upon any allegedly fraudulent misrepresentations by Defendant. Thus, under California law Plaintiffs fail to state a claim for fraud under either Cal. Civ. Code§ 1572 or § 1573.
Accordingly, the Court GRANTS Defendant's Motion to Dismiss Plaintiffs' Cause of Action under Cal. Civ.Code §§ 1572 and 1573, with leave to amend to allege specific facts in support of their claim, if so desired.
At issue is whether Plaintiffs are entitled to state a claim for unjust enrichment in the alternative, given that they allege breach of an express contract.
Under California law, unjust enrichment is an action in quasi-contract. Gerlinger v. Amazon.Com, Inc., 311 F.Supp.2d 838, 856 (N.D.Cal.2004). However, "as a matter of law, a quasi-contract action for unjust enrichment does not lie where ... express binding agreements exist and define the parties' rights." Villager Franchise Systems, Inc. v. Dhami, Dhami & Virk, No. CVF046393RECSMS, 2006 WL 224425 (E.D.Cal. Jan. 26, 2006) (quoting Cal. Med. Ass'n v. Aetna U.S. Healthcare of Cal., 94 Cal.App.4th 151, 172, 114 Cal.Rptr.2d 109 (Cal.Ct.App. 2001)). Although Rule 8 of the Federal Rules of Civil Procedure allows a party to state multiple, even inconsistent claims, the rule does not allow a plaintiff invoking state law to assert an unjust enrichment claim while also alleging an express contract. Gerlinger, 311 F.Supp.2d at 856.
Here, Plaintiffs allege that they assented to Defendant's "Terms and Conditions and Privacy Policy," and that the provisions of this Policy "constitute a valid and enforceable contract" between Plaintiffs and Defendant. (Complaint ¶¶ 101, 102.) Because Plaintiffs allege that an express contract existed between themselves and Defendant, they cannot also assert an unjust enrichment claim. Gerlinger, 311 F.Supp.2d at 856. Since it is not possible to state a claim for unjust enrichment under Plaintiffs' own allegations, the Court dismisses Plaintiffs' unjust enrichment claim with prejudice.
Accordingly, the Court GRANTS Defendant's Motion to Dismiss Plaintiffs' Cause of Action for unjust enrichment with prejudice.
The Court GRANTS in part and DENIES in part Defendant's Motion to Dismiss as follows:
Cal.Penal Code § 502(b)(10).