TANYA WALTON PRATT, District Judge.
Plaintiff Alan Rackemann ("Rackemann"), on behalf of himself and others similarly situated, alleges that Defendants LISNR, Inc., ("LISNR"), Adept Mobile, LLC ("Adept Mobile"), and the Indianapolis Colts, Inc. ("the Colts") (collectively, "Defendants"), violated federal antiwiretapping laws in their operation of a Colts' mobile application. Rackemann alleges that Defendants unlawfully intercepted and unlawfully used his private communications. Specifically, he alleges the Defendants hijack users' smartphones and turn them into listening devices. Defendants have each filed Motions to Dismiss. (
The following facts are not necessarily objectively true. But as required when reviewing a motion to dismiss, the Court accepts as true all factual allegations in the Second Amended Complaint and draws all reasonable inferences in favor of Rackemann as the non-moving party. See Bielanski v. County of Kane, 550 F.3d 632, 633 (7th Cir. 2008).
The Colts are a professional football team in the National Football League. (
LISNR and Adept Mobile are both audio technology development companies. In 2016, the Colts partnered with LISNR and Adept Mobile to further develop the App. (
During those specified periods, the App activates the device's microphone. (
Adept Mobile developed and maintained the code base of the App and ensures the deliverability of the App to the Google Play Store. (
Rackemann downloaded the App sometime in 2012 from the Google Play store, and it remained on his smartphone through mid-September 2016. (
On November 18, 2016, Rackemann filed this lawsuit against Defendants in the District of Massachusetts, on behalf of himself and two putative classes of plaintiffs. (
Federal Rule of Civil Procedure 12(b)(6) allows a defendant to move to dismiss a complaint that has failed to "state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). When deciding a motion to dismiss under Rule 12(b)(6), the court accepts as true all factual allegations in the complaint and draws all reasonable inferences in favor of the plaintiff. Bielanski v. County of Kane, 550 F.3d at 633 (7th Cir. 2008). However, courts "are not obliged to accept as true legal conclusions or unsupported conclusions of fact." Hickey v. O'Bannon, 287 F.3d 656, 658 (7th Cir. 2002).
The complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). In Bell Atlantic Corp. v. Twombly, the Supreme Court explained that the complaint must allege facts that are "enough to raise a right to relief above the speculative level." 550 U.S. 544, 555 (2007). Although "detailed factual allegations" are not required, mere "labels," "conclusions," or "formulaic recitation[s] of the elements of a cause of action" are insufficient. Id.; see also Bissessur v. Ind. Univ. Bd. of Trs., 581 F.3d 599, 603 (7th Cir. 2009) ("it is not enough to give a threadbare recitation of the elements of a claim without factual support"). The allegations must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Twombly, 550 U.S. at 555. Stated differently, the complaint must include "enough facts to state a claim to relief that is plausible on its face." Hecker v. Deere & Co., 556 F.3d 575, 580 (7th Cir. 2009) (citation and quotation omitted). To be facially plausible, the complaint must allow "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).
Rackemann's Complaint raises two causes of action, one on behalf of the first class of plaintiffs against LISNR, and the other on behalf of the second class against all Defendants. In each count, Rackemann alleges that Defendants have violated 18 U.S.C. §§ 2510 et seq., (the "Wiretap Act") in that they have intercepted (by listening to and recording) Rackemann's "private conversations, including oral communications, where [Rackemann] and the [class] exhibited expectations that such communications were to remain private and would not otherwise be subject to interception under circumstances justifying such expectation." (
The Colts and Adept Mobile first argue that Rackemann's claims must be dismissed because he lacks standing to bring them. (
The "irreducible constitutional minimum of standing consists of three elements. The plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016), as revised (May 24, 2016) (citation omitted). "The plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing these elements. Where, as here, a case is at the pleading stage, the plaintiff must clearly allege facts demonstrating each element." Id. (citation and quotation omitted). As to the injury-in-fact element, "a plaintiff must show that he or she suffered an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical." Id. (citation and quotation omitted).
The Colts and Adept Mobile both focus their standing arguments on Rackemann's allegations that the App's use of his smartphone's microphone caused battery usage and wear and tear to his smartphone. They argue that these allegations are not sufficient to demonstrate a concrete injury. Rackemann responds, however, that his Complaint "is premised on an invasion of [his] substantive interest, protected by the Wiretap Act, in the privacy of his private communications." (
The question is whether such an invasion of privacy constitutes an injury in fact sufficient to confer standing to Rackemann under Article III. In Spokeo, the Supreme Court stated that:
Spokeo, 136 S.Ct. 1540, 1549. The Supreme Court goes on to note that "the law has long permitted recovery by certain tort victims even if their harms may be difficult to prove or measure." Id. (citing Restatement (First) of Torts §§ 569 (libel), 570 (slander per se) (1938)). The Supreme Court concluded that "[j]ust as the common law permitted suit in such instances, the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact. In other words, a plaintiff in such a case need not allege any additional harm beyond the one Congress has identified. Spokeo, 136 S. Ct. at 1549-50 (citing Federal Election Comm'n v. Akins, 524 U.S. 11, 20-25 (1998) (confirming that a group of voters' "inability to obtain information" that Congress had decided to make public is a sufficient injury in fact to satisfy Article III); Public Citizen v. Department of Justice, 491 U.S. 440, 449 (1989) (holding that two advocacy organizations' failure to obtain information subject to disclosure under the Federal Advisory Committee Act "constitutes a sufficiently distinct injury to provide standing to sue")). As one court has summarized Spokeo, it:
Matera v. Google Inc., 2016 WL 5339806, at *9 (N.D. Cal. 2016).
The Wiretap Act is violated when any person "intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication." 18 U.S.C. § 2511(1)(a). As to the first element of the Spokeo analysis, Rackemann argues that the statute bears a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit—the invasion of privacy. (
Invasion of privacy has been recognized as a tort under common law for over a century. See Matera, 2016 WL 5339806, at *10 (citing Restatement (Second) of Torts §§ 652A-I (noting that the right to privacy was first accepted by an American court in 1905, and "a right to privacy is now recognized in the great majority of the American jurisdictions that have considered the question")). And, while this is not a requirement under the Spokeo analysis, the Court notes that the right to privacy has also long been rooted in the jurisprudence surrounding Fourth Amendment search and seizure law. Indeed, the Seventh Circuit has made the following observations regarding recorded conversations and privacy in the context of considering Illinois' eavesdropping statute:
Am. Civil Liberties Union of Illinois v. Alvarez, 679 F.3d 583, 605 (7th Cir. 2012).
Other courts have likewise held that "the unauthorized interception of an individual's private communications may state a claim for common law invasion of privacy." Matera, 2016 WL 5339806, at *10 (citing Vernars v. Young, 539 F.2d 966, 969 (3d Cir. 1976) (finding that a plaintiff stated a claim for common law invasion of privacy when "the defendant is accused of opening plaintiff's private mail and reading it without authority"); Quigley v. Rosenthal, 327 F.3d 1044, 1073 (10th Cir. 2003) (noting that, under Colorado law, "it is clear that the interception of the Quigleys' telephone conversations would constitute an intentional intrusion on the Quigleys' seclusion or solitude"); Billings v. Atkinson, 489 S.W.2d 858, 860 (Tex. 1973) (noting that eavesdropping was an indictable offense at common law, and recognizing an invasion of privacy cause of action based on a wiretap of plaintiff's telephone); Arrington v. Colortyme, Inc., 972 F.Supp.2d 733, 746-47 (W.D. Pa. 2013) (denying motion to dismiss state law invasion of privacy claim based on electronic surveillance of plaintiff's computer activity)).
As to the second element—congressional judgment in establishing the statutory right, including whether the statutory right is substantive or procedural—the Court concludes that Congress exercised its judgment to codify a substantive right, as discussed above, long recognized in American jurisprudence. The Court agrees with the Matera court that the Wiretap Act was passed to protect against the invasion of privacy, and particularly privacy with regard to electronic communications. Matera, 2016 WL 5339806, at *10 (citing DirecTV, Inc. v. Webb, 545 F.3d 837, 850 (9th Cir. 2008) (stating that the Wiretap Act's "emphasis on privacy is evident in both the legislative history of the Wiretap Act and in the breadth of its prohibitions")).
For these reasons, the Court concludes that Rackemann has standing to raise a challenge regarding violations of the Wiretap Act.
"In relevant part, the ECPA imposes civil liability on persons who intentionally intercept, or try to intercept, a wire, oral or electronic communication." Bowden v. Kirkland & Ellis LLP, 432 F. App'x 596, 600 (7th Cir. 2011) (citing 18 U.S.C. §§ 2511(1); McCann v. Iroquois Mem'l Hosp., 622 F.3d 745, 751-52 (7th Cir. 2010); Doe v. GTE Corp., 347 F.3d 655, 658 (7th Cir. 2003)). The Act defines an "oral communication" as "any oral communication uttered by a person exhibiting an expectation that such communication is not subject to interception under circumstances justifying such expectation." 18 U.S.C. § 2510(2). To make out a valid interception claim under the Wiretap Act, a plaintiff must allege that the defendant "acqui[red]" the contents of his or her oral communications. 18 U.S.C. § 2510(4) (defining interception as "acquisition"); see Valentine v. WideOpen W. Fin., LLC, 288 F.R.D. 407, 411 (N.D. Ill. 2012). "Contents" include "any information concerning the substance, purport, or meaning of that communication." 18 U.S.C. § 2510(8).
Defendants assert three reasons why, Rackemann has failed to state a claim of "interception" under the Wiretap Act. They contend that Rackemann has failed to allege (1) a private communication; (2) interception; and (3) that content was acquired. (
Defendants argue that Rackemann has failed to identify in his Complaint any specific, private communications that were intercepted, and that his allegations are "naked conclusions" and "devoid of" required factual details. (
In suggesting that Rackemann was required to provide such information in his Complaint, Defendants ask this Court to apply the wrong standard to Rackemann's pleadings. Defendants fault Rackemann for failing to include information regarding the specific details of any communication that might have been intercepted, including that he did not list participants, subject matter, or location of any such communication. However, this is not a fraud case, subject to the heightened pleading requirements of Federal Rule of Civil Procedure 9(b), which requires that a plaintiff plead the alleged fraud in detail. Rackemann is subject to the normal notice-pleading requirements, which require him to provide "enough facts to state a claim to relief that is plausible on its face." Hecker, 556 F.3d at 580.
Rackemann alleges that during the four years that the App was installed on his smartphone, he carried that device on his person, and would take his smartphone to places where he would not invite other people, and to places where he would have private conversations. (
These allegations are sufficient to state a claim for relief under the Wiretap Act.
To make out a valid interception claim under the Wiretap Act, a plaintiff must allege that the defendant "acqui[red]" the contents of his or her oral communications. 18 U.S.C. § 2510(4) (defining interception as "acquisition"); see Valentine v. WideOpen W. Fin., LLC, 288 F.R.D. 407, 411 (N.D. Ill. 2012). Defendants argue that the term "acquire" means to "come into possession of" the communication, and that Rackemann has not pleaded that Defendants ever held them in their possession. (
Defendants cite United States v. Smith, 155 F.3d 1051 (9th Cir. 1998), in support of their proposed definition. That case involved the question of whether the Wiretap Act, or alternatively the Stored Communications Act, applied to the recording of a voicemail message.
The Smith court did not conclude that interception requires possession, though the statutory term was broad enough to encompass that definition, and this Court also declines to do so. In any event, the balance of authority, including later opinions by the Ninth Circuit, supports a different definition of the term: acquisition occurs "when the contents of a wire communication are captured or redirected in any way." United States v. Rodriguez, 968 F.2d 130, 136 (2d Cir. 1992); Noel v. Hall, 568 F.3d 743, 749 (9th Cir. 2009) (same). Rackemann has adequately pled that his communications were captured, as he alleges that the App recorded portions of audio captured by the device's microphone, and that audio was analyzed by Defendants.
To make out a valid interception claim under the Wiretap Act, a plaintiff must allege that the defendant "acqui[red]" the contents of his or her oral communications. 18 U.S.C. § 2510(4) (defining interception as "acquisition"). "Contents" include "any information concerning the substance, purport, or meaning of that communication." 18 U.S.C. § 2510(8). Defendants argue that Rackemann has failed to adequately plead that they acquired the "content" of any communication. (
On the contrary, Rackemann alleges that the App functions by activating a smartphone's microphone, and that the App temporarily records portions of the audio for analysis. He alleges that the App "was continuously running on his smartphone, [and it] listened-in to private oral communications." (
Second, Defendants dispute Rackemann's factual allegation that the App records audible communications. (
The Court concludes that Rackemann has plausibly alleged that Defendants acquired the content of his communications.
The Colts and LISNR each argue that, while the other party might be liable under the Act, it is not. The Colts assert that all of Rackemann's allegations contend that LISNR (and its software) "enable" the interception of communications. (
The Court need not reach the issue of aider and abettor liability here, because the Colts' argument fails on other grounds. Rackemann makes a number of factual allegations ignored by the Colts in its briefing here, including that: the App belongs to the Indianapolis Colts, (
As to LISNR, it argues that it cannot be held liable under the Act, because it is "merely a provider of technology." (
As with the Colts, Rackemann's allegations are sufficient to support a claim of liability against LISNR.
Adept Mobile also argues that Rackemann's Complaint fails to state a claim that Adept Mobile was the party who intercepted Rackemann's communications. (
As with Defendants the Colts and LISNR, the Court concludes that Rackemann has pleaded a plausible claim against Adept Mobile. Ultimately, resolution of this issue turns upon facts that cannot be considered (and indeed may not be known to Rackemann) at this stage. Other courts have concluded (at least at the motion to dismiss stage) that allegations of defendants working in concert or participating in the interception of communications can suffice to state a claim. See, e.g., Luis v. Zang, 833 F.3d 619, 633 (6th Cir. 2016) ("The alleged intercept of a communication thus occurs at the point where WebWatcher—without any active input from the user—captures the communication and reroutes it to Awareness's own servers. Construing these allegations liberally, as we must . . . the complaint supports an inference that Awareness itself—not simply the WebWatcher user—`acquires' the communications by rerouting them to servers that it owns and controls."); Byrd v. Aaron's, Inc., 14 F.Supp.3d 667, 690 (W.D. Pa. 2014) (concluding that a complaint survived motion to dismiss where the defendant was "intimately and integrally involved with its Franchisees' acts of building Detective Mode and spying upon Aaron's customers"); Integrated Bus. Techs., LLC v. Netlink Sols., LLC, 2016 WL 4742306, at *7 (N.D. Okla. 2016) (finding plausible claim where multiple defendants, allegedly "acting in concert, somehow monitored and intercepted emails between IBT and its customers . . . IBT likely lacks details as to how and when this was accomplished but has stated a plausible claim for relief assuming it can gather the necessary evidence.").
As such, the Court concludes that Rackemann has adequately pled his claim against Adept Mobile.
Defendants also argue that Rackemann fails to allege that they "used" any intercepted communications, in violation of 18 U.S.C. § 2511(d). (
Satchell, 234 F. Supp. 3d at 1008-09.
The Court therefore concludes that Rackemann has failed to adequately plead a violation of this provision, and this claim should be dismissed. Because this defect could be cured through further pleading, however, the Court grants this dismissal without prejudice.
For the reasons stated above, the Court
Should he choose to do so, Rackemann may file an amended complaint, within