KEITHLY v. INTELIUS INC., C09-1485RSL. (2011)
Court: District Court, D. Washington
Number: infdco20110728860
Visitors: 9
Filed: Feb. 08, 2011
Latest Update: Feb. 08, 2011
Summary: FootNotes 1. Plaintiffs argue that defendants' motion is premature because Adaptive Marketing, LLC, has not yet answered the third-party complaint filed by Intelius. Rule 12(c) states that a party may move for judgment on the pleadings "[a]fter the pleadings are closed — but early enough not to delay trial...." All allegations in support of and defenses against plaintiff's claims have been asserted: the pleadings regarding the issues raised in defendants' motion are, in fact, closed for purpo
Summary: FootNotes 1. Plaintiffs argue that defendants' motion is premature because Adaptive Marketing, LLC, has not yet answered the third-party complaint filed by Intelius. Rule 12(c) states that a party may move for judgment on the pleadings "[a]fter the pleadings are closed — but early enough not to delay trial...." All allegations in support of and defenses against plaintiff's claims have been asserted: the pleadings regarding the issues raised in defendants' motion are, in fact, closed for purpos..
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FootNotes
1. Plaintiffs argue that defendants' motion is premature because Adaptive Marketing, LLC, has not yet answered the third-party complaint filed by Intelius. Rule 12(c) states that a party may move for judgment on the pleadings "[a]fter the pleadings are closed — but early enough not to delay trial...." All allegations in support of and defenses against plaintiff's claims have been asserted: the pleadings regarding the issues raised in defendants' motion are, in fact, closed for purposes of Rule 12(c). Adaptive Marketing's response to Intelius' demand for indemnification/contribution is not relevant to, much less dispositive of, any of plaintiffs' claims, and the Court is able to determine whether judgment on the pleadings is appropriate based on the existing record.
2. In addition to challenging the accuracy of the screen shots submitted by defendants, plaintiffs also argue that the screen shots are incomplete in that they do not reflect plaintiffs' entire experience while on Intelius' website. A review of the screen shots submitted shows that the representations made to consumers, the design elements used on each page, and even the nature and sequence of the pages were not uniform. In addition, the screen shots presented do not track the initial purchase of the Intelius product, nor are they presented as one would see them on a normal computer screen (i.e., with content hidden beyond the margins of the screen, visible only by scrolling down or across). The Court's consideration of these documents in the context of this motion is without prejudice to plaintiffs' ability to conduct discovery regarding the accuracy and authenticity of the screen shots presented by defendants.
3. The Court has also considered the parties' supplemental submissions (Dkt. # 89, # 103, and # 108) and plaintiff's request to strike the cases submitted by defendants. Plaintiff's request to strike (Dkt. # 92) is DENIED.
4. As noted above, the screen shots provided by defendants reflect only part of Keithly's interaction with Intelius' website. Whether Keithly received other offers for products and services as he navigated through the site cannot be ascertained on the current record. The documents produced regarding plaintiff Bebbington's transactions show that he was offered seven additional services/products using four different marketing techniques.
5. In plaintiff Bebbington's case, after he selected the product he wanted and input the search criteria, he was presented with an additional three-column screen entitled "Select a Product or Special Offer." Two pricing options for the product he chose were presented in the first column. The second and third columns touted two additional Intelius products, each of which could be purchased at a discounted price "with FREE Identity Protect Trial."
After completing his initial purchase, Bebbington requested additional People Search Reports. The discounted pricing options were not offered on these later purchases, presumably because Bebbington had already signed up for Identity Protect when purchasing his first People Search Report.
6. The order summaries associated with plaintiff Bebbington's order, which were generated seven months after Keithly's order, state:
1. People Search Report $0.95
Identity Protect Discount.
You saved $1.00.
2. Identity Protect Trial $0.00
Cancel anytime. After your trial,
you will be billed $19.95 per month.
____________________________________________
Total $0.95
You Saved $1.00
7. The services offered through this marketing technique apparently varied by time period. The screen shots provided by defendants market services called "24Protect Plus," "Valu-Max," "SavingsAce," and "People Search."
8. Defendants also argue that plaintiffs have failed to satisfy the heightened pleading requirements of Fed.R.Civ.P. 9(b). Rule 9(b) applies to all averments of fraud in federal court, whether arising out of state or federal law. Vess v. Ciba-Geigy Corp., 317 F.3d 1097, 1103 (9th Cir.2003). Where fraud is not an essential element of a claim, as is the case here (see Hangman, 105 Wash.2d at 785, 719 P.2d 531), Rule 9(b) nevertheless applies if plaintiff chooses to allege that the defendant has engaged in fraudulent conduct (Vess, 317 F.3d at 1103). For the most part, plaintiffs have simply described defendants' business practices, marketing methods, and revenue streams. Whether those practices and methods are deceptive can be determined without reference to Intelius subjective intent. For purposes of this motion, plaintiffs' allegations regarding Intelius' state of mind (such as ¶ 25) have not been considered.
9. Although issues such as the capacity to deceive and what a reasonable person would do in certain circumstances are generally considered issues of fact, the Washington Supreme Court recently held that "[w]hether a particular act or practice is `unfair or deceptive' is a question of law." Panag v. Farmers Ins. Co. of Wash., 166 Wn.2d 27, 27, 204 P.3d 885 (2009). But see Guijosa v. Wal-Mart Stores, Inc., 144 Wn.2d 907, 921, 32 P.3d 250 (2001) (noting that "the jury was free to determine what could constitute an unfair and deceptive act or practice ..."). Because only defendant has requested dispositive relief (and neither party has addressed this interesting issue of state law), the Court will limit its analysis to whether a reasonable jury could find that the undisputed conduct alleged by plaintiffs is deceptive.
10. This particular technique is telling. Rather than touting the benefits of Identity Protect and making an effort to convince the consumer that he wants, if not needs, this service, Intelius uses the bare promise of a price reduction to slip Identity Protect into the consumer's cart. Had Intelius been attempting to identify customers who would knowingly choose to purchase Identity Protect, the solicitation would have been formatted very differently to highlight the service that was being offered and ensure a knowing selection of the service. Instead, Intelius developed a multi-step system through which there was a significant likelihood that consumers, having unknowingly added Identity Protect to their carts, would not take the necessary steps to remove it, resulting in the purchase of an unwanted item.
11. Because of the way the survey is presented, a reasonable consumer could answer the survey questions even if he did not intend to purchase Family Safety Report. The initial impression created by the advertisement is that completing the survey is a condition precedent to receiving $10.00 cash back. This impression is incorrect, however. The fine print reveals that the survey is actually just a distraction, an operational nullity: the consumer obtains the right to claim the $10.00 by signing up for a seven day trial subscription of Family Safety Report, not by taking the survey. In the context of this marketing technique, the less suspicious among us could reasonably, but wrongly, complete the survey in an effort to obtain a $10.00 rebate and, as discussed above, follow the other directions on the screen in an effort to obtain the previously-purchased report.
12. The Court respectfully disagrees with the analyses and conclusions of Baxter v. Intelius, Inc., 2010 WL 3791487 (C.D.Cal. Sept. 16, 2010), and In re Vistaprint Corp. Marketing and Sales Practices Litig., 2009 WL 2884727 (S.D.Tex. Aug. 31, 2009), aff'd sub nom. Bott v. Vistaprint USA Inc., 392 Fed.Appx. 327 (5th Cir.2010). Those decisions focus primarily on the language of the disclosure to determine whether the offer was deceptive. Such a truncated analysis is improper under the Washington Consumer Protection Act because the Court must view the marketing technique as a whole and in context before determining whether it has the capacity to lead consumers astray. The issue is not, as Vistaprint suggests, whether or not consumers should be held to terms that they declined to read. The issue is whether a reasonable consumer could have been unaware that there was a bargain in the offing, such that the failure to look for and review the terms of the unexpected bargain would be justified. Nor is the Baxter court's point that the consumer "affirmatively accepted" the offer details when he entered his email address persuasive. The entry of an email address was used as a proxy for a number of standard internet practices (including the addition of the product to the cart, the presentation of an order summary, and the request for payment information). While the offer details and the entry of the consumer's email co-exist on one page, the pieces of the transaction are presented in such a way that a reasonable consumer could think he was simply jumping through the necessary hoops to obtain his purchased report.
13. Plaintiffs argue that the choice of law provision in Intelius' terms and conditions of use conveys standing under the CPA. Plaintiffs do not explain how a contractual agreement between private parties can expand the statutory and jurisdictional limits discussed in Schnall. Nor have they identified any case law that would support their theory. While plaintiffs may have a contractual right to the protections of the CPA, the breach of that right would result in a breach of contract claim, not a direct claim under a statute that does not, by its terms, apply.
14. Defendants' citation to Young for the proposition that the benefit must be conferred upon defendant directly "by the plaintiff" is misleading. The passage quoted by defendants is actually taken from an earlier Court of Appeals case. The Supreme Court's own statement of the elements of an unjust enrichment claim does not include the reference to "by the plaintiff." Young, 164 Wash.2d at 484-85, 191 P.3d 1258. While the Court has no doubt that some benefits are simply too remote to form the basis of an unjust enrichment claim, that is not the case here.
Source: Leagle
