United States District Court, N.D. California
For Matthew Campbell, on behalf of himself and all others similarly situated, Michael Hurley, on behalf of himself and all others similarly situated, Plaintiffs: David F. Slade, Joseph Henry Bates, III, Carney Bates & Pulliam, PLLC, Little Rock, AR; Hank Bates, Carney Williams Bates Pulliam & Bowman, PLLC, Little Rock, AR; Jeremy A. Lieberman, Pomerantz Grossman Hufford Dahlstrom & Gross LLP, New York, NY; Lesley F. Portney, Pomerantz, LLP, New York, NY; Melissa Ann Gardner, Lieff Cabraser Heimann Bernstein, LLP, SAN FRANCISCO, CA; Nicholas Diamand, Lieff Cabraser Heimann and Bernstein LLP, New York, NY; Rachel Geman, Lieff Cabraser Heimann & Bernstein, LLP, New York, NY; Michael W. Sobol, Lieff Cabraser Heimann & Bernstein, LLP, San Francisco, CA.
For David Shadpour, Plaintiff: Jon A Tostrud, LEAD ATTORNEY, Tostrud Law Group, P.C., Los Angeles, CA; Lionel Z. Glancy, LEAD ATTORNEY, Glancy Binkow & Goldberg LLP, Los Angeles, CA; David F. Slade, Joseph Henry Bates, III, Carney Bates & Pulliam, PLLC, Little Rock, AR; Hank Bates, Carney Williams Bates Pulliam & Bowman, PLLC, Little Rock, AR; Jeremy A. Lieberman, Pomerantz Grossman Hufford Dahlstrom & Gross LLP, New York, NY; Lesley F. Portney, Pomerantz, LLP, New York, NY; Melissa Ann Gardner, Lieff Cabraser Heimann Bernstein, LLP, SAN FRANCISCO, CA; Nicholas Diamand, Lieff Cabraser Heimann and Bernstein LLP, New York, NY; Rachel Geman, Lieff Cabraser Heimann & Bernstein, LLP, New York, NY; Michael W. Sobol, Lieff Cabraser Heimann & Bernstein, LLP, San Francisco, CA.
For Facebook Inc., Defendant: Christopher Chorba, LEAD ATTORNEY, Gibson, Dunn & Crutcher LLP, Los Angeles, CA; Jeana Marie Bisnar Maute, LEAD ATTORNEY, Gibson, Dunn and Crutcher LLP, Palo Alto, CA; Jessica S. Ou, LEAD ATTORNEY, Gibson Dunn, Palo Alto, CA; Joshua Aaron Jessen, LEAD ATTORNEY, Gibson Dunn & Crutcher LLP, Irvine, CA.
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS
PHYLLIS J. HAMILTON, United States District Judge.
Defendant's motion to dismiss plaintiffs' consolidated amended complaint came on for hearing before this court on October 1, 2014. Plaintiffs Matthew Campbell, Michael Hurley, and David Shadpour (" plaintiffs" ) appeared through their counsel, Michael Sobol. Defendant Facebook, Inc. (" defendant" or " Facebook" ) appeared through its counsel, Joshua Jessen. Having read the parties' papers and carefully considered their arguments and the relevant legal authority, and good cause appearing, the court hereby GRANTS in part and DENIES in part defendant's motion as follows.
This is a privacy case involving the scanning of messages sent on Facebook's social media website. Facebook describes itself as the " world's largest social networking platform," with approximately 1.2 billion users worldwide. Facebook users are able to share content -- such as photos, text, and video -- with other users. Users can select the group of people with whom they wish to share this content, and may choose to share certain information publicly (i.e., with all Facebook users), or may choose to share certain information only with their " friends" (i.e., Facebook users with whom they have mutually agreed to share content). Facebook users may also choose to share certain information privately, with just one other Facebook user, through the use of a " private message." While not identical to email, a private message is analogous to email, in that it involves an electronic message sent from one user to one or more other users. Facebook users can access a " messages" inbox through the Facebook website, which is akin to an email inbox. This suit arises out of Facebook's handling of these " private messages."
Plaintiffs allege that Facebook scans the content of these private messages for use in connection with its " social plugin" functionality. Specifically, certain websites have a Facebook " like" counter displayed on their web pages, which enables visitors of the page to see how many Facebook users have either clicked a button indicating that they " like" the page, or have shared the page on Facebook. In essence, the " like" counter is a measure of the popularity of a web page.
Plaintiffs allege that Facebook scans the content of their private messages, and if there is a link to a web page contained in that message, Facebook treats it as a " like" of the page, and increases the page's " like" counter by one. Plaintiffs further allege that Facebook uses this data regarding " likes" to compile user profiles, which it then uses to deliver targeted advertising to its users. Plaintiffs allege that
the messaging function is designed to allow users to communicate privately with other users, and that Facebook's practice of scanning the content of these messages violates the federal Electronic Communications Privacy Act (" ECPA," also referred to as the " Wiretap Act" ), as well as California's Invasion of Privacy Act (" CIPA" ), and section 17200 of California's Business and Professions Code.
Plaintiffs seek to represent a nationwide class of " all natural person Facebook users located within the United States who have sent or received private messages that included URLs in their content, from within two years before the filing of this action up through and including the date when Facebook ceased its practice." Consolidated Amended Complaint (" CAC" ), ¶ 59.
A. Legal Standard
A motion to dismiss under Rule 12(b)(6) tests for the legal sufficiency of the claims alleged in the complaint. Ileto v. Glock, Inc., 349 F.3d 1191, 1199-1200 (9th Cir. 2003). Review is limited to the contents of the complaint. Allarcom Pay Television, Ltd. v. Gen. Instrument Corp., 69 F.3d 381, 385 (9th Cir. 1995). To survive a motion to dismiss for failure to state a claim, a complaint generally must satisfy only the minimal notice pleading requirements of Federal Rule of Civil Procedure 8.
Rule 8(a)(2) requires only that the complaint include a " short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Specific facts are unnecessary -- the statement need only give the defendant " fair notice of the claim and the grounds upon which it rests. Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). All allegations of material fact are taken as true. Id. at 94. However, a plaintiff's obligation to provide the grounds of his entitlement to relief " requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citations and quotations omitted). Rather, the allegations in the complaint " must be enough to raise a right to relief above the speculative level. Id.
A motion to dismiss should be granted if the complaint does not proffer enough facts to state a claim for relief that is plausible on its face. See id. at 558-59. " [W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged -- but it has not show[n] -- that the pleader is entitled to relief. Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
In addition, when resolving a motion to dismiss for failure to state a claim, the court may not generally consider materials outside the pleadings. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). There are several exceptions to this rule. The court may consider a matter that is properly the subject of judicial notice, such as matters of public record. Id. at 689; see also Mack v. South Bay Beer Distributors, Inc., 798 F.2d 1279, 1282 (9th Cir. 1986) (on a motion to dismiss, a court may properly look beyond the complaint to matters of public record and doing so does not convert a Rule 12(b)(6) motion to one for summary judgment). Additionally, the court may consider exhibits attached to the complaint, see Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1555 n.19 (9th Cir. 1989), and documents referenced by the complaint and accepted by all parties as authentic. See Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002).
B. Legal Analysis
1. Wiretap Act
The Wiretap Act provides for civil penalties against any person who " 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 the statutory text indicates, the focus of this provision is on the interception of the communication itself. While another provision of the Wiretap Act prohibits the use of the contents of a communication, that prohibition applies only if the interception itself is unlawful under section 2511(1)(a). Specifically, section 2511(1)(d) applies to any person who " intentionally uses, or endeavors to use, the contents of any wire, oral, or electronic communication," but only if that person knows or has reason to know " that the information was obtained through the interception of a wire, oral, or electronic communication in violation of this subsection." See 18 U.S.C. § 2511(1)(d) (emphasis added). In other words, if there is no unlawful interception, there can be no unlawful use.
Facebook argues that this distinction between " interception" and " use" favors dismissal of plaintiffs' Wiretap Act claim. According to Facebook, plaintiffs' real objection is not to Facebook's interception of private messages, but rather, to Facebook's use of the information. Facebook argues that it must have access to the messages in order to facilitate their delivery, so there cannot be any unlawful interception; and thus, there can be no unlawful use. See Noel v. Hall, 568 F.3d 743, 751 (9th Cir. 2009) (" use" provision " protects against the dissemination of private communications that have been unlawfully intercepted." ) (emphasis in original).
However, the Noel court also made clear that the term " interception" should not be interpreted as narrowly as urged by Facebook. The Noel court quoted the Wiretap Act's definition of " intercept," which is " the aural or other acquisition of the contents of any wire, electronic, or oral communication through the use of any electronic, mechanical, or other device," and then held that an " acquisition" occurs " when the contents of a wire communication are captured or redirected in any way." Noel, 568 F.3d at 749 (emphasis added).
At this stage of the case, the court is unable to determine whether Facebook unlawfully " redirected" the content of plaintiffs' private messages. While Facebook must certainly receive the contents of any message in order to transmit it to the recipient(s), there is no evidentiary record from which the court can determine whether Facebook " redirected" messages in order to scan their content for use in increasing " like" counters and for targeted advertising.
In the CAC, plaintiffs allege that Facebook uses a software application called a " web crawler" to scan any URLs that are contained in messages and to send server requests to that web page. CAC, ¶ 25. If true, the use of this " web crawler" could constitute a " redirection" of the contents of users' messages, and therefore, a separate " interception" under the Wiretap Act. Because the court takes the complaint's allegations as true, it would be premature to find that plaintiffs' claims center only around Facebook's use, not its interception, of users' private messages.
Facebook raises a second threshold challenge to plaintiffs' Wiretap Act claim. It argues that any actionable " interception" under the Wiretap Act must involve the communication being acquired during transmission, rather than during storage. Facebook points out that Congress created a separate statute, the Stored Communications
Act, to address access to stored electronic communications. Facebook argues that the " sequence of actions that plaintiffs allege involves use of content already in storage." Dkt. 29 at 27.
However, the CAC does indeed allege that " Facebook's interception occurred in transit, in transmission, and/or during transfer of users' private messages." CAC, ¶ 25. While Facebook may ultimately produce evidence showing that the messages were actually accessed while in storage, not during transmission, that issue is premature at this stage of the case, and would be better addressed as part of a motion for summary judgment with a more ...