United States District Court, N.D. California, San Jose Division
ALICE SVENSON, individually and on behalf of all others similarly situated, Plaintiff,
GOOGLE INC., a Delaware Corporation, and GOOGLE PAYMENT CORPORATION, a Delaware Corporation, Defendants.
ORDER DENYING MOTION TO DISMISS FOR LACK OF ARTICLE III STANDING; AND GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM [Re: ECF 89]
BETH LABSON FREEMAN, District Judge.
Plaintiff Alice Svenson ("Svenson") brings this putative class action to challenge the alleged failure of Defendants Google, Inc. and Google Payment Corporation (collectively "Google") to honor the written privacy policies governing Google's electronic payment service, Google Wallet ("Wallet"). Google moves to dismiss the operative first amended complaint ("FAC") under Federal Rule of Civil Procedure 12(b)(1) for lack of Article III standing and under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. The Court has considered the briefing and the oral argument presented at the hearing on January 15, 2015. For the reasons discussed below, the motion to dismiss for lack of Article III standing is DENIED and the motion to dismiss for failure to state a claim is GRANTED IN PART AND DENIED IN PART.
Svenson alleges that prior to the filing of this lawsuit, Google's practice was to ignore these restrictions and, whenever a user purchased an App in the Play Store, to share the user's personal information with the App vendor. FAC ¶ 70-71. Svenson confusingly refers to this personal information as "Packets Contents." Id. ¶ 71. "Packets Contents" are defined in the FAC as "the data, transmitted in packets sent by Plaintiff and the Class to Defendants, that provide Defendants information necessary to execute the App purchase and does not include packets record information such as control elements (e.g., electronic-addressing information that enables the packets to arrive at their intended destination)." FAC ¶ 9. "Packets Contents" include "personal information about Buyers, including credit card information, purchase authorization, addresses, zip codes, names, phone numbers, email addresses, and/or other information." Id. ¶ 10. Svenson alleges that Google made "Packets Contents" available to the App vendor after collecting the App purchase price, retaining a thirty percent cut of the purchase price, remitting the remaining portion of the purchase price to the App vendor, and providing the buyer with a receipt. Id. ¶¶ 71, 114. She asserts that Google's sharing of the "Packets Contents" with the App vendor was not necessary to the App purchases and was not otherwise authorized by the Google Wallet Terms of Service. Id. ¶¶ 72-79. Svenson claims that Google ceased its blanket practice of sharing users' personal information with App vendors shortly after she filed this lawsuit. Id. ¶ 11.
On May 6, 2013, Svenson used Wallet to buy the "SMS MMS to Email" App in the Play Store for $1.77. FAC ¶ 87-88. Google collected the $1.77 by debiting the payment instrument associated with Svenson's Wallet account. Id. ¶¶ 90-92. Google also made Svenson's "Packets Contents" available to the App vendor, YCDroid. FAC ¶ 90. Because of the way that Svenson defines the term "Packets Contents, " it is unclear exactly what information was shared with YCDroid. The Court understands Svenson to be alleging that Google shared with YCDroid "personal information, " as that term is used in the applicable privacy policies, even though YCDroid did not need the information for the App transaction and sharing the information was not authorized under the privacy policies.
Based upon these allegations, Svenson asserts claims on behalf of herself and those similarly situated for: (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, (3) violation of the Stored Communications Act, 18 U.S.C. § 2701; (4) violation of the Stored Communications Act, 18 U.S.C. § 2702; and (5) violation of California's Unfair Competition Law ("UCL"), California Business and Professions Code § 17200.
II. LEGAL STANDARDS
A. Rule 12(b)(1)
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) raises a challenge to the Court's subject matter jurisdiction. See Fed.R.Civ.P. 12(b)(1). "Article III... gives the federal courts jurisdiction over only cases and controversies." Public Lands for the People, Inc. v. United States Dep't of Agric., 697 F.3d 1192, 1195 (9th Cir. 2012) (internal quotation marks and citation omitted). "The oft-cited Lujan v. Defenders of Wildlife case states the three requirements for Article III standing: (1) an injury in fact that (2) is fairly traceable to the challenged conduct and (3) has some likelihood of redressability." Id. at 1195-96 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). If these requirements are not satisfied, the action should be dismissed for lack of subject matter jurisdiction. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 109-10 (1998).
B. Rule 12(b)(6)
"A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted tests the legal sufficiency of a claim.'" Conservation Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts as true all well-pled factual allegations and construes them in the light most favorable to the plaintiff. Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the Court need not "accept as true allegations that contradict matters properly subject to judicial notice" or "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (internal quotation marks and citations omitted). While a complaint need not contain detailed factual allegations, it "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when it "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.
A. Subject Matter Jurisdiction
Svenson clearly has Article III standing to bring her two claims under the Stored Communications Act. See In re Zynga Privacy Litig., 750 F.3d 1098, 1105 n.5 (9th Cir. 2014) ("Because the plaintiffs allege that Facebook and Zynga are violating statutes that grant persons in the plaintiffs' position the right to judicial relief, we conclude they have standing to bring this claim."). However, "Article III standing is  claim- and relief-specific, such that a plaintiff must establish Article III standing for each of her claims and for each form of relief sought." In re Adobe Sys., Inc. Privacy Litig., ___ F.Supp.2d ___, 2014 WL 4379916, at *10 (N.D. Cal. Sept. 4, 2014). Google asserts Svenson has not established Article III standing to bring her state law claims for breach of contract, breach of the implied covenant, and unfair competition. Specifically, Google asserts that she has not alleged that she suffered any cognizable injury in fact that is fairly traceable to Google. As discussed below, Svenson has alleged facts sufficient to state a claim for breach of contract, breach of the implied covenant of good faith and fair dealing, and unfair competition, meaning that she has alleged that she suffered damages ("injury in fact") resulting from Google's breach of contract, breach of the implied covenant, and unfair competition ("fairly traceable to the challenged conduct"). See Public Lands for the People, 697 F.3d at 1195-96 (reciting Lujan factors).
Accordingly, the motion to dismiss for lack of Article III standing is DENIED.
B. Failure to State a Claim
1. Claim 1 - Breach of Contract
Claim 1 alleges breach of contract. To succeed on a breach of contract claim under California law, a plaintiff must establish a contract, the plaintiff's performance or excuse for nonperformance, the defendant's breach, and resulting damages to the plaintiff. Pyramid Tech., Inc. v. Hartford Cas. Ins. Co., 752 F.3d 807, 818 (9th Cir. 2014).
Based upon the prior pleading and argument, the Court had understood there to be one contract entered into when a user obtains a Wallet account. While the Court had understood different contract provisions to cover different circumstances - e.g., Wallet being used to purchase Apps versus Wallet lying dormant after initial registration - the Court was under the impression that all those circumstances were addressed in a single contract. However, Svenson now alleges expressly that a new contract is formed each and every time a user purchases an App in the Play Store. See FAC ¶¶ 34-35. Google urges the Court to reject that allegation as implausible in light of Svenson's allegation in the original complaint that she agreed to the Google Wallet Terms of Service when she registered for Wallet. See Defs.' Reply at 5 n.2, ECF 95. Google relies upon cases holding that when determining plausibility of allegations in an amended complaint, the Court may consider contradictory allegations made in prior iterations of the complaint. See Kennedy v. Wells Fargo ...