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Silverstein v. Keynetics Inc.

United States District Court, N.D. California

June 27, 2016

WILLIAM SILVERSTEIN, Plaintiff,
v.
KEYNETICS INC., et al., Defendants.

          ORDER ON MOTIONS TO DISMISS RE: DKT. NOS. 6, 13

         Defendants 418 Media LLC ("418 Media) and Lewis Howes, and specially appearing Defendants Keynetics, Inc. ("Keynetics") and Click Sales, Inc. ("Click Sales), separately move pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(b)(2) to dismiss Plaintiff William Silverstein's amended complaint. [Docket Nos. 6, 13.] The court ordered the parties to file supplemental briefing on the motions, which the parties timely filed. [Docket Nos. 34-36.] The court held a hearing on April 28, 2016. For the following reasons, Defendants' motions to dismiss are granted because Plaintiff's claims for relief are preempted by federal law.

         I. BACKGROUND

         The following facts are taken from the allegations in Plaintiff's amended complaint, and are assumed to be true for purposes of this motion.[1]

         Plaintiff brings this putative class action alleging violations of California's restrictions on unsolicited commercial email. Plaintiff is a member of the group "C, Linux and Networking Group" on LinkedIn, a professional networking website. FAC ¶ 4. Through his membership in that group, he received unlawful commercial emails ("spam" emails) that came from fictitiously named senders through the LinkedIn group email system. The emails were sent from the domain "linkedin.com, " even though non-party LinkedIn did not authorize the use of its domain, and was not the actual sender of the emails. Id. at ¶¶ 30, 42.

         The bodies of the emails contain links to web pages at linkedinfluence.com, paidsurveyauthority.com, takesurveysforcash.com, click4surveys.com, and getcashforsurveys.com. Id. at ¶ 4. Plaintiff alleges upon information and belief that these links "go through clickbank.net, " which is owned and operated by Click Sales, and that Click Sales is a wholly owned subsidiary of Keynetics. Id. at ¶¶ 6, 14. He also alleges upon information and belief that 418 Media owns the domain name linkedinfluence.com, and that Doe 2 is Lewis Howes, an individual who owns and operates 418 Media. Id. at ¶ 12.

         Plaintiff alleges that the information in the "from" name field in the email headers falsely states who is actually sending or advertising in the spam emails. Id. at ¶¶ 32, 34. For example, the "from" names include "Liana Christian, " "Whitney Spence, " "Ariella Rosales, " and "Nona Paine, " none of whom are the true senders of the emails. Moreover, the "from" names do not identify the web page links contained in the bodies of the emails, nor do they appear to be associated with any of the Defendants. Id. at ¶¶ 36, 37.

         Plaintiff attached an exemplar email to his amended complaint. It contains the following email header information:

From: "Liana Christian" <groups-noreply@linkedin.com> Subject: [New discussion] How a newbie banked $5K THIS WEEK…What Nobody Told You About 1:22 am To: "William Silverstein" <linkedin.com@[redacted]>

Id. at ¶ 26, Ex. A. The body of the email contains a web link. Id. Plaintiff received at least 86 spam emails from July 6, 2015 to November 17, 2015 advertising linkedinfluence.com, paidsurveyauthority.com, takesurveysforcash.com, click4surveys.com, and getcashforsurveys.com, all of which had falsified or misrepresented "from" names in their headers. Id. at ¶¶ 35, 36.

         Plaintiff asserts one claim for violation of California Business and Professions Code section 17529.5, which prohibits certain unlawful activities related to commercial email advertisements. He seeks liquidated damages of $1, 000 per unlawful email message, as well as attorneys' fees and costs. Id. at ¶¶ 65-71. Defendants 418 Media and Howes move pursuant to Rule 12(b)(6) to dismiss Plaintiff's amended complaint on three grounds: 1) Plaintiff's section 17529.5 claims are preempted by the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 ("CAN-SPAM Act"), 15 U.S.C. §§ 7701-7713; 2) the amended complaint is not pled with the requisite specificity; and 3) Plaintiff does not plead specific facts regarding Howes's liability. Defendants Keynetics and Click Sales join in 418 Media and Howes's motion to dismiss on the ground of federal preemption. [Docket No. 13 at 8.] Keynetics and Click Sales also move pursuant to Rule 12(b)(6) for failure to state a claim against Keynetics, and pursuant to Rule 12(b)(2) to dismiss Plaintiff's amended complaint for lack of personal jurisdiction.[2]

         II.LEGAL STANDARDS

         A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the claims alleged in the complaint. See Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). When reviewing a motion to dismiss for failure to state a claim, the court must "accept as true all of the factual allegations contained in the complaint, " Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam) (citation omitted), and may dismiss a claim "only where there is no cognizable legal theory" or there is an absence of "sufficient factual matter to state a facially plausible claim to relief." Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010) (citing Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009); Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)) (quotation marks omitted). A claim has facial plausibility when a plaintiff "pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citation omitted). In other words, the facts alleged must demonstrate "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 554, 555 (2007) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)); see Lee v. City of L.A., 250 F.3d 668, 679 (9th Cir. 2001), overruled on other grounds by Galbraith v. Cnty. of Santa Clara, 307 F.3d 1119 (9th Cir. 2002).

         III. DISCUSSION

         A. Preemption

         California Business and Professions Code section 17529.5 governs unsolicited commercial email. It provides that it is unlawful for a person or entity "to advertise in a commercial e-mail advertisement either sent from California or sent to a California electronic mail address under any of the following circumstances:"

(1) The e-mail advertisement contains or is accompanied by a third-party's domain name without the permission of the third party.
(2) The e-mail advertisement contains or is accompanied by falsified, misrepresented, or forged header information.[3] This paragraph does not apply to truthful information used by a third party who has been lawfully ...

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