United States District Court, N.D. California
SONG FI, INC., JOSEPH N. BROTHERTON, LISA M. PELLEGRINO, N.G.B., RASTA ROCK, INC., Plaintiffs,
GOOGLE, INC., YOUTUBE LLC, Defendants.
ORDER ON MOTION TO DISMISS THIRD AMENDED COMPLAINT
(DOCKET NO. 107)
CLAUDIA WILKEN United States District Judge.
Google, Inc. and YouTube LLC move to dismiss Plaintiffs'
Third Amended Complaint (3AC). The Court grants
Defendants' motion in part, and denies it in part.
Court described this case's factual and procedural
background in its order granting Defendants' motion to
dismiss Plaintiffs' Second Amended Complaint (2AC).
There, the Court dismissed Plaintiffs' Cartwright Act,
fraudulent concealment, libel per quod and tortious
interference claims, with leave to amend. The Court ruled
that Plaintiffs may not add further claims. Plaintiffs filed
timely their 3AC.
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). On a motion under Rule
12(b)(6) for failure to state a claim, dismissal is
appropriate only when the complaint does not give the
defendant fair notice of a legally cognizable claim and the
grounds on which it rests. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). In considering
whether the complaint is sufficient to state a claim, the
court will take all material allegations as true and construe
them in the light most favorable to the plaintiff. NL
Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir.
1986). However, this principle is inapplicable to legal
conclusions. "Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements,
" are not taken as true. Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at
Iqbal, 556 U.S. at 679, the Supreme Court laid out
the following approach for assessing the adequacy of a
a court considering a motion to dismiss can choose to begin
by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth.
While legal conclusions can provide the framework of a
complaint, they must be supported by factual allegations.
When there are well-pleaded factual allegations, a court
should assume their veracity and then determine whether they
plausibly give rise to an entitlement to relief.
has facial plausibility "when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged." Id. at 678. "The plausibility
standard is not akin to a ‘probability requirement,
' but it asks for more than a sheer possibility that a
defendant has acted unlawfully." Id. (quoting
Twombly, 550 U.S. at 556). Determining whether a
complaint states a plausible claim for relief is "a
context-specific task that requires the reviewing court to
draw on its judicial experience and common sense."
Id. at 679.
granting a motion to dismiss, the court is generally required
to grant the plaintiff leave to amend, even if no request to
amend the pleading was made, unless amendment would be
futile. Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection
Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990). In
determining whether amendment would be futile, the court
examines whether the complaint could be amended to cure the
defect requiring dismissal "without contradicting any of
the allegations of [the] original complaint." Reddy
v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir.
1990). Leave to amend should be liberally granted, but an
amended complaint cannot allege facts inconsistent with the
challenged pleading. Id. at 296-97. Courts consider
whether the plaintiffs have previously amended the complaint
in determining whether to grant leave to amend. See,
e.g., Fid. Fin. Corp. v. Fed. Home Loan Bank of
S.F., 792 F.2d 1432, 1438 (9th Cir. 1986) ("The
district court's discretion to deny leave to amend is
particularly broad where the court has already given the
plaintiff an opportunity to amend his complaint.").
previous order, the Court dismissed Plaintiffs'
Cartwright Act claim because it did not support that 1)
Plaintiffs' injuries were proximately caused by the
alleged conspiracy for view count inflation; 2) the
conspiracy harmed competition; and 3) Defendants were
involved in the conspiracy or worked with other alleged
3AC, Plaintiffs reframe the alleged conspiracy as follows.
The conspiring entities include Defendants, at the direction
of various executives; Universal Music Group and its
subsidiaries, associated record labels and distribution
partners; other major music labels, referred to as
"Major Labels"; Raymond Braun Media Group and
Scooter Braun personally; and the Fake View
Facilitators. Together, these parties conspired to
restrain the following market: "the sale, promotion, and
distribution of recorded music and music videos in the United
States." 3AC ¶ 17. They did so largely by
manipulating view counts on YouTube. Plaintiffs allege that
Defendants, through YouTube, are "the dominant provider
of online video hosting services" and that there is
"no other music or video website operating anywhere in
the world that remotely rivals Youtube's viewership,
market share, profitability, and name recognition."
Id. ¶ 15. Notably, Plaintiffs' description
of YouTube does not connect YouTube to the relevant market or
describe its share of that market. The conspiracy allegedly
benefitted the conspirators to the detriment of advertisers
on YouTube as well as Plaintiffs and others in the
independent artist community.
conspiracy began in 2006, when Google acquired YouTube and
transformed it into a vehicle to effectuate the conspiracy.
At this point, Google entered into contracts with the Major
Labels, "which called for the splitting of advertising