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LLC v. Facebook, Inc.

United States District Court, N.D. California

February 17, 2017

SIX4THREE, LLC, a Delaware limited liability company, Plaintiff,
v.
FACEBOOK, INC., a Delaware corporation, and DOES 1 through 50, inclusive, Defendant.

          ORDER REMANDING ACTION TO STATE COURT

          WILLIAM ALSUP UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         In this unfair-competition action, defendant removed the action from state court following a discovery response purportedly disclosing a federal question. Plaintiff moves to remand and for attorney's fees and costs incurred as a result of remand. For the reasons stated below, the motion to remand is Granted, and the request for attorney's fees and costs is Denied.

         STATEMENT

         At all relevant times, defendant Facebook, Inc., operated a social media website on the Internet. Facebook enabled users to connect and share information with their friends and family. Facebook offered various tools to third-party software developers to enable developers to build applications that integrated with the Facebook social network. Facebook promoted those tools to developers, and the third-party applications drove additional traffic to Facebook's website.

         Plaintiff Six4Three, LLC, joined Facebook's developer platform in 2012, and developed an application for iPhones and iPads called “Pikinis.” Six4Three's application used pattern-recognition technology to search through a Facebook user's friends' photographs, using certain developer tools offered by Facebook, to “identify photographs of the user's friends at the beach or in the summer” (Second Amd. Compl. ¶¶ 60-63). The complaint avoids providing a more detailed description of the Pikinis application. Nevertheless, this order takes judicial notice that during the pendency of this motion, the “About” section of a page promoting Pikinis on Facebook stated, “Pikinis is the iPhone app that automatically finds swimsuit photos on Facbeook” (see About Pikinis, Facebook (Feb. 13, 2017, 8:52 a.m.), https://www.facebook.com/pg/ pikinisapp/about/).

         This dispute arises because Facebook discontinued the developer tool that Six4Three's Pikinis application relied on, allegedly in contravention of promises made to developers.

         In April 2016, Six4Three commenced this action in San Mateo County Superior Court. After demurrer practice, Six4Three filed a second amended complaint, alleging five causes of action: (1) violation of Section 17200 of the California Business and Professions Code, (2) promissory estoppel, (3) negligent misrepresentation, (4) intentional interference with a contract, and (5) intentional interference with prospective business relations. (After further demurrer practice, the Superior Court sustained demurrer as to the promissory estoppel claim as alleged in the second amended complaint.)

         In December 2016, once discovery had already been under way, Facebook propounded the following interrogatory (Godkin Decl., Exh. 3, Interrogatory No. 34):

State ALL laws that YOU contend Facebook's conduct violates RELATED TO YOUR claim for violation of Business and Professions Code § 17200 et seq.

         On January 12, subject to several general objections, Six4Three served a verified response identifying various alleged violations of California statutory and common law (and one of New York law), as well as the following alleged violations of federal law (ibid.):

Facebook's conduct also violates Section 5 of the Federal Trade Commission Act (15 U.S.C. § 45) prohibiting unfair methods of competition in or affecting commerce and unfair or deceptive practices in or affecting commerce. Facebook's conduct further violates Section 1 of the Sherman Act prohibiting contracts in restraint of trade or commerce. Facebook's conduct further repeatedly violates Section 2 of the Sherman Act prohibiting the monopolization of attempt to monopolize any part of the trade or commerce among states. Facebook's conduct further repeatedly violates Section 2 of the Clayton Act, the Robinson-Patman Price Discrimination Act, prohibiting discrimination of price between different purchasers where the effect is to lessen competition or tend to create a monopoly. Facebook's conduct further repeatedly violates Section 3 of the Clayton Act prohibiting agreements that require avoidance of services or goods from competitors that tend to create a monopoly or lessen competition.

         On January 24, the day prior to the deadline to serve dispositive motions in state court, Facebook removed the action to federal court here in San Francisco on the ground that Six4Three's interrogatory response indicated that its claim under Section 17200 presented a federal question.

         Six4Three now moves to remand. It also seeks its reasonable attorney's fees and costs ...


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