159 F. Supp. 3d 1101
N.D. Cal.2016Background
- Google’s reCAPTCHA sometimes shows two distorted words: the first for security, the second to crowdsource OCR transcription for Google’s book/maps projects. Plaintiff encountered such a two-word reCAPTCHA when signing up for Gmail and alleges Google did not disclose the secondary commercial purpose.
- Plaintiff filed a putative class action asserting Massachusetts G.L. c. 93A, California CLRA and UCL claims, and quasi-contract/unjust enrichment, seeking restitution and damages.
- Google moved to dismiss under Fed. R. Civ. P. 12(b)(6); the parties’ Gmail Terms of Service include a California choice-of-law clause and forum-selection provision, and the case was transferred to the Northern District of California.
- The FAC did not allege what specific prompt Plaintiff saw, what she was told or believed, or that she would have acted differently had Google disclosed the transcription purpose.
- The court evaluated (1) enforceability of the California choice-of-law clause as to the Massachusetts claim, (2) sufficiency of CLRA, UCL, and quasi-contract claims, and (3) whether reCAPTCHA qualifies as a CLRA "good or service." The court granted dismissal with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of California choice-of-law re: Mass. c.93A claim | Massachusetts c.93A protections (Section 9) are non-waivable and provide greater protection, so California law should not be applied | Parties agreed to California law in the Terms; California enforces valid choice-of-law clauses unless contrary to fundamental policy | Choice-of-law clause enforced; Mass. claim barred because plaintiff failed to show California would refuse to apply the clause |
| CLRA omission-based claim (materiality/reliance/damages) | Google omitted material fact (secondary commercial use); omission was actionable and caused damages | Complaint fails to plead what Plaintiff saw, that the omitted fact was material, that she relied or suffered damages | CLRA claim dismissed: no plausible allegation of a material omission, reliance, or compensable damages |
| Applicability of CLRA to reCAPTCHA | reCAPTCHA (or Gmail) is a consumer "service" covered by the CLRA | reCAPTCHA is online software/a gatekeeper, not a CLRA good or service | CLRA inapplicable because reCAPTCHA is software used online and not a CLRA "good or service"; CLRA claim futile to amend |
| UCL (unlawful, unfair, fraudulent prongs) | Google’s nondisclosure is unlawful/unfair/fraudulent; users were deprived of value of their labor | Plaintiff cannot show statutory violation (CLRA or c.93A), economic injury, or that omission caused her to change behavior | UCL claim dismissed for failure to plead unlawful predicate, lack of cognizable economic injury, and no plausible reliance/causation |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard under Rule 8)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must permit reasonable inference of liability)
- Atlantic Marine Constr. Co. v. U.S. Dist. Court, 134 S. Ct. 568 (2013) (effect of forum-selection clauses and choice-of-law analysis after transfer)
- Nedlloyd Lines B.V. v. Superior Court, 3 Cal.4th 459 (1992) (California enforces choice-of-law clauses absent fundamental-policy conflict)
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (2011) (standing/reliance principles in consumer protection context)
- Anderson v. Comcast Corp., 500 F.3d 66 (1st Cir. 2007) (interpretation of Mass. G.L. c.93A enforceability and waivers)
- Fraley v. Facebook, Inc., 830 F. Supp. 2d 785 (N.D. Cal. 2011) (privacy/publicity-based theory supporting deceptive-practices claims)