(Re: Docket Nos. 71, 77)
ORDER GRANTING-IN-PART MOTION TO DISMISS AND GRANTING MOTION TO STRIKE
Like Rocky rising from Apollo’s uppercut in the 14th round, Plaintiffs’ complaint has sustained much damage but just manages to stand. The court GRANTS the motion, but only IN-PART.
I. BACKGROUND
This is a nationwide, putative class action against Google on behalf of all persons and entities in the United States that acquired a Google account between August 19, 2004 and February 29, 2012, and continued to maintain that Google account on or after March 1, 2012, when a new Google privacy policy went into effect. Plaintiffs also bring nationwide class claims against Google on behalf of (a) all persons and entities in the United States that acquired an Android-powered device between May 1, 2010 and February 29, 2012 and switched to a non-Android device on or after March 1, 2012 (the “Android Device Switch Subclass”); and (b) all persons and entities in the United States that acquired an Android-powered device between August 19, 2004 and the present, and downloaded at least one Android application through the Android Market and/or Google Play (the “Android App Disclosure Subclass”).
Google is a technology and advertising company that provides free web-based products to billions of consumers around the world. Google can offer its products free of charge due to its primary business model — advertising. In 2011, Google’s revenues were $87.91 billion, approximately 95% of which ($36.53 billion) came from advertising. In 2012, Google’s revenues increased to $46.04 billion, approximately 95% of which ($43.69 billion) came from advertising.
In order to accomplish this, Google logs personal identifying information, browsing habits, search queries, responsiveness to ads, demographic information, declared preferences and other information about each consumer that uses its products. Google’s Gmail service also scans and discloses to other Google services the contents of Gmail communications. Google uses this information, including the contents of Gmail communications, to place advertisements that are tailored to each consumer while the consumer is using any Google product or browsing third-party sites that have partnered with Google to
Before March 1, 2012, information collected in one Google product was not automatically commingled with information collected during the consumer’s use of other Google products. Google did not, for instance, ordinarily and automatically associate a consumer’s Gmail account (and therefore his or her name and identity, his or her private contact list, or the contents of his or her communications) with the consumer’s Google search queries or the consumer’s use of other Google products like Android, YouTube, Picasa, Voice, Google +, Maps, Docs, and Reader.
Google has always maintained a general or default privacy policy purporting to permit Google to “combine the information you submit under your account with information from other services.”
On March 1, 2012, however, Google replaced those policies with a single, unified policy that allows Google to comingle user data across accounts and disclose it to third-parties for advertising purposes.
Plaintiffs brought their original complaint on March 20, 2012 and consolidated it with related actions on June 8, 2012.
Plaintiffs’ first amended complaint, filed on March 7, 2013, expanded the bounds of the alleged classes, as well as the explana
With these new allegations in place, Plaintiffs allege effectively the same harms as before. The class as a whole complains that commingling and disseminating user data violates Google’s prior privacy policies and constitutes an unreasonable invasion of consumer privacy.
II. LEGAL STANDARDS
A. Article III Standing
To satisfy Article III, a plaintiff “must show that (1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.”
The 'injury required by Article III may exist by virtue of “statutes creating legal rights, the invasion of which creates standing.”
B. Rule 12(b)(6)
A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.”
On a motion to dismiss, the court must accept all material allegations in the complaint as true and construe them in the light most favorable to the non-moving party.
“Dismissal with prejudice and without leave to amend is not appropriate unless it is clear ... that the complaint could not be saved by amendment.”
III. DISCUSSION
As in prior motions, Google attacks Plaintiffs’ operative complaint on two fronts. First, it argues that Plaintiffs lack standing to bring their claims at all. Second, it argues that even if they have standing, Plaintiffs have once again failed to plead their claims in more than a concluso-ry manner, such that they must be dismissed under Iqbal and Twombly.
A. Standing
In its earlier order, the court explained that Plaintiffs had standing to raise their claims based on: (1) the greater discharge of battery power and system resources due to unauthorized activity; (2) the costs incurred by each named plaintiff when he bought a new phone after the policy change, since his initial phone choice was substantially driven by privacy concerns; (3) the injury incurred overpaying for Android devices based on Google’s misrepresentation about certain features; (4) violation of statutory rights bestowed by the Wiretap Act; (5) violations of statutory rights bestowed by the Stored Communications Act and (6) violations of statutory rights bestowed by Cal. Civ. Code § 3344.
1. Alleged Heightened Risks of Future Harms Do Not Confer Standing
Google initially challenges the Application Disclosure subclass’ standing to bring
The Ninth Circuit has recognized that the improper disclosure of personal information can give rise to standing based on the threat of future harm so long as that harm is credible, real, and immediate, and not merely conjectural or hypothetical.
The alleged threat of future harm in this case is similarly conjectural. The information disclosure is markedly distinguishable from that in Krottner: there, disclosure was a result of laptop theft containing sensitive personal information of almost 100,000 Starbucks employees.
2. Plaintiff Nisenbaum’s Phone Replacement Still Confers Standing
Google’s second argument against standing targets the injury that Nisenbaum asserts in bringing the Device Switch Subclass’ UCL and CLRA claims. Google argues that Nisenbaum has not suffered an actual harm that would confer standing because (a) based on his purchase date, he was a party to a 2009 privacy policy — not the 2008 privacy policy upon which his claim is based — that expressly allows data commingling, and (b) the court’s prior holding that phone replacement conferred standing no longer applies because he now alleges that Google’s failure to disclose its intention to disregard its policy, rather than fear of data commingling, was the cause of replacement.
Google’s arguments are not persuasive. First, the court’s granting Plaintiffs’ motion to strike Google’s submission of the 2009 privacy policy renders the first half of Google’s argument moot. Accepting Plaintiffs’ allegations as true, Nisenbaum was a party to the 2008 privacy policy giving rise to his claim. Second, and of more substantive import, the court’s prior ruling that the economic injury resulting from Nisenbaum’s phone replacement still applies.
3. Battery Depletion Confers Standing
Google’s third substantive argument against standing attacks the alleged injury to Plaintiffs’ battery life caused by Google Play’s unauthorized transmission of their information when they download an app.
Google’s argument here — challenging the causal nexus between its alleged conduct and the Plaintiffs’ alleged injury— requires a heavily and inherently fact-bound inquiry that the court may not reach at this stage in the litigation.
B. Sufficiency of the Pleadings
With the standing question resolved, the court next turns to the legal sufficiency of the claims alleged. At the outset, it is worth noting that this court’s prior order found that Google is immune from the claims alleged under the Wiretap Act because of its status as a provider of electronic communication services,
1. CLRA Claim on Behalf of Device Switch Subclass
Plaintiffs’ first cause of action seeks recovery under Sections (a)(5),(7), (9), (14) and (16) of the CLRA on behalf of the Device Switch Subclass. It is based on the theory that Google drafted its 2008 Android Policy with the intent of deceiving potential purchasers of Android devices into buying them based on the promise that Google would not associated device-related information (such as the device’s IMEI) with a user’s account, that Google had a secret plan to change that policy, and that “[h]ad Google disclosed in June 2010 that it did not intend to honor the terms of the ‘Android-powered device privacy policy’ at that time, Plaintiff Nisenb-aum would not have purchased his Android device.”
Google first argues that Plaintiffs’ CLRA claim should fail because software is neither a good nor a service as required for liability under Cal. Civ. Code § 1770. However, Plaintiffs’ allegations are not premised on the sale of the apps, but the sale of the Android device itself.
In its prior order, the court dismissed all of Plaintiffs’ theories of recovery under the CLRA because Plaintiffs did not allege that Google intended to use their information in a manner other than was advertised at the time that Plaintiffs purchased devices and registered for accounts.
Plaintiffs try to dodge this flaw in their claim with three arguments. First, they argue that “CLRA jurisprudence is abundantly clear that the reliance element is satisfied with allegations that ‘the plaintiff ‘in all reasonable probability’ would not have engaged in the injury-producing conduct’ absent the misrepresentation or omission.”
In short, although it was properly directed at Google, the Device Switch Subclass’ CLRA claim must be dismissed once again based on deficient pleadings.
California’s UCL provides a private cause of action for users who are harmed by unfair, unlawful, or fraudulent business practices.
Plaintiffs’ claim under the unlawful prong of the UCL is based entirely on their CLRA claim.
Plaintiffs’ claim under the unfair prong of the UCL fails as well, but for a different reason. Their unfairness theory is best understood in a three-step syllogism: (1) Plaintiffs have a right to privacy under the California Constitution; (2) Google’s conduct “resulted in a violation of’ that right to privacy, therefore (3) Google’s conduct ran afoul of the UCL.
As the theories of harm fail under all three prongs of the UCL, the Device Switch Subclass’ claim under the UCL is dismissed.
3. Breach of Contract Claim on Behalf of App Disclosure Subclass
Plaintiffs’ third through fifth causes of action are brought on behalf of the App Disclosure subclass. The first is the breach of contract claim, which underlies this subclass’ other claims.
“Under California law, the elements of a breach of contract claim are: (1) the existence of a contract, (2) plaintiffs performance or excuse for nonperformance, (3) defendant’s breach, and (4) resulting damage to plaintiff.”
Google argues that the complaint fails to state a breach of contract claim for three reasons.
Google’s second and third arguments also are unpersuasive. The second — that Plaintiffs are not parties to the general privacy policy on which they base their claims
4. Intrusion Upon Seclusion Claim on Behalf of App Disclosure Subclass
As the court previously admonished Plaintiffs, to assert an intrusion upon seclusion claim, a plaintiff must plead facts in support of two elements: “1) intrusion into a private place, conversation or matter, and 2) in a manner highly offensive to a reasonable person.... To show intrusion, a plaintiff must have ‘an objectively reasonable expectation of seclusion or solitude in the place, conversation or data source,’ and the defendant must have ‘penetrated some zone of physical or sensory privacy surrounding, or obtained unwanted access to data about, the plaintiff.’ ”
Google argues that the court should simply stick with its prior holding that commingling of user data is an inadequate allegation for an intrusion claim.
5. UCL Claim on Behalf of App Disclosure Subclass
Plaintiffs’ fifth cause of action is another UCL claim, this time on behalf of the App Disclosure subclass. The App Disclosure subclass seeks recovery under two of the three prongs of the UCL, one of which is easily disposed of by this court’s prior order. Their theory under the unfair prong of the UCL is that members of the App Disclosure subclass were lured into believing that their personal information would be closely guarded while Google encouraged them to “make Android devices and applications indispensable to their lives;” they were-therefore trapped when Google implemented policies “from which they cannot effectively opt out.”
The App Disclosure subclass’ claim under the fraudulent prong of the UCL, however, carries weight. As described above, under the fraudulent prong of the UCL, Plaintiffs must plead specific facts to show that the members of the public are likely to be deceived by the actions of the defendant and that Plaintiffs both relied on and were harmed by those actions.
IV. CONCLUSION
After running each claim (and subclaim) of each class (and subclass) through the gauntlet of constitutional and procedural hurdles, two claims remain: the App Disclosure Subclass’ breach of contract claim, and the fraudulent prong of the App Disclosure Subclass’ UCL claim. Plaintiffs may proceed on these two causes of action alone. Because the court warned Plaintiffs in its last order that any future dismissal would likely be with prejudice,
IT IS SO ORDERED.
Notes
. Originally, the complaint named only two Plaintiffs: Robert DeMars and Lorena Barrios. See Docket No. 1 at ¶ 27-28. The second amended complaint names five more: Pedro Marti, David Nisenbaum, Nicholas Anderson, Matthew Villani, and Scott McCullough. See Docket No. 68 at ¶¶ 25-31.
. See Docket No. 1.
. Unless otherwise noted, all facts are drawn from the operative complaint and the docket records in this case. Plaintiffs' motion to strike the declaration of Silva Reyes is GRANTED, as a court is to decide a motion to dismiss based only on the complaint, and documents properly subject to judicial notice. See Lee v. Cty. of Los Angeles,
. See Docket No. 68 at ¶ 1.
. See id. at ¶ 4.
. See id. al ¶ 5.
. See id. at ¶ 6
. Id. at ¶ 7.
. See id. at ¶ 7.
. See id. at ¶¶ 5-14.
. See Docket No. 1; Docket No. 14.
. See Docket No. 14 at ¶¶ 9-10.
. See Docket No. 45 at 8-12.
. See id. at 12.
. See Docket No. 50 at ¶¶ 19-22, 35-7, 128-91.
. In finding standing, the court relied on Plaintiffs' allegations of (a) economic harm in the forms of involuntary battery and bandwidth consumption, expenditures on replacement devices in order to avoid Google’s privacy policy, and overpayment for devices in reliance on fraudulent privacy statements; and (b) violations of statutory rights. See Docket No. 67 at 11-17.
. See id. at 18-30.
. Id. at 30.
. Docket No. 68 at ¶ 9.
. See id. at ¶¶ 9-10.
. Id. at ¶ 9.
. See id. at ¶¶ 10, 12-13, 16, 49, 51, 57, 75.
. See id. at ¶¶ 11, 126-27, 146.
. See id. at ¶¶ 7, 15, 39, 76, 114, 124-27, 156, 159, 271, 292-93, 300.
. See id. at ¶¶ 149, 150, 151.
. See id. at ¶¶ 17, 146, 160.
. See id. at ¶¶ 18, 19, 147-48, 161-193.
. See id. at ¶¶ 250-343. Because the court previously dismissed them, Plaintiffs bring their claims for breach of contract and those under the Federal Wiretap Act and Stored Electronic Communications Act for appellate preservation purposes only. See id. at 75, 77, 80 nn.1-3. These claims would have been preserved for appeal, regardless of whether they were re-plead. See Lacey v. Maricopa Cnty.,
. See Friends of the Earth, Inc. v. Laidlaw Envtl. Sys. (TOC), Inc.,
. Steel Co. v. Citizens for a Better Environment,
. See Steel Co.,
. See Edwards v. First Am. Corp.,
. See id. (quoting Warth,
. Maya v. Centex Corp.,
. DaimlerChrysler Corp. v. Cuno,
. Fed. R. Civ. P. 8(a)(2).
. Bell Atlantic Corp. v. Twombly,
. Ashcroft v. Iqbal, 556 U.S. 662, 663,
. Balistreri v. Pacifica Police Dep’t,
. Bell Atl. Corp. v. Twombly,
. See Metzler Inv. GMBH v. Corinthian Colls., Inc.,
. See id. at 1061.
. See Sprewell v. Golden State Warriors,
. Eminence Capital, LLC v. Aspeon, Inc.,
. See Docket No. 67 at 13-17.
. Docket No. 71 at 6.
. See Docket No. 68 at ¶¶ 287, 302.
. See Docket No. 71 at 8-9.
. See id. at 9 (citing Docket No. 45 at 10).
. Docket No. 68 at 42.
. See Krottner v. Starbucks Corp.,
. See Low v. Linkedln Corp., Case No. 5:11-cv-01468-LHK,
.See Yunker v. Pandora Media, Inc., Case No. 4:11 cv-03113-JSW,
. See also Frezza v. Google Inc., Case No. 5:12-cv-00237-RMW,
. See Krottner,
. See Krottner,
. See Low,
. See Docket No. 71 at 6-7; Docket No. 78 at 3-4.
. See Docket No. 67 at 13-14.
. See Docket No. 67 at 14 (“Nisenbaum specifically alleges that but for the policy switch he would not have otherwise have bought a new phone. The alleged injury is fairly traceable to Google based on Mr. Nisenbaum's allegation that he relied on Google’s previous policies in purchasing the Android phone in the first place.”).
. See Docket No. 68 at ¶ 262.
. See id. at ¶ 259-62.
. See Docket No. 71 at 8.
. See id. at 69-73.
. Id.
. See Docket No. 78 at 5.
. See Maya v. Centex Corp.,
. Docket No. 78 at 5.
. See Docket No. 67 at 12-13.
. See Docket No. 71 at 70-74.
. See Docket No. 67 at 18.
. See id. at 23.
. See id. at 25.
. See Docket No. 68 at ¶ 66.
. See Marolda v. Symantec Corp.,
. See Kearns v. Ford Motor Co.,
. Cf. In re iPhone Application Litig. Case No. 5:11-md-02250-LHK,
.See Docket No. 68 at ¶ 255.
The Android-powered device policy provided that Google "would not associate the following discrete categories of Android user information with that user’s Google profile or account: (i) the hardware model of a user's Android-powered phone or device; (ii) the version of Android software used by a user; (iii) information about crashes or other phone-level events experienced by an Android-user; (iv) information generated by the use of third-party applications or features, such as mobile browsers, social networking software, address books, and reference applications, used by an Android user; and (v) an Android user’s location information, including Cell ID and GPS information.”
. See Perrine v. Sega of America, Inc., Case No. 3:13-cv-01962-JSW,
. See Oestreicher v. Alienware Corp.,
. Docket No. 68 at ¶ 260.
. See Oestreicher,
. See Docket No. 67 at 29.
. See Docket No. 68 at ¶ 257 ("Google’s assurances in its Android-powered device privacy policy ... were false when made because Google already decided, no later than May 2010, not to honor these terms.”).
. See Docket No. 71 at 9.
. See Docket No. 74 at 18.
. See In re Tobacco II Cases,
. See In re Tobacco II,
. There was no allegation of misrepresentation in the In re Google AdWords case; the case was based entirely on Google’s omission of a material fact. See Docket No. 166.
. See Docket No. 74 at 18.
. Cf. Collins v. eMachines, Inc., 202 Cal.App.4th 249, 256,
. Docket No. 74 at 19. With respect to the 2009 Mobile Policy, it is mentioned nowhere in the CSAC and thus is irrelevant.
. See id.
. Google also argues that the CLRA claim is also deficient under Fed. R. Civ. P. Rule 9(b), providing yet another ground for dismissal. See Docket No. 71 at 9. However, most of the particular deficiencies raised (where Ni-senbaum’s phone was purchased, from whom it was purchased, etc.) would do little to provide Google with the necessary notice to defend itself on these claims. In addition, under Nisenbaum's theory, he would not have purchased his phone if he had known that Google simply had the authority to associate device numbers with Google accounts, regardless of whether or not it ever actually did so.
. See Lozano v. AT & T Wireless Servs., Inc.,
. See Trazo v. Nestlé USA, Inc., Case No. 5:12-cv-2272-PSG,
. See Kearns v. Ford Motor Co.,
. See Finuliar v. BAC Home Loans Servicing, L.P., Case No. 3:11-cv-02629-JCS,
. See Kearns v. Ford Motor Co.,
. Yanting Zhang v. Superior Court, 57 Cal.4th 364, 380 n.9,
. McDonald v. Coldwell Banker,
. Wilson v. Hynek, 207 Cal.App.4th 999, 1008,
. See Docket No. 68 at ¶ 268.
. See In re Tobacco II Cases,
. See id. at ¶ 269-70.
. Compare Docket No. 50 at ¶¶ 270-72, 314 (claiming violation of the unfair prong of the UCL based on luring Plaintiffs into becoming accustomed to “indispensable” services with promises of privacy protection then making it incredibly difficult to "opt out” of undesirable policies in the future), with Docket No. 68 at ¶ 268.
. Hill v. Nat'l Collegiate Athletic Ass’n,
. See In re iPhone Application Litig.,
. EPIS, Inc. v. Fid. & Guar. Life Ins. Co.,
. See Docket No. 67 at 25.
. See Docket No. 68 at ¶¶ 273-280. Plaintiff includes a breach of contract claim on behalf of the entire class only for purposes of appellate preservation. Id. at 75 n.l.
. Docket No. 68 at ¶ 278.
. See id. at ¶¶ 130 (quoting Android-powered device policy), 131 ("The Google Play terms of service simply refer to the Google Wallet privacy policy”), 132-34 (discussing and quoting Google Wallet Privacy Policy), 135 (discussing and quoting Google’s general privacy policy).
. See id. at ¶ 278.
. See id. at ¶ 279.
. See Docket No. 71 at 15-16.
. Id. at 15.
. Docket No. 68 at ¶ 277.
. See id. at ¶¶ 130-35.
. Docket No. 71 at 15.
. See Docket No. 71 at 15.
. Docket No. 68 at ¶ 130.
. Id. at ¶ 132.
. Id.
. Id. at ¶ 135.
. Thompson v. Chase Bank N.A., Case No. 4:09-cv-2143-DMS,
. Joseph v. J.J. Mac Intyre Companies, L.L.C.,
. See Panahiasl v. Gurney, Case No. 5:04-cv-04479-JF,
. See Sanders v. Am. Broad. Companies, Inc.,
. See Yee v. Lin, Case No. 5:12-cv-02474-WHA,
. See Docket No. 71 at 16 (citing Docket No. 67 at 29).
. See Docket No. 68 at ¶¶ 281-88 (alleging intrusion on behalf of App Disclosure sub
. Belluomini v. Citigroup Inc., Case No. 3:13-cv-01743,
. See
. See Docket No. 68 at ¶ 299.
. See Kearns v. Ford Motor Co.,
. See Docket No. 68 at ¶¶ 128-44, 295.
. See id. at ¶ 110-27.
. See id. at ¶ 296.
. See Docket No. 67 at 30.
