This case involves putative class action claims regarding Defendant Yahoo!, Inc.’s (‘Yahoo”) practice of scanning and analyzing emails of non-Yahoo Mad users in purported violation of federal and California anti-wiretapping laws. Plaintiffs Cody Baker, Brian Pincus, Halima Nobles, and Rebecca Abrams, individually and on behalf of those similarly situated (“Plaintiffs”), allege that Yahoo’s operation of its Yahoo Mail service violates their expectation of privacy under the Electronic Communications Privacy Act (ECPA), California’s Invasion of Privacy Act (CIPA), and the California Constitution. Plaintiffs filed a Consolidated Class Action Complaint on February 12, 2014. ECF No. 35 (“Compl.”). Before the Court is Yahoo’s Motion to Dismiss. ECF No. 37 (“Mot.”). Pursuant to Civil Local Rule T — 1(b), the Court finds this matter appropriate for resolution without a hearing and hereby VACATES the hearing set for August 29, 2014. The Case Management Conference set for August 29, 2014 at 10 a.m. remains as set. For the reasons stated below, the Court DENIES in part and GRANTS in part Yahoo’s Motion to Dismiss.
A. Factual Allegations
Plaintiffs are four individuals representing a class of individuals who do not use Yahoo’s email service (“Yahoo Mail”) but have sent emails to Yahoo Mail users from non-Yahoo email addresses. Compl. ¶¶ 15-18. Plaintiffs allege Yahoo’s practices while operating Yahoo Mail violate state and federal anti-wiretapping laws and invade their protected privacy interests under the California Constitution. Id. ¶¶ 5-7. Plaintiffs seek injunctive and declaratory relief and statutory damages on behalf of a class of non-Yahoo Mail usеrs. Id. ¶ 7. Plaintiffs’ proposed class consists of all persons in the United States who are not Yahoo Mail users and who sent emails to or received emails from a Yahoo Mail user between October 2, 2011 and the present. Id. ¶ 97.
1. Yahoo Mail and Yahoo’s Use of Scanned Emails
Yahoo operates Yahoo Mail as a free web-based email service. Id. ¶¶ 20-23. More than 275 million users have registered for Yahoo Mail to create @yahoo.com, @ymail.com, or @rocketmail.com email addresses. Id. ¶¶ 20-21. Before signing up for a Yahoo Mail account, potential users must provide Yahoo with personal information such as their name, birthday, telephone number, and account information. Id. ¶ 31.
In order to provide Yahoo Mail as a free email service to users, Yahoo charges advertisers to display advertisements on Yahoo Mail webpages. Id. ¶ 23. Roughly 75% of Yahoo’s revenue in 2013 came from advertising. Id. ¶ 28. Plaintiffs allege Yahoo can increase its revenues by charging advertisers higher rates to display targeted advertisements to Yahoo Mail users. Id. Thus, Yahoo has a financial incentive to scan and store email content to allow advertisers to target individuals based on certain personal characteristics. Id.
The instant dispute concerns Yahoo’s interception, scanning, and storage of Yahoo Mail users’ incoming and outgoing emails for content, specifically the content of emails to and from non-Yahoo Mail users with whom Yahoo Mail users communicate. Plaintiffs allege Yahoo intercepts and scans Yahoo Mail users’ emails “during transit and before placing the emails into storage.” Id. ¶ 24. Plaintiffs allege Yahoo scans, analyzes, collects, and stores user information without their consent. Id. ¶¶ 1, 3, 5, 26.
2. Yahoo Terms and Privacy Policy
Three relevant agreements exist between Yahoo and Yahoo Mail users: Yahoo Terms of Service (ECF No. 35-1, “TOS”), Yahoo Global Communications Additional Terms of Service for Yahoo Mail and Yahoo Messenger (ECF No. 35-4, “ATOS”), and Yahoo Privacy Policy (ECF No. 35-2). When creating a Yahoo Mail account, Yahoo directs users to view the ATOS and Privacy Policy via hyperlinks. Compl. ¶ 31. The sentence “I agree to the Yahoo Terms and Privacy” appears above the “Create Account” Button.” Id.; see also Mot. at 7. The phrase “Yahoo Terms” links to the ATOS. Compl. ¶ 31. The word “Privacy” is an individual hyperlink to Yahoo’s Privacy Policy. Id. The Complaint does not allege whether “Yahoo Terms” links to the TOS. However, Plaintiffs Opposition concedes that the TOS, ATOS, and Privacy Policy comprise the agreements between Yahoo and its users. ECF No. 39 (“Opp’n”) at 11.
Section 1(c) of the ATOS references Yahoo’s practice of scanning and analyzing users’ email content. Additionally, the ATOS places responsibility on Yahoo Mail users to notify about these scanning policies non-users with whom they communicate. The ATOS in relevant part provides:
Please note that your Yahoo Messenger account is tied to your Yahoo Mail account. Therefore, your use of Yahoo Messenger and all Yahoo Messenger services will be subject to the TOS and laws applicable to the Applicable Yahoo Company in Section 10. Yahoo’s automated systems scan and analyze all incoming аnd outgoing communications content sent and received from your account (such as Mail and Messenger content including instant messages and SMS messages) including those stored in your account to, without limitation, provide personally relevant product features and content, to match and serve targeted advertising and for spam and malware detection and abuse protection. By scanning and analyzing such communications content, Yahoo collects and stores the data. Unless expressly stated otherwise, you will not be allowed to opt out of this feature. If you consent to this ATOS and communicate with non-Yahoo users using the Services, you are responsible for notifying those users about this feature.
ATOS § 1(c) (emphasis in original). Plaintiffs allege that Yahoo added the line “By scanning and analyzing such communications content, Yahoo collects and stores the data” “at some time during” the proposed class period. Compl. ¶ 42. The phrase “collects and stores” is a hyperlink that leads the user to a page titled “Yahoo Mail FAQ.” ECF No. 85-7. The FAQ page explains that Yahoo’s scanning technology “looks for patterns, keywords, and files” in users’ emails. Compl. ¶ 47. Yahoo further discloses that it “may anonymously share specific objects from a message with a 3rd party to provide a more relevant experience.” ECF No. 35-7; Compl. ¶ 47.
Yahoo’s TOS and Privacy Policy do not explicitly reference the content of email sent between users and non-users. Instead, the TOS provides:
Registration Data and certain other infоrmation about you are subject to our applicable privacy policy. For more information, see the full Yahoo Privacy Policy at http://info.yahoo.com/privacy/ us/yahoo/ ... You understand that through your use of the Yahoo Services you consent to the collection and use (as set forth in the applicable privacy policy) of this information, including the transfer of this information to the United States and/or other countries for storage, processing and use by Yahoo and its affiliates.
TOS § 4. Yahoo’s Privacy Policy also does not explicitly mention email content. The policy states: ‘Yahoo collects personal information when you register with Yahoo, when you use Yahoo products or services, when you visit Yahoo pages or the pages of certain Yahoo partners, and when you enter promotions or sweepstakes.” ECF No. 35-2 at 1. Furthermore, the Privacy Policy suggests it covers only “how Yahoo treats personal information that Yahoo collects and receives, including information related to your past use of Yahoo products and services.” Id. Yahoo goes on to define personal information as “personally identifiable” information such as “your name address, email address, or phone number, and that is not otherwise publicly available.” Id. The Privacy Policy also discloses that Yahoo provides users’ personal information to “trusted partners who work on behalf of or with Yahoo under confidentiality agreements.” Id. at 2; Compl. ¶ 37.
Yahoo also has a number of other terms and privacy documents in its Terms Center and Privacy Center online. Compl. ¶¶ 43-46. Plaintiffs’ Complaint references one privacy document that applies to Yahoo Mail. ECF No. 35-6. The document has a section titled “Personally Relevant
Yahoo provides personally relevant product features, content, and advertising, and spam and malware detection by scanning and analyzing Mail, Messenger, and other communications content. Some of these features and advertising will be based on our understanding of the content and meaning of your, communications. For instance, we scan and analyze email messages to identify key elements of meaning and then categorize this information for immediate and future use.
ECF No. 35-6.
3. Class Allegations and Relief Sought
Plaintiffs allege that Yahoo’s operation of Yahoo Mail violates the Electronic Communications Privacy Act (ECPA), California’s Invasion of Privacy Act (CIPA), and Article I Section I of the California Constitution. Compl. ¶¶ 5-6. Plaintiffs seek relief on behalf of a class of persons who are not Yahoo Mail users who have either sent emails to or received emails from a Yahoo Mail user. Id. ¶ 97. The proposed class period begins October 2, 2011 and extends to the present. Id. Plaintiffs seek certification of a class of non-Yahoo Mail users, injunctive relief, declaratory relief, statutory damages, and disgorgement of Yahoo’s revenues from unjust enrichment related to Yahоo’s interception, scanning, and storage of emails from and to non-Yahoo Mail users. Id. at p.18.
B. Procedural History
Beginning on October 2, 2013, Plaintiffs filed six separate class action complaints against Yahoo in the Northern District of California, alleging that Yahoo scans and analyzes emails in violation of privacy laws. On December 18, 2013, this Court related all six pending actions because they involve the same defendant, Yahoo, and “substantially the same basic allegations” that Yahoo’s “interception, storage, reading and scanning of email violates Plaintiffs’ and other consumers’ rights of privacy.” ECF No. 14 at 2. On January 8, 2014, two of the Plaintiffs filed stipulations to dismiss their actions, which the Court granted. See Kevranian v. Yahoo!, 13-cv-04547-LHK, ECF No. 36. On January 22, 2014, this Court consolidated the remaining four cases for pretrial purposes, ECF No. 27, and appointed interim class counsel, ECF No. 29. Plaintiffs filed a consolidated class action complaint on February 12, 2014. ECF No. 35.
On March 5, 2014, Yahoo filed a Motion to Dismiss Plaintiffs’ claims. ECF No. 37. On March 26, 2014, Plaintiffs filed an Opposition to Yahoo’s Motion to Dismiss. ECF No. 39. On April 7, 2014, Yahoo filed a Reply. ECF No. 41 (“Reply”).
II. LEGAL STANDARDS
A. Request for Judicial Notice
The Court generally may not look beyond the four corners of a complaint in ruling on a Rule 12(b)(6) motion, with the exception of documents incorporated into the complaint by reference, and any relevant matters subject to judicial notice. See Swartz v. KPMG LLP,
The Court also may take judicial notice of matters that are either (1) generally known within the trial court’s territorial jurisdiction or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. Fed.R.Evid. 201(b). Proper subjects of judicial notice when ruling on a motion to dismiss include legislative history reports, see Anderson v. Holder,
B. Motion to Dismiss
Pursuant to Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss an action for failure to allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
However, a court need not accept as true allegations contradicted by judicially noticeable facts, Shwarz v. United States,
C. Leave to Amend
If the Court determines that the complaint should be dismissed, it must then decide whether to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely given when justice so requires,” bearing in mind “the underlying purpose of Rule 15 ... [is] to facilitate decision on the merits, rather than on the pleadings or technicalities.” Lopez v.
III. REQUESTS FOR JUDICIAL NOTICE
In support of its Motion to Dismiss, Yahoo requests the Court take judicial noticе of (A) a transcript of proceedings held on September 5, 2013 in In Re: Google Inc. Gmail Litigation, 13-md-02430 LHK (N.D.Cal); and (B) U.S. Senate Report No. 99-541 (1986) discussing Congress’ intent in passing ECPA. ECF No. 38. Plaintiffs did not file any opposition to these requests, and even cite to Exhibit B in their Opposition. Opp’n at 14. The Court takes judicial notice of both Exhibit A and Exhibit B. Yahoo’s Exhibit A is a public document that is part of this Court’s own records. See Jared v. Keahey (In re Keahey),
In support of their Opposition to Yahoo’s Motion to Dismiss, Plaintiffs request judicial notice of (A) an amicus brief filed by Senator Patrick J. Leahy in United States v. Councilman, First Circuit Case No. O3-1383; (B) Senate Report 90-1097 discussing Congress’ intent in passing the Omnibus Crime Control and Safe Streets Act of 1968; and (C) a California state superior court decision addressing violations of the California constitution, Ung v. Facebook, 1-12-cv-217244, Dkt. No. 54 (July 2, 2012). ECF No. 40. Yahoo did not file any opposition to Plaintiffs’ request for judicial notice. The Court also takes judicial notice of Plaintiffs’ Exhibits A, B, and C. All three are matters of public record and thus judicially noticeable. Exhibit A is an amicus brief that discusses the legislative history of the ECPA. Courts have taken judicial notice of amicus briefs that relate to the matters at issue. See Gustavson v. Wrigley Sales Co.,
While neither рarty requests judicial notice of the following items, the Court sua sponte takes judicial notice of Exhibits AG attached to Plaintiffs’ Complaint because they are aspects of a publicly accessible website, Plaintiffs’ Complaint necessarily relies on the contents of these webpages, and Yahoo does not contest the authenticity of the documents. See Coto Settlement,
A. Electronic Communications Privacy Act
Plaintiffs allege that Yahoo’s email scanning practices violate federal anti-wiretapping laws. Plaintiffs bring causes of action under two separate titles of ECPA: the Wiretap Act, Compl. ¶¶ 75-83, and the Stored Communications Act (“SCA”), id. ¶¶ 84-92. The Court provides background on both statutes before addressing Yahoo’s arguments in its Motion to Dismiss.
Congress passed ECPA in 1986 to protect the privacy of electronic communications. See Konop v. Hawaiian Airlines, Inc.,
The Wiretap Act includes various exemptions for such interceptions, two of which are relevant to the instant case. First, the Wiretap Act provides that “[i]t shall not be unlawful ... to intercept a wire, oral, or electronic communication ... where one of the parties to the communication has given prior consent to such interception.” 18 U.S.C. § 2511(2)(d). Since the Wiretap Act concerns the unauthorized interception of electronic communication, the consent of one party is a complete defense to a Wiretap Act claim. Murray v. Fin. Visions, Inc., CV-07-2578-PHX-JM,
In contrast to the interception of electronic communications, the SCA prohibits certain unauthorized access to stored communications and records. Enacted as Title II of the ECPA, the SCA imposes civil and criminal liability for anyone who “(1) intentionally accesses without authorization a facility through which an electronic communication service is provided; or (2) intentionally exceeds an authorization to access that facility; and thereby obtains, alters, or prevents authorized access to a wire or electronic communication while it is in electronic storage in such system.” 18 U.S.C. § 2701(a) (emphasis added). 18 U.S.C. § 2510(17)(A) states that “ ‘electronic storage’ means ... any temporary, intermediate storage of a wire or electronic communication incidental to the electronic transmission thereof.” The SCA grants immunity to 18 U.S.C. § 2701(a) claims to electronic communication service providers (“ECS providers”) for accessing
1. The Wiretap Act
a. Whether the Wiretap Act Applies to Yahoo’s Conduct
Yahoo first argues Plaintiffs’ Wiretap Act claim must be dismissеd because the SCA, not the Wiretap Act, applies to Yahoo’s conduct. Mot. at 1. Yahoo first notes that the Ninth Circuit has held that for a communication to be “intercepted” in violation of the Wiretap Act, it must be accessed during transmission — i.e., while it is in transit — and not while it is in “electronic storage.” Mot. at 4 (citing Konop,
The Court does not address Yahoo’s argument by analyzing whether Ninth Circuit law holds that the term “intercept” under the Wiretap Act applies to the “en route storage of electronic communications” because Yahoo’s argument is premature. On a Rule 12(b)(6) motion to dismiss, the Court must “accept factual allegations in the complaint as true.” Man-zarek,
b. Consent
Plaintiffs allege Yahoo’s operation of Yahoo Mail involves the knowing and purposeful interception of emails “in transit to and from Yahoo Mail accounts” without consent and “for [Yahoo’s] own profit.” Compl. ¶¶ 79-81. Yahoo moves to dismiss the Wiretap Act claim on the ground that Yahoo obtained express consent for its interception and email scanning from all Yahoo Mail users when they signed up for Yahoo Mail. Mot. at 7. Plaintiffs respond there is no consent by Yahoo Mail users because none of Yahoo’s terms adequately discloses that Yahoo engages in this conduct. Opp’n at 11. The Court GRANTS Yahoo’s Motion to Dismiss for the reasons stated below.
Consent to an interception under the Wiretap Act may be either explicit or implied, but it must be actual. See United States v. Poyck,
Yahoo argues that Yahoo Mail users explicitly consented
The question thus becomes whether the ATOS sufficiently establishes user consent by putting users on notice of Yahoo’s alleged conduct, and if so, to what extent. Plaintiffs allege that Yahoo scanned and analyzed emails to “provide personally relevant product features and content,” “to match and serve targeted advertising,” for “spam and malware detection and abuse protection,” to use the information from the emails to create user profiles, to share the information from the emails with third parties, and to “collect” and “store” the information for “future use.” Compl. ¶¶ 1, 3-4, 26-27, 29, 41, 46-49, 50, 70-71. The Court thus evaluates whether the ATOS adequately notifies the reasonable Yahoo Mail user that their emails with non-Yahoo Mail users will be intercepted for these various purposes.
The Court concludes that the ATOS establishes explicit consent by Yahoo Mail users to Yahoo’s conduct. Notably, Section 1(c) of the ATOS explicitly acknowledges that Yahoo scans and analyzes users’ email for various purposes: “Yahoo’s automated systems scan and analyze all incoming and outgoing communications content sent and received from your account (such as Mail and Messenger content including instant messages and SMS messages) including those stored in your account to, without limitation, provide personally relevant product features and content, to match and serve targeted advertising and for spam and malware detеction and abuse protection .... Unless expressly stated otherwise, you will not be allowed to opt out of this feature. If you consent to this ATOS and communicate with non-Yahoo users using the Services, you are responsible for notifying those users about this feature.” Compl. ¶ 41; ECF No. 35-4 (ATOS) (emphases added). In light of the clarity of the language in this disclosure, to which Yahoo Mail users agreed when creating an account, the Court finds that the ATOS provides explicit and sufficient notification to Yahoo Mail users that any communication sent via Yahoo Mail will be scanned and analyzed for the stated purposes of providing personal product features, providing targeted advertising, and detecting spam and abuse. By agreeing to the ATOS, Yahoo Mail users consented to such conduct. Plaintiffs provide no convincing argument to the contrary other than to say that “the ATOS does not explicitly inform Yahoo Mail users what Yahoo does with the contents of its users’ email.” Opp’n at 11. This argument fails in light of the specific statements in the ATOS that Yahoo scans the emails in order to “provide personally relevant product features and content, to match and serve targeted advertising and for spam and malware detection and abuse protection.” ECF No. 35-4 at 1. Plaintiffs’ other argument that the TOS and Privacy Policy “say nothing about the scanning and analysis of email,” Opp’n at
The Court further finds that the ATOS also established Yahoo Mail users’ consent to Yahoo’s practice of scanning and analyzing emails for the purposes of creating user profiles for both parties to the email communication and sharing content from the emails with third parties. Compl. ¶ 27. Notably, Plaintiffs allege that Yahoo’s creation of user profiles serves to “enhance Yahoo’s ability to target advertising” and that Yahoo’s sharing of information with third parties is for “advertising purposes.” Id.
prove that by agreeing to the ATOS, users also consented to Yahoo’s conduct of scanning and analyzing emails for the purpose of creating user profiles and sharing content with third parties. In light of the ATOS, the Court concludes that additional allegations cаnnot save Plaintiffs claim that there was no consent to scan and analyze emails for the purposes of providing personal product features, providing targeted advertising, detecting spam and abuse, creating user profiles, and sharing information with third parties. Thus, the Court GRANTS Yahoo’s Motion to Dismiss Plaintiffs’ Wiretap Act claim with respect to scanning and analyzing for these purposes with prejudice.
The only remaining question is whether there was consent to Yahoo’s conduct of “collecting” and “storing” the content from emails for “future use.” Plaintiffs claim Yahoo provided Yahoo Mail users no notice of this conduct. Opp’n at 12. Plaintiffs note that for part of the class period, the ATOS did not inform users that Yahoo collects and stores email content on its servers. Id.; Compl. ¶42. Plaintiffs concede that “at some time during the proposed class period,” Yahoo revised ATOS § 1(c) by adding the line: “By scanning and analyzing such communications content, Yahoo collects and stores the data.” Compl. ¶¶ 41-A2; Opp’n at 12. Nonetheless, Plaintiffs argue that even after Yahoo added this statement, Yahoo did not provide sufficient notice of collection and storage because Yahoo failed to explain to users “what it does with the data” it stores or what Yahoo “plans to do with it in the future.” Opp’n at 12. The Court dis
Plaintiffs concede that for at lеast the latter part of the class period, the ATOS explicitly notified users that Yahoo “collects and stores” their email communications. Compl. ¶¶ 41-42; Opp’n at 12. The Court concludes that this explicit language contained in the agreement between Yahoo and its users sufficed to put a reasonable user on notice of such collection and storage for the latter part of the class period. The Court further concludes that even for the portion of the class period during which the ATOS did not explicitly reference collection and storage, the reasonable user was nonetheless similarly on notice that Yahoo engages in collection and storage of email content. This is because the reasonable user would know that the ATOS’s language that Yahoo “scan[s] and analyze[s]” email content necessarily means Yahoo simultaneously collects and stores the email content, i.e., the reasonable user would know that “scanning and analyzing” requires Yahoo to collect and store the email content. In other words, the Court finds it implausible that users did not — after agreeing, based on the ATOS, to Yahoo’s scanning and analysis of emails — realize that in order to engage in analysis of emails, Yahoo would have to store the emails somewhere on its servers. Indeed, Plaintiffs do not provide any plausible reason why scanning and analyzing email content does not require the collection and storage of that content. If anything, Plaintiffs’ allegation that Yahoo “scans [еmail] content, storing the data it collects” suggests that the very process of scanning simultaneously stores the content. Compl. ¶ 1. Furthermore, the ATOS stated, at all times during the class period, that Yahoo “store[s]” emails in users’ accounts, which would have put the reasonable user on notice that Yahoo already stores at least some emails on its servers. ECF No. 35-4 (ATOS) (‘Yahoo’s automated systems scan and analyze all incoming and outgoing communications content sent and received from your account ... including those stored in your aceount[.]”) (emphasis added). Thus, the Court concludes that the reasonable user was on notice and thus consented to Yahoo’s collection and storage of email content when the user agreed to the ATOS.
The only remaining issue is whether Yahoo informed users that Yahoo was going to use the information it was collecting and storing in the “future.” Plaintiffs claim there was no notice of such future conduct because users had no notice of what specific use Yahoo would make of the email content in the future. Opp’n at 12. Plaintiffs’ argument is unconvincing. Given the explicit statements in the ATOS that Yahoo scans and analyzes email content to provide personal product features, provide targeted advertising, and detect spam and abuse. It is logical that Yahoo’s future uses would be the same. Further, Plaintiffs do not allege what they believe Yahoo was planning to do with the email content in the future separate and apart from the various uses of which this Court has alreаdy found users were on notice: to provide personal product features, provide targeted advertising, and detect spam and abuse. Accordingly, the Court finds that Yahoo Mail users consented to Yahoo’s collection and storage of their emails for future use, and GRANTS Yahoo’s Motion to Dismiss the Wiretap claim with respect to this conduct. However, the Court GRANTS leave to amend in order to allow Plaintiffs to allege any other “future use” they believe Yahoo would make of their email content, separate and apart from the uses of which this Court has found users
2. The Stored Communications Act
In the alternative to a Wiretap Act violation, Plaintiffs argue that Yahoo’s scanning practices violate the Stored Communications Act. Compl. ¶ 6. Plaintiffs assert this claim in the alternative “in the event the Court concludes that Yahoo accesses plaintiffs’ emails after they have been delivered to the recipients” and are thus in storage. Opp’n at 3; Compl. at ¶ 87 (“Plaintiffs assert this SCA claim in the alternative, in the event the Court finds that Yahoo intercepts the emails while they are in ‘storage’ rather than ‘in transit’[J”). Yahoo moves to dismiss Plaintiffs’ SCA claim.
Yahoo contends that if the SCA applies to Plaintiffs’ claims, Yahoo has statutory immunity to any alleged 18 U.S.C. § 2701(a) violation
However, Plaintiffs also assert Yahoo is liable under 18 U.S.C. § 2702(a)(1), which prohibits Yahoo from disclosing the content of users’ emails to third parties. Compl. ¶ 90 (alleging Yahoo’s “sharing of the content with third parties”); Opp’n at 14-15 (stating Yahoo is “prohibited from disclosing the contents of their customers’ emails to any person or entity”). Plaintiffs claim Yahoo improperly disclosed to third parties the content from the scanned emails between Yahoo Mail users and nonusers. Id. Section 2702(a)(1) holds ECS providers liable under the SCA if they “knowingly divulge to any person or entity the contents of a communication while in electronic storage by that service.” 18 U.S.C. § 2702(a)(1). Yahoo argues Plaintiffs’ claim for a violation of § 2702(a)(1)
In order to state a claim for improper disclosure under the SCA, Plaintiffs must plausibly allege that Yahoo knowingly divulged “the contents of a communication.” See In re Zynga Privacy Litigation,
The Court notes, as a preliminary matter, that Plaintiffs are incorrect to argue that the Privacy Policy supports Plaintiffs’ argument that their allegations sufficiently plead that Yahoo divulged “the contents of a communication.” The Plaintiffs cite to one part of the Privacy Policy which states that Yahoo provides “its users’ personal information ‘to trusted partners who work on behalf of or with Yahoo under confidentiality agreements.’ ” Compl. ¶ 37. The SCA distinguishes between “contents of a communication” and “record information.” The SCA incorpоrates the definition of “contents” from the Wiretap Act. 18 U.S.C. § 2711(1). Under the Wiretap Act, “contents” includes “any information concerning the substance, purport, or meaning of that communication.” Id. § 2510(8). The Ninth Circuit has interpreted the language and statutory framework of ECPA to find that “contents” means “a person’s intended message to another.” Zynga,
Nonetheless, the Court still finds that Plaintiffs’ allegations suffice to plausibly allege a claim under Twombly. This is because the Complaint contains sufficient factual detail to plausibly allege that Yahoo shared with third parties “the contents of a communication.” Zynga,
While Yahoo argues Plaintiffs have failed to allege what specific information was shared and with what specific third parties, the FAQ, as alleged in the Complaint, does give at least one example of the kind of information in emails that was shared with third parties — i.e., a package tracking number. In any event, Yahoo cites no case holding that a plaintiff must allеge the specific information in the content that was shared or the identity of the third party in order to state a claim for a violation of § 2702(a)(1). Ultimately, the Court finds that Plaintiffs’ allegations as a whole sufficiently plead “factual content that allows the court to draw the reasonable inference that the defendant is liable
The Court notes that in its Reply, Yahoo argues in one sentence in a footnote that the language in the ATOS “suffices as consent for SCA purposes.” Reply at 6 n.7. Because the Court has concluded, as Plaintiffs concede, that Yahoo has not violated § 2701(a), the only consent exception relevant under the SCA is the consent exception to a § 2702(a) violation, see § 2702(b)(3). However, Yahoo did not argue in its opening brief that there was consent for a § 2702(a) violation and only focused on how Yahoo had consent to a § 2701(a) violation pursuant to § 2701(c)(2). Mot. at 12 n.9. Thus, the Court does not consider Yahoo’s consent argument in its Reply because arguments raised for the first time in Reply briefs are waived. Sealant Sys. Intl., Inc. v. TEK Global S.R.L., 5:11-CV-00774-PSG,
3. Good Faith Defense
Yahoo raises a good faith defense against Plaintiffs’ Wiretap Act and SCA claims. Mot. at 13. The Wiretap Act provides:
A good faith reliance on—
(1) a court warrant or order, a grand jury subpoena, a legislative authorization, or a statutory authorization (including a request of a governmental entity under section 2703(f) of this title);
(2) a request of an investigative or law enforcement officer under section 2518(7) of this title; or
(3) a good faith determination that section 2511(3) or 2511(2)(i) of this title permitted the conduct complained of;
is a complete defense against any civil or criminal action brought under this chapter or any other law.
18 U.S.C. § 2520(d); see also 18 U.S.C. § 2707(e) (providing a nearly identical good faith defense for SCA violations). Specifically, as a defense to Plaintiffs’ § 2701(a) SCA claim, Yahoo claims it relied in good faith on §§ 2701(a), (c). As a defense to Plaintiffs’ Wiretap claim, Yahoo claims it relied on (1) the decisions of the Ninth Circuit in Konop and Theofel v. Farey-Jones,
The Court does not reach Yahoo’s good faith reliance on §§ 2701(a) and (c) because the Court GRANTS, on other grounds as stated above, Yahoo’s Motion to Dismiss any claim that Yahoo violated § 2701(a). See supra, Part IV.A.2. The Court also does not reach Yahoo’s alleged good faith reliance on the Ninth Circuit decisions Konop and Theofel or on §§ 2511(c) and 2511(2)(a)(i) of the Wiretap Act because the Court GRANTS, on other grounds as set forth above, Yahoo’s Motion to Dismiss the Wiretap claim, see supra, Part IV.A.l.b. Thus, the Court need not reach Yahoo’s Motion to Dismiss either the SCA claim or Wiretap claim based on the good faith defense.
B. California’s Invasion of Privacy Act (“CIPA”)
Plaintiffs bring a cause of action under CIPA, CaLPenal Code § 630, et seq.
Section 631 of CIPA makes it unlawful to use “any machine, instrument or contrivance” to intentionally intercept the content of a communication over any “telegraph or telephone wire, line, cable or instrument,” or to read, attempt to read, or learn the “contents or meaning of any message, report, or communication while the same is in transit or passing over any wire, line or cable” without the consent of all parties to the communication. See CaLPenal Code § 631(a). The California Supreme Court has held that § 631 protects against three distinct types of harms: “intentional wiretapping, willfully attempting to learn the contents or meaning of a communication in transit over a wire, and attempting to use or communicate information obtained as a result of engaging in either of the two previous activities.” Tavemetti v. Superior Court,
Plaintiffs allege Yahoo has violated § 631 of CIPA. Compl. ¶¶ 53-65. Yahoo moves to dismiss first on the grounds that § 631 only applies to communications intercepted “in transit,” and that here the communications at issue were not “in transit” but in “electronic storage” because the emails were already on Yahoo’s servers when Yahoo accessed the emails. Mot. at 14-15. Second, Yahoo similarly argues that the all-party consent provision in § 631 should not apply to “recorded communications” already in the hands of and received by a provider because that would lead to illogical results, id. at 16, and thus that this Court must interpret CIPA to find that “when an email reaches the recipient’s provider,” the email “is no longer in transit” and CIPA does not apply. Reply at 13. Finally, Yahoo argues that the SCA and Wiretap Act would preempt § 631 if CIPA applied to emails “on an ECS providers’ servers” — like the emails Yahoo contends are at issue here. Id. at 18-19.
Yahoo relies on Konop to support its contention that emails an ECS provider has received en route to a recipient are in electronic storage rather than “in transit,” and thus that CIPA does not apply. Mot. at 14. Yet as discussed above, see supra Part IV.A.l.a, the Court must accept as true Plaintiffs’ allegation that “Yahoo intercepts and scans its users’ incoming emails for content during transit and before placing the emails into storage.” Compl. ¶ 24. The Court must defer resolution of whether Yahoo accessed the emails only after the emails were on Yahoo’s servers until after discovery makes clear where and how Yahoo’s scanning technology intercepted the emails. Thus, the Court rejects Yahoo’s first argument that CIPA does not apply.
Yahoo’s second argument that CIPA should not apply when an email has reached Yahoo’s servers — based on allegedly illogical implications that would result from applying CIPA’s all-party consent provision to such emails — similarly assumes the emails were on Yahoo’s server when intercepted, which this Court cannot assume at this stage. Even if the Court could make such an assumption, the Court would still have to reject Yahoo’s argument that the Court should find the emails at issue were not “in transit” when intercepted because that would contradict the
Finally, the Court rejects Yahoo’s preemption argument for similar reasons. Yahoo contends that the SCA and Wiretap Act preempt Plaintiffs’ CIPA claims, relying on all three theories of federal preemption. Mot. at 18; Chae v. SLM Corp.,
Accordingly, the Court DENIES Yahoo’s Motion to Dismiss Plaintiffs’ CIPA claim.
C. California Constitution
Plaintiffs allege that Yahoo’s scanning, storage, and disclosure of Plaintiffs’ email content violates their right to privacy under Article I, Section 1 of the California Constitution. Compl. ¶¶ 66-74. Yahoo contends Plaintiffs fail to allege sufficient facts to state a claim. Mot. at 21. The Court GRANTS Yahoo’s motion with leave to amend.
The California Constitution creates a privacy right that protects individuals from the invasion of their privacy by private parties. Am. Acad, of Pediatrics v. Lungren,
“A ‘reasonable’ expectation of. privacy is an objective entitlement founded on broadly based and widely accepted community norms.” Hill,
In the event a plaintiff establishes the three elements, the “diverse and somewhat amorphous character of the privacy right” may still be balanced with competing or countervailing interests of the defendant. Id. at 37-38,
The California Constitution sets a “high bar” for establishing an invasion of privacy claim. See Belluomini v. Citigroup, Inc., No. CV 13-01743 CRB,
Finally, “[w]hether a legally recognized privacy interest is present in a given case is a question of law to be decided by the court.” Hill, 7 Cal.4th at 40,
Here, the question is whether Plaintiffs have alleged sufficient facts to demonstrate (1) a legally protected privacy interest; (2) a reasonable expectation of privacy under the circumstances; and (3) conduct by Yahoo that amounts to a serious invasion of that protected privacy interest. Plaintiffs allege that Yahoo scans and stores the content of emails between Yahoo Mail users and non-users, and distributes that content to third parties. Compl. ¶ 71. Plaintiffs allege they have a legally protected privacy interest “in the private email communications” they send to Yahoo Mail users. See id. ¶ 69; Opp’n at 24.
As a preliminary matter, under California law there are only two classes of legally protected privacy interests under the California Constitution: “interests in precluding the dissemination or misuse of sensitive and confidential information (‘informational privacy’); and (2) interests in making intimate personal decisions or conducting personal activities without observation, intrusion, or interference (‘autonomy privacy’).” Hill,
However, this Court concludes, as others have, that there can be a legally protected privacy interest or reasonable expectation of privacy in any confidential and sensitive content within emails. See,
Plaintiffs’ arguments to the contrary are unavailing. First, they argue that they have stated a privacy claim by emphasizing that they do not consent to Yahoo’s conduct. Opp’n at 23-24; Compl. ¶¶ 70-71. However, Plaintiffs cite no authority in support of their argument that an allegation of lack of consent suffices to state a privacy claim. Rather, the case law suggests that in determining whether a plaintiff has satisfied the elements of the claim, a plaintiffs lack of consent does not matter so much as the nature of the information in which he or she alleges a privacy interest. See, e.g., In re iPhone Application Litig.,
Plaintiffs also argue that they need not allege that each of their emails contained confidential information in order to state a claim because the right to privacy was adopted to protect the public from the “stockpiling of personal information.” Opp’n at 24. Plaintiffs cite to the ballot argument for the initiative creating the constitutional right to privacy as evidence that the people intended to prevent “government and business interests from collecting and stockpiling unnecessary information about us and or misusing information gathered for one purpose in order to serve other purposes or to embarrass us.” Id. at 23 (citing Hill,
In sum, because Plaintiffs do not plead sufficient facts to allege an invasion of privacy, Yahoo’s Motion to Dismiss Plaintiffs’ claims for a violation of Article I, Section 1 of the California Constitution is GRANTED. However, the Court grants leave to amend because Plaintiffs may be able to plead specific email content in specific emails that may suffice to state the elements of the claim.
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS Yahoo’s Motion to Dismiss with prejudice Plaintiffs’ Wiretap Act claim that Yahoo scans and analyzes emails for the purposes of providing personal product features, providing targeted advertising,
The Court GRANTS Yahoo’s Motion to Dismiss with prejudice with respect to Plaintiffs’ SCA claim for unauthorized access under § 2701(a). The Court DENIES Yahoo’s Motion to Dismiss Plaintiffs’ SCA claim for improper disclosure under § 2702(a)(1). The Court GRANTS Yahoo’s Motion to Dismiss without prejudice Plaintiffs’ claim under Article I, Section 1 of the California Constitution. The Court DENIES Yahoo’s Motion to Dismiss Plaintiffs’ CIPA § 631 claim.
Plaintiffs shall file any amended complaint within 21 days of this order. Plaintiffs may not add new causes of action or parties without a stipulation or order of the Court under Rule 15 of the Federal Rules of Civil Procedure. Failure to cure the deficiencies addressed in this Order will result in dismissal with prejudice.
IT IS SO ORDERED.
Notes
. Yahoo does not argue there was implied consent by either party to the communication, nor does Yahoo contend that non-users consented to the alleged interceptions.
. The Complaint also alleges that "Yahoo can increase revenues by obtaining more detailed background information about users of the service,” and that "Yahoo benefits from gathering as much personal information about its Yahoo Mail users, and non-users who email with its users, as it can.” Id. ¶ 28. Plaintiffs' allegations do not explain how Yahoo increases its revenues other than to provide targeted advertisements. Id. ("Yahoo can charge advertisers substantially more to place ads that are 'targeted1 to certain demographic groups and even to specific individuals.”).
. Because the Court GRANTS Yahoo’s Motion to Dismiss the Wiretap Act claim on consent grounds, the Court need not reach Yahoo's argument that the “ordinary course of business” exception to Wiretap Act liability applies. The Court also need nоt reach Yahoo’s argument, raised for the first time in Reply, that Plaintiffs’ "bare allegation” that Yahoo intercepts emails while they are "in transit” fails to state a Wiretap Act claim under Twombly. Reply at 2.
. An SCA violation under 18 U.S.C. § 2701(a) occurs when someone "(1) intentionally accesses without authorization a facility through which an electronic communication service is provided; or (2) intentionally exceeds an authorization to access that facility; and thereby obtains, alters, or prevents authorized access to a wire or electronic communication while it is in electronic storage in such system.” 18 U.S.C. § 2701(a).
. Section 2701(c)(1) provides an exception to liability for an 18 U.S.C. § 2701(a) violation when the conduct is authorized: "(1) by the person or entity providing a wire or electronic communications service.” 18 U.S.C. § 2701(c)(1).
. Plaintiffs’ Complaint does not explicitly state which provision of the SCA Yahoo has violated.
. Because the parties agree that Yahoo has immunity under 18 U.S.C. § 2701(c)(1), the Court does not reach whether Yahoo had its users' consent to access the communications under 18 U.S.C. § 2701(c)(2), as Yahoo claims, Mot. at 12 n.9’.
. Plaintiffs allege in the Complaint that they have a "legally protected interest in their private email communications with Yahoo Mail users.” Compl. ¶ 69. From the Complaint alone, it is unclear if Plaintiffs allege that non-Yahoo Mail users have privacy interest in both the emails sent to and received from Yahoo Mail users. However, in their Opposition, Plaintiffs assert they have a privacy interest in the "emails they send to Yahoo Mail users.” Opp’n at 23-24. This suggests Plaintiffs only intend to allege that they have a constitutionally protected privacy interest in their own outgoing email content rather than the content they receive from Yahoo Mail users.
. The nature of the content at issue is also examined when courts assess whether the third prong of a privacy claim is met — i.e., whether there was a serious or egregious violation of social norms. See Low v. LinkedIn Corp.,
. While Yahoo cites this Court’s holding in Gmail that the plaintiffs in that case had not shown that the email communications were “confidential communications” under CIPA § 632, Reply at 15, Gmail did not suggest or hold that there can never be a reasonable expectation of privacy in email content. Rather, Gmail confronted a circumstance similar to the instant motion, where plaintiffs suggested that emails in general were confidential.
. Plaintiffs' cited cases do not so hold. Opp’n at 25. Rather, they are inapposite, as they arise in the Fourth Amendment context. See United States v. Forrester,
. While Plaintiffs rely on Ung v. Facebook, Inc., Santa Clara County Superior Court Case No. 1-12-cv-217244, Dkt. No. 54 (July 2, 2012), see ECF No. 40-1 at 230, that case did not hold that an allegation of stockpiling information automatically suffices to state a privacy claim. Further, that case is distinguishable. There, where it was alleged that Facebook created user profiles linked to Fa-cebook users’ identities by tracking the internet browsing history of users across numerous other websites even when the user is not logged into Facebook, the court found a legally protected privacy interest in users’ "identifiable browsing history” because Facebook could link the history to their identities, or names. Id. The court also held that non-Facebook users did not have a protected interest in their browsing history which Face-book tracked because the history "had not been linked to their identities.” Id. Plaintiffs in Yahoo are more analogous to the non-Facebook users in Ung who did not have a privacy interest because the emails Yahoo allegedly intercepts are not linked to Plaintiffs' identities, as Yahoo does not necessarily know who Plaintiffs are. While Plaintiffs allege Yahoo creates "profiles” of them, Compl. ¶ 27, Plaintiffs do not allege that Yahoo attempts to link the information it acquires to Plaintiffs' identities (i.e., to their names) as opposed to just creating generic profiles that describe Plaintiffs' interests and general characteristics (female, likes shampoo products, etc).
