ORDER GRANTING GOOGLE’S MOTION TO DISMISS UNDER RULE 12(B)(6) FOR FAILURE TO STATE A CLAIM
“CAPTCHAS,” tyрically distorted words that website visitors are required to identify before accessing certain internet services, are ubiquitous. Their stated purpose is to ensure that the website user is a human. Google’s reCAPTCHA program sometimes requires the user to transcribe two words. The first word serves the security purpose, but Google utilizes the user’s transcription of the second to assist with Google’s digitalization of books; in effect, Google is “crowd sourcing” the transcription of words that a computer cannot decipher. This lawsuit alleges that Google does so without disclosing this purpose to the human user.
Now pending before the Court is Google’s Motion to Dismiss Plaintiffs First Amended Complaint (“FAC”). (Dkt. No. 52.) The gravamen of the question presented is whether Google’s failure to disclose the true purpose of the user’s transcription of the second word is unfair, fraudulent or otherwise illegal. After carefully considering the parties’ submissions, including their supplemental briеfs, and having had the benefit of oral argument on December 10, 2015, the Court GRANTS the motion.
ALLEGATIONS OF THE COMPLAINT
Google, a Delaware corporation headquartered in Mountain View, California, earns some of its revenue from transcribing books, newspapers, photographs, and other images. (FAC ¶ 5, 24.) Some of these transcriptions are done for paying third parties such as the New York Times. (Id.) Some, Google uses for its own Google Books or Google Maps. (Id. ¶¶ 5, 25-26.) Google then profits from the ads displayed to users who visit Google Books or Google Maps. (Id.) To transcribe these texts, Google uses optical character recognition (“OCR”) technology; however, OCR does not always capture all of the words or numbers in an image. (Id. ¶ 21.) Those missed characters require human review. (Id.)
Instead of employing people to review those missed words, Google uses a program that already required users to view and transcribе distorted images: reCAPT-CHA, Google’s version of a Completely
While most CAPTCHA programs present only one word or phrase, rеCAPTCHA sometimes requires users to transcribe two words. (Id. ¶ 18.) The first word in those prompts is known to Google and serves a security purpose. (Id. ¶¶ 3, 19.) The second word or phrase is one that Google’s OCR technology failed to recognize and serves no security purpose. (Id.) The unknown word is presented to users multiple times until the responses all point to one transcription. (Id. ¶¶ 22-23.) Then, Google updates its transcription of the source. (Id.)
Plaintiff, a Massachusetts resident, encountered a two word reCAPTCHA prompt in the process of signing up for a Gmail account in August 2014. (Id. ¶ 8.) She was “required ... to respond.” (Id.). The complaint does not detail what she saw when she completed the prompt or what she understood the purpose of the prompt to be.
PROCEDURAL BACKGROUND
Plaintiff filed her complaint in the District of Massachusetts on January 22, 2015. (Dkt. No. 1.) Google responded with a motion to dismiss or ‘transfer, relying on the Terms of Service Plaintiff accepted when signing up for her Gmail account. (Dkt. No. 12; Dkt. No. 31 at 4-5; Dkt. No. 52 at 7-8.
The laws of California, U.S.A., excluding California’s conflict of laws rules, will apply to any disputes arising out of or relating to these terms or the Services. All claims arising out of or relating to these terms or the Services will be litigated exclusively in the federal or state courts of Santa Clara County, California, USA, and you and Google consent to personal jurisdiction in those courts.
(Dkt. No. 52 at 8.) The District of Massachusetts, over Plaintiffs objection, found the Terms of Service applied to her claim and transferred the case to the Northern District of California in August 2015 while declining to rule on the motion to dismiss. (Dkt. No. 31.) Two days before this Court was scheduled to hear the still pending motion to dismiss, the parties filed a stipulation allowing Plaintiff to amend her complaint. (Dkt. No. 48.)
Plaintiffs FAC alleges four causes of action: (1) unfair and deceptive acts and praсtices in violation of Massachusetts General Law Chapter 93A, (2) unfair or deceptive acts or practices in violation of California’s Consumers Legal Remedies
LEGAL STANDARDS
A motion to dismiss pursuant to Federal Rule оf Civil Procedure 12(b)(6) challenges the sufficiency of the complaint where the action fails to allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
If the Court concludes that a Rule 12(b)(6) motion to dismiss should be granted, the “court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Lopez v. Smith,
Google moves to dismiss the FAC on numеrous grounds: (1) Plaintiffs claims under Massachusetts law are contractually barred by the choice of law provision contained in Google’s Terms of Service, to which Plaintiff agreed, (2) Plaintiff has failed to state a claim under either the CLRA or UCL, including by failing to allege fraud with specificity as required by Federal Rule of Civil Procedure 9(b), (3) the CLRA does not apply to Plaintiffs claim because reCAPTCHA is software, and thus neither a good nor a service under the statute, and (4) Plaintiffs claims for quasi-contract or unjust enrichment do not exist under California law or are barred by Google’s Terms of Service. The Court addresses each argument in turn.
A. Plaintiffs Claim Under Massachusetts Law is Barred
Google argues that the California choice of law provision in Google’s Terms of Service, to which Plaintiff agreed when she signed up for her Gmail account, bars Plaintiffs claim under Massachusetts law. Google bases this argument partly on the District of Massachusetts’s transfer order, which concluded the forum selectiоn clause in Google’s Terms of Service applied to. Plaintiffs claim. Plaintiff counters that the choice of law clause cannot preclude her from bringing her Massachusetts claim because Section 9 of Massachusetts General Law (“MGL”) Chapter 93A, which provides remedies for consumers, is not waivable.
Federal courts sitting in diversity jurisdiction look to the law of the forum state when making choice of law determinations. Fields v. Legacy Health Sys.,
Plaintiff does not dispute that, as the Massachusetts court found in transferring this action, she agreed to Google’s Terms of Service when she signed up for her Gmail account. (Dkt. No. 31-at 6.) The Terms of Service contained a choice of law clause indicating that “[t]he laws of California ... will apply to any disputes arising out of or relating to these terms or the Services.” (Id.) Plaintiff does not argue this choice of law provision does not apply to her claim. Nor does she argue that
Plaintiff has a different, and, as far as the Court can tell, unprecedented argument. She contends that even though Massachusetts does not have a materially greater interest in this dispute than California, California would not enforce the parties’ choice of California law because consumer claims under Section 9 of Massachusetts General Law Chapter 93A are not waivable. See, e.g., Anderson v. Comcast Corp.,
Plaintiff relies on two California cases to support her contention. See Am. Online, Inc. v. Superior Court,
Plaintiff first contends that California’s “injury” requirement means that
Under the plaintiffs’ theory of “injury,” any consumer contract, oral or written, that violates the requirement of law in any respect, i.e., is noncompliant with any statute, rule regulation or court decision, automatically constitutes an “injury” under G.L. c. 93A (is an injury per se) entitling the plaintiff to recover statutory damages, attorney’s fees, and costs, even though the plaintiff cannot demonstrate that the illegal contract (the invasion of a legally protected interest) causes any loss. There is nothing to suggest that the Legislature ever intended such a result, it is contrary to the regulation promulgated by the Attornеy General, see note 11, supra, and this court has never sanctioned that view.9 Every consumer is, of course, entitled to the full protection of law. If any person invades a consumer’s legally protected interests, and if that invasion causes the consumer a loss — whether that loss be economic or noneconomic — the consumer is entitled to redress under our consumer protection statute. A consumer is not, however, entitled to redress under G.L. c. 93A, where no loss has occurred. To permit otherwise is irreconcilable with the express language of G.L. c. 93A, § 9, and our earlier case law.
Id. at 801-02,
Plaintiff next contends that Massachusetts law affords consumers more protection because unlike the CLRA, it does not require a consumer to show reliance. While Chapter 93A Section 9 does not require a “plaintiff [to] show proof of actual reliance on a misrepresentation under c. 93A, § 9,” see Int’l Fid. Ins. Co. v. Wilson,
Plaintiff has thus failed to point to any substantive differences between Massachusetts and California law that would offend either state’s public policy. Both require a causal connection between the alleged misrepresentation and Plaintiffs actions which result in a loss. Moreover, even if there was a fundamental difference, Plaintiff has not cited any case in which a California court refused to apply California law pursuant to a valid contractual choice of law provision because California law offered fewer protections than another state’s law. The choice of law provision is thus enforceable and Plaintiffs claim under Chapter 93A must be dismissed.
B. Plaintiffs CLRA Claim Fails
“To state a claim under [Section 1770(a)(5) of the CLRA], a plaintiff must allege: (1) a misrepresentation; (2) reliance on that misrepresentation; and (3) damages caused by that misrepresentation.” In re Sony PS3 Other OS Litig.,
1. Plaintiff Fails to Identify a Misrepresentation
A CLRA claim based on a defendant’s omission must be based on an omission “contrary to a representation actually made by the defendant, or an omission of a fact the defendant was obliged to disclose.” Mui Ho,
Under the CLRA a defendant has an obligation to disclose information in four circumstances:
(1) when the defendant is the plaintiffs fiduciary; (2) when the defеndant has exclusive knowledge of material facts not known or reasonably accessible to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representa*1113 tions that are misleading because some other material fact has not been disclosed.
Collins v. eMachines, Inc.,
Plaintiff fails to allege facts that plausibly support an inference of a duty to disclose. First, Plaintiff does not allege what representations she encountered when she signed up for Gmail; instead, she merely alleges that as a condition for signing up for Gmail, she had to resрond to a re-CAPTCHA prompt by typing two words. (Dkt. No. 49 ¶8.) For this reason, alone, her claim fails.
Second, Plaintiff fails to allege the nondisclosure of a “material” fact. The FAC includes a screenshot of a Google reCAPT-CHA prompt (although it does not allege that this is the prompt Plaintiff encountered):
[[Image here]]
(Id. ¶ 18.) This prompt advises the user that it is “necessary to prevent automated signups.” The FAC also alleges that other reCAPTCHA versions represent that they ensure that the user “is not a robot.” (Dkt. No. 49 ¶ 53.) Plaintiff contends that these versions are misrepresentations because they omit disclosing that the second reCAPTCHA word is used for transcription services from which Google profits rather than for security purposes. Assuming that such a disclosure is omitted, Plaintiff fails to allege any facts that plausibly support an inference that the fact omitted is material. “A fact is deemed ’material,’ and obligates an exclusively knowledgeable defendant to disclose it, if a ’reasonable [consumer]’ would deem it important in determining how to act in the transaction at issue.” Collins v. eMachines, Inc.,
2. Plaintiff Fails to Allege Reliance
As Plaintiff has not plausibly alleged the materiality of the omitted information, it follows that she has also not plausibly alleged that she relied on the alleged omission. As explained above, she has not even alleged what representations she encountered, let alone that she relied upon them. See Handy,
Plaintiffs insistence that she is nonetheless entitled to an inference of reliance is wrong. None of the cases she cites support an inference of reliance where, as here, the Plaintiff has failed to allege what she saw, what she believed as a result, how knowledge would impact her behavior, or facts that otherwise support a reasonable inference that an omitted fact was material. See, e.g., Morales v. Uniliver U.S., Inc., No. 2:13-2213 WBS,
3. Plaintiff Fails to Allege Damages
Plaintiff has also not alleged that she suffered any damages as a result of the alleged misrepresentation. At best, she alleges that Google profited from her allegedly uninformed decision to complete the two-word reCAPTCHA. But Google’s
Plaintiffs attempt to analogize this situation to Fraley v. Facebook, Inc.,
Plaintiff has therefore failed to allege any of the required elements of her CLRA claim.
4. ReCAPTCHA is not a CLRA good or service
Even if Plaintiff could cure these pleading defects, there remains the ques7 tion of whether the CLRA applies at all. The CLRA prohibits “unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer,” including “[rjepresenting that ... services have ... characteristics ... which they do not.” Cal. Civ. Code § 1770(a), (a)(5). Plaintiff argues Google violated Section 1770(a)(5)’s prohibition on “Representing that ... services have ... characteristics ... which they do not” by “representing] that reCAPTCHA prompts performed a security purpose” when, in fact, only one of the twо words did so. (FAC ¶¶ 51, 53, 66.) The CLRA defines services as “work, labor, and services for other than a commercial or business use, including services furnished in connection with the sale or repair of goods.” Cal. Civ. Code § 1761(b). “Goods” are defined as “tangible chattels bought or leased for use primarily for personal, family or household purposes.” Id. § 1761(a).
The FAC alleges in one place that Google provides a “service” called reCAPT-CHA. (FAC at ¶¶ 2-3), but in another it identifies Google’s services as “including, by way of example, Gmail, Google Search, You[T]ube, Maps, and Google+ .” (Id. ¶ 55.) ReCAPTCHA is the service that generated the alleged misrepresentation and extracted what Plaintiff characterizes as her free labor. At oral argument, Plaintiff urged that reCAPTCHA is a component of the broader Gmail service as the prompt is necessary to acquire a Gmail account and therefore Gmail is the “service” at issue on the CLRA claim. Not so: reCAPTCHA and Gmail arе not intrinsically entwined.
The question, then, is whether reCAPT-CHA is a good or service. Google argues that because it is software it is neither. There is considerable support for this conclusion. In Ferrington v. McAfee, Inc., No. 10-CV-01455-LHK,
Plaintiff unpersuasively suggests that there is a “split of authority on this issue” relying on Haskins v. Symantec Corp., No. 13-CV-01834-JST,
The other cases upon which Plaintiff relies are similarly inapposite. See, e.g., Ladore v. Sony Computer Entm’t Am., LLC,
C. Plaintiff Fails to Allege a Claim Under the UCL
The UCL prohibits any “unlawful, unfair or fraudulent business act or practice.” Cal. Bus. & Prof. Code § 17200. “Its coverage has been described as ’sweeping,’ and its standard for wrongful business conduct is ’intentionally broad.’” Elias v. Hewlett-Packard Co.,
1. Plaintiff Fails to State a Claim Under the UCL’s Unlawful Prong
“The unlawful prong of the UCL prohibits anything that can properly be called a business practice and that at the same time is forbidden by law.” Ferrington v. McAfee, Inc., No. 10-CV-01455-LHK,
Plaintiff premises her unlawful prong UCL claim on Google’s alleged CLRA violation, and in her opposition brief, also on her Massachusetts claim. (FAC ¶ 66; Dkt. No. 54 at 13-14.) As Plaintiff fails to state a claim under either statute, she necessarily cannot state a UCL unlawful prong claim. See Kimball v. Flagstar Bank F.S.B.,
2. Plaintiff Fails to State a Claim Under the UCL’s Unfair Prong
“A business practice is unfair within the meaning of the UCL if it violates established public policy or if it is immoral, unethical, oppressive or unscrupulous and causes injury to consumers which outweighs its benefits.” McKell v. Wash. Mut., Inc.,
Plaintiffs reliance on Fraley v. Facebook, Inc.,
Google’s behavior is also not immoral and oppressive because the harm — if any — of typing a single word without knowledge of how Google profits from such conduct does not outweigh the benefit. Google’s profit is not the only benefit the Court considers in this balancing test— completing the prompt also entitles users to a free Gmail account. Moreover, users’ transcriptions increase the utility of other free Google services such as Google Maps or Google Books. Plaintiff has failed to allege how these numerous benefits outweigh the few seconds it takes to transcribe one word.
3. Plaintiff Fails to State a Claim Under the UCL’s Fraudulent Prong
To “[s]tate a claim under [t]he fraudulent prong of the UCL, it is necessary only to show that members of the public are likely to be deceived by the business practice.” In re Carrier IQ, Inc.,
As with Plaintiffs CLRA claim, “[ojmissions can [also] form the basis of a fraudulent prong UCL claim.” In re Carrier IQ, Inc., 78 F.Supp.3d at *1112. To bring a UCL claim based on a defendant’s omission, the “omission must be contrary to a representation actually made by the defendant, or an omission of a fact the defendant was obliged to disclose.” Mui Ho,
Finally, “a plaintiff must have suffered an injury in fact, which may be shown when he or she (1) expended money due to the defendant’s acts[;] (2) lost money or property; or (3) been denied money to which he or she has a cognizable claim.” Handy v. LogMeln, Inc., No. 1:14-cv-01355-JLT,
For the reasons explained in connection with the CLRA claim, Plaintiff has not alleged an actionable misrepresentation, reliance or loss or causation. Nor has Plaintiff adequately alleged an economic injury. Plaintiff asserts that California has a public policy “that people should be paid for work they perform,’’.and cites Cortez v. Purolator Air Filtration Prods. Co.,
Finally, Plaintiff argues that she suffered an economic injury because she “surrendered more in the reCAPTCHA transaction (i.e., additional time and labor) than she would have surrendered had Google not required that she decipher a second image for Google’s commercial purposes.” (Dkt. No. 54 at 20). Plaintiffs statement, however, does not go far enough. As previously discussed, the question is whether Plaintiff would have changed her behavior had Google disclosed the purpose of the second word. Absent any allegation that she would have, she suffered no injury of any sort, let alone an economic injury. As Google suggests, it strains credulity that Plaintiff or class members would forego access to a free Gmail account and higher quality Google Books or Google Maps because their brief transcription of a single word might, indirectly or directly, facilitate Google’s profit earning.
Plaintiff has thus failed to plead a UCL claim.
D. Plaintiffs Quasi-Contract and Unjust Enrichment Claims
“[I]n California, there is not a standalone cause of action for unjust enrichment, which is synonymous with restitution.” Astiana v. Hain Celestial Grp.,
However, when a plaintiff fails “to sufficiently plead an actionable misrepresentation or omission, his [or her] restitution claim must be dismissed.” Donohue,
For the reasons explained above, the Court GRANTS Google’s motion to dismiss pursuant to Rule 12(b)(6). The dismissal is without leave to amend. As the Massachusetts claim is barred by the parties’ contractual choice of California law, amendment would be futile. Amendment of the CLRA claim would also be futile given that reCAPTCHA is not a “good” or “service” under the CLRA. The UCL claim cannot be successfully amended because, among other things, Plaintiff cannot allege a loss of money or property given her lack of support for her theory that she is entitled to compensation for the few seconds it takes to transcribe one word. The quasi-contract claim cannot be amended for the same reason.
In addition, at oral argument, Plaintiff did not represent that if given leave to amend she could allege that had she known the second reCAPTCHA word was used to assist Google with its other services she would not have completed the reCAPTCHA. To the contrary, counsel represented that he had not asked Plaintiff and he did not know what she would say. (Dkt. No. 60 at 20:23-26.) Such question, of course, should have been asked and answered before this lawsuit was filed and pursued in two states. Regardless, it defies common sense that the answer would be yes. For this reason, too, leave to amend is denied.
Judgment shall be entered in Google’s favor.
IT IS SO ORDERED.
Notes
. Both parties have consented to the jurisdiction of a magistrate judge pursuant to 28 U.S.C. § 636(c). (Dkt. Nos. 36, 42.)
. Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the ECF-generated page numbers at the top of the documents.
. The Massachusetts Class would consist of "[a]ll persons who have responded to a re-CAPTCHA prompt in order to access a website or certain features of a website while they were Massachusetts residents.” (FAC ¶ 31.)
. The Nationwide Class would consist of "[a]ll persons who have responded to a re-CAPTCHA presented to such person as part of their use of a Google service in order to access a website or certain features of a website while they were United States residents.” (FAC ¶ 32.)
. “Chapter 93A provides a cause of action to consumers who have been injured by an unfair method of competition or unfair or deceptive acts or practices in the conduct of any trade or ■ commerce.” Anderson v. Comcast Corp.,
. The America Online court found that these differences between California and Virginia consumer protection law provided an alternate basis to decline to enforce the forum selection and choice of law provisions, but noted that such a comparison was not required as enforcing the clauses would "inevi-tab[ly] ... eliminate” the specific protections the California Legislature enacted and made unwaivable. Id. at 14,
. The Court likewise does not adopt Google's argument that regardless of whether the good and/or service at issue is Gmail or reCAPT-
. The Court’s conclusion is not inconsistent with the District of Massachusetts' finding in its Transfer Order that Plaintiff’s complaint broadly arises out of or relates to Gmail and therefore the Gmail Terms of Use apply. (Dkt. No. 31 at 7.) The question here is not whether Plaintiff’s claim relates to Gmаil, but whether the program generating the alleged misrepresentation is Gmail or reCAPTCHA. For the reasons explained above, it is reCAPTCHA. Indeed, before the Massachusetts court Plaintiff argued that reCAPTCHA is the service at issue on their claims. (Id.)
. Given the Court's conclusion that the CLRA does not apply to Plaintiff's claim, it is unnecessary reach Google's third argument that the claim should be dismissed because Plaintiff failed to comply with the CLRA’s pre-suit notice requirements.
. Google raises the possibility that Plaintiff may be unable to show entitlement to payment even if an employer-employee relationship exists because "numerous courts have held that daily periods of approximately 10 minutes [or less] are de minimis’’ and non-compensable under certain circumstances. Troester v. Starbucks Corp., No. CV 12-7677 GAF,
