Luis v. Zang, 081616 FED6, 14-3601

Docket Nº:14-3601
Opinion Judge:RONALD LEE GILMAN, CIRCUIT JUDGE.
Party Name:Javier Luis, Plaintiff-Appellant, v. Joseph Zang et al., Defendants, Awareness Technologies, Defendant-Appellee.
Attorney:Clayton L. Wiggins, VANDERBILT APPELLATE LITIGATION CLINIC, Nashville, Tennessee, for Appellant. Bernard W. Wharton, MCCASLIN, IMBUS & MCCASLIN, Cincinnati, Ohio, for Appellee. Clayton L. Wiggins, Alistair E. Newbern, VANDERBILT APPELLATE LITIGATION CLINIC, Nashville, Tennessee, for Appellant. Be...
Judge Panel:Before: MERRITT, BATCHELDER, and GILMAN, Circuit Judges. ALICE M. BATCHELDER, Circuit Judge, dissenting.
Case Date:August 16, 2016
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Javier Luis, Plaintiff-Appellant,

v.

Joseph Zang et al., Defendants,

Awareness Technologies, Defendant-Appellee.

No. 14-3601

United States Court of Appeals, Sixth Circuit

August 16, 2016

Argued: April 27, 2016

Appeal from the United States District Court for the Southern District of Ohio at Cincinnati. No. 1:12-cv-00629-Susan J. Dlott, District Judge.

ARGUED:

Clayton L. Wiggins, VANDERBILT APPELLATE LITIGATION CLINIC, Nashville, Tennessee, for Appellant.

Bernard W. Wharton, MCCASLIN, IMBUS & MCCASLIN, Cincinnati, Ohio, for Appellee.

ON BRIEF:

Clayton L. Wiggins, Alistair E. Newbern, VANDERBILT APPELLATE LITIGATION CLINIC, Nashville, Tennessee, for Appellant.

Bernard W. Wharton, MCCASLIN, IMBUS & MCCASLIN, Cincinnati, Ohio, for Appellee. Javier Luis, Tampa, Florida, pro se.

Before: MERRITT, BATCHELDER, and GILMAN, Circuit Judges.

OPINION

RONALD LEE GILMAN, CIRCUIT JUDGE.

Javier Luis, a resident of Florida, developed an online personal relationship with Ohio resident Catherine Zang. The relationship was apparently platonic, but Catherine's husband, Joseph Zang, was nonetheless suspicious of his wife's online activities. This caused Joseph to secretly install a product known as WebWatcher on the computer used by Catherine in order to monitor her communications. According to Luis, WebWatcher and its manufacturer, Awareness Technologies, Inc., surreptitiously intercepted the emails, instant messages, and other communications that were sent between Luis and Catherine. Awareness then allegedly disclosed the communications to Joseph, who used them as leverage to divorce Catherine on favorable terms.

Upset by the capture and disclosure of his otherwise private communications, Luis filed suit against Joseph Zang, Awareness, and several others. He eventually settled his claims against all the defendants other than Awareness. With respect to Awareness, Luis alleged that the involvement of its WebWatcher "spyware" in secretly recording the communications at issue violated the federal Wiretap Act, the Ohio Wiretap Act, and Ohio common law. The district court concluded that Luis had failed to state a cause of action against Awareness, leading to the present appeal. Because the district court's dismissal failed to take into account the extent to which Awareness itself was allegedly engaged in the asserted violations, we REVERSE the judgment of the district court and REMAND the case for further proceedings consistent with this opinion.

I. BACKGROUND

A. Factual background

This case is on appeal from the district court's order granting Awareness's motion to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. The account that follows is consequently based on the facts as alleged in Luis's amended complaint. See Boland v. Holder, 682 F.3d 531, 534 (6th Cir. 2012) ("Like a district court considering a motion to dismiss in the first instance, we accept all facts alleged in the complaint as true.").

In early 2009, Luis made contact with Catherine Zang while participating in an online "Metaphysics" chatroom hosted by America Online. Catherine at the time was married to Joseph Zang, but the marriage was not a happy one. This resulted in Luis reaching out to Catherine and "develop[ing] a caring relationship with her." The two never met in person, but they had "daily communications" that were sent via the internet between Luis's home in Florida and the Zang residence in Ohio.

Joseph suspected that Catherine was communicating with other men and decided to take steps to monitor Catherine's actions. He accordingly installed a software program known as "WebWatcher" on the computer used by Catherine. According to Luis's complaint, this program intercepts electronic communications such as emails and instant messages in real time as the communications are sent. The program then contemporaneously forwards the intercepted communications to servers maintained by Awareness in California, where the communications are stored for later review. A WebWatcher user such as Joseph may then access the servers and peruse copies of the communications at issue at any time after the communications are intercepted and stored.

Joseph allegedly installed WebWatcher on the computer used by Catherine sometime in early 2009, and he used the program to intercept emails and instant messages sent between Luis and Catherine for several months thereafter. He then used these communications as leverage to help his attorney secure favorable terms for a divorce from Catherine in 2010.

WebWatcher is manufactured and marketed by Awareness. The program allegedly "records all PC activity including emails, IMs, websites visited, web searches, Facebook/MySpace activity, and anything typed in real time." According to Awareness's advertisements, the WebWatcher program creates and stores a record of whatever is sent to or from the computer in question. The process occurs in "near real-time, even while [a] person is still using the computer." This means that even if a computer user deliberately deletes or fails to save a communication, the WebWatcher program will record and save it for later retrieval from servers owned and maintained by Awareness.

The process also allows a WebWatcher user to access the communications from any location with an internet connection. Intercepted communications, in other words, are stored in and made available to the user from Awareness's servers, so a WebWatcher user can access the intercepted communications without physically accessing the computers that were used to send or receive those communications.

In addition, Awareness provides a service known as "Alert Word." This software program scans the captured communications and monitors them for certain keywords that may be of interest to the WebWatcher user. The program then takes screenshots of the relevant communications and highlights them so that the WebWatcher user can view the communications without sorting through material deemed irrelevant to the user.

According to Luis's complaint, Awareness markets the WebWatcher program as a means for suspicious spouses to illegally monitor their partners' communications without their partners' knowledge or consent. Luis specifically alleges that Awareness "intentionally targets their product at spouses in their marketing campaigns-enticing them with the lure of finding out everything that goes on in the targeted computer's private accounts." (Emphasis in original.) This marketing strategy allegedly goes "far beyond" any ostensibly legitimate purpose (such as monitoring a child's use of the Internet) that WebWatcher might otherwise have. Moreover, the marketing is allegedly similar to other companies' marketing strategies that the Federal Trade Commission has in the past condemned as encouraging illegal spying. Luis thus contends that Awareness "knew or should have known" that purchasers of WebWatcher "would use it for illegal purposes."

B. Procedural background

Luis became aware of Joseph's use of WebWatcher in the summer of 2010. He thereafter sued Awareness, Joseph, and several other defendants in the United States District Court for the Middle District of Florida. In August 2012, that court transferred the case to the United States District Court for the Southern District of Ohio.

As relevant to the current appeal, the complaint asserts three causes of action against Awareness. It first alleges that Awareness intentionally intercepted Luis's electronic communications, in violation of 18 U.S.C. § 2511 (part of the federal Wiretap Act). The complaint next alleges that Awareness violated 18 U.S.C. § 2512 (another part of the federal Wiretap Act) by manufacturing, marketing, selling, and operating a device that Awareness knew or had reason to know was to be used primarily for the surreptitious interception of electronic communications. Finally, the complaint asserts that Awareness violated Ohio state law by (1) intercepting and using his electronic communications within the meaning of Ohio's Wiretap Act, and (2) invading his privacy within the meaning of the common-law tort.

Awareness moved to dismiss Luis's complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure. It argued that (1) WebWatcher does not "intercept" communications as defined in the federal Wiretap Act, (2) Awareness cannot be held liable in a civil action because it did not "engage in" the alleged violation of the Act, and (3) Luis's factual allegations lacked enough detail to plead a claim under state law.

A magistrate judge was directed to prepare a Report and Recommendation (R&R) evaluating Awareness's arguments. The R&R concluded that Luis's communications had in fact been...

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