Kellman v. Spokeo, Inc.
| Decision Date | 19 April 2022 |
| Docket Number | Case No. 3:21-cv-08976-WHO |
| Citation | 599 F.Supp.3d 877 |
| Parties | Aviva KELLMAN, et al., Plaintiffs, v. SPOKEO, INC., Defendant. |
| Court | U.S. District Court — Northern District of California |
Raina Challeen Borrelli, Pro Hac Vice, Samuel Joseph Strauss, Pro Hac Vice, Turke & Strauss LLP, Madison, WI, Michael Francis Ram, Morgan & Morgan Complex Litigation Group, San Francisco, CA, for Plaintiffs.
Daniel D. Queen, Jennifer M. Chang, John Nadolenco, Mayer Brown LLP, Los Angeles, CA, for Defendant.
ORDER DENYING MOTION TO DISMISS
Re: Dkt. Nos. 23, 24
Defendant Spokeo, Inc. ("Spokeo") runs a website that provides information about particular individuals aggregated from various sources. To advertise paid subscriptions to the site, Spokeo uses "teasers"—profiles of real people with some information redacted. The plaintiffs in this putative class action claim that, when Spokeo used teasers of them, it violated their rights of publicity and appropriated their names and likenesses in violation of California, Ohio, and Indiana law.
Spokeo moves to dismiss on numerous grounds; its motion is denied. District courts have come out on both sides of many of the issues here, but I conclude that the plaintiffs’ claims are actionable. The plaintiffs have Article III standing to sue for these alleged violations. They have adequately pleaded that their names, likenesses, and related information have commercial value and were being used for a commercial purpose. The teasers are not subject to statutory exceptions for newsworthiness or public interest information. Spokeo is not immune from liability under the Communications Decency Act. Enforcing these rights does not violate the dormant Commerce Clause. And Spokeo's alleged conduct is not shielded by the First Amendment.
Spokeo is a corporation with its principal place of business in California. Complaint ("Compl.") [Dkt. No. 1] ¶ 20. According to the Complaint, Spokeo owns and operates a website (www.spokeo.com) that aggregates online information about individuals. See id. ¶¶ 2–15. The plaintiffs allege that Spokeo uses individuals’ "names, personal information, photographs, likenesses, and personas" in online advertisements. Id. ¶ 2. The named plaintiffs—Aviva Kellman, Jason Fry, and Nicholas Newell—each allege that Spokeo used their names and other information in this way. See id. ¶¶ 2–3, 38–85.
Specifically, Spokeo advertises its website by displaying "teaser profiles" of individuals that can include "names; ages; current and past cities of residence; partially redacted addresses, emails, and phone numbers; and other personal information" and sometimes photographs. Id. ¶ 4. The "teaser" then states that Spokeo "possesses additional information" including " ‘Criminal Records’; ‘Sex Offenses’; ‘DUIs’; ‘details about birth, marriage, and divorce’; ‘Relationship Status’; ‘Location History’; ‘Estimated Salary’; ‘Family Members’; and redacted ‘Full Address[es]’; ‘Email Address[es],’ and ‘Phone Number[s].’ " Id. ¶ 5 (alterations in Complaint). The teasers state that a user will receive access to the "full profile" of the individual if they purchase a subscription (for $24.95 per month). Id. ¶ 6. The plaintiffs claim that Spokeo also advertises that a user will be charged 95 cents for access to a specific profile, but that fine print "reveals" that this purchase also comes with a full membership that begins billing after a one-week free trial. Id. ¶ 7.
These memberships, the plaintiffs allege, give users access to profiles on "hundreds of millions of individuals" that incorporate data from "over 12 billion records" from "thousands of data sources." Id. ¶ 8. They include things like contact information, location history, photos, social media accounts, lists of family members, court records, employment information, "and much more." Id. And users can track specific individuals and receive notifications when their information changes. Id. ¶ 9. The profiles and ads are "sole[ly]" authored and created by Spokeo; none of them contain user-generated content. Id. ¶ 10.
According to the plaintiffs, they "do not know how Spokeo obtained their personal information." Id. ¶ 11. They do know that Spokeo states that it collects the information "from a large variety of public online and offline sources" like property records, consumer reports, court records, unspecified "business records," and social networks. Id. The plaintiffs claim that they may have shared this information "with certain companies or the government in a variety of contexts," such as when making a credit card purchase or creating a social media profile. Id. ¶ 14. But, they say, they "did not consent to the commercial use of their personal information and personas to promote subscriptions to a website with which they have no relationship." Id. ¶ 15.
Each of the plaintiffs alleges that he or she was harmed by Spokeo's business practices. None of them used or subscribed to Spokeo's services. See id. ¶¶ 25, 29, 33. Yet each of their information was used in one of Spokeo's "teaser profile" ads. Id. ¶¶ 26, 30, 34. In each case, Spokeo publicly displays information about the plaintiff, some of it redacted. Id. But, like the teasers discussed above, it also claims to have additional information about each plaintiff. In particular, the plaintiffs claim that their names, information, and likenesses were associated on the teasers with Spokeo having information about things like "employment history," "photos and videos," "marital status," and "historical records." Id. ¶¶ 28, 32, 36. And it also states to have information about "arrests," "felonies," and "court records." Id. Spokeo advertises that purchasing a membership will give access to the full information about each plaintiff. Id.
To take one representative example, the Complaint includes a screenshot of the teaser profile for Kellman:
Id. ¶ 40. The blurred redactions of certain information exist that way in the teaser. Id. As the plaintiffs point out, the "court records" section states that it "may" include "arrests," "traffic violations," "sex offenders," and "felonies." Id. ¶ 41. If a user wishes to sign up for a paid membership, the webpages that they use to do so likewise include Kellman's name and information (or the name and information of whichever person the user was viewing as a teaser). Id. ¶¶ 45, 46.
The other named plaintiffs’ names and information are used in materially identical ways by Spokeo. See id. ¶¶ 56, 72. Fry's also includes a picture of him. See id. ¶ 56. Each named plaintiff alleges that he or she has not committed a felony and is not a sex offender. Id. ¶¶ 48, 65, 81.
The plaintiffs filed suit in this court in November 2021, claiming jurisdiction under the Class Action Fairness Act. They seek to represent a nationwide class of "[a]ll people in the United States who are not Spokeo members and whose names and personal information Spokeo incorporated in teaser profiles used to promote its Spokeo memberships." Id. ¶ 86. And they seek to represent two subclasses, one of Indiana residents and one of Ohio residents. Id. They bring seven claims: (1) violation of California's right of publicity statute, Cal. Civ. Code § 3344 ; (2) appropriation of a name or likeness under California law; (3) violation of Indiana's right of publicity statute, Ind. Code § 32-36-1; (4) appropriation of a time or likeness under Indiana law; (5) violation of Ohio's right of publicity statute, Ohio Rev. Code § 2741; (6) appropriation of a name or likeness under Ohio law; and (7) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq. After the parties stipulated to several extensions of time to respond to the Complaint, Spokeo moved to dismiss in February 2022.1
A motion to dismiss filed pursuant to Federal Rule of Civil Procedure ("FRCP") 12(b)(1) is a challenge to the court's subject matter jurisdiction. See Fed. R. Civ. P. 12(b)(1). "Federal courts are courts of limited jurisdiction," and it is "presumed that a cause lies outside this limited jurisdiction." Kokkonen v. Guardian Life Ins. of Am. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). The party invoking the jurisdiction of the federal court bears the burden of establishing that the court has the requisite subject matter jurisdiction to grant the relief requested. Id.
A challenge pursuant to Rule 12(b)(1) may be facial or factual. See White v. Lee , 227 F.3d 1214, 1242 (9th Cir. 2000). In a facial attack, the jurisdictional challenge is confined to the allegations pled in the complaint. See Wolfe v. Strankman , 392 F.3d 358, 362 (9th Cir. 2004). The challenger asserts that the allegations in the complaint are insufficient "on their face" to invoke federal jurisdiction. See Safe Air Safe Air for Everyone v. Meyer , 373 F.3d 1035, 1039 (9th Cir. 2004). To resolve this challenge, the court assumes that the allegations in the complaint are true and draws all reasonable inference in favor of the party opposing dismissal. See Wolfe , 392 F.3d at 362.
Under FRCP 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." See Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is facially plausible when the plaintiff pleads facts that "allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." See Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citation omitted). There must be "more than a sheer possibility that a defendant has acted...
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