Leong v. Carrier IQ Inc.
| Decision Date | 27 April 2012 |
| Docket Number | Case No. CV 12-01564 GAF (MRWx),Case No. CV 12-01562 GAF (MRWx) |
| Parties | Cindy Leong v. Carrier IQ Inc et al Carey Eckert v. Carrier IQ Inc et al |
| Court | U.S. District Court — Central District of California |
Present: The Honorable
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¦Renee Fisher¦None ¦N/A ¦
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¦Deputy Clerk¦Court Reporter / Recorder¦Tape No.¦
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Attorneys Present for Plaintiffs: None
Attorneys Present for Defendants: None
Proceedings: (In Chambers)
Plaintiffs initiated this class action lawsuit in state court. Defendants removed to federal court on the basis of federal question jurisdiction. Defendants contend that the issues presented in this lawsuit are completely pre-empted by the Federal Wiretap Act. Plaintiffs contend that there is no controlling authority for that proposition, that the case is a local controversy that arises under the California Invasion of Privacy Act, and move to have the action remanded to state court. For reasons discussed in greater detail below, the Court concludes that the Federal Wiretap Act does not completely pre-empt the relevant field and that the motion is therefore meritorious.
These cases are identical putative class actions brought against Defendant Carrier IQ, Inc. ("Carrier IQ"), which developed and maintains a software that is installed on cell phones and surreptitiously records the user's keystrokes, text messages and passwords without the user's knowledge or consent. Plaintiffs allege that they are California residents who are victims of the secret harvesting of their cell phone communications. They contend that the secret, non-consensual collection of their private data violates California's Invasion of PrivacyAct, Cal. Penal Code §§ 630 et seq., and constitutes an unlawful business practice within the meaning of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200 et seq. (Id. ¶¶ 3, 5, 14, 19-21.).
The information supporting this lawsuit was apparently first disclosed in November 2011 when an individual posted on an Internet blog allegations that Carrier IQ's software, which is installed on various manufacturer's cell phones, collects the contents of cell phone users' electronic communications without their knowledge. .) Since December 1, 2011, 72 federal class actions have been filed in more than 25 judicial districts naming Carrier IQ and various cell phone manufacturers as defendants and alleging similar claims under the Federal Wiretap Act, 18 U.S.C. §§ 2510 et seq., which is part of the 1986 Electronic Communications Privacy Act ("ECPA") ("Consumer Privacy Cases"). (Not. of Removal ¶ 4; Second Newby Decl. ¶ 2; Leong Docket No. 3, Eckert Docket No. 3 [Newby Decl.] ¶¶ 2-3.) Some of these cases include additional claims, based on the same underlying facts, for violations of the Stored Communications Privacy Act, 18 U.S.C. §§ 2701 et seq., and state privacy, consumer, and business laws. (Second Newby Decl. ¶ 2 n.1.) On December 2 and 9, 2011, the plaintiffs in two such cases filed separate motions with the U.S. Judicial Panel on Multidistrict Litigation ("JMPL") pursuant to 28 U.S.C. § 1407, to transfer and consolidate related actions to the Northern District of California or to the District Court of Delaware. (Second Newby Decl. ¶¶ 3-4; Newby Decl. ¶ 4.) On March 29, 2012, the MDL panel heard oral argument on these motions, and no party opposed transfer of the Consumer Privacy Cases to a single court for pre-trial coordination. (Second Newby Decl. ¶¶ 4-5; Newby Decl. ¶¶ 5-6.)
Plaintiffs filed the present actions in Los Angeles Superior Court on December 2, 2011 in the midst of this litigation flurry. Their original state court complaints alleged the same California law causes of action on behalf of a nationwide class. On December 6, 2011, Plaintiffs filed FACs alleging classes of California consumers only. (FAC ¶ 22.)1 In February of 2012, Plaintiffs in each action filed declarations of dismissal of class action claims against all diverse defendants, leading to their dismissal from the actions. (Newby Decl. ¶¶ 9-10.) On February 23, 2012, Carrier IQ removed the actions to this Court, alleging federal question jurisdiction under 28 U.S.C. § 1331 on the basis that theFederal Wiretap Act completely preempts California's Invasion of Privacy Act. (Not. of Removal ¶ 7.) Plaintiffs now move to remand, arguing that the California law is not preempted. (Leong Docket No. 13; Eckert Docket No. 12.) Leong additionally argues that Defendant's removal was procedurally improper because it was made without the consent of Research in Motion Corporation, which remained a defendant in the state court action at the time of removal. (Leong Mem. at 6.) For the reasons discussed below, the Court GRANTS Plaintiffs' motions.
DISCUSSION
"'Pursuant to the Supremacy Clause of the United States Constitution, federal law can preempt and displace state law through: (1) express preemption; (2) field preemption (sometimes referred to as complete preemption); and (3) conflict preemption.'" In re Google Inc. Street View Electronic Comm'ns Litig., 794 F. Supp. 2d 1067, 1084 (N.D. Cal. 2011) (quoting Ting v. AT&T, 319 F.3d 1126, 1135 (9th Cir. 2003)). "'Express preemption exists where Congress enacts an explicit statutory command that state law be displaced.'" Id. (same). Complete or field preemption may be found "when the federal statutory scheme is sufficiently comprehensive to infer that Congress left no room for supplementary regulation by the states." Public Utility Dist. No. 1 of Grays Harbor City Wash. v. IDACORP, Inc., 379 F.3d 641, 647 (9th Cir. 2004).
"In all cases, congressional intent to preempt state law must be clear and manifest." In re Cybernetic Servs., Inc., 252 F.3d 1039, 1046 (9th Cir. 2001). "Of the three types of preemption, only complete preemption confers federal question jurisdiction." Lane v. CBS Broadcasting, 612 F. Supp. 2d 623, 636 (E.D. Pa. 2009).
California's Invasion of Privacy Act makes it illegal to "willfully and without the consent of all parties to the communication, or in any unauthorized manner, read[], or attempt[] to read, or to 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, or is being sent from, or received at any place within this state." Cal. Penal Code § 631 (emphasis added). California's UCL prohibits "any unlawful, unfair, or fraudulent business act or practice." Cal. Bus. & Prof. Code § 17200. Liability for an unlawful business practice under the UCL is essentially derivative; that is, "[a]defendant 'cannot be liable under § 17200 for committing unlawful business practices without having violated another law.'" Briosos v. Wells Fargo Bank, 737 F. Supp. 2d 1018, 1033 (N.D. Cal. 2010) (quoting Ingels v. Westwood One Broadcasting, Servs., Inc., 28 Cal. Rptr. 3d 933, 938 (Ct. App. 2005)).
In its Notice of Removal, Carrier IQ argues that "[c]ourts in both the Central and Northern Districts of California have held that the Federal Wiretap Act, as amended by the ECPA in 1986, comprehensively regulates privacy claims concerning electronic communications." (Not. of Removal ¶ 7.) They cite to two district court cases finding complete preemption, but note two California Supreme Court cases and a district court case in the Northern District of California reaching the contrary conclusion. (Id.) Indeed, since 1974, the California Supreme Court and other state and federal district courts have come out strongly against preemption; Carrier IQ's cases are, by far, in the minority.
S. Rep. No. 90-1097, at 2187, 2196 (1968); see Navarra v. Bache Halsey Stuart Shields Inc., 510 F. Supp. 831, 833 (D.C. Mich. 1981) ( Senate Report); Conklin, 12 Cal. 3d at 272 (same). By requiring the consent of all parties to the communication, save for law enforcement officers, California's Invasion of Privacy Act is actually more restrictive than the federal law.
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