Meta Platforms, Inc. v. BrandTotal Ltd.
| Decision Date | 27 May 2022 |
| Docket Number | Case No. 20-cv-07182-JCS |
| Parties | META PLATFORMS, INC., Plaintiff, v. BRANDTOTAL LTD., et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
Ann Marie Mortimer, Jason Jonathan Kim, Jeff R. R. Nelson, Hunton Andrews Kurth LLP, Los Angeles, CA, Allison Schultz, Ari Holtzblatt, Robin C. Burrell, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, Andres R. O'Laughlin, Pro Hac Vice, Wilmer Cutler Pickering Hale and Dorr LLP, Boston, MA, Brandon L. Boxler, Pro Hac Vice, Klein Thomas & Lee LLC, Richmond, VA, Cindy Y. Pan, Pro Hac Vice, Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY, Joseph Michael Levy, Sonal N. Mehta, Thomas G. Sprankling, Wilmer Cutler Pickering Hale and Dorr LLP, Palo Alto, CA, for Plaintiff.
Rudolph A. Telscher, Kara Renee Fussner, Husch Blackwell LLP, St. Louis, MO, David Eric Anderson, Pro Hac Vice, Chicago, IL, Ryan B. Hauer, Husch Blackwell LLP, Chicago, IL, David Matthew Stauss, Dustin L. Taylor, Pro Hac Vice, Husch Blackwell LLP, Denver, CO, Jeffrey Michael Rosenfeld, Karl Stephen Kronenberger, Kronenberger Rosenfeld, LLP, San Francisco, CA, Stephen P. Bosco, Pro Hac Vice, HuschBlackwell LLP, Washington, DC, for Defendant BrandTotal Ltd.
Rudolph A. Telscher, Kara Renee Fussner, Husch Blackwell LLP, St. Louis, MO, David Matthew Stauss, Dustin L. Taylor, Pro Hac Vice, Husch Blackwell LLP, Denver, CO, Jeffrey Michael Rosenfeld, Karl Stephen Kronenberger, Kronenberger Rosenfeld, LLP, San Francisco, CA, Ryan B. Hauer, Husch Blackwell LLP, Chicago, IL, Stephen P. Bosco, Pro Hac Vice, HuschBlackwell LLP, Washington, DC, for Defendant Unimania, Inc.
Redacted Public Version
Plaintiff Meta Platforms, Inc. ("Meta") and Defendants BrandTotal Ltd. and Unimania, Inc. (collectively, "BrandTotal") each move for summary judgment. Meta also moves for sanctions based on purported spoliation of evidence and perjured testimony. The Court held a hearing on May 16, 2022. Each of those motions is GRANTED in part and DENIED in part, as discussed below.1 This order does not resolve the parties’ motions to exclude expert testimony (dkts. 248, 251), which will be addressed in a separate order.
This order is provisionally filed under seal. Any party that believes compelling reasons warrant sealing any portion of this order may bring a motion no later than June 3, 2022 to retain narrowly tailored redactions under seal.
Meta is a technology company that, among other things, operates two ubiquitous social networks: Facebook and Instagram. Much of its revenue is derived from selling the right to advertise on those services. Meta provides its advertising clients with information about how their ads are served to users.
BrandTotal provides advertising consulting services to corporate clients regarding how those clients’ and their competitors’ digital advertisements are presented to social media users. One of its primary methods of collecting that information is incentivizing individual users, whom it refers to as "panelists," to share data about the advertisements they are served while browsing social networks. The primary product at issue in this case, a browser extension called UpVoice, awards users points that can be redeemed for gift cards in exchange for using a browser extension that automatically sends data to BrandTotal while a user browses websites like Facebook. Other BrandTotal products, many of which are now defunct, provided less tangible incentives to users, allowing them to do things like keep track of the advertisements they had seen or view other users’ Instagram stories anonymously, again in exchange for collecting advertising data for BrandTotal. Two of those products, addressed below in the context of Meta's motion for sanctions, also logged users’ Instagram access credentials to a server that BrandTotal used primarily for debugging its software for period of around four months.
The current version of UpVoice introduced in 2021 ("UpVoice 2021") (as well as a Spanish-language near-equivalent product called Calix that BrandTotal recently developed in partnership with a third-party2 ) merely logs information that Facebook transmits to the user about advertisements in the course of the user's regular interaction with the website, as well as demographic information that the user specifically enters into UpVoice (rather than UpVoice collecting it from Facebook). Earlier versions of UpVoice and BrandTotal's other products automatically caused users’ browsers to query Facebook's servers for information, and collected demographic information about users from Facebook in addition to information about advertisements. BrandTotal also gathers data more proactively: its servers collect data directly from webpages that are publicly available for most advertisements on Facebook, it hires contractors to gather data using a program called the "Restricted Panel Extension" for advertisements that are not available to the public and instead require a user to be logged in (for example, age-restricted ads for alcohol),3 and it has at least at times used Facebook accounts that it purchased or created (which BrandTotal refers to internally as "Muppets") to access information on Facebook.
After successfully petitioning Google to remove the then-existing version of UpVoice from its online store, Meta—known at the time as Facebook, Inc.—filed claims against BrandTotal in California state court on October 1, 2020. Meta quickly dismissed that case without prejudice and filed the present case here on October 14, 2020. BrandTotal filed counterclaims and moved for a temporary restraining order ("TRO"). The Court denied that motion for failure to show that the relief BrandTotal sought was in the public interest. Order re TRO (dkt. 63).4
On February 19, 2021, the Court granted Meta's motion to dismiss all of BrandTotal's counterclaims, largely with leave to amend. 1st MTD Order (dkt. 108).5
BrandTotal reasserted all of its counterclaims in an amended pleading. On June 3, 2021, the Court dismissed BrandTotal's declaratory judgment counterclaims, BrandTotal's counterclaim for intentional interference with contract to the extent it was based on contracts with investors, BrandTotal's interference with prospective advantage counterclaim to the extent it was based on potential customers and investors, and BrandTotal's counterclaims under the "unfair" and "fraudulent" prongs of the UCL. 2d MTD Order (dkts. 152, 158).6 The Court denied Meta's motion to dismiss BrandTotal's interference with contract and prospective advantage counterclaims and to the extent they were based on existing customers, panelists, and Google, and its counterclaim under the "unlawful" prong of the UCL. Id.
BrandTotal moved for a preliminary injunction, but the parties agreed at the hearing to resolve that motion with a commitment by Meta not to interfere with UpVoice 2021 while this case is pending without providing notice to BrandTotal in advance, and a commitment by BrandTotal to notify Meta of any changes to the UpVoice 2021 code. Dkt. 150.
On August 31, 2021, the Court denied BrandTotal's motion for leave to add a defamation counterclaim after the deadline to amend pleadings had expired, and dismissed with prejudice BrandTotal's reasserted counterclaim under the UCL's "unfair" prong for failure to allege Meta's market power in a relevant product market. 3d MTD Order (dkt. 178).7
BrandTotal's operative third amended counterclaims assert the following theories: (1) intentional interference with BrandTotal's contracts with its corporate customers, its panelists, and Google, 3d Am. Counterclaims (dkt. 183) ¶¶ 94–130; (2) intentional interference with prospective economic advantage regarding the same relationships, id. ¶¶ 131–39; and (3) violation of the UCL's "unlawful" prong by virtue of the intentional interference theories, id. ¶¶ 140–46.
Since BrandTotal did not challenge the sufficiency of Meta's allegations through a motion to dismiss and Meta never sought preliminary injunctive relief, Meta's claims against BrandTotal have not been directly at issue in any previous motion. Meta asserts the following claims in its operative first amended complaint: (1) breach of contract, citing the Facebook and Instagram terms of use, 1st Am. Compl. ("FAC," dkt. 148) ¶¶ 83–89; (2) unjust enrichment, id. ¶¶ 90–96; (3) violation of the Computer Fraud and Abuse Act ("CFAA," 18 U.S.C. § 1030 ), id. ¶¶ 97–102; (4) violation of California's Comprehensive Computer Data Access and Fraud Act ("CDAFA," Cal. Penal Code § 502 ), id. ¶¶ 103–11; (5) intentional interference with Meta's contracts with its users, id. ¶¶ 112–18; and (6) violation of the "unlawful," "unfair," and "fraudulent" prongs of the UCL, id. ¶¶ 119–26.
Meta's sanctions motion primarily concerns two related issues: (1) data from a debugging log called Rapid7 that BrandTotal allowed to be deleted on a regular schedule, including after this action commenced and purportedly after learning that it was relevant; and (2) deposition testimony by BrandTotal's Rule 30(b)(6) witness and then-Vice President of Research and Development Oren Dor stating, inaccurately, that BrandTotal's Anonymous Story Viewer product did not transmit access credentials to BrandTotal's servers.
At all relevant times, BrandTotal has used Rapid7 as a logger tool to track the operation of its various software products. The Rapid7 log received information about processes executed by BrandTotal's software and stored that information for a period of thirty days, with each entry automatically deleted thirty days after it was created. See O'Laughlin Decl. (dkt. 246-2) Ex. 5 (Regev Nov. 2021 Dep.) at 194:20–22. According to BrandTotal, the Rapid7 log was used only for...
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