Sams v. Yahoo! Inc.

• Decision Date: 15 April 2013
• Docket Number: No. 11–16938.,11–16938.
• Citation: 713 F.3d 1175
• Parties: Fayelynn SAMS, Individually, and on behalf of a class of all others similarly situated, Plaintiff–Appellant, v. YAHOO! INC., Defendant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

713 F.3d 1175

Fayelynn SAMS, Individually, and on behalf of a class of all others similarly situated, Plaintiff–Appellant,

v.YAHOO! INC., Defendant–Appellee.

No. 11–16938.

United States Court of Appeals,Ninth Circuit.

Argued and Submitted Feb. 11, 2013.

Filed April 15, 2013.

Joshua A. Millican (argued), Law Office of Joshua A. Millican, P.C., Atlanta, GA; Laurence D. King and Mario M. Choi, Kaplan Fox & Kilsheimer LLP, San Francisco, CA, for Plaintiff–Appellant.

Marc J. Zwillinger (argued) and Jacob A. Sommer, ZwillGen PLLC, Washington, D.C., for Defendant–Appellee.

Appeal from the United States District Court for the Northern District of California, Jeremy D. Fogel, District Judge, Presiding. D.C. No. 5:10–cv–05897–JF.

Before: D.W. NELSON, STEPHEN REINHARDT, and MILAN D. SMITH, JR., Circuit Judges.

OPINION

M. SMITH, Circuit Judge:

Fayelynn Sams appeals the district court's order dismissing her putative class claims against Yahoo! Inc. with prejudice. Sams alleges that Yahoo! violated the Stored Communications Act (SCA), 18 U.S.C. §§ 2701–2712, when it disclosed some of Sams' noncontent subscriber information to the government pursuant to allegedly invalid subpoenas. Sams further argues that even if the subpoenas were valid, Yahoo! failed to comply with their terms when it produced the requested documents prior to the deadline set in the subpoenas. Because the SCA provides a “complete defense to any civil or criminal action” where the defendant can demonstrate that it produced documents in “good faith reliance on ... a grand jury subpoena,” we affirm the district court's order dismissing Sams' claims.

BACKGROUND

Yahoo! styles itself as a “premier digital media company,” whose product offerings include Internet search and email. Yahoo! is a Delaware corporation, and its principal place of business is located in Sunnyvale, California. While Yahoo! maintains an office in Georgia, its legal compliance team is located in Sunnyvale.

On December 2, 2008, Yahoo!'s legal compliance team received a facsimile of a grand jury subpoena from the District Attorney's Office for the Southern Judicial Circuit of Georgia. The District Attorney requested that Yahoo! disclose “any and all records regarding the identification” of one of its users.¹ The user in question was later determined to be Sams. The subpoena was signed by both a judge and the clerk of the Superior Court of Lowndes County, Georgia, and demanded that Yahoo! produce the requested records at 8:30 a.m. on January 28, 2009. A substantially similar subpoena was faxed to Yahoo!'s legal compliance team on December 15, 2008, demanding the production of additional documents by the January 28 deadline. ²

Both subpoenas were accompanied by nearly identical cover letters that purported to explain Yahoo!'s obligations under the subpoenas. Those letters read, in relevant part:

As the subpoena indicates, you are required by law to appear and produce the evidence described in the subpoena before the Grand Jury on the date and time specified. Prior to your appearance, you may wish to voluntarily provide copies of this evidence to Inv. Wendy Lain at the District Attorney's Office ... By voluntarily providing us with copies prior to your scheduled appearance, you will make it possible for us to review the evidence in your possession in advance. This should expedite your appearance before the Grand Jury and may make it possible for us to put you on call.

Yahoo! produced the requested information sometime before January 28, 2009. Consequently, the prosecutor determined that the attendance of a witness was not needed, and no Yahoo! witness testified before the grand jury pursuant to the subpoenas.

Based on the above conduct, Sams filed a putative class action in the Superior Court of Fulton County, Georgia, purporting to represent a class of plaintiffs whose information Yahoo! had allegedly disclosed to law enforcement in violation of the SCA. Sams claimed that Yahoo!'s disclosures were unlawful because the subpoenas failed to comply with the requirements of Georgia law, and specifically the Uniform Act to Secure the Attendance of Witnesses from Without the State in Criminal Proceedings (Uniform Act). Ga.Code Ann. §§ 24–13–90–24–13–97.³ Sams further claimed that Yahoo!'s disclosures were unlawful because they were “voluntarily” made before the deadline for compliance set forth in the subpoenas.

Yahoo! successfully removed the action to the United States District Court for the Northern District of Georgia. Sams then filed a motion to transfer the case to the Northern District of California. Yahoo! agreed “that transfer to the Northern District of California was the appropriate remedy in light of Yahoo!'s terms of service,” and the case was transferred.

On January 10, 2011, Yahoo! moved to dismiss Sams' complaint. The district court granted Yahoo!'s motion after finding Yahoo! was statutorily immune from suit under 18 U.S.C. § 2703(e). The district court also granted Sams leave to amend her complaint to allege that Yahoo! impermissibly over-produced Sams' content-based information. When Sams did not amend her complaint within the allotted 30 days, the district court dismissed her complaint with prejudice. Sams timely appealed.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction to review the district court's order of dismissal under 28 U.S.C. § 1291. We review the district court's order de novo, Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir.2009), and may affirm on any ground supported in the record, Islamic Republic of Iran v. Boeing Co., 771 F.2d 1279, 1288 (9th Cir.1985).

DISCUSSION

I. Consideration of Extrinsic Evidence and Affirmative Defenses

This case comes to us on a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). At this stage of the litigation, we would usually be confined to reviewing the body of Sams' complaint, which did not include copies of the two subpoenas. See Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir.2001) (citation omitted). However, we are permitted to consider documents that were not physically attached to the complaint where the documents' authenticity is not contested, and the plaintiff's complaint necessarily relies on them. Id. at 688–89 (citing Parrino v. FHP, Inc., 146 F.3d 699, 705–06 (9th Cir.1998)).⁴ Because the subpoenas are critical to Sams' lawsuit, and there is no factual dispute as to their contents, we may properly consider the appearance and content of the subpoenas at this stage in the litigation.

Similarly, the assertion of an affirmative defense may be considered properly on a motion to dismiss where the “allegations in the complaint suffice to establish” the defense. Jones v. Bock, 549 U.S. 199, 215, 127 S.Ct. 910, 166 L.Ed.2d 798 (2007); see also Goddard v. Google Inc., 640 F.Supp.2d 1193, 1199 n. 5 (N.D.Cal.2009) (noting that “affirmative defenses routinely serve as a basis for granting Rule 12(b)(6) motions where the defense is apparent from the face of the [c]omplaint”) (internal quotation and citation omitted).

II. The Stored Communications Act Claims

Congress passed the SCA in 1986 as part of the Electronic Communications Privacy Act. “The SCA was enacted because the advent of the Internet presented a host of potential privacy breaches that the Fourth Amendment does not address.” Quon v. Arch Wireless Operating Co., 529 F.3d 892, 900 (9th Cir.2008), rev'd on other grounds,560 U.S. 746, 130 S.Ct. 2619, 177 L.Ed.2d 216 (2010) (citation omitted). To address these potential privacy breaches, the SCA “creates a set of Fourth Amendment-like privacy protections by statute, regulating the relationship between government investigators and service providers in possession of users' private information.” Orin S. Kerr, A User's Guide to the Stored Communications Act, and a Legislator's Guide to Amending It, 72 Geo. Wash. L.Rev. 1208, 1212 (2004). Specifically, the statute protects the privacy of electronic communications by (1) placing limits on the government's ability to compel network service providers to disclose information they possess about their customers and subscribers, 18 U.S.C. § 2703, and (2) restricting the ability of network service providers to voluntarily disclose information about their customers and subscribers to the government, 18 U.S.C. § 2702. Violation of these provisions may result in criminal or civil liability, unless one or both of the SCA's statutory immunity provisions applies. 18 U.S.C. §§ 2703(e), 2707(e).

A.

§ 2703(c)(2) of the SCA provides the rules for compelling the production of a subset of noncontent records (sometimes known as “basic subscriber information”) that Congress has deemed less private than other records.⁵ Under § 2703(c)(2), the government can obtain basic subscriber information—such as the information Yahoo! produced here—with a mere subpoena.⁶ And where a provider, like Yahoo!, discloses basic subscriber information to the government “in accordance with the terms of a ... subpoena,” 18 U.S.C. § 2703(e), or in “good faith reliance on ... a grand jury subpoena,” 18 U.S.C. § 2707(e), the provider is immune from suit.

Sams argues that Yahoo! is not entitled to benefit from either immunity provision because her basic subscriber information was produced pursuant to allegedly invalid subpoenas.⁷ Specifically, Sams contends that because Yahoo! is not a citizen of Georgia, it may only be lawfully subpoenaed in a criminal case pursuant to the provisions of the Uniform Act. Ga.Code Ann. §§ 24–13–90- 24–13–97. Yahoo! admits that the subpoenas here did not comply with the requirements of the Uniform Act, but argues that the Uniform Act does not apply where a foreign corporation maintains a presence in the state.

To our knowledge, no Georgia court has determined whether Georgia law requires the government to comply with the Uniform Act in order to obtain the testimony of a foreign corporation that maintains a physical presence within the State of Georgia. See...