Williams v. Facebook, Inc.

• Decision Date: 29 August 2019
• Docket Number: Case No. 18-cv-01881-RS
• Citation: 498 F.Supp.3d 1189
• Court: U.S. District Court — Northern District of California
• Parties: Anthony WILLIAMS, et al., Plaintiffs, v. FACEBOOK, INC., Defendant.

498 F.Supp.3d 1189

Anthony WILLIAMS, et al., Plaintiffs,

v.FACEBOOK, INC., Defendant.

Case No. 18-cv-01881-RS

United States District Court, N.D. California.

Signed August 29, 2019

John A. Yanchunis, Pro Hac Vice, Morgan and Morgan, P.A., Patrick A. Barthle, II, Pro Hac Vice, Ryan McGee, Pro Hac Vice, Morgan and Morgan Complex Litigation Group, Tampa, FL, Joshua Haakon Watson, Clayeo C. Arnold, a Professional Law Corporation, Sacramento, CA, Sabita J. Soneji, Tycko & Zavareei LLP, Oakland, CA, for Plaintiffs Lisa Renken, Sean Mannion.

L. Timothy Fisher, Bursor & Fisher, P.A., Walnut Creek, CA, Alec Leslie, Pro Hac Vice, Joshua David Arisohn, Neal J. Deckant, Bursor and Fisher, P.A., New York, NY, Sabita J. Soneji, Tycko & Zavareei LLP, Oakland, CA, Scott A. Bursor, Bursor & Fisher, P.A., Miami, FL, for Plaintiffs Lawrence Olin, Janice Vega-Latker, Harold Nyanjom, Sheron Smith-Jackson.

Francis J. Flynn, Jr., Law Offices of Francis J. Flynn, Jr., Los Angeles, CA, Kevin Scott Hannon, Pro Hac Vice, The Hannon Law Firm, LLC, Denver, CO, Sabita J. Soneji, Tycko & Zavareei LLP, Oakland, CA, for Plaintiff Leland Tracy.

Kevin Francis Ruf, Glancy Prongay & Murray LLP, Los Angeles, CA, Sabita J. Soneji, Tycko & Zavareei LLP, Oakland, CA, for Plaintiffs Nicole Sternemann, Phyllis Sternemann.

Diana Janik Zinser, Pro Hac Vice, Spector Roseman and Kodroff, P.C., Philadelphia, PA, Hassan Ali Zavareei, Tycko & Zavareei LLP, Washington, DC, Sabita J. Soneji, Tycko & Zavareei LLP, Oakland, CA, for Plaintiff John Condelles, III.

Joshua David Arisohn, Bursor & Fisher, P.A., New York, NY, L. Timothy Fisher, Bursor & Fisher, P.A., Walnut Creek, CA, for Plaintiffs Blake Carlyle, Marc Boehm, Raven Winham.

Elizabeth L. Deeley, Joseph C. Hansen, Nicole Charlene Valco, Latham & Watkins LLP, San Francisco, CA, Matthew J. Peters, Susan E. Engel, Latham and Watkins LLP, Washington, DC, for Defendant.

ORDER DENYING IN PART AND GRANTING IN PART MOTION TO DISMISS

RICHARD SEEBORG, United States District Judge

I. INTRODUCTION

Plaintiffs are consumers from the states of New York, Kansas, Texas, and Florida who bring claims against Facebook, Inc. for violations of California's Computer Data Access and Fraud Act ("CDAFA"), Cal. Penal Code § 502, California's constitutional right to privacy, intrusion upon seclusion, unjust enrichment, and common law fraud.¹ The center of the dispute revolves around whether Facebook scraped user call and text data by exploiting a software vulnerability in the permission settings of older versions of the Android OS. For the second time, Facebook moves to dismiss, contending that Plaintiffs: (1) lack Article III standing as a factual matter because they were not subjected to the alleged unlawful conduct and thus could not have been injured by it; (2) lack Article III standing as a facial matter; (3) fail to state a claim under Federal Rule of Civil Procedure 9(b) ; and (4) fail to state a claim under Federal Rule of Civil Procedure 12(b)(6). For the reasons explained below, Facebook's motion is denied except with regard to its factual attack on Plaintiffs' standing involving the Facebook Lite application.

II. BACKGROUND²

The full facts of this case are set forth in this Court's prior order granting Facebook's first motion to dismiss and need not be repeated here. The prior order held the nature of the averred representation sounded in fraud, and therefore Rule 9(b) applied to all such claims. The prior order further held that the FAC failed to meet this heightened pleading standard because Plaintiffs did not include the allegedly fraudulent contact upload prompt or particularized averments of fraud in the FAC. Moreover, Plaintiffs failed to aver an economic injury to establish standing for the CDAFA cause of action. The prior order found, however, that Plaintiffs' CDAFA, intrusion upon seclusion, California privacy, and unjust enrichment claims could survive dismissal if fraud were sufficiently averred under Rule 9(b). Plaintiffs reallege these four claims, in addition to a new claim for fraud.³

Plaintiffs offer new averments to account for the deficiencies identified in the prior order. The SAC includes the language of the contact upload prompt, whereby Plaintiffs allege they were prompted to grant Facebook access to their "contacts" with the following text: "Allow Facebook Messenger access to your contacts?" (SAC ¶ 1 (the "Allow Access" prompt).) Below the prompt were choices labeled "Allow" or "Deny." (Id. ) According to Plaintiffs, selecting "Allow" permitted Facebook Messenger and Facebook Lite apps for Android scape users' call and text logs even though they were not explicitly asked to consent to such conduct. Additionally, the SAC contains new averments based on an email between Facebook employees that Plaintiffs contend show Facebook knew scraping users' call and text logs without permission was possible and that it would act accordingly. Finally, Plaintiffs provide new averments regarding how they suffered an economic injury-in-fact. They first contend that Facebook's conduct depleted their phones' resources, including "battery, electricity, cellular data, CPU processing power, RAM storage, and hard drive space." (SAC ¶¶ 6-9, 42.) Plaintiffs also rely on a diminution-in-value theory, whereby they allege their personal information has diminished in value now that Facebook has purportedly stolen and monetized the information, which has an established market value of $0.05 per individual.

III. LEGAL STANDARD

A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). While "detailed factual allegations" are not required, a complaint must have sufficient factual allegations to state a claim that is "plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atl. v. Twombly , 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). This standard asks for "more than a sheer possibility that a defendant has acted unlawfully." Id. The determination is a context-specific task requiring the court "to draw on its judicial experience and common sense." Id. at 679, 129 S.Ct. 1937.

Additionally, fraud claims are subject to a higher standard and the circumstances constituting fraud must be pleaded with particularity. Fed. R. Civ. P. 9(b). The same is true of state law claims that are grounded in fraud. Vess v. Ciba-Geigy Corp. USA , 317 F.3d 1097, 1103 (9th Cir. 2003). "To satisfy Rule 9(b), a pleading must identify the who, what, when, where, and how of the misconduct charged, as well as what is false or misleading about [the purportedly fraudulent] statement, and why it is false." Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc. , 637 F.3d 1047, 1055 (9th Cir. 2011) (internal quotation marks omitted). "[T]he circumstances constituting the alleged fraud [must] be specific enough to give defendants notice of the particular misconduct ... so that they can defend against the charge and not just deny that they have done anything wrong." Vess , 317 F.3d at 1106 (internal quotation marks omitted).

A motion to dismiss a complaint under Rule 12(b)(1) of the Federal Rules of Civil Procedure challenges the court's subject matter jurisdiction over the asserted claims. It is the plaintiff's burden to prove jurisdiction at the time the action is commenced. Tosco Corp. v. Cmtys. For Better Env't , 236 F.3d 495, 499 (9th Cir. 2001), overruled on other grounds by Hertz Corp. v. Friend , 559 U.S. 77, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010) ; Morongo Band of Mission Indians v. Cal. State Bd. of Equalization , 858 F.2d 1376, 1380 (9th Cir. 1988). "A Rule 12(b)(1) jurisdictional attack may be facial or factual." Safe Air for Everyone v. Meyer , 373 F.3d 1035, 1039 (9th Cir. 2004). "In a facial attack, the challenger asserts that the allegations contained in the complaint are insufficient on their face to invoke federal jurisdiction." Id. Accordingly, when considering this type of challenge, the court is required to "accept as true the allegations of the complaint." U.S. ex rel. Lujan v. Hughes Aircraft Co. , 243 F.3d 1181, 1189 (9th Cir. 2001). By contrast, in a factual attack, "the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction." Safe Air , 373 F.3d at 1039. In resolving a factual attack on jurisdiction, the court need not presume the truthfulness of the plaintiff's allegations and it may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment. Id. Once a factual challenge has been raised to the court's subject matter jurisdiction, the party opposing dismissal must "present affidavits or any other evidence necessary to satisfy its burden of establishing that the court, in fact, possesses subject matter jurisdiction." Id. (quoting Savage v. Glendale Union High Sch. , 343 F.3d 1036, 1039 n.2 (9th Cir. 2003) ).

IV. DISCUSSION

A. Factual Attack on Jurisdiction

Facebook once more contests the sufficiency of Plaintiffs' allegations regarding their injury-in-fact. This time, Facebook provides evidence in the form of a declaration from Louis Boval, a Facebook software engineering manager, and accompanying exhibits⁴ to show Plaintiffs were not subjected to the practice they are challenging and therefore lack standing. See Foster v. Essex Prop., Inc. , No. 5:14-cv-05531-EJD, 2017 WL 264390, at *4 (N.D. Cal. Jan. 20, 2017) (granting Rule 12(b)(1) factual attack on standing in data breach case where defendant produced evidence showing plaintiffs' information was not on breached system). Specifically, Facebook asserts this evidence demonstrates that: (1)...