Levitt v. Yelp! Inc.

Filing 86

REPLY (re 77 MOTION to Dismiss Third Amended Class Action Complaint and to Dismiss or Strike Class Action Allegations; Memorandum of Points and Authorities ) filed byYelp! Inc.. (Beringer, Susan) (Filed on 9/30/2011)

Download PDF
1 2 3 4 5 6 7 8 9 10 11 12 13 14 GIBSON, DUNN & CRUTCHER LLP GAIL LEES, SBN 90363 glees@gibsondunn.com 333 South Grand Avenue Los Angeles, California 90071-3197 Telephone: (213) 229-7000 Facsimile: (213) 229-7520 S. ASHLIE BERINGER, SBN 263977 SUSANNAH WRIGHT, SBN 264473 aberinger@gibsondunn.com swright2@gibsondunn.com 1881 Page Mill Road Palo Alto, California 94304-1211 Telephone: (650) 849-5300 Facsimile: (650) 849-5333 YELP! INC. AARON SCHUR, SBN 229566 aschur@yelp.com 706 Mission Street San Francisco, California 94103 Telephone: (415) 908-3801 Facsimile: (415) 908-3833 Attorneys for Defendant YELP! INC. 15 UNITED STATES DISTRICT COURT 16 NORTHERN DISTRICT OF CALIFORNIA 17 SAN FRANCISCO DIVISION 18 19 20 21 BORIS Y. LEVITT D/B/A RENAISSANCE RESTORATION, CATS AND DOGS ANIMAL HOSPITAL, INC., TRACY CHAN D/B/A MARINA DENTAL CARE and JOHN MERCURIO D/B/A WHEEL TECHNIQUES; on behalf of themselves and all others similarly situated, 22 23 24 25 26 27 Plaintiff, v. YELP! INC.; and DOES 1 through 100, inclusive, Defendants. Case No. CV 10-01321 EMC Consolidated with CV 10-02351 EMC CLASS ACTION DEFENDANT YELP! INC.’S REPLY IN SUPPORT OF ITS MOTION TO DISMISS THIRD AMENDED CLASS ACTION COMPLAINT AND TO DISMISS OR STRIKE CLASS ACTION ALLEGATIONS; MEMORANDUM OF POINTS AND AUTHORITIES Date: October 14, 2011 Time: 1:30 p.m. Place: Courtroom 5, 17th Floor 450 Golden Gate Avenue San Francisco, California Judge: The Honorable Edward M. Chen 28 29 Gibson, Dunn & Crutcher LLP 30 31 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 TABLE OF CONTENTS 2 Page 3 4 5 6 7 I. INTRODUCTION AND SUMMARY OF ARGUMENT ................................................................ 1 II. ARGUMENT ................................................................................................................................... 1 A. This Court‘s Prior Order Is Law of the Case ................................................................ 1 B. Plaintiffs Fail to State a Claim Under the Unfair Competition Law (―UCL‖)......................................................................................................................... 4 1. Plaintiffs Have Not Alleged Unlawful Conduct ............................................... 4 2. Plaintiffs Have Not Alleged ―Unfair‖ Conduct ................................................ 6 C. Plaintiffs Fail to State a Claim for Civil Extortion or Attempted Civil Extortion........................................................................................................................ 7 D. Yelp is Immune from Plaintiffs‘ Claims under CDA Sections 230(c)(1) & (c)(2).......................................................................................................................... 7 E. Plaintiffs Lack Article III Standing ............................................................................. 10 1. Plaintiffs Failed to Meet Their Burden of Demonstrating Article III Standing ..................................................................................................... 10 2. Discovery Is Unnecessary and Inappropriate .................................................. 13 F. Plaintiffs Cannot Plead Legally Sufficient Class Allegations .................................... 13 8 9 10 11 12 13 14 15 16 17 III. CONCLUSION ............................................................................................................................. 15 18 19 20 21 22 23 24 25 26 27 28 29 Gibson, Dunn & Crutcher LLP 30 31 i YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 TABLE OF AUTHORITIES 2 Page(s) 3 4 CASES 5 A-1 Technology, Inc. v. Magedson, No. 150033/10 (N.Y. Sup. Ct. June 22, 2011) ........................................................................... 9 6 7 Anthony v. Yahoo! Inc., 421 F. Supp.2d 1257 (N.D. Cal. 2006) ...................................................................................... 8 8 Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) ............................................................................................................... 4 9 Asia Econ. Inst. v. Xcentric Ventures LLC, No. CV 10-01360 SVW (PJWx), 2011 WL 2469822 (C.D. Cal. May 4, 2011).................... 8, 9 10 11 Batzel v. Smith, 333 F.3d 1018 (9th Cir. 2003).................................................................................................... 9 12 Baymiller v. Guarantee Mut. Life Co., 2000 WL 33774562 (C.D.Cal.2000) .......................................................................................... 3 13 14 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ................................................................................................................... 4 15 Cel-Tech Communications, Inc. Los Angeles Cellular Telephone Co., 20 Cal. 4th 163 ........................................................................................................................... 7 16 Contreras v. Toyota Motor Sales USA, Inc., No. C 09-06024 JSW, 2010 WL 2528844 (N.D. Cal. June 18, 2010) ............................... 11, 12 17 18 Disimone v. Browner, 121 F.3d 1262 (9th Cir. 1997).................................................................................................... 4 19 Fraser v. Goodale, 342 F.3d 1032 (9th Cir. 2003).................................................................................................. 12 20 21 Friends of Earth, Inc. v. Mosbacher, No. C 02-04106 JSW, 2007 WL 962949 (N.D. Cal. Mar. 30, 2007) ........................................ 2 22 GreenPeace, Inc. v. State of FranceI, 946 F. Supp. 773, 789 (C.D. Cal. 1996)................................................................................... 13 23 Hisamatsu v. Niroula, No. C-07-04371-JSW (EDL), 2009 WL 4456392 (N.D. Cal. Oct. 22, 2009) ........................... 7 24 25 Holomaxx Tech. v. Microsoft Corp., No. CV-10-4924-JF, 2011 U.S. Dist. LEXIS 29402 (N.D. Cal. Mar. 11, 2011) ................. 9, 10 26 Hughes v. United States, 953 F.2d 531 (9th Cir. 1992).................................................................................................... 12 27 28 Hy Cite Corp v. Badbusinessbureau.com LLC, 418 F. Supp.2d 1142 (D. Ariz. 2005)......................................................................................... 8 29 Gibson, Dunn & Crutcher LLP 30 31 ii YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 TABLE OF AUTHORITIES [Continued] 2 Page(s) 3 4 5 6 In re Facebook Privacy Litig., No. C 10-02389 JW, 2011 WL 2039995 (N.D. Cal. 2011) ........................................... 1, 10, 11 In re Sony Grand Wega KDF-E A10/A20 Series Rear Protection HDTV Television Litig., 758 F.Supp.2d 1077 (S.D. Cal. 2010) ........................................................................................ 2 7 Jarvis v. Regan, 833 F.2d 149 (9th Cir. 1987)...................................................................................................... 6 8 Kruska v. Perverted Justice Foundation Incorporated.org, No. CV-08-00054-PHX-SMM, 2010 WL 4791666 (D. Ariz. Nov. 18, 2010) .......................... 8 9 10 Liberty Mutual Ins. Co. v. E.E.O.C., 691 F.2d 438 (9th Cir. 1982).................................................................................................. 2, 3 11 Padgett v. City of Monte Sereno, No. C 04-03946 JW, 2007 WL 878575 (N.D. Cal. March 20, 2007) ........................................ 7 12 13 People v. Oppenheimer, 209 Cal. App. 2d 413 (1962) ...................................................................................................... 6 14 Rae v. Union Bank, 725 F.2d 478 (9th Cir. 1984)...................................................................................................... 6 15 Safe Air For Everyone v. Meyer, 373 F.3d 1035 (9th Cir. 2004)............................................................................................ 11, 12 16 17 18 St. Clair v. City of Chico, 880 F.2d 199 (9th Cir.), cert. denied, 493 U.S. 993, 110 S. Ct. 541, 107 L.Ed.2d 539 (1989) ................................................................................................................................ 13 19 United States v. Lisinski, 728 F.2d 887 (7th Cir. 1984)...................................................................................................... 6 20 United States v. Rivera Rangel, 396 F.3d 476 (1st Cir. 2005) ...................................................................................................... 6 21 22 Westways World Travel, Inc. v. AMR Corp., 2005 WL 6523266 (C.D. Cal. Feb. 24, 2005) .......................................................................... 15 23 REGULATIONS 24 16 C.F.R. § 255 .................................................................................................................................... 10 25 26 27 28 29 Gibson, Dunn & Crutcher LLP 30 31 iii YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC I. 1 INTRODUCTION AND SUMMARY OF ARGUMENT Plaintiffs‘ opposition confirms that their Third Amended Complaint (―TAC‖) – which is 2 3 virtually identical to the Second Amended Complaint (―SAC‖) previously dismissed by this Court – 4 should be dismissed with prejudice. Plaintiffs argue that this Court‘s March 22, 2011 Order dismissing the SAC somehow does 5 6 not control, even though it addressed identical allegations and claims to those renewed by Plaintiffs 7 in their most recent pleading. That is not the law. Plaintiffs do not satisfy any exception to the law of 8 the case doctrine that would allow them to reargue the sufficiency of their deficient allegations of 9 ―extortion‖ again here. Instead, they rely on a few, general allegations having nothing to do with the 10 named Plaintiffs (much less, any ―extortion‖), and a handful of allegations by newly-added Plaintiff 11 Wheel Techniques that rest on the same deficient theories previously rejected by the Court. In addition, Plaintiffs have failed to come forward with a single piece of evidence that they 12 13 were injured due to any misconduct by Yelp, as they must to demonstrate Article III standing in 14 response to Yelp‘s factual challenge under Rule 12(b)(1). More troubling, Plaintiffs do not refute 15 that they created several fake 5-star reviews about their businesses that were appropriately filtered 16 from Yelp‘s site, confirming that any purported injuries result from their own deceptive conduct – 17 and not any ―manipulation‖ by Yelp. Plaintiffs‘ speculation and baseless evidentiary objections fall 18 well short of their obligation to ―furnish affidavits or other evidence necessary to satisfy their burden 19 of establishing subject-matter jurisdiction,‖ which also requires dismissal of their claims. In re 20 Facebook Privacy Litig., No. C 10-02389 JW, 2011 WL 2039995, at *2 (N.D. Cal. 2011). Plaintiffs have had six opportunities to plead a legally sufficient cause of action – and more 21 22 than 18 months to develop evidence to demonstrate their standing or support their claims – but have 23 been unable to do so. The Court should dismiss their Third Amended Complaint with prejudice. II. 24 25 26 A. ARGUMENT This Court’s Prior Order Is Law of the Case As detailed in Yelp‘s moving papers, this Court previously held that Plaintiffs‘ allegations – 27 in a nearly-identical complaint – that Yelp ―actively manipulates user reviews to force businesses into 28 purchasing advertising‖ failed to state a ―plausible claim for relief.‖ See Order Granting Mot. 29 Gibson, Dunn & Crutcher LLP 30 31 1 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 Dismiss, March 22, 2011, Dkt. No. 70 (―Order‖), at 2:26-27; 20:17; Yelp‘s Mot. Dismiss TAC 2 (―MTD‖), 5-7. Plaintiffs now argue that this Order somehow does not apply, even though it 3 addressed allegations and claims identical to those contained in Plaintiffs‘ latest pleading. Pl.‘s 4 Opp‘n. Br. (―Opp.‖), at 12-13. Plaintiffs are wrong. ―Under the ‗law of the case‘ doctrine, a court is 5 ordinarily precluded from reexamining an issue previously decided by the same court, or a higher 6 court, in the same case.‖ Friends of the Earth, Inc. v. Mosbacher, No. C 02-04106 JSW, 2007 WL 7 962949, at *1 (N.D. Cal. Mar. 30, 2007). Contrary to Plaintiffs‘ assertions, the Court ―explicitly‖ decided that the SAC failed ―to 8 9 plausibly allege that any of Yelp‘s conduct amounted to an implied extortionate threat,‖ a necessary 10 element of any claim based upon a theory of extortion. Order at 17:6-7; Liberty Mutual Ins. Co. v. 11 E.E.O.C., 691 F.2d 438, 441 (9th Cir. 1982) (law of the case doctrine applies where issue ―decided 12 explicitly or by necessary implication‖). Because Plaintiffs‘ latest complaint again relies entirely on 13 claims of extortion – based on allegations that are largely word-for-word identical to its SAC – the 14 law of the case doctrine prevents Plaintiffs from relitigating the sufficiency of these allegations again 15 here.1 See, e.g., In re Calpine Corp. ERISA Litig., No. C 03-1685 SBA, 2005 WL 3288469, at *10 16 (N.D. Cal. Dec. 5, 2005) (dismissing with prejudice amended complaint, stating ―Plaintiff may not 17 reassert a theory that has already been considered and soundly rejected as insufficient by this Court‖). Moreover, Plaintiffs are incorrect that this Court may apply the Order in its ―discretion.‖ 18 19 Opp. at 12. It is well settled that the Order is the controlling law of the case unless ―there has been an 20 intervening change of controlling authority, new evidence has surfaced or the previous disposition 21 was clearly erroneous and would work a manifest injustice.‖ Allmerica Fin. Life Ins. & Annuity Co. 22 v. Dalessio, No. C-96-0385 VRW, 2006 WL 408538, at *3 (N.D. Cal. Feb. 20, 2006). Where, like 23 here, none of these factors are present, there is no discretion to reexamine issues addressed in a prior 24 25 26 27 28 Plaintiffs‘ suggestion that the law of the case doctrine does not apply because ―Plaintiffs‘ TAC superseded the SAC‖ is baseless. Opp. at 13. Plaintiffs cite a sole case from the Southern District for this claim, which is unhelpful to them. In re Sony Grand Wega KDF-E A10/A20 Series Rear Protection HDTV Television Litig., 758 F. Supp.2d 1077, 1098 (S.D. Cal. 2010). There, the court dismissed an amended complaint, with prejudice, including a claim that previously had survived under the court‘s earlier order, finding dismissal appropriate given that plaintiffs had opted to re-plead the entire complaint – including the previously dismissed claims – rather than proceed on the sole surviving claim. This case only confirms, then, that this Court should apply its prior order to dismiss Plaintiffs‘ near-identical complaint, with prejudice. 1 29 Gibson, Dunn & Crutcher LLP 30 31 2 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 order. See United States v. Alexander, 106 F.3d 874, 876 (9th Cir. 1997) (abuse of discretion not to 2 abide by previous ruling where no exceptions to law of the case doctrine exist). Plaintiffs‘ opposition 3 fails to establish any of these limited exceptions to the law of the case doctrine. 4 Although Plaintiffs argue (without support) that the TAC presents ―additional authorities to 5 support their UCL claims,‖ to depart from this Court‘s prior ruling Plaintiffs must point to ―an 6 intervening change in controlling‖ authority. Opp. at 12; see Allmerica, 2006 WL 408538, at *3. 7 Plaintiffs do not identify any intervening legal decision that compels a different outcome here. 8 Nor do Plaintiffs point to any new evidence of an ―implied threat‖ of harm. Opp. at 12. 9 Although Plaintiffs point to a ―new‖ general allegation that Yelp hires community managers (like 10 many other internet companies) who are ―encouraged‖ to post reviews, they make no attempt to tie 11 these allegations to the named Plaintiffs or to any ―extortion‖. See Opp. at 15; TAC ¶ 38. Plaintiffs 12 do not dispute that for Plaintiffs Levitt, Cats & Dogs (―C&D‖), and Chan, the TAC adds no new 13 allegations at all. MTD at 7-8; see Decl. of S. Ashlie Beringer, Exhibit 6, Dkt. No. 79-6. See also 14 Baymiller v. Guarantee Mut. Life Co., 2000 WL 33774562 *2 (C.D.Cal.2000) (dismissing claims 15 ―alleged in both the first and second complaint‖ where plaintiff used ―the same facts‖ to support 16 those claims.). And because the allegations for new Plaintiff Wheel Techniques rely on the same, 17 deficient theory of extortion alleged by the other Plaintiffs (MTD at 8-10, 11-14), the Court‘s analysis 18 applies by ―necessary implication‖ to these allegations, too. Liberty Mutual Ins. Co., 691 F.2d at 441. 19 The circumstances in Baymiller are particularly on point. 2000 WL 33774562, at *2. There, 20 the court dismissed with prejudice four claims that it previously had dismissed from plaintiff‘s earlier 21 pleading, rejecting the plaintiff‘s arguments that the amended pleading contained allegations and 22 ―issues . . . wholly different from the claims in the FAC‖: 23 24 25 26 The [same] claims . . . are alleged in both the first and second complaint, with the same facts supporting each claim. Because Plaintiffs have failed to truly amend their complaint as to these causes of action, the SAC is hereby dismissed with prejudice for the same reasons as the FAC. Plaintiffs do not allege that the Court’s May 3, 2000 order on these issues is clearly erroneous, that the law has changed, this is not on remand, and no other circumstances have been changed. Id. (emphasis added). ―No litigant deserves an opportunity to go over the same ground twice, hoping 27 that the passage of time or changes in the composition of the court will provide a more favorable 28 29 Gibson, Dunn & Crutcher LLP 30 31 3 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 result the second time.‖ Disimone v. Browner, 121 F.3d 1262, 1266 (9th Cir. 1997). Plaintiffs 2 furnish no basis for revisiting this Court‘s detailed Order dismissing the virtually identical SAC. 3 B. 4 Plaintiffs Fail to State a Claim Under the Unfair Competition Law (“UCL”) The reason Plaintiffs seek to avoid this Court‘s Order is clear: Plaintiffs‘ opposition confirms 5 that they have failed to add a single plausible or legally sufficient allegation to their TAC that 6 supports their untenable ―extortion‖ claims. MTD at 10-15; see Ashcroft v. Iqbal, 129 S. Ct. 1937, 7 1949 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 569 (2007). In fact, Plaintiffs now concede 8 that they have no evidence to support their contention that Yelp engaged in a policy of 9 ―manipulation‖ (Opp. at 7), despite representing otherwise to this Court. Order at 20:17-19. 10 1. 11 This Court‘s prior decision that Plaintiffs‘ had alleged no ―unlawful‖ conduct under the UCL Plaintiffs Have Not Alleged Unlawful Conduct 12 was not based on a ―lack of allegations,‖ as Plaintiffs suggest. Opp. at 15. Rather, the Court found 13 that the SAC ―fail[ed] to plausibly allege that any of Yelp‘s conduct amounted to an implied 14 extortionate threat.‖ Order at 17:6-7. Specifically, after engaging in a detailed analysis of Plaintiffs‘ 15 allegations, the Court found Plaintiffs‘ claims that Yelp manufactured or deliberately manipulated 16 their reviews to be ―entirely speculative.‖ Order at 17:7-9. The Court also found that the SAC 17 lacked ―factual allegations from which any distinct communication of a threat might be inferred.‖ 18 Order at 17:11-12 (emphasis added). Plaintiffs‘ scant new allegations in no way change this. 19 Indeed, Plaintiffs rely on two ―new‖ general allegations alleging that unidentified 20 ―employees‖ wrote ―reviews‖ and that Yelp employs community managers who are ―encouraged to 21 write reviews.‖ Opp. at 15; TAC ¶¶37-38. But these allegations do not involve extortion or supply 22 any basis for a reasonable inference that Yelp made an implied threat. Opp. at 15. Plaintiffs do not 23 allege that any community managers – whose Yelp profiles contain clearly identifying badges – 24 created any reviews (negative or positive) about their businesses, much less false reviews timed to 25 sales pitches. These ―new‖ allegations furnish no more basis for Plaintiffs‘ ―extortion‖ claims than 26 Plaintiffs‘ claims in the SAC that ―false negative reviews are sometimes generated by Yelp 27 personnel‖ (SAC ¶34), which this Court previously found to be entirely deficient. Order at 17:7-10. 28 Likewise, Wheel Techniques‘ vague claim that it heard a rumor that Yelp sales employees 29 Gibson, Dunn & Crutcher LLP 30 31 4 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 were terminated for ―scamming‖ related to advertising does not support a reasonable inference that 2 Yelp engaged in extortion, or that it made a threat to Wheel Techniques or anyone else. TAC ¶ 82. 3 Plaintiffs do not explain what this supposed ―scamming‖ consisted of, nor even allege that it involved 4 reviews – and the TAC does not in any way connect this ―scamming‖ to any of the named Plaintiffs. 5 Because they cannot cite any new allegations that support their extortion claims, Plaintiffs 6 recycle the same theories that this Court previously found to be deficient. Opp. at 16. Once again, 7 Plaintiffs argue that the posting of negative reviews and removal of positive reviews (supposedly, in 8 proximity to conversations with Yelp‘s employees) should be construed as an extortionist threat. 9 But the Court squarely rejected each of these theories – including identical allegations made by 10 11 Plaintiffs Chan, Levitt, and C&D. See Order at 17:16-18:10. For the same reasons, the allegations of newly-added plaintiff Wheel Techniques fail to plead 12 extortion. See MTD at 10-14. Plaintiffs argue that a threat of harm to Wheel Techniques should be 13 inferred from its allegation that a negative review was moved to the top of its review page ―within 14 minutes‖ of speaking to Yelp about advertising, and because other negative reviews supposedly 15 ―beg[a]n to be listed first, around that time.‖ Opp. at 16. But, like the other named Plaintiffs, Wheel 16 Techniques provides ―no basis from which to infer that Yelp authored or manipulated the content of 17 the[se] negative reviews‖ (Order at 17:9-10) – and, thus, cannot overcome this Court‘s ruling that 18 claims premised on Yelp‘s posting of and ―failure to remove negative reviews … is clearly 19 immunized by [section 230 of the Communications Decency Act (―CDA 230‖)].‖ Id. at 14:25-26. 20 Nor does Wheel Techniques‘ allegation that a single, 5-star review was ―replaced‖ following 21 a sales call demonstrate the existence of a ―threat‖. Opp. at 16. As this Court held, the removal of 22 positive reviews ―is entirely consistent with Yelp‘s policy . . . that Yelp automatically filters 23 potentially fake positive and negative reviews.‖ Order at 17:18-20. Plaintiffs supply no facts to 24 suggest that the removal of a single review was due to anything other than Yelp‘s automated filter 25 (which would, for example, remove any fake positive reviews posted by Wheel Techniques itself). 26 Instead, the purported fluctuation of a few reviews on Wheel Techniques‘ review page is precisely 27 the type of ―select snapshots of plaintiffs‘ overall star ratings‖ that this Court has held does not 28 establish ―an implied threat of harm from Yelp.‖ Order at 17:20-23; 17:27-18:1. 29 Gibson, Dunn & Crutcher LLP 30 31 5 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC The criminal cases cited by Plaintiffs only highlight the deficiencies of their claims, as they 1 2 involve blatant and detailed threats of harm that are not remotely presented here. Opp. at 17-18 3 (citing United States v. Lisinski, 728 F.2d 887 (7th Cir. 1984) (government employee demanded 4 money to prevent threatened loss of victim‘s liquor license); United States v. Rivera Rangel, 396 F.3d 5 476 (1st Cir. 2005) (government employee repeatedly demanded money in exchange for approval of 6 necessary permits); People v. Oppenheimer, 209 Cal. App. 2d 413, 418 (1962) (menacing letters 7 stating ―[i]t will cost you more not to pay‖ and ―[a]re all windows insured?‖ constituted a threat). Because Plaintiffs have failed to add any allegations creating a plausible inference that Yelp 8 9 engaged in any threat of harm, their claim under the ―unlawful‖ prong must be dismissed.2 Plaintiffs Have Not Alleged “Unfair” Conduct 10 2. 11 Yelp‘s moving papers – and the Order – established that Plaintiffs also failed to allege any 12 plausible facts demonstrating that Yelp engaged in any ―unfair‖ conduct under the UCL. MTD at 14- 13 15; Order at 19:19-20:14. As Plaintiffs concede, their TAC relies on the same speculative allegations 14 and theories to support their ―unfairness‖ claim that this Court previously dismissed. Opp. at 18; 15 MTD at 14-15; Order at 20:7-9. Plaintiffs once again argue that Yelp engaged in ―unfair‖ conduct by 16 supposedly ―manipulating‖ reviews (Opp. at 18-19), but they fail to provide any additional factual 17 support for this theory, which this Court already rejected. Order at 14:25-26; 20:7-9. Plaintiffs concede that they have added no new allegations whatsoever for Plaintiffs Chan, 18 19 Levitt, or C&D, and thus their ―unfairness‖ claims for these Plaintiffs must be dismissed under this 20 Court‘s prior Order. Supra at 2-5. Indeed, the only new allegation Plaintiffs cite in support of their 21 ―unfairness‖ claim is a single alleged conversation in which Yelp supposedly informed Wheel 22 Techniques that an unidentified competitor advertised with Yelp and that Yelp ―work[s] with your 23 24 25 26 27 28 Acknowledging that their case lacks sufficient factual basis – and despite this Court‘s recent order denying discovery – Plaintiffs again suggest that they should be able to subject Yelp to discovery in the event this Court dismisses their TAC. Plaintiffs have alleged no basis whatsoever to pursue discovery at this late stage. See, e.g., Jarvis v. Regan, 833 F.2d 149, 155 (9th Cir. 1987) (denial of discovery proper where district court found alleged facts deficient as a matter of law); Rae v. Union Bank, 725 F.2d 478, 481 (9th Cir. 1984) (denial of discovery proper where plaintiffs could not point to any specific information obtainable through discovery that would have enabled appellants to state a cause of action). Nor do Plaintiffs identify any discovery that could possibly lead to support for their extortion claim, particularly since the existence of a threat of harm – the core element of extortion – necessarily is within Plaintiffs‘ knowledge. 2 29 Gibson, Dunn & Crutcher LLP 30 31 6 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 reviews if you advertise with us.‖ Opp. at 19; TAC ¶ 78. This sole, alleged conversation plainly 2 does not demonstrate an ―incipient violation of an antitrust law,‖ nor does it suggest that Yelp has 3 ―materially tilted the economic playing field in favor of plaintiffs‘ competitors‖ or ―threatened 4 competition‖ within the meaning of the test articulated in Cel-Tech or otherwise. Order at 19:25-20:4 5 (citing Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal. 4th 163 6 (1999)). As noted in Cel-Tech, ―injury to a competitor is not equivalent to injury to competition,‖ 7 and only conduct that ―significantly threatens competition‖ in the market overall satisfies this test. 20 8 Cal. 4th at 186-187. Plaintiffs do not come close to alleging facts that satisfy this standard. Finally, Plaintiffs‘ suggestion that the ―unfairness‖ prong requires courts to engage in a 9 10 ―factual inquiry‖ that ―cannot be made on the pleadings‖ (Opp. at 19-20) is refuted by numerous 11 decisions dismissing ―unfairness‖ claims where, as here, they rest on purely speculative allegations 12 that fail to allege a plausible basis for balancing the harms to plaintiffs against the benefits to 13 defendant. See Order at 20:4-9; see also, e.g., Mangindin v. Wash. Mut. Bank, 637 F. Supp. 2d 700, 14 709-10 (N.D. Cal. 2009) (dismissing unfairness claim under the balancing test). 15 C. Plaintiffs Fail to State a Claim for Civil Extortion or Attempted Civil Extortion 16 As set forth in Yelp‘s moving brief, in the rare circumstances where courts have addressed 17 claims labeled as ―extortion‖ in a civil context, the claim has been considered a claim for duress or 18 involved explicit threats of harm which are not present here. MTD at 15-17 (citing cases). Plaintiffs‘ 19 opposition does not – and cannot – cite to any cases upholding a claim for ―civil extortion‖ based on 20 vague allegations of ―implied‖ threats of harm like those asserted here. See Opp. at 20.3 Even if 21 California courts recognized claims for civil extortion, however, Plaintiffs‘ claims for extortion and 22 attempted extortion fail because they do not point to a single, plausible allegation demonstrating that 23 Yelp threatened to harm Plaintiffs unless they advertised, the essential element of any claim for 24 extortion. See MTD at 11-14; supra at 5-8. 25 D. 26 27 28 Yelp is Immune from Plaintiffs’ Claims under CDA Sections 230(c)(1) & (c)(2) 3 The cases cited by Plaintiffs are inapposite and involve explicit threats of harm. See Padgett v. City of Monte Sereno, No. C 04-03946 JW, 2007 WL 878575 at *1 (N.D. Cal. Mar. 20, 2007)(―civil extortion‖ claim based upon anonymous threatening letter); Hisamatsu v. Niroula, No. C-07-04371-JSW (EDL), 2009 WL 4456392 at *5 (N.D. Cal. Oct. 22, 2009) (civil extortion claim based upon explicit threats of bodily harm). 29 Gibson, Dunn & Crutcher LLP 30 31 7 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 Plaintiffs distort CDA 230 and this Court‘s prior Order in a continued attempt to pursue 2 claims for which Yelp is squarely immune under CDA 230(c)(1) and (c)(2). See MTD at 17-19. 3 Although this Court correctly observed that non-speculative claims 1) based on Yelp‘s own content 4 such as ―Yelp‘s own alleged postings,‖ or 2) unrelated to Yelp‘s actions as an online publisher (such 5 as ―purported threats‖) are ―potentially actionable,‖ the Court did not conclude that Plaintiffs‘ 6 allegations were in fact actionable or that Yelp has ―no immunity,‖ as Plaintiffs erroneously suggest. 7 Order at 15:25-27; 16:2-3. Instead, the Court found that Plaintiffs failed to allege a single, plausible 8 instance of Yelp creating any review about a Plaintiff (much less a false, negative review), or 9 engaging in any threat against Plaintiffs that would put Yelp outside the well-established safe harbors 10 of CDA 230(c)(1). Order at 17:6-10. Like its predecessors, Plaintiffs‘ TAC fails to provide 11 allegations sufficient to pierce Yelp‘s immunity under CDA 230(c)(1). See MTD at 17-19. 12 Attempting to sidestep Yelp‘s immunity, Plaintiffs cite several inapplicable cases, each of 13 which involved specific factual allegations that the defendant created the content giving rise to the 14 plaintiffs‘ claims – facts that are not plausibly asserted here. See Hy Cite Corp v. 15 Badbusinessbureau.com LLC, 418 F. Supp. 2d 1142 (D. Ariz. 2005) (defendant drafted editorial 16 comments and titles about plaintiff); Kruska v. Perverted Justice Foundation Incorporated.org, No. 17 CV-08-00054-PHX-SMM, 2010 WL 4791666 (D. Ariz. Nov. 18, 2010) (defendant helped create and 18 post content about plaintiff); Anthony v. Yahoo! Inc., 421 F. Supp.2d 1257 (N.D. Cal. 2006) 19 (defendant created false dating profiles provided to plaintiff). 20 Nor can Plaintiffs overcome Yelp‘s CDA 230(c)(1) immunity by relying on deficient 21 allegations that Yelp ―manipulated‖ third-party reviews. This Court has already held that allegations 22 of ―manipulation‖ predicated on Yelp‘s publishing functions (as opposed to claims that it 23 manufactured content) do not give rise to liability. Order at 14:25-15:18;16:17-18 (―Section 24 230(c)(1) immunity protects service providers from lawsuit for ‗its exercise of a publisher‘s 25 traditional editorial functions.‘‖). 26 Plaintiffs also fail to distinguish a recent case with almost identical allegations that the 27 defendant had ―manipulated‖ consumer reports. See Asia Econ. Inst. v. Xcentric Ventures LLC, No. 28 CV 10-01360 SVW (PJWx), 2011 WL 2469822 (C.D. Cal. May 4, 2011). As the court in Asia 29 Gibson, Dunn & Crutcher LLP 30 31 8 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 Economic found, allegations that a defendant ―increase[d] the prominence‖ of negative content (like a 2 one-star review) in internet search results unless a business paid money to the defendant are 3 ―insufficient to remove Defendants from the ambit of the CDA.‖ Id. Likewise, Plaintiffs‘ 4 speculative allegations that Yelp ―manipulated‖ the order of their reviews in response to their 5 advertising decisions – even if they were plausible – do not constitute a ―chang[e] . . . [in] the 6 substantive content‖ of any review, and thus cannot give rise to liability. Id.; TAC ¶ 80. 7 Plaintiffs‘ efforts to limit the recent decision in A-1 Technology to claims involving 8 defamation are similarly baseless. Opp. at 22, discussing A-1 Technology, Inc. v. Magedson, No. 9 150033/10, slip op. at 3 (N.Y. Sup. Ct. June 22, 2011). In a case involving strikingly similar 10 allegations to those asserted here, the court in A-1 Technology found that CDA 230(c)(1) immunized 11 the defendant from claims alleging it ―request[s] money from companies in exchange for removing or 12 reducing the visibility of allegedly defamatory content.‖ A-1 Technology, No. 150033/10, slip op. at 13 3. This case was not decided on the basis of a ―defamation bar‖ in the state of New York, as 14 Plaintiffs‘ suggest. Opp. at 22. Rather, the court reiterated that CDA 230 affords immunity to 15 interactive computer services from claims that they deliberately manipulated online complaints, 16 where – as here – the content is created by a third party. Id. at 9-10.4 Finally, Plaintiffs‘ contention that CDA 230(c)(2) does not apply to claims that Yelp removed 17 18 or filtered positive reviews is incorrect. Opp. at 6; 21. As this Court correctly held, Section 19 230(c)(2), separately from CDA 230(c)(1), immunizes Yelp for claims arising from its filtering or 20 removing potentially objectionable content – such as spam reviews written by business owners – so 21 long as Yelp undertakes these activities in good faith. Order at 16:22-24; see, e.g., Batzel v. Smith, 22 333 F.3d 1018, 1030 n.14 (9th Cir. 2003) (CDA(c)(2) provides immunity from ―claims premised on 23 the taking down of a customer‘s posting‖ including ―unfair business practices‖ claims).5 As recently 24 confirmed in Holomaxx Tech. v. Microsoft Corp., No. CV-10-4924-JF, 2011 WL 865278 (N.D. Cal. 25 26 Although Plaintiffs seek to distinguish these cases by claiming that Yelp ―drafted the content of reviews,‖ Plaintiffs do not – and cannot – point to a single allegation in the TAC that supports this claim. Opp. at 22. 27 5 4 28 Spam online reviews (a practice called ―astroturfing‖), like spam emails, are such an obstacle to internet commerce that the Federal Trade Commission has adopted rules to stem them. See 16 C.F.R. §§ 255, et seq. (―Guides Concerning the Use of Endorsements and Testimonials in Advertising‖). 29 Gibson, Dunn & Crutcher LLP 30 31 9 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 Mar. 11, 2011), Plaintiffs bear the burden of alleging plausible, non-speculative facts sufficient to 2 allege that Yelp‘s filtering and removal of potentially unreliable reviews is done ―in an absence of 3 good faith.‖ MTD at 18-19. Tellingly, Plaintiffs‘ opposition fails to cite any allegations that Yelp‘s 4 removal of their reviews lacked a legitimate purpose or was due to anything other than the operation 5 of its automated review filter, which filters potentially unreliable content from Yelp. See Order at 6 17:18-20; TAC ¶ 6. While the Court noted that a non-speculative ―theory of extortion‖ based upon 7 the deliberate removal of positive reviews might indicate an absence of good faith, it unequivocally 8 held that Plaintiffs had failed to provide any plausible, factual support for this theory.6 Order at 9 16:22-27; 17:7-9. As such, Plaintiffs‘ TAC fails to allege a basis for overcoming the safe harbor for 10 online publishers‘ filtering activities in Section 230(c)(2) and should be dismissed. 11 E. 12 Plaintiffs Lack Article III Standing Plaintiffs‘ opposition does not offer a shred of evidence that Plaintiffs were injured due to any 13 misconduct by Yelp – and implicitly conceded that the named Plaintiffs themselves are responsible 14 for creating the very fake positive reviews about their businesses that they now complain Yelp 15 filtered and removed. Because Plaintiffs have failed to come forward with any evidence (as opposed 16 to speculation and baseless evidentiary objections) that Yelp created false negative reviews about the 17 named Plaintiffs or unlawfully manipulated their reviews, they cannot satisfy their burden of 18 establishing standing in response to Yelp‘s Rule 12(b)(1) factual challenge. See MTD at 19-20. 19 1. 20 Although this Court previously found Plaintiffs‘ allegations of injury to be facially sufficient Plaintiffs Failed to Meet Their Burden of Demonstrating Article III Standing 21 to allege standing (Order at 10:13-14), it did not address the factual challenge to standing presented 22 on this motion. As detailed in Yelp‘s moving papers, when considering a factual challenge to 23 standing under Rule 12(b)(1), the Court ―is permitted to look beyond the complaint to extrinsic 24 evidence,‖ including specifically affidavits like Ian MacBean‘s Declaration furnished by Yelp in 25 support of its motion. MTD at 20 (citing In re Facebook Privacy Litig., No. C 10-02389 JW, 2011 26 27 28 The Court did not address whether Plaintiffs had met their burden of pleading the ―absence of good faith‖ in its March 22, 2011 Order, which was issued just days after (and based upon briefs and arguments made weeks before) the decision in Holomaxx Tech. 2011 WL 865278. 6 29 Gibson, Dunn & Crutcher LLP 30 31 10 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 WL 2039995, at *2 (N.D. Cal. 2011)). In response, Plaintiffs cannot rest on their allegations and are 2 required to come forward with actual evidence that they suffered an injury in fact due to Yelp‘s 3 misconduct. Id. (quoting Safe Air For Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004)). Rather than set forth evidence – as they must – that Plaintiffs‘ purported injuries are traceable 4 5 to user reviews that Yelp created or deliberately manipulated, Plaintiffs argue that Yelp‘s evidence 6 does not ―exclude the possibility‖ that unspecified Yelp employees ―may‖ have created false names, 7 used false email addresses, or gone to extreme technical measures (such as using ―anonymizer‖ or 8 proxy sites designed to replace the user‘s IP address) to hide their identities from Yelp in order to 9 write false reviews about Plaintiffs. Opp. at 9-10. But such conjecture is not evidence and cannot 10 rebut Yelp‘s affidavit – detailing its in-depth analysis of each review posted about each of the named 11 Plaintiffs – demonstrating that there is no evidence that these reviews were created by any Yelp 12 employee.7 MTD at 22-23; In re Facebook, 2011 WL 2039995, at *2. Yelp is not obligated to come forward with evidence that would ―exclude [every] possibility‖ 13 14 that an employee concealed his or her identity and IP address from Yelp, no matter how far-fetched 15 or absurd. To the contrary, once Yelp furnished evidence that its employees did not author the 16 reviews in question or manipulate Plaintiffs‘ reviews, the burden shifted to Plaintiffs to come forward 17 with credible evidence that this was not so. Id. Yet, Plaintiffs have failed to provide any evidence 18 indicating that their businesses were harmed because Yelp created specific reviews at issue or 19 engaged in unlawful ―manipulative‖ conduct, as they must to demonstrate Article III standing. As 20 such, Plaintiffs‘ claims must be dismissed for lack of standing. See, e.g., Contreras v. Toyota Motor 21 Sales USA, Inc., No. C 09-06024 JSW, 2010 WL 2528844, at *3-*4, *6 (N.D. Cal. June 18, 2010) 22 (dismissing complaint based on factual challenge under Rule 12(b)(1) because unrebutted 23 declarations demonstrated that plaintiffs had not sustained injury in fact). Because they cannot meet their evidentiary burden, Plaintiffs hide behind a series of baseless 24 25 ―evidentiary objections‖ to the sworn declarations and exhibits submitted by Yelp. Opp. at 8-11. 26 27 28 Contrary to Plaintiffs‘ claims, Mr. MacBean did not rely ―only on information provided to Yelp by its users.‖ Opp. at 9. He also reviewed the IP addresses associated with each review – unique technical identifying information associated with the computer used to create and post the review. MacBean Decl., ¶ 5. 7 29 Gibson, Dunn & Crutcher LLP 30 31 11 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 Unsurprisingly, Plaintiffs do not cite a single case in support of their alleged ―objections,‖ nor can 2 they. Yelp‘s motion is supported by detailed declarations and exhibits – precisely the type of 3 evidence contemplated for a factual challenge under 12(b)(1). See, e.g., Safe Air For Everyone v. 4 Meyer, 373 F.3d at 1039 (factual challenge may be asserted ―by presenting affidavits or other 5 evidence properly brought before the court‖). Likewise, Plaintiffs‘ attack on the form of Yelp‘s 6 evidence is plainly improper at this stage. See, e.g., Fraser v. Goodale, 342 F.3d 1032, 1038 (9th Cir. 7 2003) (even at summary judgment stage courts ―do not focus on the admissibility of the evidence‘s 8 form.‖); Hughes v. United States, 953 F.2d 531, 543 (9th Cir. 1992) (holding that ―[w]hile the facts 9 underlying the affidavit must be of a type that would be admissible as evidence . . . the affidavit itself 10 does not have to be in a form that would be admissible at trial.‖). And, as set forth in Yelp‘s specific 11 Responses to Plaintiffs‘ Evidentiary Objections to the MacBean Declaration, Plaintiffs‘ remaining 12 evidentiary objections are similarly baseless and apparently intended to distract the Court from their 13 utter failure to rebut Yelp‘s factual showing. See Yelp‘s Resp. Pls.‘ Evidentiary Objections. 14 Critically, Plaintiffs also do not deny that Plaintiffs Levitt and Wheel Techniques created 15 several of the fake 5-star reviews that give rise to their claims that Yelp ―manipulated‖ reviews. 16 MTD at 22-23; Opp. at 11. Plaintiffs‘ silence on this point is damning and their feeble attempts to 17 discredit Yelp‘s evidence demonstrating Plaintiffs‘ own misconduct (and defeating Plaintiffs‘ claims 18 that the removal of these fake reviews was improper) go nowhere. Yelp did not rely on ―external 19 websites‖ or ―third party information‖ to demonstrate that these Plaintiffs created fake reviews, as 20 Plaintiffs suggest, but furnished specific admissions authored by Plaintiffs and maintained in Yelp‘s 21 business records. For example, Yelp furnished the following email authored by Plaintiff Wheel 22 Techniques, transmitted through Yelp‘s messaging system, as evidence that this user account (which 23 posted several 5-star reviews about Wheel Techniques) was used by it: 24 25 26 Dear Vincent, We here at Wheel Tech really feel put down by your recent review and want to let you know that legally you cannot put such input out on the net. If you read your invoice we can legally sue you for any positive OR negative reviews . . . Please remove your negative comments or we have no choice to seek legal actions against you . . . Hope to hear from you soon. John Mercurio owner. 27 MacBean Decl., ¶ 16 and Ex. 4; see also MacBean Decl., ¶¶ 22-23 and Exs. 7 and 8 (attaching 28 information supplied by Plaintiff Levitt on his ―Boris L.‖ Yelp profile). Yelp‘s evidence, together 29 Gibson, Dunn & Crutcher LLP 30 31 12 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 with Plaintiffs‘ own silence, demonstrate that any alleged ―manipulation‖ of reviews was due not to 2 Yelp, but to Plaintiffs‘ own misconduct in creating false positive reviews and threatening third-party 3 users who posted negative reviews, in clear violation of Yelp‘s Terms of Service. 4 2. 5 Contrary to Plaintiffs‘ mischaracterization of the relevant case law, discovery on jurisdictional Discovery Is Unnecessary and Inappropriate 6 issues is permitted ―only if such discovery is necessary and if it is possible that the plaintiff [could] 7 demonstrate the requisite jurisdictional facts if afforded that opportunity.‖ GreenPeace, Inc. v. State 8 of FranceI, 946 F. Supp. 773, 789 (C.D. Cal. 1996) (quoting St. Clair v. City of Chico, 880 F.2d 199, 9 201 (9th Cir.), cert. denied, 493 U.S. 993, 110 S. Ct. 541, 107 L.Ed.2d 539 (1989)) (emphasis added). 10 ―In addition, discovery is permitted only ‗where the facts are peculiarly within the knowledge of the 11 opposing party.‘‖ Id. (emphasis added). None of these circumstances are present here. Most fundamentally, Plaintiffs have not identified any source of discovery that would 12 13 establish the jurisdictional facts necessary to demonstrate their standing. Opp. at 11-12. Although 14 Plaintiffs‘ opposition speculates that Yelp employees could have created fictitious accounts and 15 provided false information about their identities to create reviews (Opp. at 9-11), they provide 16 nothing to suggest that this actually occurred, much less explain how discovery from Yelp could 17 possibly elucidate this point. Yelp already conducted an exhaustive review of the information and 18 data in its possession (including computer IP addresses) concerning the source of the contested 19 reviews. Any additional information concerning the identity of those who created these users‘ 20 accounts is in the hands of the users themselves, and not available through discovery of Yelp. Likewise, Plaintiffs fail to identify any facts ―peculiarly within [Yelp‘s] knowledge‖ that 21 22 would provide jurisdictional support. Indeed, Plaintiffs are in the best position to know whether they 23 created the fake positive reviews that form the basis of their claims – and their failure to deny these 24 facts leaves no doubt as to what occurred. Information about Yelp‘s former sales employees – who 25 never had any contact with the named Plaintiffs – cannot possibly shed light on these issues. 26 F. Plaintiffs Cannot Plead Legally Sufficient Class Allegations 27 Finally, Yelp demonstrated that Plaintiffs‘ proposed class allegations cannot survive the 28 pleading stage under Federal Rule of Civil Procedure 12(b)(6), 12(f), or 23 because it is readily 29 Gibson, Dunn & Crutcher LLP 30 31 13 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 apparent from the face of their pleading that the proposed class is not ascertainable or maintainable 2 given the fact-intensive claims here, and because Plaintiffs‘ own allegations are inconsistent with any 3 uniform company ―policy‖ of ―manipulation‖ capable of class-wide adjudication. MTD at 23-25. Plaintiffs‘ opposition brushes aside allegations describing the absence of any company policy, 4 5 which are inconsistent with the commonality requirement for class certification. MTD at 24. 6 Instead, Plaintiffs speculate that ―if‖ Yelp terminated employees for ―scamming‖ due to ―this 7 lawsuit,‖ Plaintiffs somehow could certify a class. Opp. at 24. Such conjecture cannot overcome 8 Plaintiffs‘ own allegations that Yelp took steps to punish and prevent employees from ―scamming 9 relating to advertising‖ (defeating their claim that Yelp had a uniform ―policy‖ of manipulation) and 10 merely confirms that Plaintiffs‘ claims are based wholly on unfounded speculation. MTD at 24. 11 Moreover, Plaintiffs‘ suggestion that it would be possible to ―simply‖ determine ―which 12 reviews Yelp manipulated in a manner that did not comply with the Review Terms‖ from unspecified 13 ―electronic data‖ defies credulity. Plaintiffs do not explain what ―electronic data‖ could possibly 14 establish whether particular reviews (or Yelp‘s screening or publication of specific reviews) complied 15 with Yelp‘s Review Terms. Opp. at 23-24. Making this determination would require ascertaining for 16 each of tens of millions of individual reviews: 1) who wrote the review, 2) the motives for writing 17 the review, 3) whether or not the reviewer was improperly affiliated with or received incentives from 18 the business owner, 4) whether or not the reviewer had patronized the business, 5) whether or not the 19 review contained threats, harassment, lewdness, hate speech, or other displays of bigotry; 6) whether 20 or not the review reflected the reviewer‘s personal experience; or any one of the many other criteria 21 in Yelp‘s Review Terms. See Beringer Decl., Exs. 4 and 5; Beringer Supp. Decl., Dkt. No. 64, Exs. 1 22 and 2. This inquiry alone would require years of litigation and underscores the reasons Plaintiffs‘ 23 class allegations should be dismissed now. See MTD at 23-25.8 Likewise, Plaintiffs have identified 24 no ―electronic records‖ that would reveal whether Yelp threatened unlawful injury to specific class 25 26 27 28 Plaintiffs‘ suggestion that such an inquiry would be ―simple‖ is particularly disingenuous in view of their copious efforts to litigate the particular circumstances leading to the removal of each of the 204 reviews Yelp filtered or removed concerning the named Plaintiffs, in connection with Yelp‘s Rule 12(b)(1) motion. Plaintiffs‘ evidentiary objections alone are more than 29 pages long, forecasting the impossible task the Court would face were it to face a similar inquiry into millions of reviews for hundreds of thousands of businesses that are addressed by Plaintiffs‘ claims. See Pls.‘ Evidentiary Objections, Dkt. 85-2. 8 29 Gibson, Dunn & Crutcher LLP 30 31 14 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC 1 members – as required to identify members of the proposed classes here. Plaintiffs also fail to make any credible showing that the individual Plaintiffs‘ claims satisfy 2 3 the typicality requirement. See MTD at 24-25. Plaintiffs instead point to a handful of superficial 4 ―facts‖ they assert are ―common‖ to all class members (such as the fact that Yelp ―was in contact 5 with Plaintiffs for advertising‖) (Opp. at 24-25) but these generic similarities do not overcome the 6 material inconsistencies and variations that pervade Plaintiffs‘ claims – and which would pervade the 7 claims of hundreds of thousands of individual businesses which received different individualized 8 communications and received distinct and different reviews by millions of reviewers – including on 9 matters that bear directly on liability and the proposed class definition. See MTD at 24-25. 10 The cases cited by Plaintiffs only confirm the deficiency of their class allegations. In 11 Westways World Travel, Inc. v. AMR Corp., 2005 WL 6523266 (C.D. Cal. Feb. 24, 2005), the court 12 decertified a class asserting extortion-based claims, due to individual fact issues that pervade 13 Plaintiffs‘ claims here. Affirming that class certification in an extortion case is ―only viable if it is 14 susceptible to class-wide proof,‖ the court rejected the plaintiffs‘ proposed class-wide extortion 15 claims, finding that proof of ―the subjective and objective fear‖ of individual class members could 16 ―vary significantly among the class‖ and would require a ―fact-intensive inquiry‖ that would likely 17 predominate over common issues. Id. at *8 (emphasis added). Precisely the same is true here.9 18 III. CONCLUSION For each of these reasons, the Third Amended Complaint should be dismissed in its entirety 19 20 with prejudice, and the class allegations should be dismissed and/or stricken. 21 DATED: September 30, 2011 GIBSON, DUNN & CRUTCHER LLP By: 22 /s/ Ashlie Beringer Ashlie Beringer 23 24 25 26 27 28 Likewise, Plaintiffs cite to inapt cases finding class certification appropriate where – unlike here – claims hinged on uniform contracts or representations made to the proposed class. See Opp. at 24-25 (citing Schlagal v. Learning Tree, Int’l, No. 98-6384, 1999 WL 672306 (C.D. Cal. Feb. 23, 1999) (class members relied on written misrepresentations); Ewert v. eBay, Inc., Nos. C-07-02198 RMW C-07-04487 RMW, 2010 WL 4269259 (N.D. Cal. Oct. 25, 2010) (claims based upon form contracts with eBay). In stark contrast, the extortion allegations here hinge on specific conversations, review histories, and mental states unique for each of hundreds of thousands of proposed class members—and that do not overlap even among the named Plaintiffs. And, as detailed in Yelp‘s moving brief, Plaintiffs‘ ―new‖ allegations are inconsistent with any suggestion of a uniform company policy of ―manipulation‖. MTD at 24. 9 29 Gibson, Dunn & Crutcher LLP 30 31 15 YELP‘S REPLY IN SUPPORT OF MOTION TO DISMISS AND TO STRIKE CV 10-01321 EMC; CV 10-02351 EMC

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.


Why Is My Information Online?