Huricks et al v. Shopkick, Inc.

Filing 47

ORDER DENYING DEFENDANT'S MOTION TO DISMISS; DENYING WITHOUT PREJUDICE DEFENDANT'S MOTION TO DISQUALIFY CLASS COUNSEL AND CLASS REPRESENTATIVES; VACATING HEARING. Signed by Judge Maxine M. Chesney on October 1, 2014. (mmclc1, COURT STAFF) (Filed on 10/1/2014)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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For the Northern District of California

United States District Court

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ZAK HURICKS, et al.,
Plaintiffs,

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No. C-14-2464 MMC

v.
SHOPKICK, INC.,
Defendant.

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ORDER DENYING DEFENDANT’S
MOTION TO DISMISS; DENYING
WITHOUT PREJUDICE DEFENDANT’S
MOTION TO DISQUALIFY CLASS
COUNSEL AND CLASS
REPRESENTATIVES; VACATING
HEARING

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Before the Court are two motions filed by defendant Shopkick, Inc. (“Shopkick”):

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(1) “Motion to Dismiss First Amended Complaint,” filed August 25, 2014; and (2) “Motion to

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Disqualify Class Counsel and Class Representatives,” filed August 25, 2014. Plaintiffs Zak

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Huricks and Trista Robinson have filed opposition to each motion; Shopkick has replied.

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Having read and considered the papers filed in support of and in opposition to the motions,

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the Court deems the matters suitable for determination on the parties’ respective written

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submissions, VACATES the hearing scheduled for October 3, 2014, and rules as follows.

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A. Motion to Dismiss

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Plaintiffs allege that “Shopkick and/or its authorized agents, vendors, and/or

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contractors” sent to their respective cellular telephones unconsented “[s]pam messages.”

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(See First Amended Complaint (“FAC”) ¶¶ 35, 40.) Specifically, plaintiffs allege they each

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received an identical text message, purportedly sent by a friend, which text message, in

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addition to containing a “link to Shopkick’s website,” read as follows: “Hey, just gave you

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50 bonus points on shopkick – a cool new app that rewards you for shopping. Check it out.”

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(See FAC ¶¶ 23, 35-36, 38.) According to plaintiffs, such text messages were sent to them

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in violation of 47 U.S.C. § 227, which provides that it is unlawful “to make any call (other

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than a call made for emergency purposes or made with the prior express consent of the

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called party) using any automatic telephone dialing system . . . to any telephone number

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assigned to a . . . cellular telephone service.” See 47 U.S.C. § 227(b)(1)(A)(iii); Satterfield

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v. Simon & Schuster, Inc., 569 F.3d 946, 952 (9th Cir. 2009) (holding “a text message is a

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‘call’ within the meaning of [§ 227]”).

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By order filed July 24, 2014, the Court dismissed the initial complaint, with leave to

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amend, for the reason that plaintiffs had failed to allege any facts to support a finding that

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the text messages they received were made using an automatic telephone dialing system

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(“ATDS”). Shopkick argues plaintiffs have failed to cure such deficiency in the FAC. As

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discussed below, the Court disagrees.

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An ATDS is defined in § 227 as “equipment which has the capacity - - (A) to store or

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produce telephone numbers to be called, using a random or sequential number generator;

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and (B) to dial such numbers.” See 47 U.S.C. § 227(a)(1). As district courts have

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observed, given the “difficulty a plaintiff faces in knowing the type of calling system used

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without the benefit of discovery, . . . courts can rely on details about the call to infer the use

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of an ATDS.” See Hickey v. Voxernet LLC, 887 F. Supp. 2d 1125, 1129-30 (W.D. Wash.

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2012) (internal quotation and citation omitted).

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Here, although the FAC does not contain detailed facts regarding the telephone

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system allegedly used to send the above-referenced identical text messages, plaintiffs

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have alleged sufficient facts from which it can be inferred that said text messages were

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sent using an ATDS. In particular, plaintiffs allege that a “user” downloads Shopkick’s

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“shopping application” (hereinafter “the App”) (see FAC ¶¶ 18-19), that the App “uploads

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and stores” the user’s cell phone contacts (see FAC ¶ 21), that Shopkick “commandeers

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the functionalities of the user’s cell phone to cause it to formulate an automated . . . [s]pam
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[message] and transmit it to those uploaded and stored contact cell phone numbers (see

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FAC ¶ 30; see also FAC ¶ 26), and that the system by which Shopkick accomplishes such

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result has the capacity to “randomly generate cell phone numbers to send Shopkick . . .

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[s]pam messages” and to “generate[ ] cell phone numbers to send . . . [s]pam using a

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program that constructs new cell phone numbers in sequence from previously generated

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cell phone numbers” (see FAC ¶ 32). See, e.g., Pimental v. Google, Inc., 2012 WL

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691784, at *2 (N.D. Cal. March 2, 2012) (denying motion to dismiss claim brought under

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§ 227(b)(1)(A)(iii); finding allegation that text messages were sent “en masse, using one

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common cellular telephone number provided by [d]efendants,” together with allegation that

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defendants “harvested phone numbers,” was sufficient at pleading stage to “plausibly

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suggest[ ] the use of an ATDS”).

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Accordingly, the motion to dismiss will be denied.
B. Motion to Disqualify
Plaintiffs seek to proceed on behalf of class of persons who were sent Shopkick’s

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“[s]pam.” (See FAC ¶ 41.) Shopkick, pursuant to Rule 23(a)(4) of the Federal Rules of

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Civil Procedure, seeks an order disqualifying plaintiffs from acting as class representatives

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and disqualifying plaintiffs’ counsel from acting as counsel for the putative class.

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In its motion, Shopkick asserts that plaintiffs are personal friends of Arlyne Sorrells,

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a paralegal employed by putative class counsel and through whom the subject text

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messages were sent, and, consequently, that an actual or potential conflict of interest

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between the putative class and the named plaintiffs exists due to such relationships.

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Shopkick also argues that the initial complaint and the FAC both contain “false” information

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concerning the circumstances under which the text messages were sent to plaintiffs (see

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Def.’s Mot. to Disqualify at 10:4-7, 17:21), and that the lawsuit was “manufactured” by

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putative class counsel, who is assertedly the “driving force behind this lawsuit” (see id. at

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15:7-8, 26). In sum, Shopkick contends disqualification is appropriate because “there are

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simply too many unanswered questions about [p]laintiffs’ connections to [Arlyne] Sorrells

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and [putative class counsel], [p]laintiffs’ personal motives, their involvement in the genesis
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of this lawsuit, and their credibility and candor.” (See id. at 24:13-15.)

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Plaintiffs, in addition to disagreeing with Shopkick’s characterizations of the

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relationships between the parties and the circumstances under which they filed the instant

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action, argue that the issue of whether they and their chosen counsel can adequately

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represent the putative class is premature at the pleading stage. As discussed below, the

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Court agrees.

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Rule 23 provides that “representative parties” may only bring suit on behalf of a

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class if, inter alia, they “will fairly and adequately protect the interests of the class.” See

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Fed. R. Civ. P. 23(a)(4). At present, plaintiffs are proceeding with their individual claims

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only, and have not sought class certification. The issues Shopkick addresses in its motion

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have no bearing on plaintiffs’ individual claims, and, indeed, where courts have considered

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the type of issue raised by Shopkick, such courts have considered it in the context of a

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motion for class certification. See, e.g., Susman v. Lincoln American Corp., 561 F.2d 86,

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95 (7th Cir. 1977) (affirming order denying motion for class certification; finding lead

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plaintiffs, respectively, brother and tenant of putative class counsel, were not adequate

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class representatives given “likelihood of conflict” arising from close relationships between

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lead plaintiffs and counsel); Bodner v. Oreck Direct, LLC, 2007 WL 1223777, at *2 (N.D.

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Cal. April 25, 2007) (denying motion for class certification; finding lead plaintiff failed to

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meet “threshold typicality or adequacy requirements of Rule 23(a),” where it was “clear

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from the record that plaintiff’s counsel, and not plaintiff, [was] the driving force behind [the]

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action”).

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Although Shopkick has cited several district court opinions in which an asserted

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failure to satisfy Rule 23(a)(4) was raised other than in response to a motion to certify, the

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cases on which Shopkick relies do not address such issue at the pleading stage. Rather, in

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those cases, the defendant sought relief in response to the lead plaintiff’s having taken, or

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failed to take, certain action on behalf of the class during the course of the litigation. See

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Calvert v. Red Robin Int’l, 2012 WL 1668980, at *2-4 (N.D. Cal. May 11, 2012) (granting

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motion to disqualify plaintiff as class representative where motion was based on lead
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plaintiff’s testimony at evidentiary hearing on plaintiff’s motion to compel classwide

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discovery; finding plaintiff’s testimony established his “dishonesty”); In re Terayon

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Communications Systems, Inc., 2004 WL 413277, at *7-8 (N.D. Cal. February 23, 2004)

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(granting, in securities fraud case, motion to disqualify two lead plaintiffs who had engaged

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in “short selling,” where motion was filed in response to motion for class certification filed by

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three other lead plaintiffs); Lyon v. Arizona, 80 F.R.D. 665, 667-69 (D. Ariz. 1978) (granting

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motion to dismiss class allegations where lead plaintiff had taken no steps to seek class

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certification during three years in which action was pending). Indeed, one such district

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court observed: “Normally, these issues would have been raised at the time the lead

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plaintiffs moved to be appointed as class representatives.” See Terayon, 2004 WL 413277,

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at *7 (explaining “[p]laintiffs’ counsel [had] circumvented this inquiry” by the manner in

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which they had framed their motion for appointment as class representatives).

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Here, as noted, the case remains at the pleading stage, and nothing in the limited

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record presently before the Court indicates that any issue pertaining to the adequacy of the

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two named plaintiffs, or their chosen counsel of record, should be addressed other than in

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the ordinary manner, i.e., at the time plaintiffs move to certify a class and to be appointed

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as class representatives.

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Accordingly, the motion to disqualify will be denied, without prejudice.
CONCLUSION

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For the reasons stated above, Shopkick’s motion to dismiss and motion to disqualify
are hereby DENIED.
IT IS SO ORDERED.

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Dated: October 1, 2014
MAXINE M. CHESNEY
United States District Judge

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