Blanchard et al v. Fluent, Inc. et al

Filing 86

ORDER GRANTING PLAINTIFFS' MOTION TO REMAND; DENYING PLANITIFFS' REQUEST FOR COSTS. Signed by Judge Maxine M. Chesney on September 13, 2018. (mmclc1, COURT STAFF) (Filed on 9/13/2018)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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MIRA BLANCHARD, et al.,
Plaintiffs,

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v.

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FLUENT LLC, et al.,

ORDER GRANTING PLAINTIFFS'
MOTION TO REMAND; DENYING
PLANITIFFS' REQUEST FOR COSTS
Re: Dkt. No. 77

Defendants.

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United States District Court
Northern District of California

Case No. 17-cv-04497-MMC

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Before the Court is plaintiffs' "Motion to Remand and Request for Costs," filed July

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25, 2018.1 Defendant Fluent, LLC ("Fluent") has filed opposition, to which plaintiffs have

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replied. Having read and considered the papers filed in support of and in opposition to

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the motion, the Court hereby rules as follows.2

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On August 7, 2017, Fluent removed from state court plaintiffs' First Amended

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Complaint ("FAC"). The action now proceeds on the Third Amended Complaint ("TAC"),

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in which plaintiffs, as they did in the FAC, allege a single cause of action, specifically, a

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claim under § 17529.5 of the California Business and Professions Code. Section

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17529.5 prohibits advertising in a commercial email that "contains or is accompanied by a

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third-party's domain name without the permission of the third party," see Cal. Bus. & Prof.

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Code § 17529.5(a)(1), "contains or is accompanied by falsified, misrepresented, or forged

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The motion also includes a request to "extend/vacate plaintiffs' deadlines" to
respond to defendants’ answer and pending motion for partial summary judgment. (See
Mot. 9:7 - 10:11.) To such extent, the motion is moot, the Court having ruled on said
request by order filed July 30, 2018.
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By order filed August 27, 2018, the Court took the matter under submission.

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header information," see Cal. Bus. & Prof. Code § 17529.5(a)(2), or "has a subject line

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that a person knows would be likely to mislead a recipient, acting reasonably under the

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circumstances, about a material fact regarding the contents or subject matter of the

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message," see Cal. Bus. & Prof. Code § 17529.5(a)(3). Here, plaintiffs allege, they

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received commercial emails advertising Fluent's “products and services” (see TAC ¶¶ 1,

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45), which emails "had materially falsified and/or misrepresented information contained in

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or accompanying the email headers, contained [s]ubject [l]ines that were misleading in

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relation to the bodies of the emails, and/or contained third parties' domain names without

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permission" (see TAC ¶ 109).

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Plaintiffs argue the entirety of the above-titled action should be remanded, for the

United States District Court
Northern District of California

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reason that defendants cannot show plaintiffs have standing under Article III of the United

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States Constitution. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)

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(holding "party invoking federal jurisdiction bears the burden of establishing [the]

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elements [of standing]"); Polo v. Innovations Int'l, LLC, 833 F.3d 1193, 1196 (9th Cir.

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2016) (citing "rule" that "a removed case in which the plaintiff lacks Article III standing

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must be remanded to state court”).

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Article III standing consists of “three elements,” the first of which is “an injury in

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fact.” See Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). Where a plaintiff lacks

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an "injury in fact" caused by the assertedly wrongful conduct of the defendant, the plaintiff

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lacks standing under Article III and, consequently, the district court lacks subject matter

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jurisdiction over the claim. See id. To establish an "injury in fact," the plaintiff must show

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he "suffered an invasion of a legally protected interest that is concrete and particularized

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and actual or imminent, not conjectural or hypothetical." See id. at 1548 (internal

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quotations and citation omitted). A plaintiff "does not automatically satisfy the injury-in-

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fact requirement whenever a statute grants a person a statutory right and purports to

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authorize that person to sue to vindicate that right"; the requirement is satisfied only

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where the alleged statutory violation "caused [the plaintiff] to suffer some harm that

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actually exists in the world." See Robins v. Spokeo, Inc., 867 F.3d 1108, 1112 (9th Cir.
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2017) (internal quotation, citation and alteration omitted).
In the instant case, plaintiffs do not allege in the TAC, nor did they allege in prior

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versions of the complaint, any facts to support a finding that they have been injured by

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reason of their receipt of the subject emails. Nevertheless, Fluent argues, for purposes

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of Article III, an allegation that a plaintiff received an email sent in violation of

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§ 17529.5(a) suffices. In support of such argument, Fluent relies on Van Patten v.

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Vertical Fitness Group, LLC, 847 F.3d 1037 (9th Cir. 2017).

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In Van Patten, the Ninth Circuit considered the showing needed to establish
standing to bring a claim under a different statute, the Telephone Consumer Protection
Act ("TCPA"), which prohibits "making nonemergency, unsolicited calls advertising

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United States District Court
Northern District of California

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property, goods, or services using automatic dialing systems and prerecorded messages

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to telephones," see id. at 1041 (internal quotation and citation omitted), and determined a

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violation of that statute constitutes “a concrete, de facto injury” for purposes of Article III

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standing, see id. at 1043. In arriving at such decision, the Ninth Circuit, first noting that

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Congress, in enacting the TCPA, had made specific findings that "unrestricted

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telemarketing can be an intrusive invasion of privacy and [is] a nuisance," see id. (internal

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quotation and citation omitted), and further noting that “[u]nsolicited telemarketing phone

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calls or text messages, by their nature, invade the privacy and disturb the solitude of their

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recipients," concluded that a plaintiff alleging a violation of the TCPA need not, for

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purposes of Article III, assert any harm other than the receipt of an unsolicited telephone

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call or text message, see id.

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Irrespective of whether the sending of unsolicited commercial emails likewise can

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be deemed an invasion of privacy or a nuisance, however, § 17529.5(a), by contrast,

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does not prohibit such activity. Consequently, the reasoning set forth in Van Patten is

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inapplicable to § 17529.5(a), which only prohibits false or misleading advertising. In other

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words, its purpose is to protect against harm caused by the content of commercial

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speech, not the willingness with which it is received.

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Where, as here, a plaintiff brings a claim under a statute prohibiting the making of
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false or misleading commercial speech, courts have found the plaintiff, to have standing,

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must allege an injury caused by such speech. See, e.g., Reid v. Johnson & Johnson,

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780 F.3d 952, 958 (9th Cir. 2015) (holding, to establish Article III standing under

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California statutes prohibiting "false advertising," plaintiff "must meet an economic injury-

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in-fact requirement," such as by showing product was purchased in reliance on

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challenged advertisement); TrafficSchool.com, Inc. v. Edriver, Inc., 653 F.3d 820, 825

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(9th Cir. 2011) (holding, for plaintiff/competitor to have standing to bring claim for "false

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advertising" under Lanham Act, plaintiff must show defendant’s advertising has or could

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"harm plaintiff’s business"); Beyond Systems, Inc. v. Kraft Foods, Inc., 972 F. Supp. 2d
748, 752, 766 (D. Md. 2013) (rejecting argument that standing to bring claim under

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United States District Court
Northern District of California

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§ 17529.5, as well as under analogous Maryland state statute, can be established by

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showing "mere receipt of the offending e-mails").

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As noted, plaintiffs do not allege any facts to support a finding that they have

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incurred an injury from their receipt of the challenged emails. Nor has Fluent otherwise

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shown such an injury was incurred. Consequently, Fluent has failed to show plaintiffs

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have standing under Article III. See FW/PBS, Inc. v. City of Dallas, 493 U.S. 215,

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231(1990) (holding standing must "affirmatively appear in the record") (internal quotation

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and citation omitted).

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Accordingly, to the extent plaintiffs seek an order remanding the above-titled

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action to state court, the motion will be granted. See Polo, 833 F.3d at 1197 (holding

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district court lacks subject matter jurisdiction over removed complaint that "lack[s] a

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named plaintiff with Article III standing"); see also 28 U.S.C. § 1447(c) (providing "[i]f at

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any time before final judgment it appears that the district court lacks subject matter

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jurisdiction, the case shall be remanded").

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Lastly, plaintiffs' request for an award of costs, in the form of attorney's fees, will

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be denied. Although courts "may require payment of just costs and any actual expenses,

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including attorney fees, incurred as a result of the removal," see 28 U.S.C. § 1447(c),

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such an award, "[a]bsent unusual circumstances,” ordinarily is appropriate “only where
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the removing party lacked an objectively reasonable basis for seeking removal," see

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Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). Here, as the issues

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presented by the instant motion have not been directly addressed in binding authority, the

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Court declines to find Fluent lacked an objectively reasonable basis for seeking removal

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and opposing the instant motion to remand.
CONCLUSION

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For the reasons stated:

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1. Plaintiffs' motion to remand is hereby GRANTED, and the above-titled action is

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hereby REMANDED to the Superior Court of California, in and for the County of San
Francisco.

United States District Court
Northern District of California

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2. Plaintiffs' request for an award of costs is hereby DENIED.

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IT IS SO ORDERED.

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Dated: September 13, 2018
MAXINE M. CHESNEY
United States District Judge

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