Facebook, Inc. v. Power Ventures, Inc.

Filing 19

Corrected 18 Memorandum of Points and Authorities in Support of 17 Motion to Dismiss or, in the Alternative, For a More Definite Statement filed byPower Ventures, Inc.(a Cayman Island Corporation), Steven Vachani. (Related document(s) 18 ) (Plutzik, Alan) (Filed on 3/24/2009) Modified on 3/26/2009 (gm, COURT STAFF).

Facebook, Inc. v. Power Ventures, Inc.

Doc. 19

1 BRAMSON, PLUTZIK, MAHLER & BIRKHAEUSER, LLP Alan R. Plutzik (State Bar No. 077785) 2 Michael S. Strimling (State Bar No. 96135) L. Timothy Fisher (State Bar No. 191626) 3 2125 Oak Grove Road, Suite 120 Walnut Creek, CA 94598 4 Telephone: [phone] Facsimile: [phone] 5 Attorneys for Defendants Power 6 Ventures, Inc. and Steve Vachani 7 8 9 10 11 12 FACEBOOK, INC., 13 14 15 16 -against[CORRECTED] MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS OR, IN THE ALTERNATIVE, FOR A MORE DEFINITE STATEMENT Judge: Honorable Jeremy Fogel Date: May 8, 2009 Time: 9:00 a.m. Courtroom: 3 Plaintiff, Case No. 5:08-cv-05780 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

POWER VENTURES, INC. d/b/a POWER.COM, a California corporation; POWER VENTURES, INC. a 17 Cayman Island Corporation, STEVE VACHANI, an individual; DOE 1, d/b/a POWER.COM, an individual 18 and/or business entity of unknown nature; DOES 2 through 25, inclusive, individuals and/or business 19 entities of unknown nature, 20 21 22 23 24 25 26 27 28 Defendants.

CORRECTED MPA IN SUPPORT OF MOTION TO DISMISS OR, IN THE ALTERNATIVE, FOR A MORE DEFINITE STATEMENT 57811

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Defendants Power Ventures, Inc. and Steve Vachani respectfully submit this

2 Memorandum of Points and Authorities in support of their motion to dismiss this action for 3 failure to state a claim under Fed. R. Civ. P. 8, 9(b), and 12(b)(6) or, in the alternative, for a more 4 definite statement under Fed. R. Civ. P. 12(e). 5 I. 6 COUNTS I THROUGH III FAIL TO PLEAD FRAUD WITH PARTICULARITY The first three counts of the First Amended Complaint (hereafter, "Complaint") all sound

7 in fraud. Count I asserts a violation of the CAN-SPAM Act predicated on the transmission of 8 "materially false or misleading" messages. Complaint ¶ 92. Count II asserts a violation of the 9 Computer Fraud And Abuse Act predicated on alleged unauthorized access to certain computers 10 "with an intent to defraud." Id. ¶ 107. Count III asserts a violation of the California 11 Comprehensive Computer Data Access And Fraud Act, California Penal Code § 502, predicated 12 on allegations of "oppression, fraud and malice." Id. ¶ 120. Each of these counts sounds in 13 fraud, and each is subject to the heightened pleading requirements of Fed. R. Civ. P. 9(b). See, 14 e.g., Rubke v. Capitol Bancorp Ltd., 551 F.3d 1156, 1161 (9th Cir. 2009) (holding that Rule 9(b) 15 applies where a complaint "sounds in fraud," based on "a close examination of the language and 16 structure of the complaint, whether the complaint alleges a unified course of fraudulent conduct 17 and relies entirely on that course of conduct as the basis of a claim") (internal quotation marks 18 omitted); eBay Inc. v. Digital Point Solutions, Inc., 2009 WL 481269, at *7 (N.D. Cal. Feb. 24, 19 2009) (holding that Rule 9(b) applies to state law claims for violation of California Penal Code 20 § 502). 21 When a plaintiff asserts a claim for fraud, the complaint must do more than merely

22 provide notice. See In re Glenfed, Inc. Securities Litigation, 42 F.3d 1541, 1547 (1994). Federal 23 Rule of Civil Procedure 9(b) states that "in all averments of fraud or mistake, the circumstances 24 constituting fraud or mistake shall be stated with particularity." Fed. R. Civ. P. 9(b). As applied 25 by the Ninth Circuit, a pleading is sufficient under Rule 9(b) if the plaintiff provides "statements 26 of the time, place and nature of the alleged fraudulent activities ... [M]ere conclusory allegations 27 of fraud are insufficient." Moore v. Kayport Package Express, Inc., 885 F.2d 531, 540 (9th 28
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1 Cir.1989) (citing Wool v. Tandem Computers, Inc., 818 F.2d 1433, 1439 (9th Cir.1987)). "To 2 allege fraud with particularity, a plaintiff must set forth more than the neutral facts necessary to 3 identify the transaction. The plaintiff must set forth what is false or misleading about a 4 statement, and why it is false." Id. at 1548. "Averments of fraud must be accompanied by `the 5 who, what, when, where, and how' of the misconduct charged." Vees v. Ciba-Geigy Corp. USA, 6 317 F.3d 1097, 1106 (9th Cir.2003) (citing Cooper v. Pickett, 137 F .3d 66, 627 (9th Cir.1997)). 7 Here, the Complaint provides none of these details. It generally avers that "Defendants"

8 accessed certain computers without permission. It does not state the time, place or nature of such 9 allegedly unauthorized access. Nor does the Complaint identify with particularity which of the 10 generically referenced "Defendants" engaged in such access, nor how such access is alleged to 11 be "unauthorized." Notably, the computer that is alleged to have been accessed without 12 authorization appears to be a public website that may be accessed by anyone through the internet, 13 and thus is not a protected computer under the cited statutes. However, the lack of detail in the 14 Complaint makes it difficult to determine exactly what is being alleged in this regard, and to 15 formulate a response. Finally, the details of the alleged fraud are not stated. The time and place 16 of the fraudulent statements are not stated. Nor is the sender of the alleged fraudulent statement 17 identified. Nor is the receiver. Nor is there any allegation as to who, if anyone, was allegedly 18 misled. These counts are thus deficient under Rules 9(b) and 12(b)(6). 19 II. 20 COUNTS IV THROUGH VII FAIL TO STATE A CLAIM FOR INFRINGEMENT Counts IV through VII all sound in infringement and related theories. Count IV alleges

21 copyright infringement based on the allegation that "Defendants have copied and/or created 22 derivative works from Facebook's website and/or portions thereof." Complaint ¶ 125. The 23 Complaint includes only boilerplate allegations of infringement that provide no notice 24 whatsoever as to what is being alleged. For example, the Complaint does not identify either the 25 copyrighted work or the allegedly infringing work. It refers generically to "Facebook's 26 website," but does not identify any portion of the website, any graphics or text, or any computer 27 28
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1 program that is alleged to have been copied "and/or" the source for a derivative work. Id. The 2 complaint also refers generically to "copies and/or derivative works created by Defendants," id. 3 ¶ 127, but it does not identify the "copies and/or derivative works" in any intelligible way. At a 4 minimum, an allegation of infringement must identify the allegedly protected and infringing 5 works. This Complaint does neither. It is utterly impossible to respond to an allegation so 6 devoid of content. Count IV thus fails to meet even Rule 8's standard of notice pleading. 7 Count V asserts violation of the Digital Millennium Copyright Act (DMCA). Here the

8 complaint merely parrots the language of the statute, alleging that "Defendants manufacture, 9 import, provide, offer to the public, or otherwise traffic[] in technology, products, services, 10 devices, components, or parts thereof, that are primarily designed or produced for the purpose of 11 circumventing technological measures and/or protection afforded by technological measures that 12 effectively control access to Facebook's copyrighted website and/or portions thereof." 13 Complaint ¶ 138. Again, this allegation provides no notice whatsoever as to what the defendants 14 are alleged to have done. What "technology" is plaintiff complaining about? Or is it a product? 15 Or a service? A device? Or a component or part thereof? How did this 16 technology/product/service/device/component violate Facebook's copyright? Copyright to 17 what? The answers to these questions cannot be discerned from the allegations in the Complaint. 18 Defendants are thus unable to respond, as this Count V fails to put them on notice of the nature 19 of the allegation against them. 20 Count VI asserts unspecified violations of plaintiff's trademarks in the "FACEBOOK,"

21 mark. Complaint ¶¶ 146-149. This Count at least identifies that allegedly protected trademark ­ 22 and in that respect it provides at least one crucial fact that is missing from the previous 23 allegations of infringement. But that alone is not enough. The Complaint does not state when, 24 where or how the defendants have used this mark. Nor does the Complaint identify the 25 "products and services" that were supposedly misbranded with the infringing marks. Count VI 26 thus fails to provide adequate notice, or even the slightest hint, as to what is being alleged. 27 28
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1 III. 2

COUNT VIII FAILS TO STATE A CLAIM Count VIII is the broadest, vaguest, and most indecipherable in the Complaint. It

3 generically alleges "unlawful, unfair, and/or fraudulent business acts or practices as defined by 4 Cal. Bus. & Prof. Code § 17200 et seq." Complaint ¶ 158. Section 17200 "is a notoriously 5 broad statute." Flamingo Industries (USA) Ltd. v. United States Postal Service, 302 F.3d 985, 6 996 (9th Cir. 2002). Section 17200 has five "prongs," which prohibit "five different types of 7 wrongful conduct, each of which has become a term of art." William L. Stern, Bus. & Prof. C. 8 17200 Practice at 3-2 (The Rutter Group 2006). The five prongs include (i) unlawful business 9 practices, (ii) unfair business practices, (iii) fraudulent business practices, (iv) unfair, deceptive, 10 untrue or misleading advertising, and (v) any act prohibited by Bus. & Prof. Code §§ 1750011 17577.5. See William L. Stern, Bus. & Prof. C. 17200 Practice at 3-2 (The Rutter Group 2006). 12 The Complaint does not identify the conduct that is alleged to violate § 17200. Nor does it 13 identify which prong of the statute is alleged to have been violated. This is the barest and most 14 conclusory pleading possible, under the most "notoriously broad statute" on the books. The 15 Complaint provides no notice of the nature of this claim, making it impossible for the defendants 16 to provide a substantive response. 17 III. 18 19 20 21 22 23 24 25 26 27 28 IN THE ALTERNATIVE, PLAINTIFF SHOULD BE ORDERED TO PROVIDE A MORE DEFINITE STATEMENT UNDER FED. R. CIV. P. 12(e) In the event that the Court determines that any of the allegations are sufficient to state a claim under Fed. R. Civ. P. 8, 9(b), and 12(b)(6), the Court should order plaintiff to provide a more definite statement of the claims to enable defendants to frame a responsive pleading. Even when a complaint survives a motion to dismiss, a more definite statement under Fed. R. Civ. P. 12(e) may be appropriate. See Esoft, Inc. v. Astaro Corp., 2006 WL 2164454, at *1 (D. Colo. July 31, 2006); Agilent Technologies, Inc. v. Micromuse, Inc., 2004 WL 2346152 at *4 (S.D.N.Y. Oct. 19, 2004); Humpherys v. Nager, 962 F. Supp. 347, 352-53 (E.D.N.Y.1997). Rule 12(e) demands a more definite statement of the plaintiff's claims when the complaint "is so vague or ambiguous that a party cannot reasonably be required to frame a responsive pleading."
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1 Fed. R. Civ. P. (e); see also 5 C. Wright & A. Miller, Federal Practice and Procedure § 1376, at 2 311 (3d. ed. 2004) (Rule 12(e) applies when the pleading is "so vague or ambiguous that the 3 opposing party cannot respond to it, even with a simple denial as permitted by Rule 8(b), with a 4 pleading that can be interposed in good faith or without prejudice to himself"). 5 A more definite statement is certainly called for here. In the preceding sections, we

6 identify many basic facts that cannot be discerned from the Complaint. For example, as we point 7 out in Part I, above, the allegations of fraud do not state the time and place of the fraudulent 8 statements, nor the maker or recipient of them, nor why they were fraudulent. The allegation of 9 "unauthorized access" is similarly inscrutable ­ who is alleged to have accessed, and what is it 10 that they accessed? With respect to the allegations of infringement discussed in Part II, above, 11 the alleged infringed and infringing works should be identified ­ at a minimum. And the 12 allegation of the DMCA violation should be clarified as well. Finally, with respect to the claim 13 under Bus. & Prof. Code § 17200, a more definite statement should identify which of the five 14 prongs of that statute are at issue, and the conduct that is alleged to have violated that prong 15 should be identified. 16 IV. CONCLUSION 17 For the foregoing reasons, the Complaint should be dismissed for failure to state a claim.

18 In the alternative, plaintiff should be ordered to provide a more definite statement under Fed. R. 19 Civ. P. 12(e). 20 21 22 23 24 25 26 27 28
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1 2 Dated: March 24, 2009 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Respectfully submitted, BRAMSON, PLUTZIK, MAHLER & BIRKHAEUSER, LLP By /s/ Alan R. Plutzik __

Alan R. Plutzik (State Bar No. 77785) Michael S. Strimling (State Bar No. 96135) L. Timothy Fisher (State Bar No. 191626) 2125 Oak Grove Road, Suite 120 Walnut Creek, CA 94598 Telephone: [phone] Facsimile: [phone] LAW OFFICES OF SCOTT A. BURSOR Scott A. Bursor 369 Lexington Avenue, 10th Floor New York, NY 10017-6531 Telephone: [phone] Facsimile: [phone] Attorneys for Defendants Power Ventures, Inc. and Steve Vachani

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