"In Re: Facebook Privacy Litigation"

Filing 96

MOTION to Dismiss FACEBOOK, INC.S MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT filed by Facebook, Inc.. Motion Hearing set for 10/17/2011 09:00 AM in Courtroom 15, 18th Floor, San Francisco before Hon. James Ware. Responses due by 7/29/2011. Replies due by 8/5/2011. (Attachments: # 1 Proposed Order)(Brown, Matthew) (Filed on 7/15/2011)

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1 2 3 4 5 6 7 COOLEY LLP MICHAEL G. RHODES (116127) (rhodesmg@cooley.com) MATTHEW D. BROWN (196972) (brownmd@cooley.com) BENJAMIN H. KLEINE (257225) (bkleine@cooley.com) KELLY A. COOKE (258003) (kcooke@cooley.com) MEGAN L. DONOHUE (266147) (mdonohue@cooley.com) 101 California Street, 5th Floor San Francisco, CA 94111-5800 Telephone: (415) 693-2000 Facsimile: (415) 693-2222 Attorneys for Defendant FACEBOOK, INC. 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN FRANCISCO DIVISION 11 12 13 14 15 IN RE: FACEBOOK PRIVACY LITIGATION Case No. 10-CV-02389-JW FACEBOOK, INC.’S MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT F.R.C.P. 12(b)(6) 16 17 18 19 Date: Time: Courtroom: Judge: Trial Date: October 17, 2011 9:00 a.m. 15 (18th Floor) Hon. James Ware Not Yet Set 20 21 22 23 24 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 Table of Contents 2 3 4 5 Page I. II. III. IV. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 V. INTRODUCTION .............................................................................................................. 2 STATEMENT OF FACTS ................................................................................................. 3 APPLICABLE STANDARDS ........................................................................................... 6 ARGUMENT ...................................................................................................................... 7 A. Plaintiffs Fail to State a Claim for Violation of the Wiretap Act or Stored Communications Act (Counts I and II)................................................................... 7 1. Facebook cannot be held liable under the Wiretap Act or the SCA because the addressee or intended recipient of all communications alleged in the FAC was either Facebook or a third-party advertiser........... 9 2. The disclosures alleged in the FAC did not involve the “contents of a communication” under the Wiretap Act or the SCA.............................. 14 3. The FAC does not allege facts plausibly suggesting Facebook divulged a communication “while in transmission” under the Wiretap Act. .............................................................................................. 17 4. To the extent Plaintiffs’ SCA claim is based on hypothetical allegations of advertisers viewing Users’ profile pages, it should be dismissed. .................................................................................................. 18 B. Plaintiffs Do Not Allege Facebook Introduced a Computer Contaminant, As Required Under California Penal Code § 502(c)(8) (Count IV) ..................... 20 C. Plaintiffs’ Breach of Contract Claim Must Be Dismissed for Failure to Allege that Plaintiffs Have Suffered, or are Likely to Suffer, Any Actual Damages As a Result of a Breach (Count VI) ...................................................... 22 D. Plaintiffs Fail to State a Claim Under California Civil Code §§ 1572 and 1573 (Count VII)................................................................................................... 23 E. Plaintiffs’ Claims Should Be Dismissed with Prejudice....................................... 25 CONCLUSION ................................................................................................................. 25 20 21 22 23 24 25 26 27 28 i. Motion to Dismiss First Amended Consolidated Class Action Complaint Case No. 10-cv-02389-JW 1 TABLE OF AUTHORITIES 2 Page(s) 3 CASES 4 Allen v. City of Beverly Hills, 911 F.2d 367 (9th Cir. 1990)................................................................................................... 25 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) ........................................................................................................ 6, 21 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ............................................................................................................ 6, 23 Chem. Device Corp. v. Am. Cyanamid Co., NO. C-89-1739 WHO, 1990 WL 56164 (N.D. Cal. Jan. 11, 1990) ................................... 13, 14 Crispin v. Christian Audigier, Inc., 717 F. Supp. 2d. 965 (C.D. Cal. 2010).................................................................................... 16 Dyer v. Nw. Airlines Corps., 334 F. Supp. 2d 1196 (D.N.D. 2004) ...................................................................................... 23 Engalla v. Permanente Med. Grp., 15 Cal. 4th 951 (1997) ............................................................................................................ 25 Epstein v. Wash. Energy Co., 83 F.3d 1136 (9th Cir. 1996)................................................................................................... 21 First Commercial Mortg. Co. v. Reece, 89 Cal. App. 4th 731 (2001).................................................................................................... 22 Freedman v. Am. Online, Inc., 325 F. Supp. 2d 638 (E.D. Va. 2004)...................................................................................... 16 Freedman v. Am. Online, Inc., 412 F. Supp. 2d 174 (D. Conn. 2005 ...................................................................................... 17 Gaos v. Google, No. 10-CV-04809-JW (N.D. Cal. Apr. 7, 2011)..................................................................... 24 Gautier v. Gen. Tel. Co., 234 Cal. App. 2d 302 (1965)................................................................................................... 22 Heller v. Roberts., 386 F.2d 832 (2d Cir. 1976).................................................................................................... 14 In re Am. Airlines, Inc., Privacy Litig., 370 F. Supp. 2d 552 (N.D. Tex. 2005).............................................................................. 11, 12 ii. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 2 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 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541 (9th Cir. 1994) (en banc)................................................................................... 23 In re Google Inc. Street View Elec. Commc’ns Litig., No. CV 10-MD-02184-JW (N.D. Cal. June 29, 2011) ........................................................... 19 In re JetBlue Airways Corp. Privacy Litig., 379 F. Supp. 2d 299 (E.D.N.Y. 2005) .................................................................................... 23 In re Silicon Graphics, Inc. Sec. Litig., 970 F. Supp. 746 (N.D. Cal. 1997) ................................................................................... 23, 24 In re Zynga Privacy Litig., NO. 10-CV-04680 JW (N.D. Cal. June 15, 2011) ........................................................ 10, 11, 22 Jessup-Morgan v. Am. Online, Inc., 20 F. Supp. 2d 1105 (E.D. Mich. 1998)............................................................................ 15, 16 Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009)................................................................................................. 23 Konop v. Hawaiian Airlines, Inc., 302 F.3d 868 (9th Cir. 2002)............................................................................................... 8, 17 Moore v. Kayport Package Express, Inc., 885 F.2d 531 (9th Cir. 1989)................................................................................................... 24 Navarro v. Block, 250 F.3d 729 (9th Cir. 2001)..................................................................................................... 6 Parrino v. FHP, Inc., 146 F.3d 699 (9th Cir. 1998)..................................................................................................... 6 Perlman v. Zell, 938 F. Supp. 1327 (N.D. Ill. 1996).......................................................................................... 14 Ruiz v. Gap, Inc., 622 F. Supp. 2d 908 (N.D. Cal. 2009) .............................................................................. 22, 23 Ruiz v. Gap, Inc., 540 F. Supp. 2d 1128 (N.D. Cal. 2008) .................................................................................. 25 Quon v. Arch Wireless Operating Co., 529 F.3d 892 (9th Cir. 2008), rev’d on other grounds, 130 S. Ct. 2619 (2010) ..................... 16 Sams v. Yahoo!, Inc., No. cv-10-5897-JF (HRL), 2011 WL 1884633 (N.D. Cal. May 18, 2011) ...................... 15, 16 Small v. Fritz Co., 30 Cal. 4th 167 (2003) ............................................................................................................ 25 iii. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Snow v. DirecTV, Inc., 450 F.3d 1314 (11th Cir. 2006)............................................................................................... 20 Steckman v. Hart Brewing, Inc., 143 F.3d 1293 (9th Cir. 1998)................................................................................................. 25 Swartz v. KPMG LLP, 476 F.3d 756 (9th Cir. 2007)..................................................................................................... 6 Theofel v. Farey-Jones, 359 F.3d 1066 (9th Cir. 2004)................................................................................................. 16 Thompson v. Home Depot, Inc., No. 07-cv-1058 IEG, 2007 WL 2746603 (S.D. Cal. Sept. 18, 2007) ..................................... 25 United States v. Kennedy, 81 F. Supp. 2d 1103 (D. Kan. 2000) ....................................................................................... 17 United States v. N.Y. Tel. Co., 434 U.S. 159 (1977) ................................................................................................................ 15 Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003)................................................................................................. 23 15 Viacom Int’l Inc. v. YouTube Inc., 253 F.R.D. 256 (S.D.N.Y. 2008) ............................................................................................ 16 16 STATUTES 17 18 U.S.C. § 2510............................................................................................................................... passim § 2511............................................................................................................................... passim § 2701........................................................................................................................................ 1 § 2702............................................................................................................................... passim § 2703(c) ........................................................................................................................... 16, 17 18 19 20 21 22 23 24 25 Cal. Bus. & Prof. Code § 17200. .................................................................................................... 7 Cal. Civ. Code § 1572.................................................................................................................................. 1, 23 § 1573.................................................................................................................................. 1, 23 § 1750........................................................................................................................................ 7 Cal. Penal Code § 502............................................................................................................ passim 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO iv. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 OTHER AUTHORITIES 2 Federal Rule of Civil Procedure Rule 9(b)........................................................................................................................ 3, 23, 24 Rule 12(b) ......................................................................................................................... 1, 6, 7 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 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO v. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 2 NOTICE OF MOTION AND MOTION TO DISMISS TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: 3 PLEASE TAKE NOTICE that on October 17, 2011 at 9:00 a.m. or as soon thereafter as 4 this motion may be heard in the above-entitled court, located at 450 Golden Gate Avenue, San 5 Francisco, California, in Courtroom 15 (18th Floor), Defendant Facebook, Inc. (“Facebook”) will 6 move to dismiss with prejudice the First Amended Consolidated Class Action Complaint filed by 7 Plaintiffs. Facebook’s Motion is made pursuant to Federal Rule of Civil Procedure 12(b)(6) and 8 is based on this Notice of Motion and Motion, the accompanying Memorandum of Points and 9 Authorities, the Request for Judicial Notice filed herewith, the Declaration of Ana Yang Muller 10 and accompanying Exhibits filed herewith, and all pleadings and papers on file in this matter, and 11 upon such other matters as may be presented to this Court at the time of hearing or otherwise. 12 13 STATEMENT OF RELIEF SOUGHT Facebook seeks an order, pursuant to Federal Rule of Civil Procedure 12(b)(6), dismissing 14 with prejudice the First Amended Consolidated Class Action Complaint and each of its causes of 15 action for failure to state a claim upon which relief can be granted. 16 17 STATEMENT OF ISSUES TO BE DECIDED 1. Because Plaintiffs fail to state a claim upon which relief can be granted for each 18 remaining cause of action—alleged violations of 18 U.S.C. § 2510 et seq., 18 U.S.C. § 2701 et 19 seq., Cal. Penal Code § 502(c)(8), Cal. Civil Code §§ 1572-73, and breach of contract—should 20 the First Amended Consolidated Class Action Complaint be dismissed with prejudice? 21 22 23 24 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 2 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION 3 In a May 12, 2011 Order (the “Dismissal Order”), this Court dismissed all eight claims in 4 Plaintiffs’ original consolidated complaint (the “original Complaint”) for failure to state a claim, 5 although it granted leave to amend certain but not all of the claims. Plaintiffs’ First Amended 6 Consolidated Class Action Complaint (“FAC”) attempts to salvage their remaining claims with 7 what amounts to non-substantive, cosmetic revisions. The FAC contains the same conclusory 8 allegations, is based on essentially the same underlying facts, realleges the same rejected legal 9 theories, and suffers from the same deficiencies that were fatal to the original Complaint. 10 The core allegations in the FAC remain the same: for a period of time in 2010, when a 11 Facebook user (“User”) clicked on an advertisement on Facebook, as a result of the “referrer 12 header” function in the User’s web browser, a URL (Internet address) was transmitted to an 13 advertiser that potentially contained (i) the User’s “User ID” or “Username” and (ii) basic 14 information about the type of webpage from which the User was navigating. Because the FAC 15 only superficially changes Plaintiffs’ original complaint, each of the remaining claims should be 16 again dismissed—this time with prejudice. 17 Plaintiffs’ Wiretap Act and SCA claims (Counts I and II) fail for several reasons. First, 18 the FAC cannot overcome several explicit statutory exceptions to liability: for disclosure of 19 communications made to a provider of an electronic communication service; for disclosure to an 20 “addressee or intended recipient”; and for disclosure to a third party with the consent of an 21 addressee or intended recipient. Second, the alleged disclosures did not involve the “contents of a 22 communication” as required for liability under both statutes. Third, Plaintiffs fail to allege that 23 Facebook divulged a communication “while in transmission,” as required by the Wiretap Act. 24 Fourth, to the extent that Plaintiffs’ SCA claim is based on vague and speculative allegations that 25 advertisers could possibly have navigated to Users’ profile pages and viewed information posted 26 there, the claim should be dismissed because, in addition to other deficiencies, two statutory 27 exceptions to liability apply. 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 2. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 Nor have Plaintiffs adequately alleged facts to support their other claims. Plaintiffs do no 2 more than recite the elements of their claim for violation of California Penal Code § 502(c)(8) 3 (Count IV), with no specific allegations of what contaminant was introduced, of how any alleged 4 contaminant affected operation of their computers, or that any instructions were actually 5 introduced into their computers. Plaintiffs’ breach of contract claim (Count VI) lacks any facts 6 supporting the necessary “appreciable and actual damages”; to the contrary, the FAC makes it 7 clear that Plaintiffs cannot allege such damage because, as the Court stated previously, Facebook 8 is a free service. And Plaintiffs’ fraud claim (Count VII) both fails to satisfy the heightened Rule 9 9(b) pleading standard—since the FAC fails to state, among other things, how any particular 10 alleged representation was false or when Plaintiffs allegedly clicked on advertisements—and fails 11 to allege the necessary element of damages. 12 13 Plaintiffs’ FAC should thus be dismissed with prejudice. II. STATEMENT OF FACTS 14 Facebook operates a free social networking website, with over 500 million active Users. 15 (FAC ¶ 10.) It allows anyone who registers, agrees to the site’s terms of service, and has access 16 to the Internet to create a profile page where they can share content and updates with Friends 17 about their activities. (Id. ¶¶ 11, 13.) 18 Instead, Facebook earns revenue, in part, by selling advertising space to third parties. (See id. 19 ¶¶ 25-27.) Third-party advertisers may choose to target their ads to different groups of Users— 20 for example, based on criteria such as age, interests, or location—in accordance with Facebook’s 21 terms. Advertisers cannot target specific Users on Facebook. (See id.) Users do not pay a fee to use Facebook. (FAC ¶ 11.) 22 Facebook assigns a generic, numerical “User ID” (or “UID”) to each User for internal 23 operational purposes. The User ID associated with some Users may be contained in the technical 24 Internet 25 http://www.facebook.com/profile.php?id=123456789), to allow Facebook to display the correct 26 information on that page. (See id. ¶ 14.) Other Facebook Users have elected to create unique address (the “URL”1) on their profile pages on Facebook (e.g., 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 A “Uniform Resource Locator” specifies the location of a webpage or file on the Internet. 3. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 Facebook “Usernames” (nicknames, initials, or other phrases or terms of the Users’ choosing) for 2 the purpose of providing personalized, public Internet addresses for their profile pages. (See id. 3 ¶ 14.) For example, a San Francisco lawyer named John Smith could choose to create the 4 Username “SmithEsq” or “sanfranlawyer” or “Johnny.” 5 “Username” (and not the User ID) would appear in the URL for his or her profile page (e.g., 6 http://www.facebook.com/SmithEsq, 7 http://www.facebook.com/Johnny). Not all Facebook Users have a Username, and a Username 8 need not, and often does not, consist of the User’s real name. In such cases, a User’s chosen http://www.facebook.com/sanfranlawyer, or 9 The FAC alleges that, when a User clicked on an advertisement on Facebook, the 10 following occurred as a result of the “referrer header” function in the User’s web browser: a URL 11 was transmitted to an advertiser that potentially contained (i) the User’s User ID or Username and 12 (ii) basic information about the type of webpage from which the User was navigating. (Id. ¶¶ 35, 13 41-43.) As the FAC acknowledges, the referrer header function is a “standard web browser 14 function” effected by third-party web browsers—not Facebook—that occurs on the Internet 15 whenever a person clicks on a link to another website (including online advertisements). (Id. 16 ¶¶ 35, 41.) Indeed, the FAC concedes that the referrer header function has been “provided by 17 standard web browsers since . . . May 1996” (well before Facebook even existed). (Id. ¶ 41.) 18 The “Referrer Header [function] reveals the specific web page address” (the URL) a person was 19 viewing when he or she clicked on a link to another website. (Id. ¶ 35.) 20 The FAC alleges that “Facebook began disclosing communications containing user’s [sic] 21 usernames/UIDs no later than February 2010 when Facebook implemented a website ‘upgrade’ 22 that began to embed ever more detailed data within Referrer Headers.” (Id. ¶ 38.) Plaintiffs 23 allege that sometime after May 21, 2010, when Facebook was alerted to the issue by the Wall 24 Street Journal, URLs transmitted to advertisers from Facebook no longer included User IDs or 25 Usernames. (Id. ¶ 39.) The FAC claims—incorrectly—that an advertiser could use the User ID 26 or Username to collect additional information about the User by navigating to the Facebook 27 User’s profile page to view any information the User had posted there. (Id. ¶ 36.) In fact, even if 28 an advertiser were to take the step of navigating to a particular User’s profile page, the advertiser COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 4. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 would only be able to see information that was publicly available—in other words, information 2 the User made available to anyone on the Internet, as opposed to information available only to the 3 User’s Friends. Also, Users’ names, profile pictures, and certain basic information are always 4 publicly available on Facebook, as plainly disclosed in Facebook’s Privacy Policy and Privacy 5 Guide (relied on by Plaintiffs in their FAC). (Declaration of Ana Yang Muller (“Yang Decl.”), 6 filed herewith, Ex. B ¶ 3 (Privacy Policy); id. Ex. C ¶ 2 (Privacy Guide).)2 7 Plaintiffs assert generally that Facebook shared “personally identifiable information” with 8 advertisers. (FAC ¶¶ 1, 3, 34.) Conspicuously, as with the original Complaint, the FAC does not 9 identify what, if any, of Plaintiffs’ information was supposedly disclosed. The only allegation 10 specific to Plaintiffs is that they “clicked on at least one third-party advertisement displayed on 11 Facebook” during the “relevant time period.” (Id. ¶¶ 4, 5.) Plaintiffs do not identify the “relevant 12 time period” when they purportedly clicked on an advertisement, anything specific about the 13 advertisement, or what information was allegedly disclosed by their actions. Nor do Plaintiffs 14 allege that any advertiser ever used such unspecified information to gather any personal 15 information, much less any information specific to Plaintiffs. Plaintiffs do not allege that they 16 even have Usernames, much less that they have Usernames that reflect their real names.3 17 Again, as in the original Complaint, Plaintiffs state as legal conclusions that they have 18 “suffered irreparable injury,” “suffered harm,” and “suffered loss.” (FAC ¶¶ 106, 111, 133; see 19 also id. ¶¶ 105, 110, 122.) But the FAC does not aver that any of Plaintiffs’ information has been 20 disclosed or that such disclosure resulted in any actual injury. The closest Plaintiffs come is a 21 hypothetical allegation that advertisers “could” obtain “confidential and sometimes highly 22 sensitive information” about a User. (Id. ¶ 44.) The FAC contains an academic discussion of the 23 24 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 2 Also attached as Exhibit A is what the Complaint alternatively refers to as the “Statement of Rights and Responsibilities” (FAC ¶¶ 29, 33), “Terms and Conditions” (id. ¶¶ 46, 64, 114), “Terms of Use” (id. ¶ 33), and “Terms of Service” (id. ¶ 49(b)), and what Facebook formally refers to as the “Statement of Rights and Responsibilities.” On the Facebook website, the SRR is also sometimes referred to as “Terms.” (Yang Decl. ¶ 2, Ex. A.) 3 Again, Facebook requires that Users provide their real names when they register and create a profile. But a “Username” is different—it is voluntary, and need not be the User’s real name. 5. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 hypothetical value of personal information (id. ¶ 23), but does not allege any facts suggesting that 2 Plaintiffs ever attempted to sell their own information for economic gain. 3 III. APPLICABLE STANDARDS 4 A court may dismiss a claim under Rule 12(b)(6) when “there is no cognizable legal 5 theory or an absence of sufficient facts alleged to support a cognizable legal theory.” Navarro v. 6 Block, 250 F.3d 729, 732 (9th Cir. 2001). In deciding a motion under Rule 12(b)(6), “all material 7 allegations of the complaint are accepted as true, as well as all reasonable inferences to be drawn 8 from them.” Id. However, as the Supreme Court has emphasized, “labels and conclusions, and a 9 formulaic recitation of the elements of a cause of action will not” survive a motion to dismiss. 10 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “[A] complaint must contain sufficient 11 factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ A claim 12 has facial plausibility when the plaintiff pleads factual content that allows the court to draw the 13 reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 14 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). A plaintiff must therefore 15 plead “more than a sheer possibility that a defendant has acted unlawfully.” Id. at 1949. 16 “[T]o ‘[p]revent [] plaintiffs from surviving a Rule 12(b)(6) motion by deliberately 17 omitting . . . documents upon which their claims are based,’” a court may consider a writing 18 referenced in a complaint if the complaint relies on the document and its authenticity is 19 unquestioned. See Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007) (quoting Parrino v. 20 FHP, Inc., 146 F.3d 699, 706 (9th Cir.1998) (superseded by statute on other grounds)).4 21 22 23 24 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 4 As discussed in the Request for Judicial Notice filed herewith, the FAC references Facebook’s Statement of Rights and Responsibilities (SRR), Privacy Policy, and Privacy Guide (FAC ¶¶ 2733), which, under applicable legal principles, the Court may properly consider in ruling on this motion. Copies of these three documents are attached as Exhibits A through C to the Yang Declaration, filed herewith. 6. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 IV. 2 ARGUMENT5 A. 3 Plaintiffs Fail to State a Claim for Violation of the Wiretap Act or Stored Communications Act (Counts I and II). 4 The Court previously dismissed Plaintiffs’ claims under the Wiretap Act and the SCA as it 5 was clear from the original Complaint that any alleged disclosures were made to entities 6 authorized to receive Plaintiffs’ communications. (Dismissal Order at 9.) The FAC fails to 7 remedy these deficiencies and the claims fail as a matter of law for other reasons as well. 8 As in the original Complaint, Count I of the FAC asserts that Facebook violated 18 U.S.C. 9 § 2511(3)(a) of the Wiretap Act (FAC ¶ 65), which provides that “a person or entity providing an 10 electronic communication service to the public shall not intentionally divulge the contents of any 11 communication (other than one to such person or entity, or an agent thereof) while in 12 transmission on that service to any person or entity other than an addressee or intended recipient 13 of such communication or an agent of such addressee or intended recipient.” 14 § 2511(3)(a). An “electronic communication service” means any service that provides Users the 15 ability to send or receive electronic communications. 16 communication” is “any transfer of signs, signals, writing, images, sounds, data, or intelligence of 17 any nature transmitted in whole or in part by a wire, radio, electromagnetic, photoelectronic or 18 photooptical system that affects interstate or foreign commerce . . . .” Id. § 2510(12). The 19 “contents” of an electronic communication means “any information concerning the substance, Id. § 2510(15). 18 U.S.C. An “electronic 20 21 22 23 24 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 5 Several of Plaintiffs’ claims included in the FAC have already been dismissed with prejudice. These claims include Count III (for violation of the Unfair Competition Law, California Business and Professions Code section 17200 et seq.), the majority of Count IV (for violation of subsections (c)(1), (2), (3), (6), & (7) of California Penal Code section 502), Count V (for violation of the Consumers Legal Remedies Act, California Civil Code section 1750 et seq.), and Count VIII (for unjust enrichment). Plaintiffs state that they are including them in the FAC only to preserve them for the purposes of appeal (see FAC, headings to Counts III, IV, V, and VIII), so Facebook does not address them in this Memorandum, but instead moves to dismiss them on the ground that they have already been dismissed with prejudice by the Court. In addition, the Dismissal Order disagreed with Facebook’s argument that Plaintiffs do not have Article III standing to bring the present suit as they have not alleged injury in fact. Facebook continues to contend that this case should be dismissed under Federal Rule of Civil Procedure 12(b)(1) for lack of Article III standing, and preserves this issue in the event of any appeal. 7. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 purport, or meaning of that communication.” Id. § 2510(8). 2 held by an electronic communication service—including a subscriber’s name, address, connection 3 records, records of session times and durations, service utilization data, subscriber number or 4 identity, and payment methods—are not subject to the same limits on disclosure. Id. § 2702(c). By contrast, “customer records” 5 Also as in the original Complaint, Count II of the FAC asserts that Facebook violated 18 6 U.S.C. §§ 2702(a)(1) and (a)(2) of the SCA.6 (FAC ¶ 83.) Section 2702(a)(1) provides that “a 7 person or entity providing an electronic communication service to the public shall not knowingly 8 divulge to any person or entity the contents of a communication while in electronic storage by 9 that service.” 18 U.S.C. § 2702(a)(1). Section 2702(a)(2) provides that “a person or entity 10 providing remote computing service to the public shall not knowingly divulge to any person or 11 entity the contents of any communication which is carried or maintained on that service . . . on 12 behalf of . . . a subscriber or customer . . . .” Id. § 2702(a)(2). 13 There are a number of relevant exceptions to liability under these statutes. The Wiretap 14 Act contains an exception that allows a provider of an electronic communication service (here, 15 Facebook) to divulge the contents of a communication made to the provider itself. 18 U.S.C. 16 § 2511(3)(a) (“a person or entity providing an electronic communication service to the public 17 shall not intentionally divulge the contents of any communication (other than one to such person 18 or entity, or an agent thereof) . . .” (emphasis added)). Exceptions under both the Wiretap Act 19 and the SCA also allow providers to divulge the contents of a communication to “an addressee or 20 intended recipient” of such communication. Id. §§ 2511(3)(a), 2702(b)(1). Further, under both 21 statutes, a provider may divulge the contents of a communication “with the lawful consent of the 22 originator or any addressee or intended recipient of such communication.” Id. §§ 2511(3)(b)(ii), 23 2702(b)(3). And neither statute prohibits disclosure of communications if the system “is 24 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 6 The same conduct cannot be a violation of both the Wiretap Act and the SCA because they are mutually exclusive: one statute addresses communications while they are in transit, and the other statute addresses communications while they are in storage. Konop v. Hawaiian Airlines, Inc., 302 F.3d 868, 878-79 (9th Cir. 2002) (holding that the Wiretap Act protects communications during “transmission” while the SCA protects communications while “stored”). 8. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 configured so that such electronic communication is readily accessible to the general public.” Id. 2 § 2511(2)(g)(i) (applicable to both the Wiretap Act and the SCA). 3 Plaintiffs fail to state a claim for violation of either the Wiretap Act or the SCA for several 4 reasons. First, the FAC does not overcome the various statutory exceptions to liability: for 5 disclosure of a communication made to the service provider itself (18 U.S.C. § 2511(3)(a)); for 6 disclosure to an addressee or intended recipient of a communication (id. §§ 2511(3)(a), 7 2702(b)(1)); and for disclosure to a third party with the consent of an addressee or intended 8 recipient of a communication (id. §§ 2511(3)(b)(ii), 2702(b)(3)). No matter how one reads the 9 strained and sometimes contradictory allegations in the FAC regarding the nature of the alleged 10 User communications allegedly disclosed by Facebook, one or more of these exceptions applies. 11 Accordingly, the FAC fails to state a claim for violation of the Wiretap Act and the SCA for the 12 same reasons set forth in this Court’s prior Dismissal Order. (See Dismissal Order at 8-10.) 13 14 Second, the disclosures alleged in the FAC did not, in any event, involve the “contents of a communication” under the Wiretap Act or the SCA, a necessary element of both claims. 15 Third, the FAC does not allege facts plausibly suggesting that Facebook divulged a 16 communication “while in transmission”; thus, the FAC fails to state a claim for violation of the 17 Wiretap Act on this additional ground. 18 Fourth, to the extent that Plaintiffs’ SCA claim is based on an alternative factual theory— 19 their vague and speculative allegations that advertisers could possibly have navigated to Users’ 20 profile pages and viewed information posted there—the claim should be dismissed for several 21 additional reasons, including the applicability of two statutory exceptions to liability. 22 1. 23 Facebook cannot be held liable under the Wiretap Act or the SCA because the addressee or intended recipient of all communications alleged in the FAC was either Facebook or a third-party advertiser. 24 Wiretap Act 25 This Court previously ruled that the Wiretap Act claim (Count I) failed to state a claim. 26 (Dismissal Order at 9.) Plaintiffs claimed that they did not consent to Facebook’s disclosure of 27 their User IDs or Usernames or information about the webpage Plaintiffs were viewing when they 28 clicked on an advertisement. (Id. at 8 (citing original Complaint ¶ 56).) The Court reasoned that COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 9. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 there were two possible ways to view these allegations. Under the first view, Plaintiffs alleged 2 that when they clicked on an advertisement, the click constituted an electronic communication 3 from Plaintiffs to Facebook, with the content of that communication being a request that 4 Facebook send a further electronic communication to an advertiser. (Id. at 8.) Under the second 5 view, Plaintiffs alleged that the click constituted an electronic communication from Plaintiffs to 6 the advertiser. (Id. at 8-9.) The Court held “that as a matter of law, Plaintiffs cannot state a claim 7 under the Wiretap Act under either interpretation.” (Id. at 9.) If the communication was to 8 Facebook, the Court explained, Facebook cannot be liable for divulging it under 18 U.S.C. § 9 2511(3)(a)’s exception for communications “to such person or entity” providing an electronic 10 communication service. (Dismissal Order at 9.)7 Alternatively, the Court explained, if the 11 communication was to an advertiser, Facebook cannot be liable for divulging it under 18 U.S.C. § 12 2511(3)(a)’s “addressee or intended recipient” exception. (Dismissal Order at 9.) Accordingly, 13 the Court dismissed the Wiretap Act claim, “with leave to amend to allege specific facts showing 14 that the information allegedly disclosed by Defendant [Facebook] was not part of a 15 communication from Plaintiffs to an addressee or intended recipient of that communication.” 16 (Id.) See also In re Zynga Privacy Litig., No. 10-cv-04680 JW, at 4, 6 (N.D. Cal. June 15, 2011). 17 Plaintiffs have not made any material amendments to their Wiretap Act claim or 18 elsewhere in the FAC that cure the infirmities identified by the Court. (See FAC ¶¶ 58-67.) 19 Plaintiffs continue to allege that the communications that form the basis of their Wiretap Act 20 claim were from Plaintiffs to either Facebook or advertisers. Again, under the pertinent statutory 21 exceptions, “as a matter of law, Plaintiffs cannot state a claim under the Wiretap Act under either 22 interpretation.” (Dismissal Order at 9.) Accordingly, for the reasons set forth above and in the 23 Dismissal Order, Count I of the FAC should be dismissed with prejudice. 24 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 7 Facebook also cannot be liable for divulging such a communication because, under the Wiretap Act, a service provider may divulge the contents of a communication “with the lawful consent of the originator or any addressee or intended recipient of such communication.” Id. §§ 2511(3)(b)(ii). Facebook would be the addressee or intended recipient, and Facebook had its own consent to divulge the communication to a third party. (Cf. Dismissal Order at 10 & n.8 (discussing identical provision of SCA and case law, and dismissing SCA claim).) 10. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 SCA 2 This Court also held that Plaintiffs’ SCA claim in the original Complaint (Count II) failed 3 to state a claim. Directly tracking the analysis of the Wiretap Act claim, the Court stated that 4 Plaintiffs alleged in the SCA claim that the communications at issue were sent either to Facebook 5 or to advertisers. (Dismissal Order at 10.) The Court held that “[u]nder either interpretation, 6 Plaintiffs fail to state a claim under the Stored Communications Act.” (Id. at 10.) If the 7 communication was to Facebook, the Court explained, Facebook cannot be liable for divulging it 8 because, under the SCA, a service provider may divulge the contents of a communication “with 9 the lawful consent of the originator or any addressee or intended recipient of such 10 communication.” 18 U.S.C. § 2702(b)(3). Facebook would be the addressee or intended 11 recipient, and Facebook had its own consent to divulge the communication to third-party 12 advertisers. (Dismissal Order at 10 & n.8 (discussing 18 U.S.C. § 2702(b)(3) and In re Am. 13 Airlines, Inc., Privacy Litig., 370 F. Supp. 2d 552, 560-61 (N.D. Tex. 2005)).) Alternatively, the 14 Court explained, if the communication was to an advertiser, Facebook cannot be liable for 15 divulging it under 18 U.S.C. § 2702(b)(1)’s “addressee or intended recipient” exception. 16 (Dismissal Order at 9-10.) Accordingly, the Court dismissed the SCA claim, again (as with the 17 Wiretap Act claim) “with leave to amend to allege specific facts showing that the information 18 allegedly disclosed by Defendant [Facebook] was not part of a communication from Plaintiffs to 19 an addressee or intended recipient of that communication.” (Id. at 10.) See also In re Zynga 20 Privacy Litig., No. 10-cv-04680 JW, at 4, 6. 21 Plaintiffs amended the SCA claim to include a number of strained and sometimes 22 contradictory allegations regarding the nature of the communications that allegedly were 23 disclosed by Facebook. 24 fundamental problem identified in the Dismissal Order because every “alternative” fact pattern 25 Plaintiffs aver nevertheless falls within the § 2702(b)(3) or § 2702(b)(1) exceptions. 26 “contents of communications” (according to Plaintiffs, consisting of User IDs, Usernames, or, 27 more vaguely, “PII”) that Plaintiffs claim Facebook disclosed to advertisers were all disclosed by 28 Plaintiffs to either Facebook or an advertiser—that is, an addressee or intended recipient. COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO (FAC ¶¶ 73-78.) These amendments, however, fail to cure the 11. The MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 Plaintiffs’ primary allegation (FAC ¶¶ 73-77) is that when Plaintiffs clicked on an 2 advertisement, the click constituted a communication to Facebook, the content being a “request[] 3 that Facebook connect the user to the specific advertisement” (FAC ¶ 74). Plaintiffs allege that 4 rather than disclosing the “bare request to be taken to the advertisement,” Facebook disclosed to 5 the advertiser, “via a ‘Referrer Header,’”8 Plaintiffs’ “personal information, including UIDs and 6 [U]sernames.” “[D]isclosure of the user PII,” the FAC alleges, “violates the SCA.” (FAC ¶ 77.) 7 Plaintiffs’ convoluted allegations still fail to state a claim because in order for the disclosure of 8 “PII” to be a violation of the SCA, that PII must constitute the contents of a communication. 9 And, according to the FAC itself, such communications are from Plaintiffs to Facebook. (See, 10 e.g., FAC ¶¶ 73, 76 (stating that users share PII with Facebook for the “specific purpose[] of 11 registering to use the service”).) Facebook would be the addressee or intended recipient of these 12 communications, and, even if the FAC’s allegations were true, Facebook would have its own 13 consent to divulge the communication to third-party advertisers. (Dismissal Order at 10 & n.8.)9 14 Apparently recognizing the vulnerability of its primary allegation, Plaintiffs have included 15 a series of “facts in the alternative,” hoping that if all of them get thrown against the wall, one 16 will stick. (FAC ¶ 78.) None of these alternative, contradictory sets of allegations escape the 17 fundamental fact that the alleged communications at issue fall into the “addressee or intended 18 recipient” exception under § 2702(b)(3) (if the communication was to Facebook) or § 2702(b)(1) 19 (if the communication was to an advertiser). 20 21 22 23 24 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 8 The allegation in FAC ¶ 77 that Facebook is responsible for the transmission of referrer headers is contradicted by other allegations in the FAC. The FAC states that “[t]he HTTP Referrer Header is a standard web browser function provided by web browsers since the HTTP 1.0 specification in May 1996” (before Facebook even existed). (FAC ¶ 41 (emphasis added).) 9 Although Plaintiffs repeatedly assert that Facebook’s alleged disclosures are contrary to Facebook’s Privacy Policy (see FAC ¶¶ 35, 64, 76), that allegation has no bearing on whether Facebook may consent to disclosure of such information under the SCA. As this Court explained in its Dismissal Order, “a defendant [is] not liable under the [SCA] for disclosing personal information of which it was the intended recipient, even if the defendant was ‘contractually bound by its privacy policy not to disclose [such] information.’” (Dismissal Order at 10 n.8 (citing In re Am. Airlines, Inc., Privacy Litig., 370 F. Supp. 2d at 560-61).) 12. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 Plaintiffs’ first set of “facts in the alternative” is based on the alleged transmission by 2 Facebook of “an additional communication containing the user’s [U]sername and/or UID to the 3 Advertiser.” (FAC ¶ 78(i).) Again, even if these allegations were true, Facebook would have 4 been an intended recipient of the original “communication containing the user’s [U]sername 5 and/or UID,” and therefore would be authorized to disclose the information under § 2702(b)(3). 6 Plaintiffs’ second set of “facts in the alternative” alleges that “Facebook exceeds its 7 authority to disclose records about its users by sending [U]sernames and/or UIDs to the 8 Advertiser.” 9 “records” rather than “contents of communications” under the SCA; thus, under the express 10 provisions of § 2702(c)(6), Facebook may disclose such “records” to “any person other than a 11 governmental entity,” including a third-party advertiser. (See infra § IV(A)(2).) But, again, even 12 if this allegation were interpreted to mean that Usernames and User IDs were “contents of 13 communications,” Facebook was the intended recipient of those communications and, therefore, 14 there is no liability under § 2702(b)(3). (FAC ¶ 78(ii).) This allegation concedes that Usernames and User IDs are 15 Plaintiffs’ third set of alternative allegations is merely a slight variation on the first two 16 sets, in which Plaintiffs allege that they “provide[d] PII to Defendant for the sole purpose of 17 communicating that information to . . . ‘friends,’” not advertisers, but Facebook nevertheless sent 18 their “PII” to advertisers. (FAC ¶ 78(iii).) Although Plaintiffs have used, in this set of alternative 19 facts, an extremely vague allegation that “PII” 10 is provided to Facebook and sent to advertisers, 20 Plaintiffs clearly allege elsewhere in the FAC that it is actually User IDs and/or Usernames that 21 are sent to advertisers via referrer headers. (See FAC ¶¶ 76-77.) These specific allegations trump 22 the vaguely generalized assertion that “PII” is sent to advertisers. See Chem. Device Corp. v. Am. 23 24 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 10 To the extent that Plaintiffs’ vague allegation concerning the provision of “PII” may suggest that something more than User IDs or Usernames (such as real names or profile pictures) was provided to advertisers, the documents that Plaintiffs themselves cite and rely on state in explicit terms that basic User information, such as Users’ real names and profile pictures, shall be publicly available. (Yang Decl. Ex. B ¶ 3; id. Ex. C ¶ 2.) Plaintiffs’ allegation that such information was provided for the “sole purpose of communicating that information . . . to friends” is therefore contradicted by the documents on which they rely, and the court may refuse to accept the allegation as true. 13. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 Cyanamid Co., No. C-89-1739 WHO, 1990 WL 56164, at *3 (N.D. Cal. Jan. 11, 1990) (“[T]he 2 Court is not bound to accept conclusory legal allegations in the complaint when more specific 3 allegations in the pleadings are at variance with those conclusions.”) (citing Heller v. Roberts, 4 386 F.2d 832 (2d Cir. 1976)); accord Perlman v. Zell, 938 F. Supp. 1327, 1347 (N.D. Ill. 1996) 5 (where specific factual allegations conflict with general allegations, the specific allegations 6 control). Regardless, this allegation specifically states that the User sends this information “to 7 Defendant.” Accordingly, Facebook is an intended recipient of such information under Plaintiffs’ 8 own allegation, and the exception under § 2702(b)(3) applies. 9 Plaintiffs’ fourth and final set of alternative allegations is a variation on the third set, in 10 which Plaintiffs state that “when a Facebook user clicks on an ad, the user does not intend to send 11 Facebook nor the Advertiser any information regarding his or her true identity.” (FAC ¶ 78(iv).) 12 Again, Plaintiffs concede that this information constitutes “records” (id.), not “contents of 13 communications”; therefore, Facebook may disclose it under the express provisions of 14 § 2702(c)(6). (See infra § IV(A)(2).) And, again, even if this allegation were construed to mean 15 that this information was “contents of communications,” the “intended recipient” exception 16 would apply. Whatever “the information regarding his or her true identity” may be (which the 17 FAC leaves intentionally vague), the only information allegedly disclosed by Facebook is the 18 User’s Username or User ID, which, as discussed above, is subject to the § 2702(b)(3) “intended 19 recipient” exception. 20 As with the original Complaint, the alleged “communications” that form the basis of 21 Plaintiffs’ SCA claim were from Plaintiffs to either Facebook or advertisers. In either scenario, 22 statutory exceptions apply, and Count II of the FAC should be dismissed with prejudice. 23 24 2. The disclosures alleged in the FAC did not involve the “contents of a communication” under the Wiretap Act or the SCA. 25 Plaintiffs’ allegations center on disclosure of User IDs and Usernames included in referrer 26 headers (i.e., within the referrer URL containing the Internet address of the webpage) transmitted 27 by third-party browsers to advertisers. 28 “communication” within the intended scope of the statutes, but simply identifies the location of a COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO As an initial matter, a referrer URL is not a 14. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 webpage on the Internet, much as, for example, a postal address is not the communication itself, 2 but simply an identification of a location. Plaintiffs thus fail to satisfy the threshold requirement 3 under the Wiretap Act and the SCA that the alleged disclosures involve a “communication.” See 4 18 U.S.C. §§ 2510(12); 2711(1). 5 Facebook also cannot be held liable because only the disclosure of “the contents of a 6 communication” while in transmission or in electronic storage by a service provider is prohibited. 7 See 18 U.S.C. §§ 2511(3)(a), 2702(a)(1), 2702(a)(2) (emphasis added). The “contents” of a 8 communication means “any information concerning the substance, purport, or meaning of that 9 communication.” 18 U.S.C. § 2510(8). Basic information such as a User ID or Username does 10 not constitute the “contents” of a communication, but instead constitutes, at most, a User 11 “record,” which is governed by separate statutory provisions that do not prohibit disclosure. See 12 Jessup-Morgan v. Am. Online, Inc., 20 F. Supp. 2d 1105, 1108 (E.D. Mich. 1998) (holding 13 disclosure of an AOL User ID was not the “‘content’ of electronic communications” under 14 18 U.S.C. § 2702). The User records that were allegedly disclosed by Facebook do not reveal the 15 substance of any private communications. See id. (noting customer account information is not the 16 content of a communication); cf. United States v. N.Y. Tel. Co., 434 U.S. 159, 167 (1977) (a pen 17 register does not reveal the “‘contents’ of communications” under the Wiretap Act (as it existed 18 before amendments in 1986) because it does not reveal the existence of a communication, just the 19 telephone number). 20 This distinction was recently recognized by another court in the Northern District of 21 California in Sams v. Yahoo!, Inc., No. cv-10-5897-JF (HRL), 2011 WL 1884633, at *7 (N.D. 22 Cal. May 18, 2011). In that case, the plaintiff challenged Yahoo’s disclosure of records under the 23 SCA, arguing the government’s subpoena was invalid. Id. at *2. The disclosure included all 24 records regarding “the Yahoo! ID ‘lynnsams’ or ‘lynnsams@yahoo.com’ . . . including name and 25 address, date account created, account status, Yahoo! E-mail [sic] address, alternative e-mail 26 address, registration from IP, date IP registered and login IP addresses associated with session 27 time and dates.” Id. at *6. The court reasoned that all such information “is not content-based” 28 information subject to strict restrictions but “user identification information” which could be COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 15. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 disclosed, without notice to the user, under 18 U.S.C. § 2703(c)(2). Sams, 2011 WL 1884633, at 2 *7. The court also rejected the plaintiff’s argument that all aspects of a communication, including 3 the identity of the parties, was intended to be protected by the SCA, because the 1986 4 amendments struck out the phrase “the identity of the parties to such communication or the 5 existence” of the communication from 18 U.S.C § 2510(8)’s definition of contents. Id. at *6-7. 6 This distinction between “contents of a communication,” which are controlled by 7 §§ 2702(a)(1) and (a)(2), and “customer records,” which are controlled by § 2702(a)(3), is 8 regularly recognized by the courts. For instance, §§ 2702(a)(1) and (a)(2) are applied to actual 9 communications that by their nature contain “content.” See Theofel v. Farey-Jones, 359 F.3d 10 1066, 1070 (9th Cir. 2004) (applying § 2702(a)(2) to email messages); Quon v. Arch Wireless 11 Operating Co., 529 F.3d 892, 900 (9th Cir. 2008) (applying §§ 2702(a)(1) and (a)(2) to text 12 messages), rev’d on other grounds, 130 S. Ct. 2619 (2010); Crispin v. Christian Audigier, Inc., 13 717 F. Supp. 2d. 965, 972 (C.D. Cal. 2010) (applying §§ 2702(a)(1) and 2702(a)(2) to private 14 messages and posts on social networking sites); Viacom Int’l Inc. v. YouTube Inc., 253 F.R.D. 15 256, 264 (S.D.N.Y. 2008) (applying §2702(a)(2) to videos). In contrast, § 2702(a)(3) has been 16 applied to subscriber identification information, i.e., customer records. See Jessup, 20 F. Supp. 17 2d at 1108 (applying § 2702(a)(3) to AOL User ID); Freedman v. Am. Online, Inc., 325 F. Supp. 18 2d 638, 646 (E.D. Va. 2004) (applying § 2702(a)(3) to Internet subscriber account information 19 such as user’s screen name and membership start date). 20 The distinction between the “contents of a communication” and a user “record” is 21 important because the statutes place much more restrictive limits on the disclosure of the contents 22 of communications than they do on the disclosure of user records. For instance, under the SCA, a 23 provider has broad discretion to disclose a customer record “to any person other than a 24 governmental entity,” 18 U.S.C. § 2702(c)(6), or to a governmental entity when authorized by 25 § 2703, id. § 2702(c)(1). 26 communication service provider or a remote computing service provider to disclose customer 27 “records,” including a User’s name, address, telephone connection records, records of session 28 times and durations, service utilization, subscriber number or identity (including temporarily COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO Under § 2703(c), a government entity can require an electronic 16. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 assigned network address), and payment methods. 2 Usernames that Plaintiffs allege Facebook disclosed constitute, at most, a “subscriber number or 3 identity,” which is specifically defined by statute as a “record,” not “contents of a 4 communication.” See id. § 2703(c)(2); see also United States v. Kennedy, 81 F. Supp. 2d 1103, 5 1107-09 (D. Kan. 2000) (applying § 2703(c) to Internet subscriber account information, including 6 name, e-mail address, and membership history); Freedman v. Am. Online, Inc., 412 F. Supp. 2d 7 174, 181 (D. Conn. 2005) (noting for Fourth Amendment purposes courts have “universally” held 8 there is a distinction between “the content of electronic communications, which [are] protected, 9 and non-content information, including a subscriber’s screen name and corresponding identity, 10 which [are] not”). Under the express provisions of § 2702(c)(6), Facebook may disclose such 11 “records” to “any person other than a governmental entity,” including a third-party advertiser. Id. § 2703(c)(2). The User IDs and 12 The language and structure of the Wiretap Act and the SCA reflect that the information of 13 which Plaintiffs complain (User IDs and Usernames) are, at most, User “records,” not “contents 14 of communications.” Counts I and II should be dismissed with prejudice for this reason as well. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 3. The FAC does not allege facts plausibly suggesting Facebook divulged a communication “while in transmission” under the Wiretap Act. Plaintiffs’ allegations under the Wiretap Act are insufficient for an additional, independent reason: they do not allege that Facebook “divulged” their User IDs or Usernames contemporaneously with transmission of that information by Plaintiffs. See Konop, 302 F.3d at 876-79 (Wiretap Act covers only communications “in transmission” and not “in storage”). (FAC ¶¶ 5867; see also id. ¶ 62 (acknowledging that the Wiretap Act covers only disclosure of communications “while in transmission,” stating that “[t]he Wiretap Act prevents an electronic communications service provider from intentionally divulging the contents of any communication while in transmission on that service . . . .”) (emphasis added).) Here, Plaintiffs allege that Facebook improperly divulged their “user identities and other user information to advertisers without their consent” (FAC ¶ 65), which Plaintiffs allege occurred when they “click[ed] on an advertisement banner” on Facebook (FAC ¶ 64). But the FAC alleges that Plaintiffs’ User IDs and User Names were transmitted to Facebook at an earlier 17. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 time—namely, when they registered for the site—rather than when Plaintiffs later clicked on an 2 advertisement. (See, e.g., FAC ¶ 12 (alleging that Users provide their names when they register 3 to use facebook.com); id. ¶ 73 (“When a user signs up for Facebook’s services, the user provides 4 PII to Defendant . . . .”).) Plaintiffs therefore do not allege that their User IDs or Usernames were 5 divulged by Facebook while in transmission—i.e., at the same time Plaintiffs originally 6 transmitted them to Facebook. Thus, the Wiretap Act claim should be dismissed with prejudice. 7 4. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO To the extent Plaintiffs’ SCA claim is based on hypothetical allegations of advertisers viewing Users’ profile pages, it should be dismissed. Although unclear, Plaintiffs appear to allege an alternative factual theory in support of their SCA claim—their vague and speculative allegations (with no supporting facts or specific examples) that, with a User ID or Username obtained from a referrer header, an advertiser could possibly have navigated to a User’s profile page and viewed information posted there. (See FAC ¶¶ 27, 36-37, 83.) Plaintiffs appear to allege that the information on a User’s profile page constitutes the contents of stored communications—that is, communications from the User to Facebook. And, according to this theory, if an advertiser were to navigate to a User’s profile page (using a User ID or Username obtained from a referrer header) and see the information there—including the User’s real name, profile picture, gender, etc.—such viewing by the advertiser would somehow constitute an improper disclosure by Facebook under the SCA. (See FAC ¶¶ 80-83.) To the extent Plaintiffs rest their SCA claim on this alternative theory,11 the claim should be dismissed for reasons in addition to those above (see supra §§ IV(A)(1)–(2)). First, Plaintiffs have not adequately alleged that any information was “divulged” by anyone—certainly not Facebook—a necessary starting point for any SCA claim. See 18 U.S.C. §§ 2702(a)(1)–(2). According to this theory, a third party may have navigated to a particular webpage and viewed information that was publicly visible there. 11 In their opposition to Facebook’s earlier motion to dismiss the original Complaint, Plaintiffs stated that their theory is “not that Facebook disclosed information voluntarily published on User profiles to advertisers” and that “this is not the crux of Plaintiffs’ claims.” (Plaintiffs’ Opposition to Facebook’s Motion to Dismiss Consolidated Class Action Complaint, 16 & n.12 (emphasis added).) Facebook makes the argument here given that the same or similar language is still contained in the FAC. 18. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 Second, as demonstrated above (see supra §§ IV(A)(1)–(2)), disclosure of a User ID or 2 Username in a referrer header is not a violation of the SCA; thus, subsequent use of the properly 3 disclosed User ID or Username by a third party (not Facebook) to navigate to a webpage cannot 4 be the basis for an independent violation of the SCA by Facebook. 5 Third, to the extent Plaintiffs allege an advertiser may have viewed a User’s profile page, 6 the advertiser could have viewed only what was accessible to any other third party on the Internet. 7 The FAC concedes that Users voluntarily provide the information posted on their profile pages 8 for the purpose of sharing that information with others online. (FAC ¶¶ 11, 13.) And Plaintiffs 9 have alleged no facts whatsoever (nor can they) that any information that could have been 10 accessed by third-party advertisers on their profile pages was private or unavailable to the general 11 public. Instead, any such information was made publicly available by the User to everyone on the 12 Internet. Furthermore, Users’ names, profile pictures, and certain basic information are always 13 publicly available on Facebook, as plainly disclosed in Facebook’s Privacy Policy and Privacy 14 Guide. (Yang Decl. Ex. B ¶ 3; id. Ex. C ¶ 2.) Accordingly, everyone on the Internet, including 15 advertisers, were the intended recipients of such information on a User’s profile page, and the 16 exception to liability applies. 18 U.S.C. § 2702(b)(1) (service provider “may divulge the contents 17 of a communication . . . to an addressee or intended recipient of such communication”). 18 Fourth, the SCA does not prohibit disclosure of communications if the system “is 19 configured so that such electronic communication is readily accessible to the general public.” 18 20 U.S.C. § 2511(2)(g)(i) (applicable to “this chapter [the Wiretap Act] or chapter 121 of this title 21 [the SCA]”). 22 Wiretap Act and concluded a presumption of accessibility applies only in narrow circumstances, 23 such as traditional radio technology or broadcast radio, wherein the communication medium is 24 designed or intended to be public. In re Google Inc. Street View Elec. Commc’ns Litig., No. CV 25 10-MD-02184-JW, at *19 (N.D. Cal. June 29, 2011).12 An Internet page configured to display to 26 12 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO Recently, this Court interpreted the “readily accessible” exception under the The Google Street View case involved allegations that Google collected a substantial amount of data from individuals’ home Wi-Fi networks via mobile software technology that decoded and decrypted the data as it streamed wirelessly, including usernames, passwords and personal emails. In support of its motion to dismiss claims brought under the Wiretap Act, Google argued that 19. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 all Internet users everywhere fits comfortably within the presumption, as it is part of a medium 2 that is designed or intended to be public, i.e., publicly available Internet pages. 3 The application of the “readily accessible” exception to publicly available Internet pages 4 has been recognized by the Eleventh Circuit in Snow v. DirecTV, Inc., 450 F.3d 1314, 1321-22 5 (11th Cir. 2006). 6 concluded that “[t]he legislative history and the statutory structure clearly show that Congress did 7 not intend to criminalize or create civil liability for acts of individuals who ‘intercept’ or ‘access’ 8 communications that are otherwise readily accessible by the general public.” Id. at 1320-21. 9 This included the “World Wide Web” in instances where “individuals can easily and readily 10 access websites hosted throughout the world.” Id. at 1321-22 (holding “[t]o survive a motion to 11 dismiss, [Plaintiff] must have alleged, at a minimum, facts from which we could infer that his 12 electronic bulletin board was not readily accessible to the general public”). Because Plaintiffs do 13 not point to any private communication that allegedly was divulged to an advertiser, the SCA 14 claim must be dismissed. See 18 U.S.C. §§ 2511(2)(g)(i). 15 16 For the foregoing reasons, Plaintiffs fail to state a claim under the Wiretap Act or the SCA, and Counts I and II should be dismissed with prejudice. 17 B. 18 19 20 21 22 23 24 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO In that case, the court analyzed the “readily accessible” exception, and Plaintiffs Do Not Allege Facebook Introduced a Computer Contaminant, As Required Under California Penal Code § 502(c)(8) (Count IV). To state a claim under California Penal Code § 502(c)(8), Plaintiffs must allege that Facebook introduced a computer contaminant13 into their computer, system or network. As the such Wi-Fi communications were “readily accessible to the general public” and thus qualified for an exemption on liability under 18 U.S.C. § 2511(2)(g)(i). Facebook contends that the “readily accessible to the general public” exception should not be restricted exclusively to traditional radio broadcasts. 13 A contaminant is defined by section 502(b)(10) as “any set of computer instructions that are designed to modify, damage, destroy, record, or transmit information within a computer, computer system, or computer network without the intent or permission of the owner of the information. They include, but are not limited to, a group of computer instructions commonly called viruses or worms, that are self-replicating or self-propagating and are designed to contaminate other computer programs or computer data, consume computer resources, modify, destroy, record, or transmit data, or in some other fashion usurp the normal operation of the computer, computer system, or computer network.” Cal. Penal Code § 502(b)(10). 20. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 Court noted when it dismissed the original Complaint, Plaintiffs had failed to allege “any facts 2 suggesting that Defendant introduced computer instructions designed to ‘usurp the normal 3 operation’ of a computer, computer system or computer network” that would support a claim 4 under California Penal Code ¶ 502(c)(8). (See Dismissal Order at 13 n.11.) The FAC does not 5 allege any additional facts to alter this conclusion. 6 The FAC keeps the original conclusory statement that Facebook “introduced a computer 7 contaminant, as defined in § 502(b)(10), by introducing computer instructions designed to record 8 or transmit to advertisers Plaintiffs’ and the Class’s personally-identifiable information on 9 Facebook’s computer networks without the intent or permission of Plaintiffs . . . in violation of 10 § 502(c)(8).” (FAC ¶ 104.) It then adds the equally conclusory statement that “[t]hese 11 instructions usurped the normal operations of the relevant computers, which by normal operation 12 would not transmit the PII of Plaintiff and/or the Class members.” (Id.) Plaintiffs have not 13 alleged what contaminant Facebook introduced or how their computers operated differently after 14 the alleged contaminant was introduced. Nor have Plaintiffs alleged that the instructions were 15 actually introduced onto their computers, systems, or networks rather than simply being a part of 16 how the Facebook website operates and indeed how the Internet works. Plaintiffs simply heap 17 repetitions of the statute’s elements on top of legal conclusions that the Court has already found 18 insufficient. As courts have often observed, “conclusory allegations of law and unwarranted 19 inferences are insufficient to defeat a motion to dismiss for failure to state a claim.” Epstein v. 20 Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996); accord Iqbal, 129 S. Ct. at 1949 (citing 21 Twombly, 550 U.S. at 555 (“[t]hreadbare recitals of the elements of the cause of action, supported 22 by mere conclusory statements,” are not taken as true). 23 Plaintiffs’ own allegations also recognize that the referrer header function is “a standard 24 web browser function provided by web browsers since the HTTP 1.0 specification in May 1996.” 25 (FAC ¶ 41.) They allege that the disclosure of Usernames or User IDs occurs when developers 26 use “GET based forms for the submission of sensitive data” and that this issue is “well known” 27 among developers. 28 analogous to “self-replicating or self-propagating” viruses or worms intended to “contaminate COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO (Id. ¶ 42.) A well-recognized software development function is not 21. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 other computer programs” that “usurp” the computer’s normal function. Under Plaintiffs’ theory, 2 any computer program that works as intended, but has unintended consequences, would make the 3 developer criminally liable and subject him or her to vast civil liability. Plaintiffs’ allegations are 4 thus as baseless as Plaintiffs’ original assertion that Facebook acted “without permission” when it 5 accessed information within its own system. 6 7 Because Plaintiffs have failed to allege facts sufficient to support their claim under section 502(c)(8), their claim should be dismissed with prejudice. 8 C. 9 Plaintiffs’ Breach of Contract Claim Must Be Dismissed for Failure to Allege that Plaintiffs Have Suffered, or are Likely to Suffer, Any Actual Damages As a Result of a Breach (Count VI). 10 This Court dismissed the breach of contract claim in the original Complaint, “with leave 11 to amend to allege specific facts showing appreciable and actual damages in support of their 12 claim, if so desired.” (Dismissal Order at 15.) See also In re Zynga Privacy Litig., No. 10-cv- 13 04680 JW, at 4-5, 6. As with the original Complaint, Plaintiffs again fail to allege specific facts 14 sufficient to support a claim that they have suffered appreciable and actual damage. This Court 15 should dismiss Plaintiffs’ breach of contract claim with prejudice. 16 In order to state a cause of action for breach of contract, Plaintiffs must plead four 17 elements: “[1] the contract, [2] plaintiffs’ performance (or excuse for nonperformance), [3] 18 defendant’s breach, and [4] damage to plaintiffs therefrom.” Gautier v. Gen. Tel. Co., 234 Cal. 19 App. 2d 302, 305 (1965). Damages are essential to the claim. See First Commercial Mortg. Co. 20 v. Reece, 89 Cal. App. 4th 731, 745 (2001). Further, “[u]nder California law, a breach of a 21 contract claim requires a showing of appreciable and actual damage.” Ruiz v. Gap, Inc., 622 F. 22 Supp. 2d 908, 917 (N.D. Cal. 2009) (emphasis added); accord Dismissal Order at 15.14 23 24 In the FAC, Plaintiffs make it clear that they cannot allege any actual and appreciable damage. Plaintiffs still include no plausible allegation that Facebook gave any personal 25 26 14 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO Pursuant to the SRR, California law governs claims arising between the parties. (Yang Decl. Ex. A ¶ 15(1).) Accordingly, Facebook analyzes the common-law cause of action in the FAC (breach of contract) under California law. 22. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 information to an advertiser.15 2 property loss specific to Plaintiffs or any other User—nor could they because Facebook is a free 3 service. In fact, the primary change to Plaintiffs’ breach of contract claim allegations appears to 4 be that they have replaced the word “injury” with the word “damages.” (Compare original 5 Compl. ¶ 109 with first sentence of FAC ¶ 122.) Plaintiffs also reiterate the allegations from their 6 original Complaint that Plaintiffs and Class members “paid” for Facebook’s services with 7 personal information—a theory already rejected by this Court. (See Dismissal Order at 14 8 (“Plaintiffs’ contention that their personal information constitutes a form of ‘payment’ to 9 Defendant is unsupported by law.”).) Such conclusory allegations of harm and unsupported (and, 10 in fact, rejected) legal theories do not state a claim for relief. See Twombly, 550 U.S. at 555. 11 D. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO Moreover, the FAC contains no allegations of monetary or Plaintiffs Fail to State a Claim Under California Civil Code §§ 1572 and 1573 (Count VII). Plaintiffs have not alleged facts sufficient to state a claim for violation of California Civil Code §§ 1572 and 1573, which relate to actual and constructive fraud in the formation of contracts. An action sounding in fraud must be pled with particularity under Federal Rule of Civil Procedure 9(b) to give defendants adequate notice of the allegations. See Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009). Thus, to satisfy Rule 9(b), “[a]verments of fraud must be accompanied by ‘the who, what, when, where, and how’ of the misconduct charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (citation omitted). Furthermore, “[t]he plaintiff must set forth what is false or misleading about a statement, and why it is false.” In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994) (en banc), superseded by statute on other grounds as stated in In re Silicon Graphics, Inc. Sec. Litig., 970 F. 15 Multiple courts have held that conclusory allegations of injury based on disclosure of personal information do not constitute actionable damages for a breach of contract claim. See, e.g., Ruiz, 622 F. Supp. 2d at 917 (under California law, “[plaintiff] cannot show he was actually damaged by pointing to his fear of future identity theft”); In re JetBlue Airways Corp. Privacy Litig., 379 F. Supp. 2d 299, 326-27 (E.D.N.Y. 2005) (loss of privacy and deprivations of “economic value” based on disclosure of personal information did not constitute actionable damages for a breach of contract action); Dyer v. Nw. Airlines Corps., 334 F. Supp. 2d 1196, 1200 (D.N.D. 2004) (dismissing breach of contract claim premised on “conclusory statements” of damage from disclosure of personal information). 23. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 Supp. 746, 754 (N.D. Cal. 1997). Plaintiffs must provide support for each allegation, and “mere 2 conclusory allegations of fraud are insufficient.” Moore v. Kayport Package Express, Inc., 885 3 F.2d 531, 540 (9th Cir. 1989). 4 Plaintiffs’ allegations do not satisfy the heightened Rule 9(b) pleading standard. Plaintiffs 5 allege that Facebook made statements in its Privacy Policy and in blog postings that Users’ 6 personal information would not be provided to third parties without consent. (FAC ¶¶ 27-31, 7 126.) 8 representation was false. In fact, Plaintiffs do not point to a single instance where Facebook 9 provided any personal information associated with the named Plaintiffs (or any putative class 10 But Plaintiffs fail to allege with specificity—as they must—how any particular alleged member) to a third-party advertiser in violation of its stated policies or otherwise. 11 Plaintiffs furthermore fail to plead any particular facts regarding the advertisements 12 displayed on Facebook that they allegedly clicked on. While they state that each of them “clicked 13 on at least one third-party advertisement displayed on Facebook.com” (FAC ¶¶ 4-5), they do not 14 state when they clicked on such ads, except that they did so “during the relevant time period,” 15 with no indication of what “the relevant time period” refers to. (Id.) This question of “when” 16 Plaintiffs clicked on advertisements is fundamental. While Plaintiffs have defined their class to 17 include Users who clicked on ads “at any time after May 28, 2006” (FAC ¶ 45)—and, thus, 18 Plaintiffs may be relying on May 28, 2006 to present as “the relevant time period”—the FAC 19 alleges that (1) a February 2010 website “upgrade” led to the inclusion of more “detailed data” in 20 referrer headers and (2) Facebook ceased such transmissions in or around May 2010. (See FAC 21 ¶¶ 38-39.) Plaintiffs’ general allegation leaves open the dispositive question of whether Plaintiffs 22 actually clicked on an advertisement during the time period in which “detailed data” was 23 allegedly sent in referrer headers, or at some point before or after that time period. This Court 24 recently dismissed claims against Google related to alleged disclosure of personal information in 25 referrer headers for this exact reason. See Gaos v. Google, No. 10-CV-04809-JW, at *5 (N.D. 26 Cal. Apr. 7, 2011) (dismissing all claims for lack of Article III standing because “Plaintiff failed 27 to plead that she clicked on a link from the Google search page during the same time period that 28 Defendant allegedly released search terms via referrer headers”). COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 24. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW 1 Finally, as discussed above (supra § IV(C)), Plaintiffs once again fail to plead that they 2 suffered damages—a necessary element of any fraud claim. See Engalla v. Permanente Med. 3 Grp., 15 Cal. 4th 951, 974 (1997); Small v. Fritz Co., 30 Cal. 4th 167, 173-74 (2003). The 4 disclosure of personal information is not a loss of property under California law. See Ruiz v. Gap, 5 Inc., 540 F. Supp. 2d 1121, 1128 (N.D. Cal. 2008); Thompson v. Home Depot, Inc., No. 07-cv- 6 1058 IEG (WMc), 2007 WL 2746603, at *3 (S.D. Cal. Sept. 18, 2007). Nor have Plaintiffs 7 articulated any other grounds supporting damages. 8 prejudice. 9 E. Count VII should be dismissed with Plaintiffs’ Claims Should Be Dismissed with Prejudice. 10 Plaintiffs’ claims should be dismissed with prejudice. Even with the Court’s Dismissal 11 Order as guidance, Plaintiffs have been unable to allege legally sufficient claims. Instead, they 12 have merely used their opportunity to amend to make superficial, cosmetic changes to their 13 original allegations, which were already dismissed by the Court for failure to state a claim. Given 14 Plaintiffs’ failure to put forward legally sufficient allegations, granting Plaintiffs leave to amend 15 would be futile and dismissal with prejudice is appropriate. See Steckman v. Hart Brewing, Inc., 16 143 F.3d 1293, 1298 (9th Cir. 1998) (leave to amend should not be granted where amendment 17 would be futile); Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990) (a “district 18 court’s discretion to deny leave to amend is particularly broad where plaintiff has previously 19 amended the complaint” (citation omitted)). 20 V. 21 22 CONCLUSION For the foregoing reasons, Plaintiffs fail to state a claim as a matter of law, and the First Amended Consolidated Class Action Complaint should be dismissed with prejudice. 23 24 25 26 Dated: July 15, 2011 COOLEY LLP /s/ Matthew D. Brown ________________________________ Matthew D. Brown (196972) Attorneys for Defendant FACEBOOK, INC. 27 28 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 25. MOTION TO DISMISS FIRST AMENDED CONSOLIDATED CLASS ACTION COMPLAINT CASE NO. 10-CV-02389-JW

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