In Re FACEBOOK INTERNET TRACKING LITIGATION

Filing 128

Supplemental Brief re #101 MOTION to Dismiss Defendant Facebook, Inc.s Motion to Dismiss Plaintiffs Second Amended Consolidated Class Action Complaint (Fed. R. Civ. P. 12(b)(1) & 12(b)(6)) Regarding Spokeo's Application to Facebook's Motion to Dismiss filed byFacebook Inc.. (Related document(s) #101 ) (Brown, Matthew) (Filed on 5/31/2016)

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COOLEY LLP
MICHAEL G. RHODES (116127)
([e-mail])
MATTHEW D. BROWN (196972)
([e-mail])
KYLE C. WONG (224021)
([e-mail])
ADAM C. TRIGG (261498)
([e-mail])
101 California Street, 5th Floor
San Francisco, CA 94111-5800
Telephone:
[phone]
Facsimile:
[phone]
Attorneys for Defendant
FACEBOOK, INC.

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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In re: Facebook Internet Tracking Litigation

Case No. 5:12-md-02314 EJD
FACEBOOK’S SUPPLEMENTAL BRIEF
REGARDING SPOKEO’S APPLICATION TO
FACEBOOK’S MOTION TO DISMISS
Judge:
Trial Date:

Hon. Edward J. Davila
None Set

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COOLEY LLP
ATTO RNEY S AT LAW
SAN FRA NCI S CO

FACEBOOK’S SUPP. BR. REGARDING
SPOKEO’S APPLICATION TO MTD
CASE NO. 5:12-MD-02314 EJD

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I.

INTRODUCTION

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In Spokeo, Inc. v. Robins, the Supreme Court reversed the Ninth Circuit and held that “a

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plaintiff [does not] automatically satisf[y] the injury-in-fact requirement whenever a statute grants a

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person a statutory right and purports to authorize that person to sue to vindicate that right.” Slip op.

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at 9 (U.S. May 16, 2016). Rather, “Article III standing requires a concrete injury even in the context

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of a statutory violation.” Id. (emphasis added). The Supreme Court held that the Ninth Circuit,

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following its own Circuit precedent, 1 improperly examined only the “particularized” nature of the

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statutory rights the plaintiff alleged were violated, and neglected to determine whether the plaintiff

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had shown “concrete” injury resulting from the alleged statutory violation. Id. at 1-2, 5-8. This

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“independent requirement” of “concreteness” demands that an injury in fact be “‘de facto;’ that is, it

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must actually exist,” and must be “real” and not “abstract.” Id. at 8.

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In light of Spokeo’s holding, Plaintiffs’ Second Amended Complaint (“SAC”) is fatally

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deficient. Plaintiffs can no longer argue that merely by alleging statutory violations, they have

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standing to pursue their statutory claims.

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(“Opposition” or “Opp.”)), at 4.) Under Spokeo, they must instead show an actual, de facto harm for

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their statutory claims, just as they were required to do—and this Court held they failed to do—for

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their other claims.

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(Dkt. 104 Ex. 2 (Pls.’ Opp. to Mot. to Dismiss

The SAC, which essentially reiterates the allegations of harm from Plaintiffs’ previous

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pleading, falls far short of this requirement.

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allegations of harm in the First Amended Complaint (“FAC”) on their common-law claims (and

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claims under certain statutes that require injury or damages on their face) were too abstract and

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conjectural to meet Article III standing. Plaintiffs did not show that they lost the opportunity to sell

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their browsing histories, or that the information’s value was somehow diminished, as a result of

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Facebook’s alleged conduct. Because Plaintiffs still have not alleged that they suffered a concrete

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harm, the inquiry that Spokeo demands requires dismissal of all of Plaintiffs’ claims.

Indeed, this Court already found that Plaintiffs’

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Spokeo, slip op. at 5 & n.5 (citing Edwards v. First American Corp., 610 F. 3d 514 (9th Cir. 2010),
cert. granted sub nom. First American Financial Corp. v. Edwards, 564 U. S. 1018 (2011), cert.
dism’d as improvidently granted, 567 U. S. ___ (2012) (per curiam)).

COOLEY LLP
ATTO RNEY S AT LAW
SAN FRA NCI S CO

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FACEBOOK’S SUPP. BR. REGARDING
SPOKEO’S APPLICATION TO MTD
CASE NO. 5:12-MD-02314 EJD

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II.

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ARGUMENT
A.

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Under Spokeo, Plaintiffs lack standing for their statutory claims because they do
not allege concrete injuries fairly traceable to the alleged statutory violations.

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In their Opposition to Facebook’s Motion to Dismiss, Plaintiffs argued that “under current

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Ninth Circuit law, Art. III standing may exist solely by virtue of statutes creating legal rights. . . .

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Plaintiffs satisfy the injury-in-fact requirement for standing by alleging an invasion of a statutory

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legal right.” (Opp. at 4 (citing Edwards, 610 F.3d at 516-17) (emphasis added).) That is no longer

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true. Under Spokeo, Plaintiffs must plead a “concrete” injury that is “real” and “actually exists.”

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In Spokeo, the plaintiff, Robins, alleged that Spokeo violated the Fair Credit Reporting Act of

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1970 (“FCRA”) by posting inaccurate information about him on its website. Specifically, Robins

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alleged that his Spokeo profile incorrectly states that he is married, has children, is in his 50’s, has a

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job, is relatively affluent, and holds a graduate degree. Spokeo, slip op. at 4. These inaccuracies

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allegedly made it more difficult for him to obtain employment, and he brought suit under FCRA’s

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civil remedy provision. After the District Court dismissed the action for failure to allege Article III

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standing, the Ninth Circuit reversed, concluding that these allegations established injury in fact

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because Robins alleged that “Spokeo violated his statutory rights, not just the statutory rights of

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other people,” and because his “personal interests in the handling of his credit information are

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individualized rather than collective.” Id. at 5 (emphasis in original).

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The Supreme Court reversed, holding that injury in fact under Article III requires harm that is

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both “particularized” and “concrete,” and that the Ninth Circuit erred by focusing only on

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particularization and neglecting concreteness. 2 Id. at 8. In doing so, the Court flatly rejected the

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notion that simply bringing a claim for a statutory violation is sufficient to establish an injury in fact:

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Congress’ role in identifying and elevating intangible harms does not mean that a
plaintiff automatically satisfies the injury-in-fact requirement whenever a statute
grants a person a statutory right and purports to authorize that person to sue to
vindicate that right. Article III standing requires a concrete injury even in the context
of a statutory violation.

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Id. at 9 (emphasis added). Indeed, the Court noted that even where a FCRA violation leads to the

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The Supreme Court noted that the Ninth Circuit had relied on Edwards in reaching its conclusion.
Spokeo, slip op. at 5 & n.5.

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ATTO RNEY S AT LAW
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2.

FACEBOOK’S SUPP. BR. REGARDING
SPOKEO’S APPLICATION TO MTD
CASE NO. 5:12-MD-02314 EJD

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dissemination of false information, “not all inaccuracies cause harm or present any material risk of

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harm. An example that comes readily to mind is an incorrect zip code. It is difficult to imagine how

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the dissemination of an incorrect zip code, without more, could work any concrete harm.” Id. at 11.

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Spokeo requires this Court to revisit its analysis of standing for the Wiretap Act, SCA, and

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CIPA claims. Applying then-binding Circuit precedent, the Court held that standing was established

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simply because the FAC alleged that Facebook had violated these three statutes. (Dkt. No. 87

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(“Order”) at 14.) The Order further found that these allegations made out “a distinct and palpable

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injury considering the conduct prohibited by those statutes.” (Id.)

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But Spokeo held that an alleged statutory violation is not sufficient to establish standing. The

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Court must also find that Plaintiffs have alleged a concrete harm that actually exists. As explained in

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detail in Facebook’s Motion to Dismiss briefing, Plaintiffs have not alleged any harm—concrete or

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otherwise—that they suffered as a result of the purported statutory violations. The SAC adds

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nothing new to the injury allegations that the Court found lacking in the FAC. It leaves the

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allegations regarding the theoretical economic value of their referer URL information virtually

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unchanged from those in the FAC, and still contains no allegations that the value of their

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information has been diminished by Facebook’s conduct. (Compare Dkt. No. 35 (FAC) ¶¶ 10-14,

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111-125 with Dkt. No. 93 (SAC) ¶¶ 129-143; Dkt. No. 101 (Motion to Dismiss (“Motion”)) at 8.)

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While Spokeo reaffirmed the Supreme Court’s precedents holding that certain types of

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intangible harm can qualify as an injury-in-fact and that a “certainly impending” future harm also

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may qualify, Spokeo, slip op. at 9, nothing in the SAC identifies any particular intangible harm, let

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alone shows (1) “a close relationship to a harm that has traditionally been regarded as providing a

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basis for a lawsuit in English or American courts;” and (2) the “judgment of Congress” that the

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(unalleged) intangible harm should be sufficient to permit suit under the Wiretap Act or SCA. The

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SAC therefore falls far short of satisfying the Spokeo test. Plaintiffs’ citation of a single case from a

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Kentucky appellate court to show that at common law “some states recognize claims for privacy

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intrusions even absent economic damages” (Opp. at 6 (citing Rhodes v. Graham, 37 S.W.2d 46, 47

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(Ky. App. 1931)), hardly evinces a “traditional[]” basis that would support standing here. At most,

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Plaintiffs assert mere procedural violations of the Wiretap Act, SCA, and CIPA, which Spokeo held

COOLEY LLP
ATTO RNEY S AT LAW
SAN FRA NCI S CO

3.

FACEBOOK’S SUPP. BR. REGARDING
SPOKEO’S APPLICATION TO MTD
CASE NO. 5:12-MD-02314 EJD

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are insufficient to establish an injury in fact. 3

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Spokeo’s concreteness inquiry applies equally to Plaintiffs’ remaining statutory and common-

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law claims. Just as with their Wiretap Act, SCA, and CIPA claims, Plaintiffs have nowhere alleged

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a concrete harm stemming from their common law claims—one that is “real” and not “abstract”—

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and thus they fail to show Article III standing. 4

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B.

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Spokeo reaffirms Ninth Circuit precedent holding that a plaintiff does not have
standing in federal court to pursue state-law claims without an independent
showing of concrete and particularized injury.

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Plaintiffs spent much of their Opposition to Facebook’s Motion to Dismiss arguing that they

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have Article III standing by virtue of their state-law claims. (Opp. at 4-7.) As explained in the

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Reply, the Ninth Circuit has explicitly rejected this argument. (See Dkt. No. 109 (“Reply”) at 3-5.)

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Spokeo further undermines Plaintiffs’ argument.

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As discussed, Spokeo held that a mere violation of a federal statute without allegations of

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attendant concrete harm cannot satisfy Article III’s injury in fact requirement. It would make no

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sense if state legislatures or courts could do what Congress cannot—create private rights of action

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that can be litigated in federal court without proof of the concrete, de facto injury that Article III

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requires. Indeed, one court has already relied on Spokeo to find no standing where state statutory

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and common-law violations were alleged. Khan v. Children’s Nat’l Health Sys., No. CV TDC-15-

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2125, 2016 WL 2946165, at *7 (D. Md. May 19, 2016) (relying on Spokeo to reject the “proposition

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that a state legislature or court, through a state statute or cause of action, can manufacture Article III

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standing for a litigant who has not suffered a concrete injury”). As Spokeo makes clear, all claims—

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whether based on federal or state statutes, or common law—must be supported by plausible

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allegations of particularized and concrete harm to establish Article III standing, which Plaintiffs

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have not shown here.

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While the majority in Spokeo did not directly decide whether the plaintiff adequately alleged injury
in fact, the majority did not agree with the dissent, which would have held that the allegations about
the inaccuracies on Spokeo’s website and their effect on his employment prospects established
concreteness. The allegations of harm in Spokeo were more detailed than those in the SAC here.
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The SAC also fails to allege any particularized harm for the reasons stated in Facebook’s briefing,
a separate and independent reason why Plaintiffs lack standing. (See Motion at 8-10; Reply at 2.)

COOLEY LLP
ATTO RNEY S AT LAW
SAN FRA NCI S CO

4.

FACEBOOK’S SUPP. BR. REGARDING
SPOKEO’S APPLICATION TO MTD
CASE NO. 5:12-MD-02314 EJD

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C.

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In both their Opposition and oral argument on the Motion to Dismiss, Plaintiffs relied heavily

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on the Third Circuit’s ruling in In re Google Inc. Cookie Placement Consumer Privacy Litigation,

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806 F.3d 125 (3d Cir. 2015) (“Google Cookie Placement”), to contend they have standing.

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However, that ruling made the same mistake as the Ninth Circuit’s injury-in-fact analysis in

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Spokeo—it focused only on particularization and did not conduct a separate concreteness analysis.

The standing ruling in Google Cookie Placement was incorrect under Spokeo.

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The Third Circuit held that the plaintiffs there adequately alleged injury in fact because they

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“base their claims on highly specific allegations that the defendants, in the course of serving

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advertisements to their personal web browsers, implanted tracking cookies on their personal

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computers.” 806 F.3d at 134 (emphasis in original). The court did not identify any concrete harm

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that the plaintiffs alleged that they suffered. The Third Circuit’s holding is thus remarkably similar

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to the Ninth Circuit’s holding in Spokeo, which found injury in fact because the plaintiff “alleges

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that Spokeo violated his statutory rights, not just the statutory rights of other people” and because the

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plaintiff’s “personal interests in the handling of his credit information are individualized rather than

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collective.” Robins v. Spokeo, Inc., 742 F.3d 409, 413 (9th Cir. 2014).

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The Supreme Court held that this analysis was incomplete because it addressed only

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particularization and not concreteness. The Third Circuit’s decision in Google Cookie Placement

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made the same mistake by focusing only on the allegations that the plaintiffs’ “personal” computers

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and browsers were affected. That the court said “events that the complaint describes are concrete,

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particularized, and actual as to the plaintiffs” does not salvage the erroneous analysis. The Supreme

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Court in Spokeo recognized that the Ninth Circuit made the conclusory statement that the allegations

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established “‘concrete, de facto’ injuries,” Spokeo, slip op. at 8 (quoting Robins, 742 F.3d at 413),

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but nevertheless held that the Ninth Circuit’s analysis only considered particularization, not

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concreteness. This is precisely what the Third Circuit did in Google Cookie Placement. Thus,

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Plaintiffs’ reliance on that decision is misplaced in light of Spokeo.

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III.

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CONCLUSION
For these reasons and those set out in Facebook’s Motion to Dismiss briefing and oral

argument, Plaintiffs lack standing, and the SAC should be dismissed with prejudice.

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ATTO RNEY S AT LAW
SAN FRA NCI S CO

5.

FACEBOOK’S SUPP. BR. REGARDING
SPOKEO’S APPLICATION TO MTD
CASE NO. 5:12-MD-02314 EJD

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Respectfully submitted,
Dated: May 31, 2016

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COOLEY LLP
/s/ Matthew D. Brown
Matthew D. Brown
Attorneys for Facebook, Inc.

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132376120

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COOLEY LLP
ATTO RNEY S AT LAW
SAN FRA NCI S CO

6.

FACEBOOK’S SUPP. BR. REGARDING
SPOKEO’S APPLICATION TO MTD
CASE NO. 5:12-MD-02314 EJD