DiTirro v. Facebook, Inc.

Filing 20

MOTION to Dismiss First Amended Complaint; Memorandum of Points and Authorities filed by Facebook, Inc.. Motion Hearing set for 6/11/2014 09:00 AM in Courtroom 3, 3rd Floor, Oakland before Hon. Phyllis J. Hamilton. Responses due by 4/29/2014. Replies due by 5/6/2014. (Attachments: # 1 Declaration of Sandeep N. Solanki, # 2 Exhibit A to Declaration of Sandeep N. Solanki, # 3 Exhibit B to Declaration of Sandeep N. Solanki, # 4 Exhibit C to Declaration of Sandeep N. Solanki, # 5 Exhibit D to Declaration of Sandeep N. Solanki, # 6 Proposed Order Granting Motion to Dismiss First Amended Complaint)(Gutkin, Jeffrey) (Filed on 4/15/2014)

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COOLEYLLP
MICHAEL G. RHODES (116127)
([e-mail])
MATTHEW D. BROWN (196972)
([e-mail])
JEFFREY M. GUTKIN (216083)
([e-mail])
BENJAMIN H. KLEINE (257225)
([e-mail])
CANDACE A. JACKMAN (267599)
([e-mail])
101 California Street, 5th Floor
San Francisco, CA 94111-5800
Telephone:
[phone]
Facsimile:
[phone]

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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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OAKLAND DIVISION

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ANTHONY DITIRRO, KA TYA
BRESLER, AND MICHELLE
SHUMATE, individually and on behalf of
others similarly situated,

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Plaintiffs,

Case No. 5:14-cv-00132-PJH
DEFENDANT FACEBOOK, INC.'S NOTICE OF
MOTION AND MOTION TO DISMISS FIRST
AMENDED COMPLAINT; MEMORANDUM OF
POINTS AND AUTHORITIES

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v.
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FACEBOOK, INC., a Delaware
corporation,

Date:
Time:
Courtroom:
Judge:
Trial Date:

June 11, 2014
9:00a.m.
3
Hon. Phyllis J. Hamilton
None Set

Defendant.

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CoOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

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TABLE OF CONTENTS

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Page

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NOTICE OF MOTION AND MOTION TO DISMISS ............................................................................. 1

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STATEMENT OF RELIEF SOUGHT··································································································· 1
STATEMENT OF ISSUES TO BE DECIDED························································································ 1

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MEMORANDUM OF POINTS AND AUTHORITIES ............................................................................. 2

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I.

INTRODUCTION ................................................................................................................... 2

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II.

STATEMENT OF FACTS······································································································· 4

Ill.

LEGAL STANDARD .............................................................................................................. 6

IV.

ARGUMENT ························································································································· 7

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A.

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10

Plaintiffs fail to state a claim for false-light invasion of privacy
(Claim Three) .......................................................................................................... 7
1.

The alleged false light is not "highly offensive" to a reasonable
person .......................................................................................................... 7

2.

Plaintiffs fail to comply with Civil Code section 45a ................................. 9

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B.

Plaintiffs fail to state claims under the UCL and FAL (Claims Four and Five) ... 11
1.

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Plaintiffs lack standing under the UCL and FAL. ..................................... 11

2.

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Plaintiffs fail to allege particular misrepresentations and reliance ........... 13

C.

Plaintiffs fail to state a claim under the CLRA (Claim Six) ................................. 14

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D.

Plaintiffs fail to state a claim for negligence (Claim Seven) ................................ 16

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E.

Plaintiffs fail to state a claim for breach of contract (Claim Eight) ...................... 19
1.

Plaintiffs allege no appreciable damage from the alleged breach ............. 20

3.

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Plaintiffs fail to identify the contract term(s) allegedly breached ............. 20

2.

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Plaintiffs' implied-contract claim fails for additional reasons .................. 21

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F.

Plaintiffs fail to state a claim for breach of the implied covenant of good faith
and fair dealing (Claim Nine) ............................................................................... 23

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G.

Plaintiffs fail to state a claim for unjust enrichment (Claim Ten) ......................... 24

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H.

Plaintiffs' claims should be dismissed with prejudice .......................................... 25

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V.

CONCLUSION ................................................ ········ ...... ················ ....................................... 25

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CooLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

1.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

TABLE OF AUTHORITIES

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Page

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CASES

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Aas v. Superior Court,
24 Cal. 4th 627 (2000) ................................................................................................ 17, 18, 19

5
6
7
8
9
10
11
12
13
14

Allen v. Hylands, Inc.,
No. 12-cv-1150, 2012 WL 1656750 (C.D. Cal. May 2, 2012) ............................................... 25
AmeriFirst Bank v. TJX Cos.,
564 F.3d 489 (1st Cir. 2009) ................................................................................................... 18
Artiglio v. Corning Inc.,
18 Cal. 4th 604 (1998) ............................................................................................................ 16
Ashcroft v. Iqbal,
556 u.s. 662 (2009) ............................................................................................................ 6, 19
Baltazar v. Apple, Inc.,
CV 10-3231-JF, 2011 U.S. Dist. LEXIS 13187 (N.D. Cal. Feb. 10, 2011) ............................ 14
Barrier Specialty Roofing & Coatings, Inc. v. lei Paints North America, Inc.,
No. CV 07-1614 LJO TAG, 2008 U.S. Dist. LEXIS 104963 (E.D. Cal. May 6, 2008) ......... 18

15
16
17
18
19

Be In, Inc. v. Google Inc.,
No. 12-CV-03373-LHK, 2013 U.S. Dist. LEXIS 147047 (N.D. Cal. Oct. 9, 2013) .............. 22
Bell Atlantic Corp. v. Twombly,
550 u.s. 544 (2007) ...................................................................................................... 6, 12, 19
Berkley v. Dowds,
152 Cal. App. 4th 518 (2007) .................................................................................................. 16

20
21
22
23
24

Bilodeau v. McAfee, Inc.,
No. 12-CV-04589-LHK, 2013 U.S. Dist. LEXIS 89226 (N.D. Cal. June 24, 2013) .............. 20
Brahmana v. Lembo,
No. C-09-00106 RMW, 2010 U.S. Dist. LEXIS 24784 (N.D. Cal. Mar. 17, 2010) ................. 7
Branch v. Homejed Bank,
6 Cal. App. 4th 793 (1992) ...................................................................................................... 19

25
26
27

California State Automobile Association Inter-Insurance Bureau v. Policy Management
System Corp.,
No. C 93-4232 CW, 1996 U.S. Dist. LEXIS 21823 (N.D. Cal. Jan. 9, 1996) ........................ 16

28
COOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

ll.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

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2
3
4
5
6
7
8

TABLE OF AUTHORITIES
CONTINUED

Page
Careau & Co. v. Security Pacific Business Credit, Inc.,
222 Cal. App. 3d 1371 (1990) ................................................................................................. 23
Carillo v. Nationwide Mutual Fire Insurance Co.,
No. C 07-1979 JF, 2007 U.S. Dist. LEXIS 47919 (N.D. Cal. June 25, 2007) ........................ 17
Code Rebel, LLC v. Aqua Connect, Inc.,
No. 13-4539 RSWL, 2013 U.S. Dist. LEXIS 137937 (C.D. Cal. Sept. 24, 2013) ................. 11
Core-Vent Corp. v. Nobel Industries Sweden. A.B.,
No. 97-552494, 1998 U.S. App. LEXIS 22175 (9th Cir. Sept. 9, 1998) ................................ 11

9
10
11

12
13

Coyotzi v. Countrywide Financial Corp.,
No. CV F 09-1036 LJO, 2009 U.S. Dist. LEXIS 91084 (E.D. Cal. Sept. 15, 2009) .............. 20
Cumis Insurance Society, Inc. v. BJ's Wholesale Club, Inc.,
918 N.E.2d 36 (Mass. 2009) ................................................................................................... 18
Data/ex (Ireland) Ltd. v. PSA, Inc.,
No. CV 01-06482 DDP, 2003 U.S. Dist. LEXIS 27563 (C.D. Cal. Jan. 30, 2003) ................ 10

14
15
16
17
18

Dean v. Guard Publishing Co.,
744 P.2d 1296 (Ore. App. 1987) ............................................................................................... 8
Division of Labor Law Enforcement v. Transpacific Transportation Co.,
69 Cal. App. 3d 268 (1977) ............................................................................................... 19, 20
Donohue v. Apple, Inc.,
871 F. Supp. 2d 913 (N.D. Cal. 2012) .............................................................................. 14, 20

19
20
21
22
23

Downing v. Abercrombie & Fitch,
265 F.3d 994 (9th Cir. 2001) ............................................................................................... 9, 10
Duarte v. Freeland,
No. C05-02780 MJJ, 2007 U.S. Dist. LEXIS 73750 (N.D. Cal. Sept. 24, 2007) ................... 22
Durell v. Sharp Healthcare,
183 Cal. App. 4th 1350 (2010) .......................................................................................... 16, 24

24
25
26
27

Edwards v. Marin Park, Inc.,
356 F.3d 1058 (9th Cir. 2003) ................................................................................................. 14
In re Facebook Privacy Litigation,
791 F. Supp. 2d 705 (N.D. Cal. 2011) .............................................................................. 12, 15

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COOLEYLLP
ATTORNEYS AT LAW
SAN fRANCISCO

111.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

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3
4

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6

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8

TABLE OF AUTHORITIES
CONTINUED

Page
Fellows v. National Enquirer, Inc.,
42 Cal. 3d 234 (1986) ....................................................................................................... 7, 8, 9
Ferrington v. McAfee, Inc.,
No. 10-CV-01455-LHK, 2010 WL 3910169 (N.D. Cal. Oct. 5, 2010) .................................. 15
First Commercial Mortgage Co. v. Reece,
89 Cal. App. 4th 731 (200 1) .................................................................................................... 20
Folgelstrom v. Lamps Plus, Inc.,
195 Cal. App. 4th 986 (2011) .................................................................................................. 13

9
10
11
12
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Fraley v. Facebook, Inc.,
830 F. Supp. 2d 785 (N.D. Cal. 2011) .................................................................................... 24
Gautier v. General Telephone Co.,
234 Cal. App. 2d 302 (1965) ................................................................................................... 19
In re Google Inc. Cookie Placement Consumer Privacy Litigation,
---F. Supp. 2d ----,No. 12-2358-SLR, 2013 WL 5582866 (D. Del. Oct. 9, 2013) .......... 12, 15

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15
16
17
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In re Google Inc. Street View Electronic Communications Litigation,
794 F. Supp. 2d 1067 (N.D. Cal. 2011) .................................................................................. 12
Gould v. Maryland Sound Industries, Inc.,
31 Cal. App. 4th 1137 (1995) .................................................................................................. 22
Hill v. Roll International Corp.,
195 Cal. App. 4th 1295 (2011) ................................................................................................ 24

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20
21
22
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Hunley v. Orbital Sciences Corp.,
No. CV-05-1879-PHX-DGC, 2007 U.S. Dist. LEXIS 24101 (D. Ariz. Mar. 27, 2007) .......... 8
In re iPhone Application Litigation,
844 F. Supp. 2d 1040 (N.D. Cal. 2012) .................................................................................. 17
In re iPhone Application Litigation,
No. 11-MD-02250-LHK, 2011 WL 4403963 (N.D. Cal. Sept. 20, 2011) .................. 15, 17,21

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25
26
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In re iPhone Application Litigation,
No. 11-MD-02250-LHK, 2013 WL 6212591 (N.D. Cal. Nov. 25, 2013) .............................. 15
Isuzu Motors Ltd. v. Consumers Union of United States, Inc.,
12 F. Supp. 2d 1035 (C.D. Cal. 1998) ..................................................................................... 10

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COOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

lV.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

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5

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7
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TABLE OF AUTHORITIES
CONTINUED

Page
In re Jetblue Airways Corp. Privacy Litigation,
379 F. Supp. 2d 299 (E.D.N.Y. 2005) .................................................................................... 21
Kaing v. Pulte Homes, Inc.,
No. 09-5057 SC, 2010 U.S. Dist. LEXIS 21320 (N.D. Cal. Feb. 18, 2010) ................... 15, 16
Kalitta Air, LLC v. Century Texas Airborne Systems, Inc.,
315 F. App'x 603 (9th Cir. 2008) ........................................................................................... 17
Kapellas v. Kofman,
1 Cal. 3d 20 (1969) ................................................................................................................... 9

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10
11
12
13

Kearns v. Ford Motor Co.,
567 F. 3d 1120 (9th Cir. 2009) ........................................................... :.................................... 13
KEMA, Inc. v. Koperwhats,
No. C 09-1587 MMC, 2010 U.S. Dist. LEXIS 90803 (N.D. Cal. Sept. 1, 2010) ................... 11
Kennedy v. Bank ofAm., NA.,
No.: 12-CV-952 YGR, 2012 U.S. Dist. LEXIS 58636 (N.D. Cal. Apr. 26, 2012) ................. 19

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15
16
17
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Klein v. Chevron USA., Inc.,
202 Cal. App. 4th 1342 (2012) ................................................................................................ 24
Kwikset Corp. v. Superior Court,
51 Cal. 4th 310 (2011) ................................................................................................ 12, 13, 14
LaCourt v. Specific Media, Inc.,
No. 10-cv-1256 GW, 2011 WL 1661532 (C.D. Cal. Apr. 28, 2011) ...................................... 21

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20
21
22
23

Lamke v. Sunstate Equipment Co.,
387 F. Supp. 2d 1044 (N.D. Cal. 2004) ............................................................................ 23, 24
Levine v. Blue Shield of California,
189 Cal. App. 4th 1117 (201 0) .......................................................................................... 24, 25
Low v. Linkedin Corp.,
900 F. Supp. 2d 1010 (N.D. Cal. 2012) .................................................................................. 21

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25
26
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Low v. Linkedin Corp.,
No. 11-cv-01468-LHK, 2011 WL 5509848 (N.D. Cal. Nov. 11, 2011) ................................. 13
Lyons v. Coxcom, Inc.,
718 F. Supp. 2d 1232 (S.D. Cal. 2009) ................................................................................... 23

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CoOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

V.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

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7
8

TABLE OF AUTHORITIES
CONTINUED

Page
MG. v. Time Warner, Inc.,
89 Cal. App. 4th 623 (200 1) ...................................................................................................... 8
McAfee v. Francis,
No. 5:11-CV-00821-LHK, 2011 U.S. Dist. LEXIS 83878 (N.D. Cal. Aug. 1, 2011) ............ 20
McKinney v. Google, Inc.,
No. 5:10-CV 01177 EJD, 2011 U.S. Dist. LEXIS 97958 (N.D. Cal. Aug. 30, 2011) ...... 17, 18
Melchior v. New Line Products, Inc.,
106 Cal. App. 4th 779 (2003) .................................................................................................. 24

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10
11
12
13

Missud v. Oakland Coliseum Joint Venture,
No. 12-02967 JCS, 2013 U.S. Dist. LEXIS 91528 (N.D. Cal. June 27, 2013) ....................... 16
Navarro v. Block,
250 F.3d 729 (9th Cir. 2001) ..................................................................................................... 6
Newcombe v. Adolf Coors Co.,
157 F.3d 686 (9th Cir. 1998) ....................................................................................... 7, 8, 9, 11

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15
16
17
18

Nucal Foods, Inc. v. Quality Egg LLC,
918 F. Supp. 2d 1023 (E.D. Cal. 2013) ................................................................................... 18

0 'Connor v. Uber Technologies, Inc.,
No. C-13-3826 EMC, 2013 U.S. Dist. LEXIS 171813 (N.D. Cal. Dec. 5, 2013) .................. 22
Pennsylvania State Employees Credit Union v. Fifth Third Bank,
398 F. Supp. 2d 317 (M.D. Pa. 2005) ..................................................................................... 18

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20
21
22
23

Pacini v. Wells Fargo Bank, N.A.,
No. 12-04605 RS, 2012 U.S. Dist. LEXIS 183151 (N.D. Cal. Dec. 26, 2012) ........................ 8
Perez v. Wells Fargo Bank, N.A.,
No. C-11-02279 JCS, 2011 U.S. Dist. LEXIS 96706 (N.D. Cal. Aug. 29, 2011) .................. 23
Plastina v. Wells Fargo Bank,
873 F. Supp. 2d 1179 (N.D. Cal. 2012) .................................................................................. 23

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25
26
27

Racine & Laramie, Ltd. v. Department of Parks & Recreation,
11 Cal. App. 4th 1026 (1992) .................................................................................................. 23
Robinson Helicopter Co. v. Dana Corp.,
34 Cal. 4th 979 (2004) ............................................................................................................ 17

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COOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

VI.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

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TABLE OF AUTHORITIES
CONTINUED

Page
Robinson v. HSBC Bank USA,
732 F. Supp. 2d 976 (N.D. Cal. 2010) .................................................................................... 12
Rodriguez v. Bank of New York Mellon,
No. 13-CV-1830-GPC-BLM, 2014 U.S. Dist. LEXIS 6501 (S.D. Cal. Jan. 17, 2014) .......... 16
Roling v. E*Trade Securities, LLC,
756 F. Supp. 2d 1179 (N.D. Cal. 201 0) .................................................................................. 22
Ruiz v. Gap, Inc.,
622 F. Supp. 2d 908 (N.D. Cal. 2009) .................................................................................... 20

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10
11
12
13

Schauer v. Mandarin Gems of California, Inc.,
125 Cal. App. 4th 949 (2005) .................................................................................................. 15
Selleck v. Globe International, Inc.,
166 Cal. App. 3d 1123 (1985) ................................................................................................... 9
Shook v. Pearson,
99 Cal. App. 2d 348 (1950) ..................................................................................................... 10

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Silva v. Hearst Corp.,
No. CV 97-4142 DDP, 1997 U.S. Dist. LEXIS 22653 (C.D. Cal. Aug. 21, 1997) .................. 8
In re Sony Gaming Networks & Customer Data Security Breach Litigation,
903 F. Supp. 2d 942 (S.D. Cal. 2012) ......................................................................... 12, 17, 18
Steckman v. Hart Brewing, Inc.,
143 F.3d 1293 (9th Cir. 1998) ................................................................................................. 25

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Sweet v. Bridge Base Inc.,
No. CV F 08-1034 AWl, 2009 U.S. Dist. LEXIS 44712 (E.D. Cal. May 28, 2009) .............. 20
Thompson v. Home Depot, Inc.,
No. 07-cv-10581EG, 2007 WL 2746603 (S.D. Cal. Sept. 18, 2007) ..................................... 12
In re Tobacco II,
46 Cal. 4th 298 (2009) ............................................................................................................ 13

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Tollefson v. Price,
430 P.2d 990 (Ore. 1967) .......................................................................................................... 8
Vess v. Ciba-Geigy Corp. USA,
317 F.3d 1097 (9th Cir. 2003) ..................................................................................... 13, 14, 16

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CooLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

Vll.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-CV-00132-PJH

1

TABLE OF AUTHORITIES
CONTINUED

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Page
Vicuna v. Alexia Foods, Inc.,
No. 11-cv-6119, 2012 U.S. Dist. LEXIS 59408 (N.D. Cal. Apr. 27, 2012) ........................... 24
Yari v. Producers Guild ofAmerica, Inc.,
161 Cal. App. 4th 172 (2008) ............................................................................................ 19, 22
Youngman v. Nevada Irrigation District,
70 Cal. 2d 240 (1969) ............................................................................................................. 22
Yu v. Signet Bank/Virginia,
69 Cal. App. 4th 1377 (1999) .................................................................................................. 18

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Yunker v. Pandora Media, Inc.,
No. 11-3113 JSW, 2013 WL 1282980 (N.D. Cal. Mar. 26, 2013) ......................................... 15

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In re Zynga Privacy Litigation,
Order, No. 10-cv-04680 (N.D. Cal. Nov. 22, 2011) ............................................................... 23

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STATUTES

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California Business & Professions Code
§ 17200 ...................................................................................................................................... 1
§ 17204 .................................................................................................................................... 12
§ 17500 ...................................................................................................................................... 1
§ 17535 .................................................................................................................................... 12

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California Civil Code
§ 44 ............................................................................................................................................ 9
§ 45 ............................................................................................................................................ 9
§ 45a .................................................................................................................................. 1, 7, 9
§ 48a .................................................................................................................................. 10, 11
§ 1750 ........................................................................................................................................ 1
RULES

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Federal Rules of Civil Procedure
Rule 9(b) ...................................................................................................................... 13, 14, 16
Rule 9(g) ............................................................................................................................ 10, 11
Rule 12(b)(6) ......................................................................................................................... 1, 6

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OTHER AUTHORITIES

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Restatement 2d of Torts .................................................................................................................. 7

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CoDLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

viii.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

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NOTICE OF MOTION AND MOTION TO DISMISS

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TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

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PLEASE TAKE NOTICE that on June 11, 2014 at 9:00a.m. or as soon thereafter as this

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motion may be heard in the above-entitled Court, located at 1301 Clay Street, Oakland,

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California, in Courtroom 3, Third Floor, Defendant Facebook, Inc. ("Facebook") will move to

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dismiss Plaintiffs' First Amended Complaint ("FAC"). Facebook's motion is made pursuant to

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Federal Rule of Civil Procedure 12(b)(6) and is based on this Notice of Motion and Motion to

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Dismiss, the Memorandum of Points and Authorities herein, the concurrently filed Declaration of

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Sandeep N. Solanki ("Solanki Decl.") and the exhibits thereto, the concurrently filed Request for

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Consideration of Documents Incorporated into the First Amended Complaint, all pleadings and

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papers on file, and on such other matters as may be properly before the Court.

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STATEMENT OF RELIEF SOUGHT

Face book respectfully seeks dismissal of Counts Three through Ten of the FAC, with
prejudice, for failure to state a claim.

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STATEMENT OF ISSUES TO BE DECIDED

1.

Whether Plaintiffs' claim for false light invasion of privacy should be dismissed

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with prejudice because the allegedly false statements are not "highly offensive" to a reasonable

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person, and because Plaintiffs have failed to comply with California Civil Code section 45a.

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2.

Whether Plaintiffs' claim for violation of California's Unfair Competition Law

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("UCL"), Cal. Bus. & Prof. Code§§ 17200 et seq., and False Advertising Law ("FAL"), Cal.

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Bus. & Prof. Code §§ 17500 et seq., should be dismissed with prejudice because Plaintiffs allege

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no loss of money or property, as required to confer standing, and allege no facts to support either

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the alleged misrepresentations by Facebook or their reliance thereon.

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3.

Whether Plaintiffs' claim for violation of California's Consumers Legal Remedies

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Act ("CLRA"), Cal. Civil Code §§ 1750 et seq., should be dismissed with prejudice because

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Plaintiffs are not "consumers" and Facebook does not offer a "good or service" within the

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meaning of the statute, because Plaintiffs have failed to allege a CLRA injury, and because

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Plaintiffs' fraud-based allegations are insufficiently pleaded.

COOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

1.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

4.

Whether Plaintiffs' negligence claim should be dismissed with prejudice because

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Plaintiffs allege no cognizable duty of care, because the economic-loss doctrine bars their claim,

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and because they fail to allege appreciable damages.

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5.

Whether Plaintiffs' claim for breach of contract should be dismissed with

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prejudice because they fail to identify a provision of the contract that Facebook allegedly

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breached, allege no cognizable damages, allege no conduct supporting an implied contract, and

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allege an implied-contract claim wholly duplicative of their express-contract claim.

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6.

Whether Plaintiffs' claim for breach of the implied covenant of good faith and fair

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dealing should be dismissed because Plaintiffs fail to identify the contract provisions allegedly

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frustrated by Facebook, allege no cognizable damages, and allege a claim that duplicates

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Plaintiffs' breach-of-contract claim.

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7.

Whether Plaintiffs' claim for unjust enrichment should be dismissed with

prejudice because that cause of action does not exist under California law.

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MEMORANDUM OF POINTS AND AUTHORITIES
I.

INTRODUCTION

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This lawsuit against Facebook distills down to one essential claim-Plaintiffs deny that

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they clicked on a Facebook "Like" button associated with particular content, even though

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Facebook's objective, computerized records, including the information in Plaintiffs' own

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accounts, establish that Plaintiffs did click the Like button for that (and many other types of)

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content. Plaintiffs offer no basis whatsoever to rule out perfectly plausible and benign

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explanations for their claims, including that Plaintiffs clicked "Like" and forgot, or that they

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clicked inadvertently and did not realize it. Instead, Plaintiffs insist, with no evidence other than

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their own say-so, that Facebook intentionally planted a single fake Like in each of their accounts

24

(among many other Likes that Plaintiffs do not dispute). Even though the popularity ofFacebook

25

is proof enough of the site's ability to accurately record and share the posts, content, and social

26

actions of over one billion people, Plaintiffs maintain that these three disputed Likes cannot have

27

arisen from their own actions. Plaintiffs' claims lack any plausible factual basis.

28

Plaintiffs seek redress for their purported "embarrassment, shock ... anxiety, and dismay"

COOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

2.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

in learning that their friends may have seen that they liked, respectively, USA Today, Kohl's, and

2

Duracell. While Plaintiffs "ha[ve] nothing negative to say about" these businesses (which

3

Plaintiffs can also "Unlike" at any time), they nevertheless claim "irreparable harm" and "cruel

4

and unjust hardship and humiliation." Plaintiffs seek money damages, inter alia, because they

5

"did not receive the benefit of the bargain for which they contracted and . . . paid valuable

6

consideration" when they joined Facebook's free service. They also seek punitive damages.

7

Plaintiffs' claims are baseless. All but two should be dismissed immediately, and the

8

remainder will fail early in the litigation (and cannot support class-wide allegations, in any case).

9

Plaintiffs' claim for false-light invasion of privacy (Count 3) is insupportable, because Plaintiffs

10

did not and cannot allege that the disputed Likes are "highly offensive," and have not pleaded the

11

statutorily required "special damages" required for such a claim. Plaintiffs' unfair-competition

12

and false-advertising claims (Counts 4 and 5) fail because Plaintiffs allege no cognizable "loss of

13

money or property" from their use ofFacebook's free service, and because they fail to adequately

14

allege the misrepresentations or the required reliance. Plaintiffs' claim under the Consumers

15

Legal Remedies Act (Count 6) is, likewise, untenable both because Plaintiffs are not

16

"consumers," and Facebook's free website is not a "good or service," under the CLRA.

17

Plaintiffs' inapt negligence and contract claims (Counts 7, 8, and 9) fare no better. As to

18

negligence, Plaintiffs allege no viable source of a duty owed by Facebook, and bring claims that

19

are barred by the economic-loss doctrine. Similarly, Plaintiffs' contract claim identifies no term

20

that Facebook breached and fails to allege cognizable damages. Plaintiffs' claim under the

21

implied covenant of good faith also fails because it specifies no term of the contract that was

22

frustrated, alleges no cognizable damages, and impermissibly duplicates their breach-of-contract

23

claim. Finally, Plaintiffs' unjust-enrichment claim (Count 10) cannot go forward because there is

24

no such standalone claim.

25

For all these reasons, this case should never have been brought. The bulk of it should now

26

be dismissed with prejudice, with the remainder to be disposed of after targeted, individualized

27

discovery regarding Plaintiffs' Facebook accounts and activities.

28
COOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

3.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

II.

STATEMENT OF FACTS

2

Facebook is the world's largest social networking service, with more than one billion

3

users worldwide. (PAC ,-r 9.) It is, and always has been, free to use. To join Facebook, a person

4

must register for the service (F AC ,-r 10), and agree to Facebook' s terms of use (known as the

5

"Statement of Rights and Responsibilities" or "SRR") (see FAC ,-r,-r 18, 96, 98). Each person has

6

a personal profile page (or "Time line"), which he or she can populate with photographs, interests,

7

and other information. (PAC ,-r,-r 11, 16.) A person may also connect with others as "Friends"

8

(F AC ,-r 10), and may elect to share certain content with them (see FAC ,-r,-r 10, 11, 22).

9

A "very popular feature" on Facebook's website is the "Like Button," which "allow[s]

10

users to express their appreciation of content such as other [users'] Facebook status, comments,

11

and posted photos." (F AC ,-r 13.) People can also "Like" Facebook Pages, which are maintained

12

by companies, charitable organizations, and others. (PAC ,-r,-r 12, 14-15, Ex. C.) The Facebook

13

Like button appears not only on Facebook, but "is embedded in over 7.5 million websites." (FAC

14

,-r 17.) Plaintiffs allege that "[a] single click on a like button by a particular Facebook user [may]

15

advertise to . . . others that a particular user backs or likes a particular company's product or

16

service." (PAC ,-r 15.) 1

17

A statement that a person has "Liked" a Facebook Page (e.g., "Jane Smith Likes Barack

18

Obama") may appear contextually in a number of places throughout the site, including on the

19

person's Timeline, on the Facebook Page that the person Liked, and on the home page (or News

20

Feed) 2 of the person's Friends. (PAC ,-r,-r 12-16, Exs. A-C.) For example, if Jane Smith Liked the

21

Oakland A's on Facebook, and the Oakland A's posted a photo from a recent victory or displayed

22

an advertisement for an upcoming game, Facebook may display, as context, the statement "Jane

23

Smith Likes the Oakland A's" next to the photo or ad. (See id.) People always maintain control

24

over who can see their Likes (whether next to ads or otherwise)-e.g., no one, Friends, a custom

25
26
27
28

1

Plaintiffs claim that a "single click on a like button ... will advertise to thousands of others"
that the user Likes content on Facebook. (PAC ,-r 15.) But a person's Likes are shared only with
the audience he or she chooses via his or her privacy settings.
2

The News Feed is a running list of updates from and about a user's Friends. (PAC, Exs. A-B.)

CooLEvLLP
ATTORNEYS AT LAW

SAN FRANCISCO

4.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

group of Friends, or the public-and they can Unlike Pages at any time. (Id. ,-r,-r 13-22.)
2

Plaintiffs are three longtime Facebook users who have Liked a variety of content on

3

Facebook but take issue with a single Like in each of their accounts that was allegedly

4

republished next to an advertisement. 3 Plaintiff DiTirro, who has used Facebook since 2009,

5

alleges that, in approximately "November of 2013, [he] received notification from one of his

6

Facebook friends that [he] was featured on Facebook, 'Liking' USA TODAY newspaper in a

7

Facebook sponsored advertisement." (F AC ,-r,-r 18, 24.) DiTirro claims that "he is not an avid

8

reader of USA TODAY," does not "endorse the newspaper," and has "never clicked his 'Like

9

Button' on USA TODA Y's website, USA TODA Y's Facebook page, nor any Facebook content

10

or advertisement featuring USA TODAY." (FAC ,-r,-r 25-27.) Plaintiff Bresler, who has used

11

Facebook since 2008, makes the same claims regarding ads for Duracell in which she allegedly

12

appeared.

13

makes the same claims with respect to ads for Kohl's. (FAC ,-r,-r 20, 39-41l Plaintiffs bring ten

14

claims on behalf of a putative nationwide class, including false-light invasion of privacy,

15

violations of the UCL, FAL, and CLRA, negligence, breach of contract, breach of the implied

16

covenant of good faith and fair dealing, and unjust enrichment. (F AC ,-r,-r 57 -Ill.)

17

(F AC ,-r,-r 19, 32-34.) Plaintiff Shumate, who has also used Facebook since 2008,

Plaintiffs

claim

that

Facebook

"knowingly,"

"willfully,"

"intentionally,"

and

(See, e.g., FAC ,-r,-r 28, 31, 91.)

18

"maliciously" made allegedly false statements about them.

19

Although Plaintiffs have used Facebook for the past five to six years, the FAC does nothing to

20

undermine the more plausible explanation that Plaintiffs "Liked" the content at issue and simply

21

forgot that they did. Plaintiffs' FAC also fails to acknowledge that they may have inadvertently

22

Liked the content at issue by misclicking on the Facebook website (or elsewhere) or by

23

mistapping on their mobile phones. In fact, nowhere in the FAC do Plaintiffs dispute that the

24

3

25
26
27
28

Plaintiffs' claims do not arise from their appearance in ads generally, and they do not challenge
Facebook's practice of selling ads displaying statements that Users "Like" particular things on
Facebook. Indeed, Plaintiffs concede, as they must, that all Users consent to Facebook's
commercial use of their name, photos, and other content by agreeing to the SRR. (See FAC ,-r 98.)
4

The attached screenshot for Shumate (F AC, Ex. C) is not actually an ad, but a page displaying
her Likes in her personal profile. Of the twelve-plus pages displayed, Shumate apparently claims
to not recall liking only the Kohl's Facebook Page.

COOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

5.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

Likes in question appear on their own "Activity Log," which is a personal record of all of one's

2

activity on Facebook. Nor do Plaintiffs offer any explanation as to why Facebook would falsely

3

attribute these Likes to them, among the many other Likes that Plaintiffs do not challenge.

4

Plaintiffs also do not claim that the content that appeared next to their Like statements was

5

offensive. To the contrary, each Plaintiff "has nothing negative to say" about the companies in

6

whose ads he or she allegedly appeared. (FAC ~~ 25, 33, 40.) Parroting various elements of their

7

chosen causes of action, however, Plaintiffs allege-incongruously-that the allegedly false

8

Likes caused them "cruel and unjust hardship and humiliation" (F AC

9

reputation" (FAC

~

63; see also id.

~

~

61 ), "impairment of their

73), and a loss of money or property, "including but not

10

limited to ... misappropriation of their likenesses (which has monetary value), the lessened value

11

of DEFENDANT'S service to them, and the diminishment in value of their personal information"

12

(FAC ~ 93). Plaintiffs plead no facts in support of these allegations, as discussed below.

13

Ill.

LEGAL STANDARD

14

Rule 12(b)(6) requires dismissal when a plaintiff fails to present a cognizable legal theory

15

or to allege sufficient facts supporting a legal theory upon which relief may be granted. Navarro

16

v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Although "all material allegations ... are accepted

17

as true," id., "labels and conclusions, and a formulaic recitation of the elements [cannot defeat

18

dismissal]," and "courts are not bound to accept as true a legal conclusion couched as a factual

19

allegation," Bell At!. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation omitted).

20

Once a court sets aside conclusory assertions, it considers the well-pleaded factual

21

allegations to assess whether the plaintiff has pleaded sufficient facts to state a facially plausible

22

claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). "A claim has facial plausibility

23

when the plaintiff pleads factual content that allows the court to draw the reasonable inference

24

that the defendant is liable for the misconduct alleged." !d. at 678. "Where a complaint pleads

25

facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between

26

possibility and plausibility of entitlement to relief."' !d. (quoting Twombly, 550 U.S. at 557).

27
28
COOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

6.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

IV.

ARGUMENT

2

A.

3

Plaintiffs allege that Facebook portrayed them in a false light by displaying statements

4

that they "Liked" content on Facebook (USA Today, Duracell, and Kohl's) when they had not

5

clicked a Like button for that content. (FAC ,-r,-r 77-86.) To state a claim for false-light invasion

6

of privacy, a plaintiff must plead (1) a public disclosure, (2) that places plaintiff in a false light,

7

(3) that would be highly offensive to a reasonable person. See Fellows v. Nat'! Enquirer, Inc., 42

8

Cal. 3d 234, 238 (1986); Brahmana v. Lembo, No. C-09-00106 RMW, 2010 U.S. Dist. LEXIS

9

24784, at *10-11 (N.D. Cal. Mar. 17, 2010). Plaintiffs' false-light claim fails because, among

10

other things, they fail to allege (and cannot allege) that the alleged false light would be "highly

11

offensive" to a reasonable person and because they fail to comply (and cannot comply) with

12

California Civil Code section 45a.

13

Plaintiffs fail to state a claim for false-light invasion of privacy (Claim Three).

1.

The alleged false light is not "highly offensive" to a reasonable person.

14

"[T]o be actionable, the false light in which the plaintiff is placed must be highly

15

offensive to a reasonable person." Fellows, 42 Cal. 3d at 238-39; see also Newcombe v. Adolf

16

Coors Co., 157 F.3d 686, 694-95 (9th Cir. 1998). "The plaintiff's privacy is not invaded when

17

the unimportant false statements are made, even when they are made deliberately. It is only when

18

there is such a major misrepresentation of his character, history, activities or beliefs that serious

19

offense may reasonably be expected to be taken by a reasonable man in his position, that there is

20

a cause of action for invasion of privacy." Restatement 2d of Torts, § 652E, cmt. c; see also

21

Brahmana, 2010 U.S. Dist. LEX IS 24 784, at * 10-11 ("To avoid a conflict with First Amendment

22

rights, courts have narrowly construed the 'highly offensive' standard." (citation omitted)).

23

The alleged false statements here ("Tony DiTirro Likes USA Today," "Kat Bresler Likes

24

Duracell," and "Michelle Shumate Likes Kohl's") do not meet this standard.

25

themselves acknowledge that they have "nothing negative to say" about the companies that they

26

are alleged to have Liked (F AC ,-r,-r 25, 33, 40)-a candid admission belying any claim that

27

Plaintiffs were offended by the alleged statements. Nor can Plaintiffs claim that a reasonable

28

person would take offense to mere affiliation with well-known American companies, or that such

CoOLEYLLP
ATTORNEYS AT LAW
SAN fRANCISCO

7.

Plaintiffs

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-CV-00132-PJH

1

affiliation would expose them to "hatred, contempt, ridicule, or obloquy," MG. v. Time Warner,

2

Inc., 89 Cal. App. 4th 623, 636 (200 1). 5 The alleged statements here are, instead, of the type that

3

has been repeatedly deemed too trivial to support a false-light claim. See, e.g., Newcombe, 157

4

F.3d at 694-95 (no false-light claim where magazine ad "made it appear that [plaintiff] endorses

5

alcohol"); Silva v. Hearst Corp., No. CV 97-4142 DDP, 1997 U.S. Dist. LEXIS 22653, at *7-8

6

(C. D. Cal. Aug. 21, 1997) ("it is not highly offensive to state that a person has benefactors");

7

Hunley v. Orbital Scis. Corp., No. CV-05-1879-PHX-DGC, 2007 U.S. Dist. LEXIS 24101, at *7

8

(D. Ariz. Mar. 27, 2007) (listing plaintiff as attendee of seminar on professionalism "cannot fairly

9

be characterized as highly offensive to a reasonable person"). 6

10

Unable to meet their pleading burden, Plaintiffs attempt a sleight-of-hand, alleging that

11

"[t]he publicity created by DEFENDANT was offensive and objectionable to PLAINTIFFS and

12

Class members, and to a reasonable person of ordinary sensibilities." (FAC

13

added).) But this is not enough. Unwanted publicity is an independent element of the tort, see

14

Pacini v. Wells Fargo Bank, NA., No. 12-04605 RS, 2012 U.S. Dist. LEXIS 183151, at *11

15

(N.D. Cal. Dec. 26, 2012), and cannot be used to meet the "highly offensive" standard. False

16

light simply is not actionable unless the allegedly false statement, itself, is "highly offensive to a

17

reasonable person." Fellows, 42 Cal. 3d at 238-39; Silva, 1997 U.S. Dist. LEXIS 22653, at *6

18

("[T]he statements complained of must be highly offensive to a reasonable person." (citation

19

omitted; emphasis added)); Judicial Council of Cal. Civ. Jury Instructions ("CACI") No. 1802.

20

Because Plaintiffs have not alleged (and cannot allege) that the claimed false statements would be

21

highly offensive to a reasonable person, and because they allege no facts to support such a claim,

22

their false-light claim must fail.

23

5

24
25
26
27
28
SAN FRANCISCO

82 (emphasis

Indeed, more than 1.8 million people on Facebook Like USA Today; another 6 million people
Like Duracell; and nearly 11 million people Like Kohl's. See https://www.facebook.com/usatoday;
https://www.facebook.com/duracell; https://www.facebook.com/kohls.
6

These allegations fall far short of the false light statements that have been held to satisfy the
highly offensive standard. See, e.g., MG., 89 Cal. App. 4th at 636 (suggestion that individual had
been molested supports false-light claim); Tollefson v. Price, 430 P.2d 990, 991-92 (Ore.
1967) (statement that plaintiff does not pay his debts is highly objectionable); Dean v. Guard
Pub. Co., 744 P.2d 1296, 1298-99 (Ore. App. 1987) (portrayal of individual as an alcoholic in
need of inpatient aversion treatment supports false-light claim).

CoOLEYLLP
ATTORNEYS AT LAW

~

8.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-CV-00132-PJH

2.

1

Plaintiffs fail to comply with Civil Code section 45a.

2

Plaintiffs' false-light claim should also be dismissed for the independent reason that it

3

fails to comply with Civil Code section 45a, which provides: "Defamatory language not libelous

4

on its face is not actionable unless the plaintiff alleges and proves that he has suffered special

5

damage as a proximate result thereof." In Fellows v. National Enquirer, the California Supreme

6

Court made this provision applicable to false-light claims, reasoning that "[s]ince virtually every

7

published defamation would support an action for false light invasion of privacy, exempting such

8

actions from the requirement of proving special damages would render the statute a nullity." 42

9

Cal. 3d at 251. 7 Thus, under section 45a, a false-light claim is actionable only if (1) the alleged

10

false statement is defamatory on its face, or (2) plaintiff "plead[s] and pro[ves] special damages."

11

Id.; see also Newcombe, 157 F.3d at 694-95.
Plaintiffs' claims do not satisfy either prong of section 45a.

12

First, the alleged false

13

statements (e.g., "Tony DiTirro Likes USA Today") are not defamatory on their face. 8

14

defamatory statement is one that "exposes a[] person to hatred, contempt, ridicule, or obloquy, or

15

which causes him to be shunned or avoided, or which has a tendency to injure him in his

16

occupation." Cal. Civ. Code § 45 (defining libel); id. § 44 (libel is a form of defamation). To be

17

defamatory on its face, however, the statement must be "defamatory of the plaintiff without the

18

necessity of explanatory matter, such as an inducement, innuendo or other extrinsic fact .... "

19

Cal. Civ. Code§ 45a; see also Newcombe, 157 F.3d at 694-95. The statements here (e.g., "Tony

20

DiTirro Likes USA Today") are not defamatory and could not be, absent facts outside the alleged

21

ads themselves (no such facts are pleaded). See Newcombe, 157 F.3d at 694-95 ("The only way

22

an average person viewing the advertisement [suggesting that the plaintiff was endorsing alcohol]

23

might think that it was defamatory was if the person [knew plaintiff was] . . . a recovering

24

7

25
26
27
28

See also Selleck v. Globe Int'l, Inc., 166 Cal. App. 3d 1123, 1133-34 (1985) ("An action for
invasion of privacy by placing the plaintiff in a false light in the public eye is in substance
equivalent to a libel claim. A plaintiff alleging false light, therefore, must satisfy the
requirement[s] [for a defamation claim]."); accord Kapellas v. Kofman, 1 Cal. 3d 20, 35 (1969).
8

"[W]hether a publication is libelous on its face is [a question] of law, and must be measured by
'the effect the publication would have on the mind of the average reader."' Downing v.
Abercrombie & Fitch, 265 F .3d 994, 1010 (9th Cir. 2001) (quoting Newcombe, 157 F .3d at 695).

COOLEYLLP
ATTORNEYS AT LAW

SAN FRANCISCO

A

9.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

alcoholic; this is a textbook example of 'explanatory matter."'); Downing, 265 F.3d at 1010

2

(absent extrinsic evidence, "an average person viewing the Quarterly would [not] think it

3

defamatory if Appellants' picture was included in a section [containing] ... nude models"). The

4

alleged false statements plainly cannot satisfy this prong.

5

In addition, Plaintiffs cannot, and do not, plead special damages. In the context of a false-

6

light claim, special damages are "all damages which plaintiff alleges and proves that he has

7

suffered in respect to his property, business, trade, profession or occupation, including such

8

amounts of money as the plaintiff alleges and proves he has expended as a result[.]" Cal. Civ.

9

Code § 48a(4)(b) (emphasis added).

And "[t]he facts, . . . amount, ... and the means of

10

occasioning" such damages must be pleaded "with particularity." Shook v. Pearson, 99 Cal. App.

11

2d 348, 352 (1950); Fed. R. Civ. P. 9(g) ("If an item of special damage is claimed, it must be

12

specifically stated."). 9 Plaintiffs cannot meet this standard because they are contractually barred

13

from pursuing special damages against Facebook.

14

("[Facebook] WILL NOT BE LIABLE TO YOU FOR ANY LOST PROFITS OR OTHER

15

CONSEQUENTIAL, SPECIAL, INDIRECT, OR INCIDENTAL DAMAGES ARISING OUT

16

OF OR IN CONNECTION WITH THIS STATEMENT OR FACEBOOK[.]").) This provision

17

forecloses Plaintiffs from claiming special damages as a matter of law. 10 See, e.g., Data/ex

18

(Ireland) Ltd. v. PSA, Inc., No. CV 01-06482 DDP (VBKx), 2003 U.S. Dist. LEXIS 27563, at *5,

19

*13 (C.D. Cal. Jan. 30, 2003) (in software licensing agreement, barring consequential damages

20

based on clause disclaiming "LIABILITY FOR ANY ACTUAL, CONSEQUENTIAL,

21

INCIDENTAL, PUNITIVE, SPECIAL OR INDIRECT DAMAGES, COSTS OR EXPENSES").

22

Nor have Plaintiffs even tried to claim special damages. Indeed, Plaintiffs' requested relief on

(See Solanki Decl., Ex. A, SRR § 16.3

23
9

24
25

While the requirement that plaintiff plead special damages arises from state law, the requirement
that special damages be specifically pleaded stems from Federal Rule of Civil Procedure 9(g).
Isuzu Motors Ltd. v. Consumers Union of US., Inc., 12 F. Supp. 2d 1035, 1047 (C.D. Cal. 1998).
10

26
27
28

Identical or substantially identical provisions were in place when each of the named Plaintiffs
signed up for Facebook. (See Solanki Decl., Ex. B ("Limitation on Liability"); id., Ex. C
("Limitation on Liability"); id., Ex. D, § 14.3.) Section 16.3 forecloses special and consequential
damages with respect to Plaintiffs' other claims, as well, and limits the total recovery available to
Plaintiffs. (See Solanki Decl., Ex. A§ 16.3.)

COOLEYLLP
ATTORNEYS AT LAW
SAN fRANCISCO

10.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

this claim is limited to "general damages in an amount according to proof." (F AC ~ 84.) 11

2

Plaintiffs' allegations are, in any event, too conclusory to satisfy Plaintiffs' burden of

See Fed. R. Civ. P. 9(g).

3

pleading special damages with particularity.

4

Plaintiffs' claim that Facebook "decreased [the] value of their personal information," Plaintiffs

5

provide no supporting facts at all; they do not explain, for example, the circumstances of the

6

alleged diminution, how much was supposedly lost, how they found out, or that they have been

7

unable to monetize their personal information as a result.

8

particulars, Plaintiffs cannot pursue special damages. 12

B.

9

For example, as to

In the absence of these critical

Plaintiffs fail to state claims under the UCL and FAL (Claims Four and Five).

10

Plaintiffs' claims under the UCL and FAL fail because Plaintiffs have alleged no loss of

11

money or property, depriving them of standing to pursue their claims, and allege no specific facts

12

to support either the alleged misrepresentations by Facebook or their reliance thereon.
1.

13

To bring a claim under the UCL or FAL, Plaintiffs must demonstrate that they "lost

14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Plaintiffs lack standing under the UCL and FAL.

11

Plaintiffs' cursory allegations elsewhere in the FAC also do not plead special damages. To the
extent Plaintiffs claim reputational harm, embarrassment, mental anguish, humiliation, and hurt
feelings (see, e.g., FAC ~~ 61, 73), they allege items only of general, not specific, damages. See
Cal. Civ. Code § 48a(4)(a) ("'[G]eneral damages' are damages for loss of reputation, shame,
mortification and hurt feelings[.]"). Plaintiffs also claim to have suffered "decreased value of
their personal information, the lessened value to them of DEFENDANT'S Facebook service, loss
of time in correcting DEFENDANT'S false representations and/or communicating with Friends
to correct these false representations, loss of reputation, misappropriation of their likenesses
(which have monetary value)[.]" (FAC ~ 113; accord FAC ~ 100.) But these alleged harms do
not relate to Plaintiffs' "property, business, trade, profession or occupation[.]" Cal. Civ. Code §
48a(4)(b); cf Newcombe, 157 F.3d at 694-95 ("medications ... , gasoline for travel ... ,
telephone calls, purchase of the subject magazine, [and] photocopy of the ad," did not constitute
special damages in false light action).
12

See, e.g., Core-Vent Corp. v. Nobel Indus. Swed. A.B., No. 97-552494, 1998 U.S. App. LEXIS
22175, at *20 n.6 (9th Cir. Sept. 9, 1998) (alleged injury to business, without "identify[ing] any
particular purchaser who refrained from buying [product]," was insufficiently particular); Code
Rebel, LLC v. Aqua Connect, Inc., CV 13-4539 RSWL (MANx), 2013 U.S. Dist. LEXIS 137937,
at *12-13 (C.D. Cal. Sept. 24, 2013) ("bare allegation that [plaintiff] has or will sustain damages
in excess of$100,000.00," without facts about business's value, lacked particularity); KEMA, Inc.
v. Koperwhats, No. C 09-1587 MMC, 2010 U.S. Dist. LEXIS 90803, at *22-24 (N.D. Cal. Sept.
1, 2010) (Rule 9(g) not satisfied where FAC failed to identify '"particular purchasers' who will
not deal with plaintiffs, or the 'transactions of which [plaintiffs] claim[] to have been deprived,'
but, rather, contains only a conclusory allegation that ... plaintiffs 'have suffered damages in the
form of. .. lost revenue and damage to their business position and reputation"' (citation omitted)).

COOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

11.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

money or property" as a result of Facebook's alleged actions. See Cal. Bus. & Prof. Code

2

§ 17204 (UCL); Cal. Bus. & Prof. Code§ 17535 (FAL); Kwikset Corp. v. Super. Ct., 51 Cal. 4th

3

310, 325 (2011). Plaintiffs have failed to adequately allege a loss of either.

4

First, Plaintiffs have not alleged (and cannot allege) that they paid money to Facebook,

5

which has always been free to users. Plaintiffs allude to lost "money" three times (FAC ,-r,-r 93,

6

100, 106), but allege no factual detail as to the amount or circumstances of the alleged loss. Thus,

7

the FAC does not plead a cognizable loss of money. See Twombly, 550 U.S. at 555 ("labels and

8

conclusions, and a formulaic recitation of the elements of a cause of action will not do," and

9

"courts are not bound to accept as true a legal conclusion couched as a factual allegation").

10

Similarly, Plaintiffs have failed to allege a loss of property. Plaintiffs cursorily allege that

11

they lost "money or property, including but not limited to loss to their reputations, the

12

misappropriation of their likenesses (which has monetary value), the lessened value of

13

DEFENDANT'S service to them, and the diminishment in value of their personal information."

14

(FAC ,-r 93.) Of these alleged losses, the only "property" even arguably at issue is Plaintiffs'

15

personal information. 13

16

constitute property for purposes of a UCL claim." In re Facebook Privacy Litig., 791 F. Supp. 2d

17

705, 714 (N.D. Cal. 2011) (dismissing UCL claim with prejudice); see Thompson v. Home Depot,

18

Inc., No. 07-cv-1058 lEG, 2007 WL 2746603, at *3 (S.D. Cal. Sept. 18, 2007) ("personal

19

information" is not property under the UCL); In re Google Inc. Street View Elec. Commc 'ns

20

Litig., 794 F. Supp. 2d 1067, 1086 (N.D. Cal. 2011) (lost personal data is not "lost property for

21

purposes of determining Proposition 64 standing"); see also In re Google Inc. Cookie Placement

22

Consumer Privacy Litig., ---F. Supp. 2d ----,No. 12-2358-SLR, 2013 WL 5582866, at *10 (D.

However, it is well established that "personal information does not

23
24
25
26
27
28

13

Plaintiffs' allegations of reputational injury, emotional injury, and the "the lessened value to
them of DEFENDANT'S Facebook service" do not establish a loss of property under the UCL or
FAL. See Kwikset, 51 Cal. 4th at 325 (plaintiff must suffer economic injury to have standing
under UCL); see also, e.g., In re Sony Gaming Networks & Customer Data Sec. Breach Litig.,
903 F. Supp. 2d 942, 966 (S.D. Cal. 2012) (loss of free third-party services is not a loss of money
or property under UCL and FAL); Robinson v. HSBC Bank USA, 732 F. Supp. 2d 976, 988 (N.D.
Cal. 2010) (reputational injury, based on ridicule resulting from display of advertisements next to
pictures of plaintiff's property, not a loss of money or property under UCL).

CooLEvLLP
ATTORNF.YS AT LAW
SAN fRANCISCO

12.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

Del. Oct. 9, 2013); Low v. Linkedin Corp., No. 11-cv-01468-LHK, 2011 WL 5509848, at *5-6
2

(N.D. Cal. Nov. 11, 2011); Folgelstrom v. Lamps Plus, Inc., 195 Cal. App. 4th 986, 994 (2011).

3

Plaintiffs' allegations are also inadequate because Plaintiffs allege no specifics about the

4

losses they allegedly sustained. Indeed, Plaintiffs fail to allege a single fact suggesting that their

5

names and likenesses have value (to Plaintiffs, Facebook, or otherwise), that Plaintiffs have

6

attempted to monetize them, or that the value of that information has been diminished. Plaintiffs

7

also do not allege how Facebook's.free service, which they continue to utilize, has been lessened

8

in value to them. Plaintiffs also do not plausibly allege reputational harm; indeed, as previously

9

discussed, they each concede that they have "nothing negative to say" about the companies in

10
11

whose ads they appeared. (F AC 1[1[25, 33, 40.)
2.

Plaintiffs fail to allege particular misrepresentations and reliance.

12

Plaintiffs' claims under the UCL and FAL are premised on the allegation that Facebook

13

misrepresented that "[Plaintiffs] would own and control their personal information" and that

14

Facebook "would not disseminate false, incorrect or untruthful information, and specifically

15

would not falsely attribute sponsorship, endorsement, preference or approval in the form of

16

'Likes' to them when they had not in fact 'Liked' a product, service or company." (PAC 1[1[21,

17

23.) Plaintiffs further allege that they were "fraudulently induced to register with Facebook ...

18

based on their understanding that DEFENDANT would not fabricate false information about

19

them and broadcast it to their Friends and others." (PAC 1[89; see also id. 1[96.)

20

Because these claims are based on alleged misrepresentations, Plaintiffs must allege that

21

they relied upon the misrepresentations when joining and using Facebook. Kwikset Corp., 51

22

Cal. 4th at 326 (for UCL claims based on misrepresentations, plaintiffs must prove reliance); In re

23

Tobacco II, 46 Cal. 4th 298, 326 (2009) ("Reliance is proved by showing that the defendant's

24

misrepresentation or nondisclosure was an immediate cause of the ... injury-producing conduct."

25

(internal quotations and citation omitted)). Additionally, because UCL and FAL claims based on

26

misrepresentation "sound in fraud," all elements must meet the particularity requirement of

27

Federal Rule of Civil Procedure 9(b). See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103-

28

05 (9th Cir. 2003); Kearns v. Ford Motor Co., 567 F. 3d 1120, 1125 (9th Cir. 2009). Under Rule.

COOLEYLLP
ATTORNEYS AT LAW
SAN fRANCISCO

13.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

9(b), Plaintiffs must "allege that [they] [were] exposed to a particular representation that is

2

claimed to be deceptive," as well as "the 'specifics' of [their] reliance upon such

3

misrepresentations."

4

(emphasis added). In other words, Plaintiffs must plead the "who, what, when, where, and how"

5

of the misconduct charged. Vess, 317 F .3d at 1106.

Donohue v. Apple, Inc., 871 F. Supp. 2d 913, 924 (N.D. Cal. 2012)

6

Plaintiffs fall far short of their pleading burden. Indeed, Plaintiffs have not alleged that

7

they were exposed to, or relied on, any particular statement by Facebook. Rather, they refer

8

generically to "statements, including but not limited to [Facebook's] terms of use" (FAC

9

"false and misleading representations and omissions" (FAC

~

~

96),

99), "Facebook's terms and
~~

10

conditions and other information provided by DEFENDANT" (FAC

11

"expressed purpose" (F AC

12

specific misrepresentations by Facebook, Plaintiffs cannot plead reliance. See Kwikset, 51 Cal.

13

4th at 326-27; Donohue, 871 F. Supp. 2d at 924 (plaintiffs must allege "particular

14

[mis]representation" and "specifics" of reliance). Additionally, Plaintiffs' cursory recitation fails

15

even to approach the required level of specificity under Rule 9(b). See Edwards v. Marin Park,

16

Inc., 356 F.3d 1058, 1066 (9th Cir. 2003) (affirming dismissal of fraud-based claim where

17

complaint "contain[ ed] not a word of the ... specific [alleged misrepresentation]" and plaintiff

18

"did not attach the [alleged misrepresentations] to her complaint or to any other filing"); Baltazar

19

v. Apple, Inc., CV 10-3231-JF, 2011 U.S. Dist. LEXIS 13187, at *9-10 (N.D. Cal. Feb. 10, 2011)

20

(dismissing

21

misrepresentations ... in [defendant's] commercials and [ads]").

UCL

claim

~

22), and its "mission and policies" (F AC

because plaintiffs

did

not

allege

~

18-20), Facebook's

23). Without identifying

"content of the

alleged

22

C.

23

Plaintiffs' CLRA claims fail because (1) Plaintiffs are not "consumers" within the

24

meaning of the statute, (2) Facebook does not offer "goods or services" within the meaning of the

25

statute, (3) Plaintiffs have failed to allege a CLRA injury, and (4) Plaintiffs' fraud-based

26

allegations are pleaded with insufficient specificity.

Plaintiffs fail to state a claim under the CLRA (Claim Six).

27

An action under the CLRA may be brought only by a "consumer," defined as an

28

individual who purchases or leases any goods or services for personal, family, or household

COOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

14.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-CV-00132-PJH

1

purposes. See In re Facebook Privacy Litig., 791 F. Supp. 2d at 717 (citing Schauer v. Mandarin

2

Gems of Cal., Inc., 125 Cal. App. 4th 949, 960 (2005)). Because Facebook is free, Plaintiffs have

3

not purchased or leased anything from Facebook. Moreover, although Plaintiffs allege that they

4

"provide[d] personal information, and post[ed] content" on Facebook (see, e.g., FAC ~ 99), courts

5

have repeatedly held that an exchange of personal information for software or services is beyond

6

the scope of the CLRA.

7

(dismissing CLRA claim against Facebook with prejudice, reasoning that "a 'consumer' is [one]

8

who purchases or leases any goods or services for personal, family or household purposes ....

9

Plaintiffs' contention that their personal information constitutes a form of 'payment' to

10

[Facebook] is unsupported by law"); In re Google Inc. Cookie Placement, 2013 WL 5582866, at

11

* 11 (dismissing CLRA claim, reasoning that "Plaintiffs did not pay for the advertisements and the

12

contention that their personal information constitutes a form of 'payment' to Google 'is

13

unsupported by law"); Yunker v. Pandora Media, Inc., No. 11-3113 JSW, 2013 WL 1282980, at

14

*12 (N.D. Cal. Mar. 26, 2013) (dismissing CLRA claim in part because plaintiff alleged "he

15

purchased the defendant's services with his PII" and not with money).

See, e.g., In re Facebook Privacy Litig., 791 F. Supp. 2d at 717

16

Plaintiffs' CLRA claim also fails because Facebook's software-based website is neither a

17

"good" nor a "service" within the meaning of the CLRA. See, e.g., Ferrington v. McAfee, Inc.,

18

No. 10-CV-01455-LHK, 2010 WL 3910169, at *14 (N.D. Cal. Oct. 5, 2010) (software is not a

19

good or service under the CLRA); Yunker, 2013 WL 1282980 at *13 (mobile application is not

20

the type of tangible chattel that the CLRA defines as a good); In re Google Inc. Cookie

21

Placement, 2013 WL 5582866, at *10 (website browser is not a service under the CLRA); In re

22

iPhone Application Litig., No. 11-MD-02250-LHK, 2011 WL 4403963, at *10 (N.D. Cal. Sept.

23

20, 2011) (software is neither a good nor service under the CLRA). Thus, claims arising from the

24

use of a free website, like Facebook, are not actionable under the CLRA.

25

Plaintiffs also allege no economic injury from their use of Facebook, as discussed supra

26

Section IV.A.2, B.1. Without such injury, they cannot state a claim under the CLRA. See In re

27

iPhone Application Litig., No. 11-MD-02250-LHK, 2013 WL 6212591, at *6 (N.D. Cal. Nov. 25,

28

2013) (CLRA claim requires reliance and resulting economic injury); Kaing v. Pulte Homes, Inc.,

CooLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

15.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

No. 09-5057 SC, 2010 U.S. Dist. LEXIS 21320, at *12 (N.D. Cal. Feb. 18, 2010) (same).
Finally, as with their UCL and FAL claims, Plaintiffs' CLRA claims fail because they are

2

~

3

based on alleged misrepresentations by Facebook (see FAC

4

misrepresentation to which they were exposed or on which they relied. Plaintiffs' CLRA claim

5

thus fails for lack of reliance, see Durell v. Sharp Healthcare, 183 Cal. App. 4th 1350, 1367

6

(2010) (CLRA claim failed because plaintiff alleged no facts showing that he "relied on any

7

representation by" defendant), and because they have failed to provide the "who, what, when,

8

where, and how" required by Rule 9(b), see Vess, 317 F .3d at 1106.

9

D.

103), but fail to allege any specific

Plaintiffs fail to state a claim for negligence (Claim Seven).

10

The "elements of any negligence cause of action [are] duty, breach of duty, proximate

11

cause, and damages." Berkley v. Dowds, 152 Cal. App. 4th 518, 526 (2007); see also Artiglio v.

12

Corning Inc., 18 Cal. 4th 604, 614 (1998). Plaintiffs' claim fails for several independent reasons.

13

First, Plaintiffs allege no cognizable source of legal duty independent of their contractual

14

relationship with Facebook, as required to support a negligence claim. See, e.g., Rodriguez v.

15

Bank of N.Y. Mellon, No. 13-CV-1830-GPC, 2014 U.S. Dist. LEXIS 6501, at *27-28 (S.D. Cal.

16

Jan. 17, 2014) (dismissing negligence claim because "Plaintiff fails to show how, absent a valid

17

contractual relationship, Defendants owed any duty to Plaintiff'); Missud v. Oakland Coliseum

18

Joint Venture, No. 12-02967 JCS, 2013 U.S. Dist. LEXIS 91528, at *55-58 (N.D. Cal. June 27,

19

2013) (dismissing negligence claim because "the only injury alleged under this negligence theory

20

is that Plaintiffs' expectations under the contract were frustrated"); Cal. State Auto. Ass 'n Inter-

21

Ins. Bureau v. Policy Mgmt. Sys. Corp., No. C 93-4232 CW, 1996 U.S. Dist. LEXIS 21823, at

22

*17-18 (N.D. Cal. Jan. 9, 1996) (same because "Plaintiffs do not specify any ... duty which

23

would have arisen between the parties independent of their contractual duties").

24

In an attempt to concoct such a duty, Plaintiffs claim that Facebook "assumed a duty to

25

exercise reasonable care not to misrepresent information about Plaintiffs" "[b ]y soliciting and

26

encouraging PLAINTIFFS and Class members to register and use Facebook and post content, and

27

by agreeing to accept PLAINTIFFS' and Class members' content and information."

28

~

111.) But Plaintiffs cite no statute, regulation, legal doctrine, or special relationship that would

COOLEYLLP
ATTORNEYSATLAW
SAN FRANCISCO

(F AC

16.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

impose such an obligation on Facebook in the absence of a contract. Rather, like Plaintiffs'

2

contract claim (FAC

3

failed to operate the site in a manner that conformed to their expectations, based on unspecified

4

statements by Facebook (e.g., in the course of "soliciting" and "encouraging" Plaintiffs' use of

5

the site). (FAC

6

parties' contract, their allegations cannot support a negligence claim. See, e.g., In re iPhone

7

Application Litig., 2011 WL 4403963, at *9 (dismissing negligence claim because "Plaintiffs

8

have not yet adequately pled or identified a [non-contractual] legal duty on the part of Apple to

9

protect users' personal information from third-party app developers"); Carillo v. Nationwide Mut.

10

Fire Ins. Co., No. C 07-1979 JF, 2007 U.S. Dist. LEXIS 47919, at *5 (N.D. Cal. June 25, 2007)

11

(dismissing negligence claim that simply "repackag[ed] . . . the breach of contract claim").

~

~~

97-101), their negligence claim amounts to a complaint that Facebook

111.) Because Plaintiffs have identified no source of duty outside of the

12

Plaintiffs' negligence claim is also barred by the "economic-loss rule." Under that rule,

13

"[g]enerally speaking, in actions for negligence, liability is limited to damages for physical

14

injuries and recovery of economic loss is not allowed." Kalitta Air, LLC v. Cent. Tex. Airborne

15

Inc., 315 F. App'x 603, 605 (9th Cir. 2008); see also In re Sony Gaming Networks & Customer

16

Data Breach Litig., 903 F. Supp. 2d at 961 (absent an exception, "a plaintiffs tort recovery of

17

economic damages is barred unless such damages are accompanied by some form of physical

18

harm (i.e., personal injury or property damage)." (emphasis added)); McKinney v. Google, Inc.,

19

No. 5:10-CV-01177 EJD, 2011 U.S. Dist. LEXIS 97958, at *23 (N.D. Cal. Aug. 30, 2011)

20

(collecting cases). When it applies, the rule bars recovery of economic damages, such as "the

21

difference between price paid and value received, and deviations from standards of quality that

22

have not resulted in property damage or personal injury." Aas v. Super. Ct., 24 Cal. 4th 627, 636

23

(2000), superseded by statute on other grounds; see also In re iPhone Application Litig., 844 F.

24

Supp. 2d 1040, 1064 (N.D. Cal. 2012) ("Purely economic damages to a plaintiff which stem from

25

disappointed expectations from a commercial transaction must be addressed through contract law;

26

negligence is not a viable cause of action for such claims."); Robinson Helicopter Co. v. Dana

27

Corp., 34 Cal. 4th 979, 988 (2004) ("The economic loss rule requires a purchaser to recover in

28

contract for purely economic loss due to disappointed expectations").

COOLEYLLP
ATTORNEYS AT LAW
SAN fRANCISCO

17.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

Plaintiffs do not claim that they sustained physical injury or property damage, which,

2

alone, is fatal to their negligence claim. See, e.g., McKinney, 2011 U.S. Dist. LEXIS 97958, at

3

*23 (dismissing negligence claim on that basis). Moreover, each of Plaintiffs' asserted damage

4

claims is unequivocally barred by the doctrine. For example, Plaintiffs seek damages for the

5

"lessened value to them of DEFENDANT'S Facebook service," "misappropriation of their

6

likenesses (which [allegedly] have monetary value)," and "loss of time in correcting

7

DEFENDANT'S false representations and/or communicating with Friends to correct these false

8

representations." (F AC

9

Plaintiffs' contractual expectations, not from physical harm or property damage. See, e.g., In re

10

Sony, 903 F. Supp. 2d at 960 (in data-breach case, economic-loss rule barred recovery for "credit

11

monitoring, loss of use and value of [defendant's] services, loss of use and value of prepaid Third

12

Party Services, and diminution of the value of their [purchased products]"); 14 see Aas, 24 Cal. 4th

13

at 639 (economic-loss rule "does not support recovery of damages representing the lost benefit of

14

a bargain, such as the cost of [repair]"). Plaintiffs' alleged reputational injuries (FAC

15

no better, as such damages "constitute consequential economic losses, not claims of personal

16

injury or property damage." Barrier Specialty Roofing & Coatings, Inc. v. lei Paints N Am., Inc.,

17

No. CV 07-1614 LJO TAG, 2008 U.S. Dist. LEXIS 104963, at *16 (E.D. Cal. May 6, 2008); see

18

also Nucal Foods, Inc. v. Quality Egg LLC, 918 F. Supp. 2d 1023, 1030 (E.D. Cal. 2013) ("[L]oss

19

of reputation and lost profits and sales, is covered by the economic loss rule and cannot sound in

20

tort.").

21

damages, themselves, are not recoverable in negligence absent physical injury or other

22

circumstances not present here. See, e.g., Yu v. Signet Bank/Va., 69 Cal. App. 4th 1377, 1397

23
24
25
26
27
28

~

113.) But these items plainly stem from the alleged frustration of

SAN fRANCISCO

113) fare

Plaintiffs' asserted emotional damages also cannot save their claim because such

14

Cases in other jurisdictions have similarly applied the economic-loss doctrine to foreclose
damages for nonphysical harm in user-content and data-breach cases. See, e.g., AmeriFirst Bank
v. TJXCos., 564 F.3d 489,498 (1st Cir. 2009) (alleged damage to "property interest in[] payment
card information, which the security breach rendered worthless," was barred by the economic loss
doctrine because it was "not a result of physical destruction of property"); Pa. State Emps. Credit
Union v. Fifth Third Bank, 398 F. Supp. 2d 317, 330 (M.D. Pa. 2005) (where data breach
allegedly allowed theft of credit cards, economic loss doctrine barred negligence claim, because
"the costs of replacing the cards" did not result from physical damage); Cum is Ins. Soc y, Inc. v.
BJ's Wholesale Club, Inc., 918 N.E.2d 36, 46 (Mass. 2009) (same).

COOLEYLLP
ATTORNF.YS AT LAW

~

18.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

(1999) (emotional injury not compensable because "appellants suffered no physical injury as a

2

consequence of respondents' conduct"); Branch v. Homefed Bank, 6 Cal. App. 4th 793, 801

3

(1992) (in negligence action, vacating award of damages for emotional injury that was not

4

accompanied by physical harm).

5

Independent of the economic-loss doctrine, Plaintiffs' negligence claim fails because

6

Plaintiffs allege no "appreciable, nonspeculative, present injury," which is "an essential element

7

of a tort cause of action." Aas, 24 Cal. 4th at 646. As noted, Plaintiffs claim damages for the

8

"decreased value of their personal information," "lessened value to them of [the] Facebook

9

service," "loss of time in correcting DEFENDANT'S false representations and/or communicating

10

with Friends to correct these false representations," "loss of reputation," and "misappropriation of

11

their likenesses (which have monetary value)[.]"" (FAC

12

Plaintiffs plead not a single fact in support of these alleged harms. See supra Section IV.A.2,

13

B.l; Twombly, 550 U.S. at 555 ("labels and conclusions[] ... will not do"). Additionally,

14

Plaintiffs' allegations of "embarrassment, shock, anger, confusion, anxiety, and dismay" (FAC

15

113) are contradicted by Plaintiffs' admissions that they have "nothing negative to say" about the

16

companies to which Facebook allegedly attributed their Likes without permission. (F AC

17

see Iqbal, 556 U.S. at 663-64 (reviewing court should "draw on its experience and common

18

sense" in determining whether complaint states plausible claim); Kennedy v. Bank of Am., N.A.,

19

No. 12-CV-952 YGR, 2012 U.S. Dist. LEXIS 58636, at *12 (N.D. CaL Apr. 26, 2012) ("the

20

Court need not accept allegations that are contradicted by other allegations in the complaint").

21

For these reasons, Plaintiffs' negligence claim must be dismissed.

~

113.) However, as discussed above,

~

~

25);

22

E.

23

To state a claim for breach of contract, Plaintiffs must plead: "[ 1] the contract, [2]

24

plaintiffs' performance (or excuse for nonperformance), [3] defendant's breach, and [4] damage

25

to plaintiff therefrom." Gautier v. Gen. Tel. Co., 234 Cal. App. 2d 302, 305 (1965). "A cause of

26

action for breach of implied contract has the same elements as does a cause of action for breach

27

of contract, except that the promise is not expressed in words but is implied from the promisor's

28

conduct." Yari v. Producers Guild of Am., Inc., 161 Cal. App. 4th 172, 182 (2008); see also Div.

Plaintiffs fail to state a claim for breach of contract (Claim Eight).

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ATTORNEYS AT LAW
SAN fRANCISCO

19.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-CV-00132-PJH

of Labor Law Enforcement v. Transpac. Transp. Co., 69 Cal. App. 3d 268, 275 (1977).
2

Plaintiffs' contract claim fails on several counts.

3

1.

Plaintiffs fail to identify the contract term(s) allegedly breached.

4

To state a contract claim, "[t]he complaint must identify the specific provision of the

5

contract allegedly breached by the defendant." Donohue, 871 F. Supp. 2d at 930 (dismissing

6

claim on that basis); see Bilodeau v. McAfee, Inc., No. 12-CV-04589-LHK, 2013 U.S. Dist.

7

LEXIS 89226, at *39-41 (N.D. Cal. June 24, 2013) (same because plaintiff "fails to identify in

8

what contract Defendants assumed the obligation to 'honestly and accurately inform [her] about

9

the true condition of [her] computer,' much less identify [its] specific provisions" and warning

10

that "[a]ny amended complaint ... must identify the essential terms of the agreement and specific

11

allegations of breach"); McAfee v. Francis, No. 5:11-CV-00821-LHK, 2011 U.S. Dist. LEXIS

12

83878, at *5-6 (N.D. Cal. Aug. 1, 2011) (same because "Plaintiffs ... do not specify the exact

13

terms of the agreements ... allegedly breached"). 15

14

Plaintiffs allude to vague contractual duties, but fail to identify a single contract term that

15

Facebook allegedly breached. (E.g., FAC ~ 22 ("PLAINTIFFS ... understood ... from the terms

16

and conditions that ... "); FAC ~ 99 ("DEFENDANT agreed, whether explicitly or impliedly, not

17

to interject false content and/or make false representations about PLAINTIFFS ... ").) Plaintiffs'

18

contract claims fail for this reason alone. See Donohue, 871 F. Supp. 2d at 930; see Bilodeau,

19

2013 U.S. Dist. LEXIS 89226, at *39-41; McAfee, 2011 U.S. Dist. LEXIS 83878, at *5-6.

20

2.

Plaintiffs allege no appreciable damage from the alleged breach.

21

Plaintiffs also allege no cognizable contract damages, as required to plead a claim for

22

breach of contract. See First Commercial Mortg. Co. v. Reece, 89 Cal. App. 4th 731, 745 (2001);

23

Ruiz v. Gap, Inc., 622 F. Supp. 2d 908, 917 (N.D. Cal. 2009) ("Under California law, a breach of

24
15

25
26
27
28

This requirement applies whether the alleged contract is express or implied. See, e.g., Coyotzi
v. Countrywide Fin. Corp., No. CV F 09-1036 LJO SMS, 2009 U.S. Dist. LEXIS 91084, at *19
(E.D. Cal. Sept. 15, 2009) (dismissing contract claim because complaint "fails to identify a
specific contract and merely references 'express and implied terms of written agreements"');
Sweet v. Bridge Base Inc., No. CV F 08-1034 AWl GSA, 2009 U.S. Dist. LEXIS 44712, at *1213 (E.D. Cal. May 28, 2009) (dismissing implied-contract claim because plaintiffs failed to allege
facts supporting parties' agreement to term at issue).

COOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

20.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

contract claim requires a showing of appreciable and actual damage." (citation omitted)).
2

First, Plaintiffs do not (and cannot) allege that they were monetarily damaged, since use of

3

Facebook is free. Plaintiffs also get nowhere by alleging "that they did not receive the benefit of

4

the bargain for which they contracted and for which they paid valuable consideration in the form

5

of their Facebook membership and presence, personal information, and Facebook content," and

6

that they thus "overpaid for the bargained-for service." (FAC

7

the theory that the abstract economic loss of personal information can form the basis for damages,

8

including contract damages. See, e.g., Low v. Linkedin Corp., 900 F. Supp. 2d 1010, 1028-29

9

(N.D. Cal. 2012) (rejecting theory that, as a result of alleged breach, "'Plaintiffs relinquished []

10

valuable personal property without compensation to which they were each due[,]"' explaining

11

that "alleged decrease in the value of Plaintiffs' personal information does not constitute

12

cognizable contract damages"); In re iPhone Application Litig., 2011 WL 4403963, at *5; In re

13

Jetblue Airways Corp. Privacy Litig., 379 F. Supp. 2d 299, 326 (E.D.N.Y. 2005) (loss of privacy

14

from disclosure of data to third party "is not a damage available in a breach of contract action").

~

101.) Courts have long rejected

15

Third, Plaintiffs plead no facts in support of their damages theory. For example, they do

16

not allege that their "membership and presence, personal information, and Facebook content" has

17

any specific, calculable monetary value (FAC

18

would be compensated for the 'value' of their personal information,' [or] . . . have been

19

foreclosed from opportunities to capitalize on the value of their personal data," Low, 900 F. Supp.

20

2d at 1029 (citation omitted); see also LaCourt v. Specific Media, Inc., No. 10-cv-1256 GW

21

(JCGx), 2011 WL 1661532, at *5 (C.D. Cal. Apr. 28, 2011) (no injury because plaintiffs alleged

22

no facts showing they "ascribed an economic value" to their personal information, attempted a

23

value-for-value exchange of the information, or were deprived of its value). Plaintiffs' bare

24

allegation that "they did not receive the benefit ofthe[ir] bargain" cannot sustain this claim.

25

3.

~

101), that they "'reasonably expect[ed] that they

Plaintiffs' implied-contract claim fails for additional reasons.

26

Plaintiffs' implied-contract claim consists of a single allegation that "DEFENDANT

27

agreed, whether explicitly or implicitly, not to interject false content and/or make false

28

representations about PLAINTIFFS and Class members that would be visible to other Facebook

COOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

21.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

users[.]" (FAC ,-r 99 (emphasis added).) This claim fails for at least two additional reasons.

2

First, Plaintiffs cannot recover on an implied-contract theory because they allege the

3

existence of an express contract (see, e.g., FAC ,-r,-r 98, 103), covering the same subject matter (see

4

FAC ,-r 99 ("DEFENDANT agreed, whether explicitly or implicitly, not to interject false content

5

.... ") (emphasis added)). Because "[a] contract is either express or implied," an action "based

6

on an implied-in-fact ... contract cannot lie where there exists between the parties a valid express

7

contract covering the same subject matter." O'Connor v. Uber Techs., Inc., No. C-13-3826 EMC,

8

2013 U.S. Dist. LEXIS 171813, at *35-36 (N.D. Cal. Dec. 5, 2013) (emphasis added; citation

9

omitted); see also Roling v. E*Trade Sees., LLC, 756 F. Supp. 2d 1179, 1189 (N.D. Cal. 2010)

10

("[E]xistence of an express contract indisputably precludes allegations regarding an implied

11

contract for the same subject matter."). This rule applies with special force here because the SRR

12

includes an integration clause (SRR § 19.2 ("This Statement makes up the entire agreement

13

between the parties regarding Facebook, and supersedes any prior agreements")) that forecloses

14

the possibility of an implied contract between Facebook and Plaintiffs. 16 See Be In, Inc. v.

15

Google Inc., No. 12-CV-03373-LHK, 2013 U.S. Dist. LEXIS 147047, at *20-21 (N.D. Cal. Oct.

16

9, 2013) (action for implied contract did not lie where express contract covered same subject

17

matter and included integration clause). Plaintiffs' implied-contract claim fails as a matter of law.

18

Second, Plaintiffs plead no facts supporting the existence of an implied-in-fact-contract, as

19

required to proceed under such a theory. See, e.g., Youngman v. Nev. Irrigation Dist., 70 Cal. 2d

20

240, 246-47 (1969); Yari, 161 Cal. App. 4th at 182. Plaintiffs' implied-contract claim reduces to

21

a bare allegation that Facebook agreed, "whether explicitly or implicitly," to operate the site in a

22

particular manner.

23

Duarte v. Freeland, No. C05-02780 MJJ, 2007 U.S. Dist. LEXIS 73750, at *30 (N.D. Cal. Sept.

24

24, 2007) (dismissing implied-contract claim for failure to plead facts showing "the existence of

25

any relationship or duties that were assumed by any of the parties"); Gould v. Md. Sound Indus.,

26

Inc., 31 Cal. App. 4th 1137, 1151-52 (1995) (same where "vague reference[s]" and "oblique

27
28

(FAC ,-r 99.) This allegation cannot support Plaintiffs' claim. See, e.g.,

16

Identical or substantially identical provisions were in place when each named Plaintiff signed
up for Facebook. (See Solanki Decl. Ex. B ("Other"); id., Ex. C ("Other"); id., Ex. D, § 16.1.)

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ATTORNEYS AT LAW
SAN fRANCISCO

22.

NOTICE OF MOTION AND MOTION TO DISMISS;
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CASE No. 5:14-cv-00132-PJH

1
2
3

language" "failed to allege ... facts from which a jury could find an implied-in-fact agreement").

F.

Plaintiffs fail to state a claim for breach of the implied covenant of good faith
and fair dealing (Claim Nine).

4

Plaintiffs' claim for breach of the implied covenant of good faith and fair dealing also

5

fails. First, Plaintiffs fail to point to any particular contractual benefit of which Plaintiffs were

6

deprived. "The implied covenant ... [is] a supplement to the express contractual covenants, to

7

prevent a contracting party from engaging in conduct which (while not technically transgressing

8

the express covenants) frustrates the other party's rights to the benefits of the contract." Racine &

9

Laramie, Ltd. v. Dep 't of Parks & Recreation, 11 Cal. App. 4th 1026, 1031-32 (1992). Thus,

10

"[t]o state a claim for breach of the implied covenant of good faith and fair dealing, a plaintiff

11

must identify the specific contractual provision that was frustrated." Perez v. Wells Fargo Bank,

12

NA., No. C-11-02279 JCS, 2011 U.S. Dist. LEXIS 96706, at *50-51 (N.D. Cal. Aug. 29, 2011).

13

Plaintiffs allege that "DEFENDANT breached the implied covenant of good faith and fair dealing

14

by falsely representing content" on Facebook (F AC

15

provision allegedly frustrated by Facebook's conduct. As such, this claim must be dismissed.

16

See, e.g., Plastina v. Wells Fargo Bank, 873 F. Supp. 2d 1179, 1191 (N.D. Cal. 2012) (dismissing

17

implied covenant claim for this reason); Perez, 2011 U.S. Dist. LEXIS 96706, at *50-51 (same).

~

105), but do not identify any contractual

18

Additionally, as with their contract claim, Plaintiffs have alleged no cognizable contract

19

damages. See supra Section IV.E.2; see also Lyons v. Coxcom, Inc., 718 F. Supp. 2d 1232 (S.D.

20

Cal. 2009); CACI No. 325 (harm to plaintiff is a required element of breach of implied covenant).

21

Finally, the breach-of-implied-covenant claim should be dismissed because it duplicates

22

the breach-of-contract claim. Where the allegations in support of a breach-of-implied-covenant

23

claim "do not go beyond the statement of a mere contract breach and, relying on the same alleged

24

acts, simply seek the same damages or other relief already claimed in a companion contract cause

25

of action, they may be disregarded as superfluous as no additional claim is actually stated."

26

Careau & Co. v. Sec. Pac. Bus. Credit, 222 Cal. App. 3d 1371, 1395 (1990); see also Order, In re

27

Zynga Privacy Litig., No. 10-cv-04680, at *8 (N.D. Cal. Nov. 22, 2011), ECF No. 85 (implied

28

covenant claim was "superfluous" where it alleged same acts as contract claim); Lamke v.

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23.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

Sunstate Equip. Co., 387 F. Supp. 2d 1044, 1048 (N.D. Cal. 2004) (dismissing implied-covenant

2

claim because it "add[ ed] nothing to any breach of contract claim"). Plaintiffs' contract and

3

implied-covenant claims are founded on the same allegation: that Facebook falsely "g[a]ve the

4

appearance that PLAINTIFFS and Class members sponsored or endorsed products, services,

5

and/or companies in the form of 'Likes' when in fact they did not." (Compare FAC

6

FAC ~~ 99-100.) This claim also fails.

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105, with

7

G.

8

Plaintiffs' claim for "Restitution Based on Quasi-Contract I Unjust Enrichment" fails for a

9

number of independent reasons. As an initial matter, recent California Court of Appeal decisions

10

have made it clear that unjust enrichment does not exist as a standalone cause of action under

11

California law. See Hill v. Roll Int'l Corp., 195 Cal. App. 4th 1295, 1307 (2011); Durell, 183

12

Cal. App. 4th at 1370 ("[T]here is no cause of action in California for unjust enrichment.");

13

Levine v. Blue Shield of Cal., 189 Cal. App. 4th 1117, 1138 (20 10) (same); Melchior v. New Line

14

Prods., Inc., 106 Cal. App. 4th 779, 793 (2003) (same); Vicuna v. Alexia Foods, Inc., No. 11-cv-

15

6119, 2012 U.S. Dist. LEXIS 59408, at *7 (N.D. Cal. Apr. 27, 2012) (same); Fraley v. Facebook,

16

Inc., 830 F. Supp. 2d 785, 814-15 (N.D. Cal. 2011) (collecting authorities). As the court in

17

Melchior explained, "[t]he phrase 'Unjust Enrichment' does not describe a theory of recovery, but

18

an effect: the result of a failure to make restitution under circumstances where it is equitable to do

19

so. Unjust enrichment is a general principle, underlying various legal doctrines and remedies,

20

rather than a remedy itself." 106 Cal. App. 4th at 793 (citations and quotation marks omitted). 17

Plaintiffs fail to state a claim for unjust enrichment (Claim Ten).

21

However, even if restitution/unjust enrichment were a standalone cause of action,

22

Plaintiffs' claim must still be dismissed. First, Plaintiffs nowhere dispute the existence of a valid,

23

enforceable agreement. (FAC

24

1389 (2012) ("Although a plaintiff may plead inconsistent claims that allege both the existence of

25

an enforceable agreement and the absence of an enforceable agreement, that is not what occurred

26

17

27
28

~

98.) See Klein v. Chevron US.A., Inc., 202 Cal. App. 4th 1342,

Nor is restitution a cause of action, as these cases make clear. Rather, restitution is a remedy
that may be awarded when a plaintiff proves a particular cause of action and the requirements for
a restitutionary remedy are met. In any case, restitution would not be available here because
Plaintiffs do not allege that they paid any money to Facebook. Indeed, Facebook is a free service.

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ATTORNEYS AT LAW
SAN FRANCISCO

24.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH

1

here.

2

agreement and their unjust enrichment claim did not deny the existence or enforceability of that

3

agreement."); Allen v. Hylands, Inc., No. 12-cv-1150, 2012 WL 1656750, at *5 (C.D. Cal. May 2,

4

2012) (dismissing unjust enrichment claim and holding that "absent any allegation that Plaintiffs'

5

purchases were not enforceable agreements, Plaintiffs' quasi-contract claims are likewise not

6

viable").

7

restitution/unjust enrichment still fails because they allege no facts as to how or why the express

8

contract would be invalid or unenforceable such that the remedy for restitution would arise. See

9

Levine, 189 Cal. App. 4th at 113 8 (affirming sustaining of demurrer where plaintiffs "have not

10

Instead, plaintiffs' breach of contract claim pleaded the existence of an enforceable

Second, even if Plaintiffs had denied the express contract, their claim for

demonstrated any basis on which they would be entitled to restitution").

11

H.

12

Plaintiffs' claims should be dismissed with prejudice because they cannot amend to allege

13

facts sufficient to state a claim. Any amendment would thus be futile and would be subject to

14

dismissal. See Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1298 (9th Cir. 1998) (leave to

15

amend should not be granted where amended complaint would also be subject to dismissal).

16

V.

17

Plaintiffs' claims should be dismissed with prejudice.

CONCLUSION

For the foregoing reasons, Counts Three through Ten of the FAC should be dismissed

18

with prejudice for failure to state a claim upon which relief can be granted.

19

Dated: April15, 2014

COOLEYLLP

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22

Is/ Jeffrey M Gutkin
Jeffrey M. Gutkin
Attorneys for Defendant Facebook, Inc.

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COOLEYLLP
ATTORNEYS AT LAW
SAN FRANCISCO

25.

NOTICE OF MOTION AND MOTION TO DISMISS;
MEMO. OF POINTS AND AUTHORITIES
CASE No. 5:14-cv-00132-PJH