Matera v. Google Inc.

Filing 49

ORDER denying 20 Motion to Dismiss as to the Merits of Plaintiff's Claims. Signed by Judge Lucy H. Koh on 8/12/2016. (lhklc3, COURT STAFF) (Filed on 8/12/2016)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION United States District Court Northern District of California 11 12 DANIEL MATERA, Plaintiff, 13 v. 14 15 GOOGLE INC., 16 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS Re: Dkt. No. 20 Defendant. 17 Plaintiff Daniel Matera (“Plaintiff”), individually and on behalf of those similarly situated, 18 19 alleges that Defendant Google Inc. (“Google”) violated federal and state wiretapping laws in its 20 operation of Gmail, an email service. ECF No. 1 (“Compl.”).1 Before the Court is Google’s 21 motion to dismiss for failure to state a claim. ECF No. 20. Having considered the parties’ 22 submissions, the relevant law, and the record in this case, the Court DENIES Google’s motion to 23 dismiss as to the merits of Plaintiff’s claims. The Court will issue a separate order on standing 24 issues. 25 26 27 28 1 Unless otherwise noted, all ECF references are to the docket of 15-CV-04062 in the Northern District of California. 1 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 I. BACKGROUND A. Factual Background 2 3 4 5 6 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 1. In re Google Inc. Gmail Litigation Plaintiff’s factual allegations overlap significantly with those in the related action In re Google Inc. Gmail Litigation (“Gmail”), 13-MD-02430, a consolidated multi-district litigation in which this Court considered whether Google’s operation of Gmail violated federal and state wiretapping laws. As both the factual and procedural history of Gmail are relevant to the instant motion, the Court briefly summarizes the background of that litigation. Google provides several different but related systems of email delivery. First is a free service for individual users, which allows any user to register for an “@gmail.com” email address. In re Google Inc. Gmail Litig. (“Gmail”), 2013 WL 5423918, at *2 (N.D. Cal. Sept. 26, 2013); In re Google Inc. Gmail Litig. (“Gmail Class Cert.”), 2014 WL 1102660, at *1 (N.D. Cal. Mar. 18, 2014). Second, Google offers “Google Apps” to businesses, educational organizations, and internet service providers (“ISPs”). Gmail Class Cert., 2014 WL 1102660, at *1. The end users of Google Apps do not receive “@gmail.com” email addresses. Rather, the email addresses contain the domain name of the business, educational institution, or ISP that contracts with Google to provide the email service (for example, “@cableone.com”). Id. However, Google Apps email services are powered by Google through Gmail. Accordingly, users of the individual service and users of Google Apps are all Gmail users. The Gmail plaintiffs alleged that Google intercepted, read, and acquired the content of emails that were sent to or received by a Gmail user while the emails were in transit. Gmail, 2013 WL 5423918, at *1. Google allegedly intercepted the emails for the dual purposes of (1) providing advertisements targeted to the email’s recipient or sender, and (2) creating user profiles to advance Google’s profit interests. Id. According to the Gmail plaintiffs, Google’s interception, scanning, and analyzing of email was done without the knowledge or consent of the plaintiffs. As relevant to the instant case, the putative class in Gmail included a class of all United States non-Gmail users “who have sent a message to a Gmail user and received a reply or received 27 28 2 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 an email from a Gmail user.” Id. at *4. Because non-Gmail users exchange emails with Gmail 2 users, the Gmail plaintiffs alleged that non-Gmail users’ communications were subject to the same 3 interception, scanning, and analysis as Gmail users. The Gmail plaintiffs also sought to represent 4 (1) end users of Cable One, an ISP that contracted with Google to provide Google Apps-related 5 services to its customers; (2) users of Google Apps for Education; and (3) Gmail users under the 6 age of majority. 7 2. Allegations in the Instant Case 8 This case involves a subset of the Gmail putative class. In the instant case, Plaintiff seeks 9 to represent non-Gmail users “who have never established an email account with Google, and who have sent emails to or received emails from individuals with Google email accounts.” Compl. 11 United States District Court Northern District of California 10 ¶ 32. 12 Plaintiff alleges that Plaintiff has never had a Gmail account. Id. ¶ 8. However, due to the 13 ubiquity of Gmail, Plaintiff has sent emails to and received emails from Gmail users, which 14 Google allegedly has intercepted, scanned, and analyzed. Id. In particular, Plaintiff alleges that 15 Google employs a variety of devices that, during the transmission of emails to and from Gmail 16 accounts, intercept, scan, and analyze the content of emails. For example, Google allegedly 17 acquires and interprets the content of emails sent or received by Gmail users through “Content 18 Onebox” and “Changeling,” which are “distinct piece[s] of Google’s infrastructure.” Id. ¶ 19. 19 Google then uses a process called “Nemo” to determine how to best monetize the data extracted 20 from the intercepted emails. Id. ¶ 20. Plaintiff contends that these devices are “separate from the 21 devices that are instrumental to sending and receiving email.” Id. ¶ 2. 22 Google allegedly uses the intercepted contents of Gmail messages for the “distinct 23 purpose” of creating targeted advertisements and user profiles to be stored indefinitely. Id. ¶¶ 21, 24 28. According to Plaintiff, Google utilizes the user profiles “for purposes of selling to paying 25 customers, and sending to the profiled communicants, targeted advertising based upon analysis of 26 these profiles.” Id. ¶ 1; see also id. ¶ 17 (noting that Google “deliver[s] targeted advertisements 27 based on these [user] profiles”). Plaintiff allegedly did not consent to Google’s processing of 28 3 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 Plaintiff’s emails for these purposes. Id. ¶¶ 3, 7, 8. 2 B. Procedural History In light of the relationship between the instant case and Gmail, the Court briefly 3 4 summarizes the relevant procedural history of Gmail in addition to the instant case. 5 1. Procedural History of Gmail 6 The first case that comprised the Gmail multi-district litigation, Dunbar v. Google, Inc., 7 was filed on November 17, 2010 in the Eastern District of Texas. See Dunbar v. Google, Inc., No. 8 10-CV-00194, ECF No. 1 (E.D. Tex. Nov. 17, 2010). On June 27, 2012, upon Google’s motion, 9 the case was transferred to the Northern District of California and assigned to the undersigned 10 judge. See Dunbar v. Google, Inc., No. 12-CV-03305, ECF No. 180 (N.D. Cal. July 23, 2012). While Dunbar was pending, five other actions involving substantially similar allegations United States District Court Northern District of California 11 12 against Google were filed in this District and throughout the country. See Scott v. Google, Inc. 13 (“Scott I”), No. 12-CV-03413 (N.D. Cal.); Scott v. Google, Inc. (“Scott II”), No. 12-CV-00614 14 (N.D. Fla.); A.K. v. Google, Inc., No. 12-CV-01179 (S.D. Ill.); Knowles v. Google, Inc., No. 12- 15 CV-02022 (D. Md.); Brinkman v. Google, Inc., No. 12-CV-00699 (E.D. Pa.). On April 1, 2013, 16 the Judicial Panel on Multidistrict Litigation issued a Transfer Order, centralizing Dunbar along 17 with the five other actions in the Northern District of California before the undersigned judge. See 18 No. 13-MD-02430, ECF No. 1. The Court later related a seventh case to the multi-district 19 litigation, Fread v. Google, Inc., No. 13-CV-01961 (N.D. Cal.). See No. 13-MD-02430, ECF No. 20 29. 21 The Gmail plaintiffs filed a Consolidated Complaint on May 16, 2013. No. 13-MD-02430, 22 ECF No. 38. That complaint attempted to state causes of action under (1) the Electronic 23 Communications Privacy Act of 1986 (the “ECPA” or the “Wiretap Act”), 18 U.S.C. § 2510 et 24 seq.; (2) California’s Invasion of Privacy Act (“CIPA”), Cal. Penal Code § 630 et seq.; (3) 25 Maryland’s Wiretap Act, Md. Code Ann., Cts. & Jud. Proc. § 10-402 et seq.; (4) Florida’s Wiretap 26 Act, Fla. Stat. Ann. § 934.01 et seq.; and (5) Pennsylvania’s Wiretapping and Electronic 27 Surveillance Control Act, 18 Pa. Cons. Stat. § 5701 et seq. Google filed a motion to dismiss the 28 4 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 2 Consolidated Complaint on June 13, 2013. See No. 13-MD-02430, ECF No. 44. The Court granted in part and denied in part Google’s motion on September 26, 2013. See 3 No. 13-MD-02430, ECF No. 69. As relevant here, the Court denied the motion to dismiss as to 4 plaintiffs’ Wiretap Act claim. Specifically, the Court rejected Google’s contention that any 5 alleged interceptions fell within the “ordinary course” of Google’s business and were therefore 6 exempt from anti-wiretapping statutes. Using the tools of statutory interpretation, the Court 7 concluded that the “ordinary course of business” exception was “narrow and designed only to 8 protect electronic communication service providers against a finding of liability under the Wiretap 9 Act where the interception facilitated or was incidental to provision of the electronic 10 communication service at issue.” Id. at 13–22. United States District Court Northern District of California 11 In addition, the Court rejected Google’s argument that all Gmail users had consented to the 12 alleged interceptions based on Google’s terms of service and privacy policy. The Court concluded 13 that the terms of service and privacy policy did not provide sufficient disclosures to show that 14 Gmail users had consented to the alleged interceptions. Id. at 22–26. The Court further rejected 15 Google’s contention that all email users had impliedly consented to the alleged interceptions 16 because all email users, including non-Gmail users, understand that such interceptions are part of 17 how emails are transmitted. Id. at 27–28. 18 The Court also held that the Gmail plaintiffs could proceed on their claims under section 19 631 of CIPA, California’s anti-wiretapping law. Id. at 28–40. The Court first found that section 20 631 applies to email, not just to communications passing over telephone and telegraph wires, lines, 21 or cables. The Court also concluded that Google was not exempt from section 631 liability as a 22 “public utility.” Accordingly, the Court denied Google’s motion to dismiss the Gmail plaintiffs’ 23 section 631 claim. 24 On January 27, 2014, the Court denied Google’s motion to certify the Court’s order on the 25 motion to dismiss for interlocutory appeal under 28 U.S.C. § 1292(b). Gmail, 2014 WL 294441, 26 at *4 (N.D. Cal. Jan. 27, 2014). The Court found that the long and tortured history of the Dunbar 27 action and the consolidated multi-district litigation suggested that immediate appeal would not 28 5 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 materially advance the termination of the litigation. Id. The Court also noted that, regardless of 2 the definition of the “ordinary course of business” exception under the Wiretap Act, further factual 3 development would be necessary to determine whether the alleged interceptions of email fell 4 within the “ordinary course” of Google’s business. Id. at *3 n.2. 5 On October 25, 2013, the Gmail plaintiffs moved for class certification of a damages class 6 under Federal Rule of Civil Procedure 23(b)(3). No. 13-MD-02430, ECF No. 87-26. On March 7 18, 2014, the Court denied class certification. No. 13-MD-02430, ECF No. 158. Specifically, the 8 Court found that the Gmail plaintiffs had failed to meet the predominance requirement, which 9 “tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation.” Id. The Court concluded that the question of whether the Gmail class members 11 United States District Court Northern District of California 10 had consented to the alleged interceptions needed to be litigated on an individual rather than 12 classwide basis. The Court further concluded that the individualized inquiries into consent would 13 predominate over questions common to the class and thus denied class certification. On May 12, 14 2014, the Ninth Circuit denied the Gmail plaintiffs’ petition for interlocutory review of the Court’s 15 class certification order. No. 13-MD-02430, ECF No. 174. 16 After the Court’s order denying class certification, only the claims of individual plaintiffs 17 remained in the Gmail litigation. On May 23, 2014, the plaintiffs in Dunbar, Scott I, Scott II, 18 Knowles, Brinkman, and Fread dismissed with prejudice their individual claims in the Gmail 19 multidistrict litigation and in their original individual actions. No. 13-MD-02430, ECF No. 175. 20 On July 14, 2014, the plaintiffs in the last case remaining in the multidistrict litigation, A.K., 21 dismissed with prejudice their individual claims in the Gmail multidistrict litigation and in their 22 original individual action. No. 13-MD-02430, ECF No. 177. 23 2. Procedural History in the Instant Case 24 Plaintiff filed the complaint on September 4, 2015. ECF No. 1. Like the Gmail plaintiffs, 25 Plaintiff asserts violations of the ECPA and CIPA. Plaintiff seeks to represent the following 26 classes: 27 28 CIPA Class (Count One): All persons in the State of California who have never 6 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS established an email account with Google, and who have sent emails to or received emails from individuals with Google email accounts. 1 2 ECPA Class (Count Two): All persons in the United States who have never established an email account with Google, and who sent emails to or received emails from individuals with Google email accounts before December 19, 2014. 3 4 5 Id. ¶ 32. On September 23, 2015, the case was related to Gmail and reassigned to the undersigned 6 judge. ECF No. 13. On October 29, 2015, Google filed the instant motion to dismiss, ECF No. 20 (“Mot.”), 7 8 and a request for judicial notice, ECF No. 20-1 (“Google RJN”). On December 4, 2015, Plaintiff 9 opposed the motion to dismiss, ECF No. 29 (“Opp.”), and filed a request for judicial notice, ECF 10 No. 31 (“Pl. RJN”). Google replied on December 22, 2015. ECF No. 33 (“Reply.”). The same day that Google filed the instant motion, Google also moved to temporarily stay United States District Court Northern District of California 11 12 the case pending the U.S. Supreme Court’s resolution of Spokeo, Inc. v. Robins, No. 13-01339. 13 ECF No. 21. Because this Court concluded that Spokeo may impact whether Plaintiff has standing 14 to proceed in this action, this Court granted Google’s motion to stay on February 5, 2016. ECF 15 No. 36. On April 28, 2016, this Court set a case management conference for May 25, 2016. ECF 16 No. 37. 17 The U.S. Supreme Court issued an opinion in Spokeo on May 16, 2016. See Spokeo, Inc. 18 v. Robins, 136 S. Ct. 1540 (2016). At the May 25, 2016 case management conference, this Court 19 lifted the stay in the instant case and ordered supplemental briefing as to the impact of Spokeo on 20 Plaintiff’s standing. ECF No. 40. The parties filed simultaneous opening supplemental briefs on 21 June 1, 2016. ECF Nos. 41, 42. The parties filed simultaneous reply supplemental briefs on June 22 13, 2016. ECF Nos. 45, 46. This Court will address issues of standing, including the impact of 23 Spokeo, in a separate order. 24 II. 25 26 27 28 LEGAL STANDARD A. Rule 12(b)(6) Motion to Dismiss Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” A complaint 7 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 that fails to meet this standard may be dismissed pursuant to Rule 12(b)(6). Rule 8(a) requires a 2 plaintiff to plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. 3 Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff 4 pleads factual content that allows the court to draw the reasonable inference that the defendant is 5 liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility 6 standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a 7 defendant has acted unlawfully.” Id. (internal quotation marks omitted). 8 9 For purposes of ruling on a Rule 12(b)(6) motion, the Court “accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The 11 United States District Court Northern District of California 10 Court, however, need not accept as true allegations contradicted by judicially noticeable facts, see 12 Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000), and it “may look beyond the plaintiff’s 13 complaint to matters of public record” without converting the Rule 12(b)(6) motion into a motion 14 for summary judgment, Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir. 1995). Nor must the 15 Court “assume the truth of legal conclusions merely because they are cast in the form of factual 16 allegations.” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam). Mere 17 “conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to 18 dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004). 19 20 B. Leave to Amend If the Court concludes that the complaint should be dismissed, it must then decide whether 21 to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to 22 amend “shall be freely given when justice so requires,” bearing in mind “the underlying purpose 23 of Rule 15 . . . [is] to facilitate decision on the merits, rather than on the pleadings or 24 technicalities.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (ellipsis in 25 original). Nonetheless, a district court may deny leave to amend a complaint due to “undue delay, 26 bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by 27 amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of 28 8 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 the amendment, and futility of amendment.” See Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 2 522, 532 (9th Cir. 2008) (brackets omitted). 3 III. JUDICIAL NOTICE 4 Plaintiff and Google have each filed requests for judicial notice. Under Federal Rule of 5 Evidence 201(b), the Court can take judicial notice of any fact that is “not subject to reasonable 6 dispute because it . . . can be accurately and readily determined from sources whose accuracy 7 cannot reasonably be questioned.” Fed. R. Evid. 201(b). Under the doctrine of incorporation by 8 reference, the Court also may consider documents whose contents are alleged in the complaint, 9 provided that the complaint “necessarily relies” on the documents or contents thereof, the document’s authenticity is uncontested, and the document’s relevance is uncontested. Coto 11 United States District Court Northern District of California 10 Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010). Plaintiff asks for judicial notice of the transcript of the November 2, 2015 oral argument 12 13 before the U.S. Supreme Court in Spokeo, as well as a U.S. Senate Report regarding the passage of 14 the ECPA. See Pl. RJN. Google requests judicial notice of Google’s public terms of service dated 15 April 14, 2014; Google’s December 19, 2014 privacy policy, which is quoted in the complaint, as 16 well as archived versions of the privacy policy; Google’s website entitled “Updates: Privacy 17 Policy”; two reports from California Senate Committees; and three bills introduced in the 18 California Legislature. See Google RJN. Both Plaintiff’s and Google’s requests for judicial 19 notice are unopposed, and the documents therein are the proper subject of judicial notice. See 20 Anderson v. Holder, 673 F.3d 1089, 1094 n.1 (9th Cir. 2012) (“Legislative history is properly a 21 subject of judicial notice.”); Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (matters 22 of public record), overruled in part on other grounds by Galbraith v. Cty. of Santa Clara, 307 23 F.3d 119, 1125–26 (9th Cir. 2002); Caldwell v. Caldwell, 2006 WL 618511, at *4 (N.D. Cal. Mar. 24 13, 2006) (publicly accessible websites). Accordingly, the Court GRANTS Plaintiff’s and 25 Google’s unopposed requests for judicial notice. 26 IV. 27 28 DISCUSSION Google moves to dismiss Plaintiff’s claims under: (1) the Electronic Communications 9 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 Privacy Act of 1986 (the “ECPA” or “Wiretap Act”), 18 U.S.C. § 2510 et seq., and (2) 2 California’s Invasion of Privacy Act (“CIPA”), Cal. Penal Code § 630 et seq. As to the Wiretap 3 Act, Google claims that the alleged interception, scanning, and analysis of email falls within the 4 “ordinary course of business” exception to liability. Google also requests certification of an 5 interlocutory appeal on this issue to the Ninth Circuit. As to CIPA, Google asks the Court to 6 decline supplemental jurisdiction and contends that CIPA does not apply to electronic 7 communications like email. The Court first addresses Plaintiff’s Wiretap Act claim then 8 Plaintiff’s CIPA claim. 9 A. Wiretap Act 1. Ordinary Course of Business 11 United States District Court Northern District of California 10 The Wiretap Act generally prohibits the interception of “wire, oral, or electronic 12 communication[s]” through the use of “any electronic, mechanical, or other device.” 18 U.S.C. 13 § 2511(1). In the instant case, Plaintiff contends that Google violated the Wiretap Act in its 14 operation of the Gmail system by intentionally intercepting the content of emails in order to create 15 user profiles and to provide targeted advertising. Google counters that Plaintiff has not stated a 16 claim with respect to the Wiretap Act because the alleged interceptions fall within the “ordinary 17 course of business” exception to the definition of “any electronic, mechanical, or other device.” 18 Under that exception, “any telephone or telegraph instrument, equipment or facility, or any 19 component thereof . . . being used by a provider of wire or electronic communication service in the 20 ordinary course of its business” is not a “device,” and the use of such an instrument is not 21 prohibited by the Wiretap Act. Id. § 2510(5)(a)(ii). 22 Specifically, Google contends that any interception of Plaintiff’s emails occurred in the 23 ordinary course of Google’s business. Google asks the Court to reconsider Gmail, which held that 24 the “ordinary course of business” exception “offers protection from liability only where an 25 electronic communication service provider’s interception facilitates the transmission of the 26 communication at issue or is incidental to the transmission of such communication.” Gmail, 2013 27 WL 5423918, at *8. The Court first addresses the “ordinary course of business” exception and 28 10 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 2 Gmail’s interpretation of that exception, then addresses Google’s challenge to that interpretation. As noted above, the Wiretap Act prohibits the interception of “wire, oral, or electronic 3 communication[s]” through the use of “any electronic, mechanical, or other device.” 18 U.S.C. 4 § 2511(1). Specifically, a Wiretap Act violation exists when any person “intentionally intercepts, 5 endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, 6 oral, or electronic communication.” 18 U.S.C. § 2511(1)(a); see also id. § 2520 (creating a private 7 right of action for violations of § 2511). The Wiretap Act defines “intercept” as “the aural or other 8 acquisition of the contents of any wire, electronic, or oral communication through the use of any 9 electronic, mechanical, or other device.” 18 U.S.C. § 2510(4). However, the definition of 10 United States District Court Northern District of California 11 12 13 “electronic, mechanical, or other device” excludes devices: (i) furnished to the subscriber or user by a provider of wire or electronic communication service in the ordinary course of its business and being used by the subscriber or user in the ordinary course of its business or furnished by such subscriber or user for connection to the facilities of such service and used in the ordinary course of its business; or 15 (ii) being used by a provider of wire or electronic communication service in the ordinary course of its business, or by an investigative or law enforcement officer in the ordinary course of his duties; 16 Id. § 2510(5)(a). Accordingly, the Wiretap Act includes two “ordinary course of business” 17 exceptions. The first, under subsection (a)(i), is for users or subscribers of electronic 18 communication services while the second, subsection (a)(ii), applies to the providers of electronic 19 communication services. This case implicates the latter, as Google provides the electronic 20 communication service at issue here, Gmail. 14 21 The Ninth Circuit has not yet ruled on the scope of the “ordinary course of business” 22 exception in subsection (a)(ii). In Gmail, however, the Court analyzed subsection (a)(ii) and 23 rejected Google’s contention that any interception of email in that case fell within the “ordinary 24 course” of Google’s business. Analyzing the text of the statute, the statutory scheme, case law, 25 and legislative history, the Court concluded that the ordinary course of business exception 26 protected electronic communication service providers from liability where the interceptions 27 “facilitated or [were] incidental to provision of the electronic communication service at issue.” 28 11 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 Gmail, 2013 WL 5423918, at *11. In other words, the Court concluded that there “must be some 2 nexus between the need to engage in the alleged interception and the [provider’s] ultimate 3 business, that is, the ability to provide the underlying service or good.” Id. 4 The Court then found that the Gmail plaintiffs had plausibly alleged that there was no 5 nexus between Google’s provision of Gmail and the alleged interception and scanning of email for 6 advertising purposes. The Court noted that the Gmail plaintiffs alleged that Google’s 7 interceptions of email were “for Google’s own benefit in other Google services unrelated to the 8 service of email or the particular user” and thus “the alleged interception of emails at issue here is 9 both physically and purposively unrelated to Google’s provision of email services.” Id. (brackets 10 United States District Court Northern District of California 11 omitted). In the instant case, similar to Gmail, Plaintiff alleges that Google intercepts, scans, and 12 analyzes Plaintiff’s in-transit email for Google’s commercial purposes. Google concedes that the 13 processing of emails alleged here is not within the “ordinary course of business” exception as 14 interpreted by the Court in Gmail. However, Google asks the Court to reconsider Gmail. 15 Specifically, Google challenges the Gmail Court’s interpretation of: (1) the plain meaning of the 16 Wiretap Act, (2) applicable case law, and (3) the statutory scheme. In addition, Google argues 17 that, under the Gmail interpretation, the alleged interception, scanning, and analysis of email in the 18 instant case has a sufficient nexus to Google’s business to fall within the “ordinary course of 19 business” exception. The Court addresses these challenges in turn. 20 21 a. Plain Meaning Google contends that the plain meaning of the “ordinary course of business” exception 22 must encompass more than the conduct necessary to the transmission of an electronic 23 communication. Relying on two dictionaries, Google defines “ordinary” as “normal” or “usual” 24 and “business” as “the activity of making, buying, or selling goods or providing services in 25 exchange for money.” Mot. at 9. Based on these definitions, Google contends that Google “need 26 only show that its Gmail-related practices are supported by a legitimate or valid business purpose 27 in order to take advantage of the ‘ordinary course of business’ exception.” Id. at 10, 14. 28 12 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS The Court disagrees. As the Court stated in Gmail, “the presence of the modifier 1 2 ‘ordinary’ must mean that not everything Google does in the course of its business would fall 3 within the exception.” Gmail, 2013 WL 5423918, at *8. Thus, not every practice that is routine 4 or legitimate will fall within the scope of the “ordinary course of business.” See id. To give effect 5 to the word “ordinary,” the Court in Gmail concluded that the “ordinary course of business” 6 exception applies when there is “some nexus between the need to engage in the alleged 7 interception and the [provider’s] ultimate business, that is, the ability to provide the underlying 8 service or good.” Id. at *11. Following Gmail, Chief Judge Phyllis Hamilton of this district analyzed the “ordinary 9 course of business” exception and adopted the same “nexus” requirement as Gmail. Campbell v. 11 United States District Court Northern District of California 10 Facebook Inc., 77 F. Supp. 3d 836, 844 (N.D. Cal. 2014). In the instant motion, Google contends 12 that Chief Judge Hamilton adopted a unique view of the “ordinary course of business” exception. 13 Mot. at 17–18; Reply at 11. Upon review of Campbell, however, the Court finds no support for 14 Google’s position. Chief Judge Hamilton specifically “agree[d] with the Gmail court’s finding 15 that there must be ‘some nexus between the need to engage in the alleged interception and the 16 subscriber’s ultimate business, that is, the ability to provide the underlying service or good.’” 17 Campbell, 77 F. Supp. 3d at 844. In addition, like this Court in Gmail, Chief Judge Hamilton 18 found that the defendant in that case failed to “indicate a nexus between [the defendant’s] alleged 19 scanning of users’ private messages for advertising purposes and its ability to provide its service.” 20 Id. 21 Moreover, Chief Judge Hamilton rejected an interpretation similar to the one offered by 22 Google here. As Chief Judge Hamilton explained, “the statute’s inclusion of the word ‘ordinary’ 23 implies some limits on a company’s ability to self-define the scope of the exception. An 24 electronic communications service provider cannot simply adopt any revenue-generating practice 25 and deem it ‘ordinary’ by its own subjective standard.” Id. If it were otherwise, an electronic 26 communication service provider could claim that any activity routinely undertaken for a business 27 purpose is within the ordinary course of business, no matter how unrelated the activity is to the 28 13 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 provision of the electronic communication service. See id. As Chief Judge Hamilton noted, such 2 a reading of the “ordinary course of business” exception is untenable, and would permit electronic 3 communication service providers to effectively exempt themselves from the Wiretap Act. See id. 4 The reading of the “ordinary course of business” exception adopted in Gmail and 5 Campbell is supported by examining the full text of the “ordinary course of business” exception, 6 which exempts from interception any devices “being used by a provider of wire or electronic 7 communication service in the ordinary course of its business.” 18 U.S.C. § 2510(5)(a)(ii) 8 (emphases added). This phrase suggests that Google’s exemption from the Wiretap Act’s 9 prohibition on interception is limited to “its” business as “a provider of . . . electronic communication service.” Id.; see also Campbell, 77 F. Supp. 3d at 844 (noting that the “use of the 11 United States District Court Northern District of California 10 word ‘its’ indicates that the court must consider the details of [the electronic communication 12 provider’s] business”). The interpretation of the “ordinary course of business” exception adopted 13 in Gmail and Campbell, which requires “some nexus between the need to engage in the alleged 14 interception and the [provider’s] ultimate business, that is, the ability to provide the underlying 15 service or good,” thus gives effect to the word “ordinary” as well as to the business of the 16 electronic communication service provider. 17 This Court is not persuaded otherwise by Google’s citation to In re Google, Inc. Privacy 18 Policy Litigation (“Google Privacy”), 2013 WL 6248499 (N.D. Cal. Dec. 3, 2013). In Google 19 Privacy, the plaintiffs challenged the introduction of a new Google privacy policy that permitted 20 the combination of personal information collected from different Google services—Google search, 21 Gmail, YouTube, Google Maps, Picasa, etc.—in order to create a single user profile. The 22 plaintiffs alleged that this commingling violated the Wiretap Act, and Google moved to dismiss on 23 the basis of the “ordinary course of business” exception. In Google Privacy, former U.S. 24 Magistrate Judge Paul Grewal rejected a “narrow read” of the exception that would be “limited to 25 only action taken to deliver the electronic communication.” Id. at *10. Instead, Magistrate Judge 26 Grewal found that “Congress specifically chose the broader term ‘business’ that covers more 27 farranging activity.” Id. Magistrate Judge Grewal also stated that Congress’s pairing of the term 28 14 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 “business” with the terms “ordinary course” further “suggest[ed] an interest in protecting a 2 provider’s customary and routine business practices.” Id. Accordingly, Magistrate Judge Grewal 3 found that “the ‘ordinary course of business’ exception is not limited to actions necessary to 4 providing the electronic communication services.” Id. 5 The Court respectfully disagrees with Google Privacy. As this Court found in Gmail and 6 Chief Judge Hamilton found in Campbell, the plain meaning of the text of the exception requires a 7 different reading of the “ordinary course of business.” Magistrate Judge Grewal’s reading of the 8 “ordinary course of business” exception to encompass any customary and routine business 9 practice, regardless of the nexus to the electronic communication service, gives too little weight to the word “ordinary” as well as to the electronic service provider’s particular business. See 11 United States District Court Northern District of California 10 Campbell, 77 F. Supp. 3d at 844; Gmail, 2013 WL 5423918, at *8. In addition, such a reading 12 permits an electronic communication service provider like Google to unilaterally adopt any 13 revenue-generating business practice, deem it “routine,” and exempt itself from the Wiretap Act. 14 As Chief Judge Hamilton noted, it is untenable for electronic communication service providers to 15 “self-define” the scope of their exemption from Wiretap Act liability. See Campbell, 77 F. Supp. 16 3d at 844. Thus, Magistrate Judge Grewal’s interpretation of the “ordinary course of business” 17 exception is not supported by the text’s plain meaning. 18 Moreover, the Court in Gmail and in the instant case exhaustively addresses applicable 19 case law as well as the statutory scheme. By contrast, Magistrate Judge Grewal’s Google Privacy 20 ruling does not mention the statutory scheme and relies on only two cases construing the “ordinary 21 course of business” exception, Kirch v. Embarq Management Co., 702 F.3d 1245 (10th Cir. 2012), 22 and Hall v. Earthlink Network, Inc., 396 F.3d 500 (2d Cir. 2005). The Court in Gmail and in the 23 instant case extensively analyzes both Kirch and Hall, and finds that these cases support the Gmail 24 and Campbell courts’ interpretation of the “ordinary course of business” exception. Further, the 25 Court in Gmail and in the instant case finds that additional case law and the statutory scheme—not 26 addressed by Magistrate Judge Grewal in Google Privacy—support the Gmail and Campbell 27 courts’ interpretation of the “ordinary course of business” exception. Kirch, Hall, additional 28 15 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 2 applicable case law, and the statutory scheme are discussed further in sections IV.A.1.b–d below. In sum, under the plain meaning of the Wiretap Act, the “ordinary course of business” 3 exception protects an electronic communication service provider’s interception of email where 4 there is “some nexus between the need to engage in the alleged interception and the [provider’s] 5 ultimate business, that is, the ability to provide the underlying service or good.” Gmail, 2013 WL 6 5423918, at *11. The Court next addresses the case law supporting this interpretation of the 7 “ordinary course of business” exception. 8 9 b. Applicable Case Law: Kirch and Hall Google contends that two cases support reading the “ordinary course of business” exception to encompass all of an electronic communication service provider’s routine business 11 United States District Court Northern District of California 10 practices: Kirch v. Embarq Management Co., 702 F.3d 1245 (10th Cir. 2012), and Hall v. 12 Earthlink Network, Inc., 396 F.3d 500 (2d Cir. 2005). This Court relied on both of these cases in 13 Gmail to conclude that not all interceptions of email by an electronic communication service 14 provider fall within the “ordinary course of business” exception. 15 In Kirch, the Tenth Circuit affirmed a grant of summary judgment in favor of Embarq, an 16 ISP, where Embarq had intercepted only data incidental to its provision of the internet service. In 17 that case, Embarq placed a device on its servers that redirected users’ Internet traffic to a third- 18 party company, NebuAd, which tracked the websites that Embarq’s users visited and used that 19 information to target ads. 702 F.3d at 1247. The Tenth Circuit held that Embarq had not violated 20 the Wiretap Act because the ISP could not be liable for NebuAd’s interceptions. Id. at 1249. 21 Further, Embarq itself did not review any of the raw data that NebuAd collected. Id. at 1250. 22 Rather, Embarq had “access to no more of its users’ electronic communications” than Embarq 23 necessarily had as an ISP. Id. Because Embarq’s ordinary course of business as an ISP required 24 Embarq to have access to data that was transmitted over its equipment, the Tenth Circuit 25 concluded that “Embarq’s access [to the data] was in the ordinary course of its core business as an 26 ISP transmitting data over its equipment.” Id. at 1249–50 (emphasis added). In Gmail, the Court 27 found that “Kirch stands only for the narrow proposition that interceptions incidental to the 28 16 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 provision of the alleged interceptor’s internet service fall within the ‘ordinary course of business’ 2 exception.” Gmail, 2013 WL 5423918, at *8. 3 Google counters that the “ordinary course of business” exception as interpreted by Kirch 4 exempts all of an ISP’s routine and legitimate business practices from the Wiretap Act. According 5 to Google, the Tenth Circuit found that Embarq’s interception of user data fell within Embarq’s 6 “ordinary course of business” even though Embarq “extracted a subset of the data for purposes of 7 delivering targeted advertisements.” Mot. at 13. However, Google misreads Kirch. Embarq did 8 not extract any user data for purposes of delivering targeted advertisements. Indeed, it was crucial 9 to the Tenth Circuit’s analysis that “the only access Embarq had to the data extracted by NebuAd was in its capacity as an ISP, not because of any special relationship with NebuAd or the 11 United States District Court Northern District of California 10 [extraction of data by NebuAd].” Kirch, 702 F.3d at 1249 (emphasis added). 12 Further, the Tenth Circuit construed the “ordinary course of business” exception to apply 13 only to interceptions incidental to the provision of the internet service: “Embarq’s access was in 14 the ordinary course of its core business as an ISP transmitting data over its equipment” and “in the 15 ordinary course of providing Internet services as an ISP.” Id. at 1246, 1249 (emphases added). 16 The Tenth Circuit did not mention the reasoning of the district court below, which did not reach 17 the issue of Embarq’s “ordinary course of business” defense but nonetheless stated in dicta that the 18 defense “appears to have merit” because Embarq’s actions “further legitimate business purposes 19 and . . . behavioral advertising is a widespread business and is commonplace on the Internet.” See 20 Kirch, 2011 WL 3651359, at *9 n.42 (D. Kan. Aug. 19, 2011). Instead, the Tenth Circuit focused 21 on Embarq’s provision of a communication service and—as this Court did in Gmail—analyzed 22 whether the alleged interception facilitated or was incidental to Embarq’s provision of that service. 23 See Kirch, 702 F.3d at 1249 (noting that “Embarq’s access was in the ordinary course of its core 24 business as an ISP transmitting data over its equipment” (emphasis added)). Accordingly, Kirch 25 “stands only for the narrow proposition that interceptions incidental to the provision of the alleged 26 interceptor’s internet service fall within the ‘ordinary course of business’ exception.” Gmail, 2013 27 WL 5423918, at *8. 28 17 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 In the second case relied upon by Google, Hall, the plaintiff had a dispute with his ISP, 2 Earthlink, that resulted in the termination of the plaintiff’s email account. However, Earthlink 3 continued to receive emails that were sent to the user’s address even after the termination, and the 4 user complained that the receipt of email constituted an unlawful “interception” under the Wiretap 5 Act. Hall, 396 F.3d at 502. The Second Circuit affirmed a grant of summary judgment in favor of 6 Earthlink because Earthlink’s continued receipt of emails was within the ordinary course of 7 business. Id. at 505. The Second Circuit noted that Earthlink “used its routers, servers and other 8 computer equipment as part of its e-mail service to all customers, including [plaintiff].” Id. In 9 addition, Earthlink presented testimony that Earthlink routinely continued to receive and store emails after an account was canceled and more critically that Earthlink “did not have the ability to 11 United States District Court Northern District of California 10 bounce e-mail back to senders after the termination of an account.” Id. Accordingly, the alleged 12 interceptions in Hall were an incidental part of Earthlink’s ability to provide email services. 13 Google interprets Hall to apply the “ordinary course of business” exception to any standard 14 business practice, whether or not the practice is necessary to providing the electronic 15 communication service. Mot. at 12. Hall, however, does not support Google’s argument. As 16 stated above, the Second Circuit noted that the devices used to “intercept” the plaintiff’s email 17 were the same as those “used . . . as part of [Earthlink’s] e-mail service to all customers.” Hall, 18 396 F.3d at 505. Moreover, the Second Circuit specifically noted that Earthlink “did not have the 19 ability to bounce e-mail back to senders after the termination of an account.” Id. (expressing 20 concern that ISPs would be liable for provision of “their basic services”). These statements 21 demonstrate that the Second Circuit relied upon the fact that Earthlink’s receipt of Plaintiff’s email 22 was part of and incidental to Earthlink’s provision of email services. 23 In both Kirch and Hall, the only information to which the defendant ISPs had access was 24 collected by the devices that provided internet or email services. Kirch, 702 F.3d at 1250; Hall, 25 396 F.3d at 505. By contrast, Plaintiff here alleges that Google used devices “separate from the 26 devices that are instrumental to sending and receiving email” to intercept, scan, and analyze the 27 28 18 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS putative class’s emails.2 Compl. ¶¶ 1, 19, 22–23. Thus, Google is thus less like Embarq or 2 Earthlink and more akin to NebuAd, the third party in Kirch that intercepted data for the purpose 3 of providing targeted advertising—a purpose separate and apart from the provision of internet 4 service. Cf. Kirch, 702 F.3d at 1248. Because NebuAd settled with the plaintiffs in Kirch, the 5 Tenth Circuit’s opinion does not deal with NebuAd’s liability. Id. at 1248 n.2, 1249 (“[W]e need 6 not address whether NebuAd intercepted any of the Kirches’ electronic communications.”). 7 However, both Kirch and Hall exempted ISPs from liability where the alleged interceptions were 8 incidental to the provision of the ISP’s internet or email service. Accordingly, the Court finds that 9 Kirch and Hall support the Court’s construction of the “ordinary course of business” exception in 10 Gmail, which found that the exception applies “only where an electronic communication service 11 United States District Court Northern District of California 1 provider’s interception facilitates the transmission of the communication at issue or is incidental to 12 the transmission of such communication.” Gmail, 2013 WL 5423918, at *8. 13 c. Applicable Case Law: Cases Interpreting § 2510(5)(a)(i) of the Wiretap Act 14 In addition to challenging the Court’s interpretation of Kirch and Hall, Google takes issue 15 with the citations in Gmail to decisions construing the “ordinary course of business” exception of 16 § 2510(5)(a)(i), which applies to users and subscribers of electronic communication services. 17 Mot. at 13–14. By contrast, as noted above, Google is covered by subsection (a)(ii), which applies 18 to electronic communication service providers. Google contends that the “far different context of 19 the[] cases” interpreting subsection (a)(i) limits their relevance, and, regardless, that the subsection 20 21 22 23 24 25 26 27 28 2 On April 30, 2014, Google ceased intercepting, scanning, and analyzing, for advertising purposes, the contents of emails transmitted via Google Apps for Education. See Corley v. Google, Inc., 16-CV-00473-LHK, ECF No. 73 at 17 (N.D. Cal.) (statement of Google). Accordingly, it appears that Google is able to provide the Gmail service without intercepting, scanning, and analyzing the content of email for advertising purposes. The Court takes judicial notice of the transcript of the April 20, 2016 case management conference in Corley, in which Google confirmed the termination of the intercepting, scanning, and analyzing, for advertising purposes, of emails transmitted via Google Apps for Education. In that case, also related to Gmail, the plaintiffs are users of Google Apps for Education who allege that Google unlawfully intercepted, scanned, and analyzed their email for advertising purposes and without consent. No. 16-CV-00473, ECF No. 19. Lawyers representing Plaintiff and Google in the instant case also represent the respective parties in Corley. Moreover, the Court may take judicial notice of public court records. See Lee, 250 F.3d at 688. 19 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 (a)(i) cases do not support the reading of the “ordinary course of business” exception adopted in 2 Gmail. 3 In Gmail, the Court noted that in the context of subsection (a)(i), “courts have held, consistent with the textual limitation that ‘ordinary’ imposes on ‘course of business,’ that not 5 everything that a company may want to do falls within the ‘ordinary course of business’ 6 exception.” Gmail, 2013 WL 5423918, at *8. This reading of the “ordinary course of business” 7 exception is clearly supported by the cases cited in Gmail. See Watkins v. L.M. Berry & Co., 704 8 F.2d 577, 582 (11th Cir. 1983) (“The phrase ‘in the ordinary course of business’ cannot be 9 expanded to mean anything that interests a company.”); Adams v. City of Battle Creek, 250 F.3d 10 980, 984 (6th Cir. 2001) (providing that the “ordinary course of business” requires that a device’s 11 United States District Court Northern District of California 4 use be “for a legitimate business purpose,” “routine,” and “with notice”); Arias v. Mut. Cent. 12 Alarm Serv., Inc., 202 F.3d 553, 559 (2d Cir. 2000) (finding ordinary course of business exception 13 applied when “[l]egitimate business reasons” supported the challenged activity); Berry v. Funk, 14 146 F.3d 1003, 1009 (D.C. Cir. 1998) (noting that the challenged business practice must “be 15 justified by a valid business purpose” or “at least must be shown to be undertaken normally”). 16 Google, by contrast, reads the subsection (a)(i) cases to define “ordinary” as “legitimate” 17 and “routine,” and thus contends that routine business practices justified by a business purpose fall 18 within the “ordinary course of business.” However, as the Court explained in Gmail, the 19 subsection (a)(i) cases suggest that a business practice is “legitimate” (and thus within the 20 “ordinary course of business”) only when there is “some nexus between the need to engage in the 21 alleged interception and the subscriber’s ultimate business, that is, the ability to provide the 22 underlying service or good.” Gmail, 2013 WL 5423918, at *11. For example, in Arias, the 23 Second Circuit found that it was within an alarm company’s ordinary course of business to record 24 all incoming and outgoing calls because maintaining records of the calls was instrumental “to 25 ensure that [the alarm company’s] personnel are not divulging sensitive customer information, that 26 events are reported quickly to emergency services, that customer claims regarding events are 27 verifiable, and that the police and other authorities may rely on these records in conducting any 28 20 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 2 investigations.” 202 F.3d at 559 (internal quotation marks and alterations omitted). Similarly, the Tenth Circuit addressed an employer’s installation of a telephone monitoring 3 device on the phone lines in departments where employees interacted with the public. James v. 4 Newspaper Agency Corp., 591 F.2d 579 (10th Cir. 1979). The Tenth Circuit concluded that such 5 activity was within the employer’s ordinary course of business because of “concern by 6 management over abusive language used by irate customers when called upon to pay their bills, 7 coupled with the possible need to give further training and supervision to employees dealing with 8 the public.” Id. at 581. In other words, both the Second and Tenth Circuits analyzed whether a 9 nexus existed between the challenged interception and the defendant’s business. 10 As another example, in Watkins, the Eleventh Circuit addressed a situation in which an United States District Court Northern District of California 11 employer listened in on an employee’s personal phone call wherein the employee discussed a job 12 interview. The Eleventh Circuit held that an employer could only listen to an employee’s phone 13 call for the purpose of determining whether a call is for personal or business purposes, and thus 14 the employer “was obliged to cease listening as soon as she had determined that the call was 15 personal, regardless of the contents of the legitimately heard conversation.” Watkins, 704 F.2d at 16 584. Applying that principle, the Eleventh Circuit found that the alleged interception was not 17 within the employer’s ordinary course of business even though the conversation was “obviously of 18 interest and concern to [the employer].” Id. at 582–83. 19 Likewise, the Sixth Circuit in Berry rejected “the general principle that any call whose 20 subject is business, if monitored, is necessarily done in the ordinary course of business even if not 21 authorized by a company monitoring policy and not known to employees.” Berry, 146 F.3d at 22 1009. Thus, examining the facts of the subsection (a)(i) cases reveals that an employer’s 23 interception of communications falls within the “ordinary course of business” only when the 24 interception has a nexus to the defendant’s ability to provide the underlying service, not when the 25 interceptions serve any conceivable business purpose. This limitation, applied to electronic 26 communication service providers in the context of subsection (a)(ii), means that the “ordinary 27 course of business” exception applies if the electronic communication service provider 28 21 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 “demonstrate[s] the interception facilitated the communication service or was incidental to the 2 functioning of the provided communication service.”3 Gmail, 2013 WL 5423918, at *8. 3 d. Statutory Scheme Google next challenges Gmail’s interpretation of the statutory scheme. The Court in 4 5 Gmail highlighted another provision of the Wiretap Act, 18 U.S.C. § 2511(2)(a)(i), which 6 provides protection for individual employees of a communication service provider. This section 7 provides: 8 It shall not be unlawful under this chapter for an operator of a switchboard, or an officer, employee, or agent of a provider of wire or electronic communication service, whose facilities are used in the transmission of a wire or electronic communication, to intercept, disclose, or use that communication in the normal course of his employment while engaged in any activity which is a necessary incident to the rendition of his service or to the protection of the rights or property of the provider of that service, except that a provider of wire communication service to the public shall not utilize service observing or random monitoring except for mechanical or service quality control checks. 9 10 United States District Court Northern District of California 11 12 13 18 U.S.C. § 2511(2)(a)(i) (emphasis added). Google points out that the Court in Gmail 14 erroneously stated that the limitation in this section on the use of “service observing or random 15 monitoring” applies to electronic communication service providers, when this limitation applies 16 only to wire communication service providers. See Gmail, 2013 WL 5423918, at *9. However, 17 the distinction between wire and electronic communication service providers in this section is less 18 important than the distinction between activities that are, or are not, incidental to the provision of 19 the communication service. This second distinction is reflected in the ECPA’s legislative history: 20 In applying the second clause only to wire communications, this provision reflects an important technical distinction between electronic communications and traditional voice telephone service. The provider of electronic communications 21 22 23 24 25 26 27 28 3 The Court notes that the subsection (a)(i) cases address when interception is within the ordinary course of an electronic communication service user’s ordinary course of business. See, e.g., Arias, 202 F.3d at 559 (discussing ordinary course of business of an alarm company); Berry, 146 F.3d at 1005–06, 1010 (discussing the business practice of the State Department operations center in monitoring telephone calls). By contrast, the subsection applicable to electronic communication service providers like Google, subsection (a)(ii), refers to the electronic communication service provider’s ordinary course of business. Kirch and Hall, discussed above, analyzed subsection (a)(ii). Both Kirch and Hall stand for the proposition that interceptions that facilitated or were incidental to the provision of the electronic communication service fall within the “ordinary course of business” exception. 22 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS services may have to monitor a stream of transmissions in order to properly route, terminate, and otherwise manage the individual messages they contain. These monitoring functions, which may be necessary to the provision of an electronic communication service, do not involve humans listening in on voice conversations. Accordingly, they are not prohibited. In contrast, the traditional limits on service “observing” and random “monitoring” do refer to human aural interceptions and are retained with respect to voice or “wire” communications. 1 2 3 4 Pl. RJN Ex. B, at 20. As the Court noted in Gmail, this legislative history “suggests that Congress 5 intended to protect electronic communication service providers from liability when the providers 6 were monitoring communications for the purposes of ensuring that the providers could 7 appropriately route, terminate, and manage messages.” Gmail, 2013 WL 5423918, at *10. It does 8 not suggest that Congress intended to provide protection from liability for any interception that 9 10 United States District Court Northern District of California 11 12 benefits an electronic communication service provider’s business model. Accordingly, the Court finds that § 2511(2)(a)(i) supports interpreting the “ordinary course of business” exception in § 2510(5)(a)(ii) to require an electronic communication service provider to “show some link between the alleged interceptions at issue and its ability to operate the communication system.” 13 Id. 14 15 16 17 In sum, having considered Google’s arguments, the Court concludes that the Court’s interpretation of the “ordinary course of business” exception in Gmail is correct. The plain language of the “ordinary course of business” exception, the applicable case law, and the statutory scheme do not support reading the “ordinary course of business” exception to apply to any 18 interceptions that serve any conceivable business purpose. Rather, the exception offers protection 19 from liability “only where an electronic communication service provider’s interception facilitates 20 the transmission of the communication at issue or is incidental to the transmission of such 21 22 23 communication” and there is “some nexus between the need to engage in the alleged interception and the [provider’s] ultimate business, that is, the ability to provide the underlying service or good.” Gmail, 2013 WL 5423918, at *8, *11. 24 e. Existence of a Nexus 25 26 Assuming that Gmail’s interpretation of the “ordinary course of business” exception applies, Google contends that there is a nexus between the interceptions alleged here and Google’s 27 28 23 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 ability to provide Gmail. According to Google, the alleged interception of email enables Google 2 to provide targeted advertising, which in turn generates the revenue necessary for Google to 3 provide Gmail. Mot. at 15. Google further contends that “the use of data to target ads is routine 4 and legitimate commercial behavior.” Id. 5 On a motion to dismiss, the Court “accept[s] factual allegations in the complaint as true 6 and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek, 519 7 F.3d at 1031. Plaintiff alleges that Google intercepts emails for purposes of creating user profiles 8 and targeting advertising through “distinct piece[s] of Google’s infrastructure” that are “separate 9 from the devices that are instrumental to sending and receiving email.” Compl. ¶¶ 2, 19. Plaintiff further alleges that Google “intercepts Gmail for the distinct purpose of acquiring and retaining 11 United States District Court Northern District of California 10 user data and creating targeted advertising,” which is separate from “the functioning of the 12 provided communication service.” Id. ¶ 28. Taking the foregoing as true, Plaintiff plausibly 13 alleges that Google’s alleged interceptions neither facilitate the provision of email services, nor are 14 they an incidental effect of providing these services. Thus, at the motion to dismiss stage, the 15 Court can not say that Google’s alleged interception of email is within the “ordinary course of 16 business” as a matter of law. 17 Moreover, on April 30, 2014, Google ceased intercepting, scanning, and analyzing, for 18 advertising purposes, the contents of emails transmitted via Google Apps for Education. See 19 Corley, 16-CV-00473-LHK, ECF No. 73 at 17 (statement of Google). Accordingly, Google is 20 able to provide the Gmail service to at least some users without intercepting, scanning, and 21 analyzing the content of email for advertising purposes. This strongly suggests that the alleged 22 interception, scanning, and analysis of email neither facilitates nor is incidental to the provision of 23 Google’s electronic communication service. Plaintiff plausibly alleges that Google’s alleged 24 interceptions of email are outside of the ordinary course of Google’s business. 25 For the reasons stated above, Google’s motion to dismiss Plaintiff’s Wiretap Act claim is 26 DENIED. See Gmail, 2013 WL 5423918, at *11 (denying motion to dismiss when “the alleged 27 interception of emails at issue here is both physically and purposively unrelated to Google’s 28 24 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 provision of email services”); Campbell, 77 F. Supp. 3d at 844 (denying motion to dismiss when 2 “the court cannot find any facts alleged in the complaint or facts presented by Facebook that 3 indicate a nexus between Facebook’s alleged scanning of users’ private messages for advertising 4 purposes and its ability to provide its service”); Dunbar v. Google, Inc., 2011 WL 12907501, at *4 5 (E.D. Tex. May 23, 2011) (“The applicability of the ‘ordinary course of business’ exception 6 therefore cannot be resolved at the pleading stage.”). 7 2. Interlocutory Appeal 8 Should the Court deny Google’s motion to dismiss Plaintiff’s Wiretap Act claim, Google 9 asks the Court to certify the following question to the Ninth Circuit: “Whether Google’s automated scanning of emails in providing Google services falls within the ‘ordinary course of its 11 United States District Court Northern District of California 10 business’ exception, 18 U.S.C. § 2510(a)(ii), to the Wiretap Act.” Mot. at 16. The Court may, in 12 its discretion, certify an interlocutory order for appellate review when the Court is of “the opinion 13 that such order involves a controlling question of law as to which there is substantial ground for 14 difference of opinion and that an immediate appeal from the order may materially advance the 15 ultimate termination of the litigation.” 28 U.S.C. § 1292(b). Section 1292(b) “is a departure from 16 the normal rule that only final judgments are appealable, and therefore must be construed 17 narrowly.” James v. Price Stern Sloan, Inc., 283 F.3d 1064, 1067 n.6 (9th Cir. 2002); see also In 18 re Cement Antitrust Litig., 673 F.2d 1020, 1026 (9th Cir. 1982) (“[T]he legislative history of 19 1292(b) indicates that this section was to be used only in exceptional situations in which allowing 20 an interlocutory appeal would avoid protracted and expensive litigation.”). 21 The Court finds that Google has not established the exceptional circumstances necessary to 22 “invoke the narrow exception to the final judgment rule embodied in 28 U.S.C. § 1292(b).” 23 Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010). First, the question that Google seeks 24 to certify is not a purely legal one. Rather, additional factual development is necessary as to how 25 Google scanned email as well as how the alleged interceptions relate to Google’s provision of 26 Gmail. As the Court noted in denying Google’s motion to certify an interlocutory appeal in 27 Gmail, “[r]egardless of which definition [of the ‘ordinary course of business’ exception] is 28 25 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 adopted, the Court finds that factual development would be necessary in determining whether 2 Google’s interceptions fall within the ‘ordinary course of business’ exception. For example, the 3 Court cannot determine based on the pleadings alone what is ‘necessary,’ ‘customary or routine,’ 4 or ‘instrumental’ to Google’s business.” Gmail, 2014 WL 294441, at *3 (N.D. Cal. Jan. 27, 5 2014). Consequently, “[a]n interlocutory appeal prior to any discovery would deprive the 6 appellate court of a factual record that likely would aid its consideration of the legal questions 7 presented.” See Lenz v. Universal Music Corp., 2008 WL 4790669, at *7 (N.D. Cal. Oct. 28, 8 2008). Moreover, while Google seeks to certify the question of whether the “automated scanning 9 of emails in providing Google services falls within the ‘ordinary course of its business’ exception,” a proper question for interlocutory appeal “must be stated at a high enough level of 11 United States District Court Northern District of California 10 abstraction to lift the question out of the details of the evidence of facts of a particular case.” 12 Sateriale v. RJ Reynolds Tobacco Co., 2015 WL 3767424, at *2 (C.D. Cal. June 17, 2015). These 13 factors weigh against granting interlocutory appeal. See id.; Lenz, 2008 WL 4790669, at *7. 14 Second, the Court finds that an immediate appeal will not materially advance the ultimate 15 termination of this litigation but rather will delay resolution of this case. Even if Google were to 16 prevail on appeal on the issue for which Google seeks certification, Plaintiff’s CIPA claim will 17 need to be litigated. Plaintiff’s CIPA claim is premised on the same alleged intercepting, 18 scanning, and analyzing of email underlying Plaintiff’s Wiretap Act claim, and will require the 19 parties to engage in very similar discovery. Consequently, “an interlocutory appeal will not allow 20 the parties to avoid protracted litigation [but] will simply create the prospect of two separate 21 appeals.” Wadler v. Bio-Rad Labs., Inc., 2015 WL 8753292, at *2 (N.D. Cal. Dec. 15, 2015); see 22 also Sonoda v. Amerisave Mortg. Corp., 2011 WL 3957436, at *2 (N.D. Cal. Sept. 7, 2011) 23 (“When litigation will be conducted in substantially the same manner regardless of our decision, 24 the appeal cannot be said to materially advance the ultimate termination of the litigation.”). 25 Moreover, if Google were truly concerned about receiving a ruling from the Ninth Circuit 26 on the scope of the “ordinary course of business” exception, Google could have chosen to litigate 27 and appeal any of the individual cases in Gmail. The Court denied class certification in Gmail on 28 26 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 March 18, 2014, leaving only individual claims remaining. That ruling was over two years ago. 2 Had Google chosen to litigate any of the individual claims in Gmail through appeal, Google likely 3 would have received a ruling from the Ninth Circuit by now. Instead, Google and all the 4 individual plaintiffs stipulated to dismissals with prejudice by July 14, 2014. No. 13-MD-02430, 5 ECF Nos. 175, 177. Accordingly, the Court is not persuaded that exceptional circumstances exist 6 to delay the instant litigation in order for Google to appeal an issue that Google could have 7 appealed two years ago. 8 9 Because Google has failed to show a “controlling question of law” on which an immediate appeal “may materially advance the ultimate termination of litigation,” certification of an interlocutory appeal is improper and the Court need not determine whether there is “substantial 11 United States District Court Northern District of California 10 ground for difference of opinion.” See 28 U.S.C. § 1292(b). For the reasons discussed above, and 12 respecting the high bar imposed for interlocutory appeal, the Court sees no reason to view the 13 instant issue as an “exceptional situation[]” warranting interlocutory appeal. In re Cement 14 Antitrust Litig., 673 F.2d at 1026; see also U.S. Rubber Co. v. Wright, 359 F.2d 784, 785 (9th Cir. 15 1966) (noting that § 1292(b) “was not intended merely to provide review of difficult rulings in 16 hard cases”). The Court DENIES Google’s motion to certify an interlocutory appeal to the Ninth 17 Circuit. 18 19 B. CIPA Google moves to dismiss Plaintiff’s CIPA claim on two grounds: (1) the Court should 20 decline supplemental jurisdiction; and (2) section 631 of CIPA does not apply to email 21 communications and thus does not apply to the conduct alleged here. The Court addresses these 22 arguments respectively. 23 1. 24 Where a federal court has original jurisdiction over a claim, the court has supplemental 25 jurisdiction over “all other claims that are so related to claims in the action within [the court’s] 26 original jurisdiction that they form part of the same case or controversy under Article III of the 27 United States Constitution.” 28 U.S.C. § 1367(a); see also Trs. of Constr. Indus. & Laborers 28 Supplemental Jurisdiction 27 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 Health & Welfare Tr. v. Desert Valley Landscape & Maint., Inc., 333 F.3d 923, 925 (9th Cir. 2 2003) (upholding the constitutionality of supplemental jurisdiction). Nonfederal claims are part of 3 the same “case” as federal claims when they “derive from a common nucleus of operative [facts] 4 and are such that a plaintiff ‘would ordinarily be expected to try them in one judicial proceeding.’” 5 Finley v. United States, 490 U.S. 545, 549 (1989) (quoting United Mine Workers of Am. v. Gibbs, 6 383 U.S. 715, 725 (1966)), superseded by statute on other grounds as stated in Exxon Mobil Corp. 7 v. Allapattah Servs., Inc., 545 U.S. 546, 558 (2005). A district court has the discretion to decline 8 supplemental jurisdiction under subsection 1367(a) if: (1) the claim raises a novel or complex 9 issue of state law; (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction; (3) the district court has dismissed all claims over which it 11 United States District Court Northern District of California 10 has original jurisdiction, or (4) in exceptional circumstances, there are other compelling reasons 12 for declining jurisdiction. 28 U.S.C. § 1367(c). The district court’s discretion to decline 13 supplemental jurisdiction is informed by the values of economy, convenience, fairness, and 14 comity. Gibbs, 383 U.S. at 726. 15 Google does not contest that Plaintiff’s CIPA claim is “part of the same case or 16 controversy” as Plaintiff’s federal Wiretap Act claim and thus that supplemental jurisdiction is 17 proper. However, Google asks the Court to exercise its discretion to decline supplemental 18 jurisdiction because Plaintiff’s CIPA claim “raise[s] a novel or complex issue of State law” that 19 California courts have not addressed. Mot. at 18–20 (quoting 28 U.S.C. § 1367(c)(1)).4 Google 20 specifically points to a lack of binding authority regarding whether section 631 of CIPA applies to 21 electronic communications like email. Two California state courts have suggested, without providing analysis, that section 631 22 23 applies to electronic communications. See Speaker v. Andrews, 2015 WL 6859816, at *5 (Cal. Ct. 24 25 26 27 28 4 Google also argues that, should the Wiretap Act claim be dismissed, the Court should decline to exercise supplemental jurisdiction over Plaintiff’s CIPA claim because the Court would lack original jurisdiction over any claim. Mot. at 18–19. The Court need not address this argument because the Court denies Google’s motion to dismiss Plaintiff’s Wiretap Act claim, as discussed above. 28 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 App. Nov. 9, 2015) (assuming that plaintiff would be entitled to damages under section 631 if 2 plaintiff could establish a prima facie case that defendant read her private emails); Diamond v. 3 Google, Inc., CIV-1202715 (Cal. Super. Ct., Marin Cty. Aug. 14, 2013) (finding, without analysis, 4 that allegations of email interception are sufficient to state a claim under section 631). 5 Additionally, three federal district courts have determined that section 631 applies to electronic 6 communications. In re Facebook Internet Tracking Litig., 140 F. Supp. 3d 922, 936 (N.D. Cal. 7 2015) (concluding that CIPA applies to electronic communications); Campbell, 77 F. Supp. 3d at 8 848 (applying CIPA to electronic communications); Gmail, 2013 WL 5423918, at*20–21 9 (analyzing text and case law to determine that CIPA applies to electronic communications). Nonetheless, Google is correct that no binding authority exists as to whether section 631 of CIPA 11 United States District Court Northern District of California 10 applies to electronic communications. Therefore, according to Google, Plaintiff’s CIPA claim 12 arguably “raises a novel or complex issue of State law.” 28 U.S.C. § 1367(c)(1). 13 Novelty alone does not determine whether a district court should decline supplemental 14 jurisdiction. Allen v. City of Los Angeles, 92 F.3d 842, 846 (9th Cir. 1996) (exercising 15 supplemental jurisdiction over a novel issue of state law because the values of “economy, 16 convenience and fairness [were] best addressed by the court retaining jurisdiction”), overruled on 17 other grounds by Acri v. Varian Assocs., Inc., 114 F.3d 999, 1001–02 (9th Cir. 1997). Instead, the 18 U.S. Supreme Court has made clear that the Court should consider economy, convenience, 19 fairness, and comity. Gibbs, 383 U.S. at 726. 20 In the instant case, the Court finds that the values of economy, convenience and fairness 21 are best advanced by the Court’s retention of jurisdiction over Plaintiff’s CIPA claim. See Allen, 22 92 F.3d at 846. The Wiretap Act and CIPA are both wiretapping statutes prohibiting the 23 unauthorized interception of communications. Gmail, 2013 WL 5423918, at *5–6, *12–13. As 24 such, both claims require analysis of Google’s terms of service and privacy policies to determine 25 whether Gmail and non-Gmail users consent to the alleged interceptions. See id. In addition, both 26 claims in the instant case arise from the same underlying conduct: Google’s alleged interception 27 and reading of emails sent to and received by Gmail users before December 19, 2014, which 28 29 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 Google analyzed for purposes of creating user profiles and targeted advertising. Compl. ¶¶ 42–70. 2 Although Plaintiff’s CIPA claim also alleges post-December 19, 2014 intercepting, scanning, and 3 analysis of email, Google allegedly used the same devices to intercept, scan, and analyze email at 4 all relevant times. See id. ¶¶ 19–23. Because Plaintiff’s Wiretap Act and CIPA claims arise from 5 a common nucleus of fact and have similar legal underpinnings, the two claims will be subject to 6 similar discovery and sources of proof. Accordingly, declining supplemental jurisdiction would 7 be duplicative and inefficient. See NetApp, Inc. v. Nimble Storage, Inc., 41 F. Supp. 3d 816, 838 8 (N.D. Cal. 2014) (exercising supplemental jurisdiction when federal and state claims involved the 9 same underlying conduct and similar sources of proof); Lerma v. NTT McKee Retail Ctr., LLC, 2011 WL 4948667, at *6 (N.D. Cal. Oct. 18, 2011) (forcing a plaintiff to bring “a separate, nearly 11 United States District Court Northern District of California 10 identical case in state court alleging the same facts” would waste judicial resources). 12 Moreover, the undersigned judge has previously determined the legal issue presented. See 13 Gmail, 2013 WL 5423918, at *20–21. In Gmail, the plaintiffs sued Google under both the 14 Wiretap Act and CIPA for “intercept[ing], read[ing], and acquir[ing] the content of emails that 15 were sent or received by Gmail user[s]” for the purpose of creating user profiles and targeted 16 advertising. Id. at *1. The Court examined the text of section 631 and California Supreme Court 17 decisions, and concluded that section 631 applies to electronic communications like email. Id. at 18 *20–21. Given that the instant case alleges substantially similar conduct by Google over a 19 substantially similar time period, the undersigned judge is “intimately familiar” with the facts 20 underlying Plaintiff’s CIPA claim, in addition to the legal issues. See Allen, 92 F.3d at 846. 21 Therefore, exercising supplemental jurisdiction over Plaintiff’s CIPA claim substantially advances 22 judicial economy, convenience and fairness. Id. 23 Further, Plaintiff’s CIPA claim does not predominate over Plaintiff’s Wiretap Act claim. 24 As previously stated, Plaintiff’s Wiretap Act and CIPA claims have related factual and legal 25 underpinnings. See Compl. ¶¶ 42–70. Therefore, “[t]he state law claim[] do[es] not predominate 26 because the underlying conduct is the same and will likely involve similar sources of proof.” 27 NetApp, 41 F. Supp. 3d at 838. In light of the foregoing, the Court elects to retain supplemental 28 30 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 jurisdiction over Plaintiff’s CIPA claim. 2 2. 3 8 Section 631 of CIPA establishes liability for: [a]ny person who, by means of any machine, instrument, or contrivance, or in any other manner, intentionally taps, or makes any unauthorized connection, whether physically, electrically, acoustically, inductively, or otherwise, with any telegraph or telephone wire, line, cable, or instrument, including the wire, line, cable, or instrument of any internal telephonic communication system, or who willfully and without the consent of all parties to the communication, or in any unauthorized manner, reads, or attempts to read, or to learn the contents or meaning of any message, report, or communication while the same is in transit or passing over any wire, line, or cable, or is being sent from, or received at any place within this state .... 9 Cal. Penal Code § 631 (emphasis added). In Gmail, the Court concluded that this provision 4 5 6 7 Merits applies to email and thus that the interception of email without consent violates California law. 11 United States District Court Northern District of California 10 Gmail, 2013 WL 5423918, at *20–21. 12 In the instant case, Google asks the Court to reconsider the Gmail holding. Google 13 specifically argues that (a) CIPA is limited to communications that pass over telephone and 14 telegraph wires, and thus does not apply to email; (b) legislative intent demonstrates that CIPA is 15 limited to eavesdropping, not email privacy; (c) Gmail mistakenly concluded that California 16 statutes generally apply to new technologies and thus CIPA applies to email; and (d) amendments 17 to a related statute without corresponding amendments to CIPA demonstrate an intent not to apply 18 section 631 to email. The Court addresses Google’s arguments respectively. 19 20 a. Plain Language of CIPA The Court begins with the statutory text. In particular, there are two clauses in section 631. 21 The first clause of section 631 creates liability for any individual who “intentionally taps, or 22 makes any unauthorized connection . . . with any telegraph or telephone wire, line, cable, or 23 instrument.” Cal. Penal Code § 631. The second clause of the statute creates liability for any 24 individual who “reads, or attempts to read, or to learn the contents or meaning of any message, 25 report, or communication while the same is in transit or passing over any wire, line, or cable, or is 26 being sent from, or received at any place within this state.” Id. As this Court noted in Gmail, the 27 second clause of section 631, as opposed to the first clause, is not limited to communications 28 31 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 passing over “telegraph or telephone” wires, lines, or cables. See Gmail, 2013 WL 5423918, at 2 *20. Rather, the plain language of the second clause prohibits the unauthorized interception of 3 communications passing over “any wire, line, or cable.” Cal. Penal Code § 631 (emphasis added). 4 This language encompasses email communications, which pass over wires, lines, or cables. 5 Google concedes that the limitation of “telegraph or telephone” in the first clause of the 6 statute is not explicitly repeated in the second clause, but argues that it is “nonsensical” to assume 7 that the California Legislature intended section 631 to cover two categories of wires, lines, and 8 cables. Mot. at 25 n.25. However, the Court finds no reason to conclude that the limitation of 9 “telegraph or telephone” on “wire, line, cable, or instrument” in the first clause of the statute should be imported to the second clause of the statute. In other words, while the first clause of 11 United States District Court Northern District of California 10 section 631 explicitly applies to “instrument[s]” in addition to “wire[s], line[s], [and] cable[s],” the 12 second clause applies only to “wire[s], line[s], [and] cable[s].” This difference in coverage 13 between the first and second clauses suggests that the Legislature intended two separate clauses 14 applying to different types of communications. See Gmail, 2013 WL 5423918, at *20. 15 Accordingly, the Court rejects Google’s argument that the second clause of CIPA is limited to 16 telephone and telegraph communications, and finds that CIPA applies to email. 17 18 b. Legislative Intent The Court turns to Google’s contention that legislative intent indicates that CIPA does not 19 apply to email. Mot. at 20–21. Google highlights section 630 of CIPA, which is titled 20 “Legislative finding and intent.” Section 630 states: 21 22 23 24 25 26 The Legislature hereby declares that advances in science and technology have led to the development of new devices and techniques for the purpose of eavesdropping upon private communications and that the invasion of privacy resulting from the continual and increasing use of such devices and techniques has created a serious threat to the free exercise of personal liberties and cannot be tolerated in a free and civilized society. Cal. Penal Code § 630. Google points out that Black’s Law Dictionary defines eavesdropping as “secretly listening to the private conversation of others without their consent.” Relying upon this definition, Google contends that “CIPA should not be interpreted to reach technologies like email 27 28 32 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 2 that cannot be ‘eavesdropped’ in any sense of the word.” Mot. at 20. However, Google ignores that Black’s Law Dictionary provides a second definition of 3 eavesdropping, which is “a clandestine attempt to overhear or intercept others’ private 4 communication.” See Black’s Law Dictionary (10th ed. 2014). The alleged interception, 5 scanning, and analysis of Plaintiff’s private communications fall squarely within this definition of 6 eavesdropping. 7 Moreover, Google fails to acknowledge the next paragraph in section 630, “Legislative 8 finding and intent”: “The Legislature by this chapter intends to protect the right of privacy of the 9 people of this state.” This expression of intent is broader than protection against “eavesdropping.” Moreover, the California Legislature chose to “protect the right of privacy of the people of this 11 United States District Court Northern District of California 10 state” by enacting the prohibitions in section 631. Indeed, the California Supreme Court has 12 repeatedly found that the California Legislature intended CIPA to establish strong privacy 13 protections. For example, the California Supreme Court has stated: “In enacting [CIPA], the 14 Legislature declared in broad terms its intent to protect the right of privacy of the people of this 15 state from what it perceived as a serious threat to the free exercise of personal liberties that cannot 16 be tolerated in a free and civilized society. This philosophy appears to lie at the heart of virtually 17 all the decisions construing [CIPA].” Flanagan v. Flanagan, 27 Cal. 4th 766, 775 (2002) (internal 18 quotation marks, alterations, and citations omitted); Ribas v. Clark, 38 Cal. 3d 355, 361 (1985) 19 (finding it is “probable” that the California Legislature designed section 631 as a catch all to 20 “proscrib[e] attempts to circumvent other aspects of the Privacy Act, e.g., by requesting a 21 secretary to secretly transcribe a conversation over an extension, rather than tape recording it in 22 violation of section 632”); Tavernetti v. Superior Court, 22 Cal. 3d 187, 195 (1978) (“Th[e] 23 forceful expression of the constitutional stature of privacy rights [in California] reflects a concern 24 previously evinced by the Legislature in enacting the invasion of privacy provisions of the Penal 25 Code.”). 26 27 28 In light of this intent, the California Supreme Court has instructed courts to interpret CIPA in the manner that “fulfills the legislative purpose of [CIPA] by giving greater protection to 33 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 privacy interests.” Flanagan, 27 Cal. 4th at 775. Thus, when faced with two possible 2 interpretations of CIPA, the California Supreme Court has construed CIPA in accordance with the 3 interpretation that provides the greatest privacy protection. See Ribas, 38 Cal. 3d at 360–61. This 4 Court, when applying California law, “must apply the law as it believes the California Supreme 5 Court would apply it.” Kairy v. SuperShuttle Int’l, 660 F.3d 1146, 1150 (9th Cir. 2011). 6 In light of section 630’s statement that CIPA is intended to “protect the right of privacy of the 7 people this this state,” and the California Supreme Court’s findings about the legislative intent of 8 CIPA, the Court concludes that the California Supreme Court would find that legislative intent 9 supports the application of CIPA to email. 10 United States District Court Northern District of California 11 c. Application of Statutes to New Technologies Next, Google argues that CIPA does not apply to email because email did not exist at the 12 time of CIPA’s enactment. Mot. at 22. Thus, according to Google, the California Legislature 13 could not have envisioned the application of CIPA to email. 14 The California Supreme Court, however, regularly reads statutes to apply to new 15 technologies where such a reading would not conflict with the statutory scheme. The California 16 Supreme Court stated this principle plainly in Apple Inc. v. Superior Court, 56 Cal. 4th 128, 137 17 (2013) (ellipsis in original): “Fidelity to legislative intent does not ‘make it impossible to apply a 18 legal text to technologies that did not exist when the text was created. . . . Drafters of every era 19 know that technological advances will proceed apace and that the rules they create will one day 20 apply to all sorts of circumstances they could not possibly envision.” Thus, that a technology did 21 not exist at the time of a statute’s enactment does not necessarily preclude the application of the 22 statute to that technology. See id. at 139–41. 23 As another example, in Davis v. Pacific Telephone & Telegraph, 127 Cal. 312, 316 (1899), 24 the California Supreme Court interpreted the term “telegraph” functionally based on the type of 25 communication that was enabled. Specifically, the California Supreme Court held that the phrase 26 “telegraph lines” in a criminal law proscribing the cutting of lines included telephone lines 27 because “[t]he idea conveyed by each term is the sending of intelligence to a distance . . . [thus] 28 34 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 the term ‘telegraph’ means any apparatus for transmitting messages by means of electric currents 2 and signals, and embraces within its meaning the narrower word ‘telephone.’” Davis, 127 Cal. at 3 316. 4 In the instant motion, Google contends that Davis is inapposite because the California Supreme Court rejected Davis in Sunset Telephone & Telegraph Co. v. City of Pasadena, 161 Cal. 6 265 (1911). However, Sunset Telephone did not in fact reject Davis. Instead, Sunset Telephone 7 concluded that Davis’s interpretation of the word “telegraph” in the context of the California Penal 8 Code did not govern the interpretation of the word “telegraph” as used in a provision of the 9 California Civil Code addressing public grants to use public streets and highways. 161 Cal. at 10 274–75. Sunset Telephone noted that public grant statutes are strictly construed in favor of the 11 United States District Court Northern District of California 5 public, and thus found that a statute granting telegraph companies the right to use public streets 12 and highways should be read narrowly and thus did not permit telephone companies the same 13 right. Id. at 273, 279–80. The rules of construction applicable to public grant statutes do not 14 apply to CIPA. Moreover, since Sunset Telephone, the California Supreme Court has reaffirmed 15 Davis and Davis’s inclusion of “telephone” within the term “telegraph.” See, e.g., People v. 16 Trieber, 28 Cal. 2d 657, 661 (1946); Ex parte Cannon, 167 Cal. 142, 143–44 (1914). 17 Because the California Supreme Court regularly reads statutes to apply to new 18 technologies where such a reading would not conflict with the statutory scheme, the Court is 19 unpersuaded by Google’s argument that CIPA can not apply to email because email did not exist 20 at the time of CIPA’s enactment. 21 Further, the Court sees no conflict between the statutory scheme and applying CIPA to 22 email. Google contends that exposing electronic communication service providers like Google to 23 “massive potential liability” for routine business conduct would be inconsistent with the statutory 24 scheme. Mot. at 23–25. However, Plaintiff alleges that the interceptions at issue in the instant 25 case do not facilitate and are not incidental to Google’s provision of email services. See Compl. 26 ¶¶ 19, 22–23, 28 (“Google intercepts Gmail for the distinct purpose of acquiring and retaining user 27 data and creating targeted advertising . . . .”). Thus, taking Plaintiff’s allegations as true, liability 28 35 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 for the interceptions alleged does not threaten Google’s ability to provide electronic 2 communication services. Moreover, Google may seek the consent of its users and other parties to 3 these communications for any interceptions that Google wishes to undertake. See Cal. Penal Code 4 § 631(a) (providing that interception is unlawful if done “without the consent of all parties to the 5 communication”). Accordingly, the Court concludes that neither the statutory scheme nor the fact 6 that email did not exist at the time of CIPA’s enactment prohibit the application of section 631 to 7 email. 8 9 d. Legislative History Lastly, the Court addresses Google’s argument that amendments to California’s Wiretap Act, Cal. Penal Code § 629.50 et seq., without corresponding amendments to CIPA, demonstrate 11 United States District Court Northern District of California 10 that section 631 does not apply to email. California’s Wiretap Act governs interceptions of wire 12 and electronic communications by law enforcement. Google points to two instances, in 1995 and 13 2010, in which the California Legislature amended California’s Wiretap Act to expressly cover 14 electronic communications, but did not make corresponding amendments to CIPA. See Google 15 RJN Exs. I, J (California Bill Analyses by a California Senate Committee). In 1995, the 16 California Senate Judiciary Committee noted in its bill analysis that “[i]t is not clear that 17 California law specifically protects e-mail and other electronic communications from improper 18 interception by either private parties or law enforcement” and asked whether, “as a corollary” to 19 the extension of California’s Wiretap Act, “the privacy laws [should] be amended to expressly 20 protect electronic communications from interception by anyone in the absence of a court order.” 21 Id. Ex. I, at 4. Google contends that the failure of the Legislature to amend CIPA shows that 22 CIPA should not cover email, and highlights the U.S. Supreme Court’s statement that “[w]hen 23 Congress amends one statutory provision but not another, it is presumed to have acted 24 intentionally.” See Gross v. FBL Fin. Servs., Inc., 557 U.S. 167, 174 (2009). 25 Gross is distinguishable. In Gross, Congress amended the ADEA and Title VII at the 26 same time, and only the Title VII amendments included a particular provision at issue in the case. 27 Id. The U.S. Supreme Court held that “negative implications raised by disparate provisions are 28 36 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 strongest when the provisions were considered simultaneously when the language raising the 2 implication was inserted.” Id. at 175(internal quotation marks omitted). By contrast, here Google 3 points to no bill amending CIPA that was contemporaneous with the amendments expanding 4 California’s Wiretap Act. See Google RJN Exs. K–M (highlighting earlier proposed amendments 5 to CIPA, in 1986 and 1990). Nor does Google point to any bill in which the California Legislature considered and 6 7 rejected amending CIPA to include email. The California Supreme Court has stated that 8 legislative inaction may indicate many things, including the “sheer pressure of other and more 9 important business, political considerations, or a tendency to trust to the courts to correct their own errors.” Cty. of L.A. v. Workers’ Comp. Appeals Bd., 30 Cal. 3d 391, 403–04 (1981) (internal 11 United States District Court Northern District of California 10 quotation marks omitted). In the absence of any amendments to CIPA contemporaneous with the 12 amendments to California’s Wiretap Act, or the affirmative rejection of a proposal to apply CIPA 13 to email, the Court finds minimal value in the Legislature’s inaction with respect to amending 14 CIPA. In sum, in light of the plain language of section 631, the legislative intent underlying CIPA 15 16 to protect privacy, and the California Supreme Court’s approach to applying statutes to new 17 technologies, the Court finds that Gmail’s application of section 631 to email was correct. The 18 Court notes that following Gmail, two courts in this district have applied section 631 to electronic 19 communications similar to email. In re Facebook Internet Tracking Litig., 140 F. Supp. 3d at 936 20 (holding that section 631 applies to “electronic communications”); Campbell, 77 F. Supp. 3d at 21 848 (finding that plaintiffs stated a claim under section 631 when defendant allegedly intercepted 22 online Facebook messages). By contrast, Google points to no case in which a court has concluded 23 that section 631 does not apply to email. In line with the foregoing analysis and the weight of 24 authority, the Court DENIES Google’s motion to dismiss Plaintiff’s CIPA claim. 25 V. 26 27 28 CONCLUSION For the foregoing reasons, the Court DENIES Google’s motion to dismiss as to the merits of Plaintiff’s claims. 37 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS 1 IT IS SO ORDERED. 2 3 4 5 Dated: August 12, 2016 ______________________________________ LUCY H. KOH United States District Judge 6 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 38 Case No. 15-CV-04062-LHK ORDER DENYING MOTION TO DISMISS AS TO THE MERITS OF PLAINTIFF’S CLAIMS

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