Divino Group LLC et al v. Google LLC et al

Filing 122

ORDER by Magistrate Judge Virginia K. DeMarchi denying 112 Motion for Reconsideration and Denying Motion for Entry of Judgment. (vkdlc2, COURT STAFF) (Filed on 1/17/2023)

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Case 5:19-cv-04749-VKD Document 122 Filed 01/17/23 Page 1 of 6 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 DIVINO GROUP LLC, et al., 8 Plaintiffs, 9 v. 10 GOOGLE LLC, et al., United States District Court Northern District of California 11 Case No. 19-cv-04749-VKD ORDER DENYING PLAINTIFFS’ MOTION FOR RECONSIDERATION AND DENYING MOTION FOR ENTRY OF JUDGMENT Re: Dkt. No. 112 Defendants. 12 13 With leave of court, plaintiffs move for reconsideration of the portion of the Court’s 14 15 September 30, 2022 order dismissing, without leave to amend, their California Unruh Act and 16 Unfair Competition Law (“UCL”) claims as barred by Section 230 of the Communications 17 Decency Act (“CDA”), 47 U.S.C. § 230(c)(1). Dkt. Nos. 107, 110, 111, 112. Plaintiffs contend 18 that reconsideration is warranted in view of a recent Fourth Circuit decision, Henderson v. The 19 Source for Public Data, L.P., 53 F.4th 110 (4th Cir. 2022). Defendants oppose the motion for 20 reconsideration. Although not expressly included in their motion for reconsideration, plaintiffs 21 previously requested, in the alternative, entry of final judgment pursuant to Rule 54(b) to permit 22 them to seek an immediate or expedited appeal of the dismissal of their Unruh Act and UCL 23 claims. See Dkt. No. 110. The matter is deemed suitable for determination without oral argument. 24 Civil L.R. 7-1(b). Upon consideration of the moving and responding papers, the Court denies 25 plaintiffs’ motion for reconsideration and denies their motion for entry of judgment. 26 I. MOTION FOR RECONSIDERATION 27 Rule 54(b) of the Federal Rules of Civil Procedure provides that “any order or other 28 decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities United States District Court Northern District of California Case 5:19-cv-04749-VKD Document 122 Filed 01/17/23 Page 2 of 6 1 of fewer than all the parties . . . may be revised at any time before the entry of a judgment 2 adjudicating all the claims and all the parties’ rights and liabilities.” Fed. R. Civ. P. 54(b). Under 3 Civil Local Rule 7-9(b), a party seeking reconsideration of an interlocutory order must show one 4 of the following: (1) “a material difference in fact or law exists from that which was presented to 5 the Court before entry of the interlocutory order for which reconsideration is sought”; (2) “[t]he 6 emergence of new material facts or a change of law occurring after the time of such order”; or 7 (3) “[a] manifest failure by the Court to consider material facts or dispositive legal arguments 8 which were presented to the Court before such interlocutory order.” Civil L.R. 7-9(b). 9 Reconsideration is an “extraordinary remedy, to be used sparingly in the interests of finality and 10 conservation of judicial resources.” Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th 11 Cir. 2000) (internal quotations and citation omitted). “Indeed, a motion for reconsideration should 12 not be granted, absent highly unusual circumstances, unless the district court is presented with 13 newly discovered evidence, committed clear error, or if there is an intervening change in the 14 controlling law.” Id. Plaintiffs seek reconsideration pursuant to Civil Local Rule 7-9(b)(2), arguing that the 15 16 Fourth Circuit’s decision in Henderson represents a change in the law justifying reconsideration of 17 the Court’s determination that their Unruh Act and UCL claims are barred by CDA Section 18 230(c)(1),1 which provides that “[n]o provider or user of an interactive computer service shall be 19 treated as the publisher or speaker of any information provided by another information content 20 provider.” 47 U.S.C. § 230(c)(1). The Court concluded that defendants satisfied the requirements 21 for Section 230(c)(1) immunity, namely that they are “(1) a provider or user of an interactive 22 computer service (2) whom a plaintiff seeks to treat . . . as a publisher or speaker (3) of 23 information provided by another information content provider.” Barnes v. Yahoo, Inc., 570 F.3d 24 1096, 1100-01 (9th Cir. 2009); see also Dkt. No. 107 at 26-30. Plaintiffs argue that under Henderson, their Unruh Act and UCL claims do not implicate 25 26 27 28 1 Inasmuch as the Fourth Circuit addressed only the immunity provided by Section 230(c)(1), see Henderson, 53 F.4th at 119, the Court does not address, and does not understand plaintiffs to seek reconsideration of, the portion of the September 30, 2022 order finding that their Unruh Act and UCL claims are barred by CDA Section 230(c)(2). 2 United States District Court Northern District of California Case 5:19-cv-04749-VKD Document 122 Filed 01/17/23 Page 3 of 6 1 traditional publishing conduct and therefore do not fall within Section 230(c)(1) immunity. 2 Henderson concerned claims by a putative class of job seekers against a group of defendants who 3 collected information about individuals, created a database of that information, and sold access to 4 that database on a website for the purpose of furnishing consumer reports to third parties. The job 5 seekers claimed that the defendants violated various provisions of the federal Fair Credit 6 Reporting Act (“FCRA”) by failing to provide the job seekers with a copy of their own records, 7 failing to obtain certain certifications from employers, and failing to maintain proper procedures to 8 ensure accurate information in background reports. See Henderson, 54 F.4th at 118-19. Noting 9 that “[t]he term ‘publisher’ as used in [CDA] § 230(c)(1) ‘derive[s] [its] legal significance from 10 the context of defamation law,’” the Fourth Circuit held that “a claim only treats the defendant ‘as 11 the publisher or speaker of any information’ under [CDA] § 230(c)(1) if it (1) bases the 12 defendant’s liability on the disseminating of information to third parties and (2) imposes liability 13 based on the information’s improper content.” Id. at 123 (quoting Zeran v. Am. Online, Inc., 129 14 F.3d 327, 332 4th Cir. 1997)). In the present litigation, plaintiffs maintain that their Unruh Act 15 and UCL claims do not seek to hold defendants liable for publishing improper content and, thus, 16 Section 230(c)(1) immunity does not apply. 17 Henderson, however, is inapposite. In Henderson, the Fourth Circuit examined the 18 plaintiff job seekers’ claims, in the specific context of the FCRA, and concluded that certain of 19 those claims did not seek to treat the defendants as publishers because they concerned the 20 dissemination of information to the plaintiffs themselves (not a third party), the failure to obtain 21 certain information from third parties, and the failure to maintain proper procedures to ensure 22 accurate information—all of which were deemed not to fall within “publisher” functions for 23 purposes of Section 230(c)(1) immunity. Id. at 124-25. While the job seekers’ other claims could 24 implicate publishing functions to the extent they “functionally depend” on the defendants’ 25 dissemination of inaccurate information to a third party, the Fourth Circuit nonetheless found that 26 Section 230(c)(1) immunity did not apply because the defendants were “information content 27 provider[s]” who “made substantive changes to the records’ content that materially contributed to 28 the records’ unlawfulness,” including by reformatting, distilling, and stripping out information and 3 Case 5:19-cv-04749-VKD Document 122 Filed 01/17/23 Page 4 of 6 1 replacing information with defendants’ own created summaries. Id. at 118, 126, 129. There are no such facts in the present litigation, which concerns defendants’ decisions to United States District Court Northern District of California 2 3 remove, restrict, or demonetize plaintiffs’ videos. See Dkt. No. 107 at 28. Indeed, Henderson 4 expressly declined to consider whether CDA Section 230(c)(1) immunity applies when a claim 5 seeks to hold a party liable for a decision not to publish. Henderson, 54 F.4th at 124 n.18. 6 Moreover, Henderson is not binding on this Court; and while the scope of Section 230(c)(1) 7 immunity is not unlimited, the Fourth Circuit’s narrow construction of Section 230(c)(1) appears 8 to be at odds with Ninth Circuit decisions indicating that the scope of the statute’s protection is 9 much broader. See Fair Housing Council of San Fernando Valley v. Roommates.com, LLC , 521 10 F.3d 1157, 1170-71 (9th Cir. 2008) (“[A]ny activity that can be boiled down to deciding whether 11 to exclude material that third parties seek to post online is perforce immune under section 230.”); 12 see also Prager Univ. v. Google LLC, 85 Cal. App. 5th 1022, 1033 n.4 (2022) (noting that 13 “Henderson’s narrow interpretation of section 230(c)(1) is in tension with the California Supreme 14 Court’s broader view, which we follow, absent a contrary ruling by the United States Supreme 15 Court.”) (citing Murphy v. Twitter, Inc., 60 Cal. App. 5th 12, 24-26 (2021)). Based on the foregoing, plaintiffs have not demonstrated that Henderson warrants 16 17 reconsideration of the Court’s September 30, 2022 order. Their motion for reconsideration 18 therefore is denied. 19 II. 20 MOTION FOR ENTRY OF JUDGMENT Plaintiffs alternatively request that the Court enter final judgment pursuant to Rule 54(b) 21 on their Unruh Act and UCL claims so that plaintiffs may seek an expedited appeal on the 22 construction and constitutionality of CDA Section 230(c) as applied to those claims. Specifically, 23 plaintiffs request entry of “final judgment under Rule 54(b) as to all portions of the Court’s 24 [September 30, 2022] Order dismissing any part of the Unruh Act or UCL claims with prejudice, 25 whether under either, or both, of §§ 230(c)(1) and (c)(2).” Dkt. No. 110 at 7. Although plaintiffs 26 requested entry of judgment in their motion for leave to file a motion for reconsideration, they did 27 not include the request in the motion for reconsideration itself. See Dkt. Nos. 110, 112. For that 28 reason, defendants declined to address the request at length, but nevertheless state that they object 4 Case 5:19-cv-04749-VKD Document 122 Filed 01/17/23 Page 5 of 6 1 United States District Court Northern District of California 2 to the entry of a partial final judgment. Dkt. No. 120 at 4 n.1. Rule 54(b) “allows a district court dealing with multiple claims or multiple parties to direct 3 the entry of final judgment as to fewer than all of the claims or parties; to do so, the court must 4 make an express determination that there is no just reason for delay.” Curtiss-Wright Corp. v. 5 Gen. Elec. Co., 446 U.S. 1, 3 (1980). In determining whether to enter final judgment under Rule 6 54(b), the Court “must first determine that it is dealing with a ‘final judgment.’” Id. at 7. That is, 7 “[i]t must be a ‘judgment’ in the sense that it is a decision upon a cognizable claim for relief, and 8 it must be ‘final’ in the sense that it is ‘an ultimate disposition of an individual claim entered in the 9 course of a multiple claims action.’” Id. (citation omitted). Second, “the district court must go on 10 to determine whether there is any just reason for delay,” because “[n]ot all final judgments on 11 individual claims should be immediately appealable, even if they are in some sense separable from 12 the remaining unresolved claims.” Id. at 8. 13 “It is left to the sound judicial discretion of the district court to determine the ‘appropriate 14 time’ when each final decision in a multiple claims action is ready for appeal.” Id. “This 15 discretion is to be exercised in the interest of sound judicial administration” and “the equities 16 involved.” Id. (internal quotations and citation omitted). District courts properly may consider 17 factors such as whether the claims subject to Rule 54(b) are “separable from the others remaining 18 to be adjudicated” and whether an appellate court will have to decide the same issues more than 19 once in the event of subsequent appeals. Id. “Plainly, sound judicial administration does not 20 require that Rule 54(b) requests be granted routinely.” Id. at 10. 21 The Court’s September 30, 2022 order is a final disposition of plaintiffs’ Unruh Act and 22 UCL claims. Nonetheless, taking into account judicial administrative interests, as well as the 23 equities involved, plaintiffs have not established the second part of the test for entry of Rule 54(b) 24 judgment. Although plaintiffs note that this action has been pending for some time, and that the 25 parties continue to litigate the sufficiency of the pleadings, plaintiffs themselves have either 26 requested or stipulated to a number of considerable extensions of time. See Dkt. Nos. 12, 31, 68, 27 75, 86, 90, 108, 118. Moreover, plaintiffs have asked for and taken multiple opportunities to 28 amend their complaint. Their most recent effort, their fourth amended complaint, is the subject of 5 United States District Court Northern District of California Case 5:19-cv-04749-VKD Document 122 Filed 01/17/23 Page 6 of 6 1 a pending motion to dismiss on the sole remaining claim for breach of the implied covenant of 2 good faith and fair dealing. Dkt. No. 121. As that motion has not yet been fully briefed or heard, 3 the Court expresses no opinion as to how that matter may be resolved, but notes that the pending 4 motion to dismiss will be heard on March 21, 2023. If this Court were to enter final judgment 5 now as to the Unruh Act and UCL claims, to a certain degree, the Ninth Circuit would still be 6 required to review the same set of facts twice in the event of a subsequent appeal, as all of 7 plaintiffs’ claims2 are based on essentially the same facts. Issues concerning the applicability of 8 CDA Section 230(c) immunity would potentially also have to be addressed in piecemeal fashion, 9 as defendants have asserted that statute as a defense against all of plaintiffs’ claims. Accordingly, 10 the Court is not convinced that entering judgment as to the Unruh Act and UCL claims now would 11 spare an appellate court from duplicating its efforts if there were an immediate appeal and another 12 one following the final disposition of plaintiffs’ other claims. Plaintiffs’ motion for entry of 13 judgment as to their Unruh Act and UCL claims is denied. IT IS SO ORDERED. 14 15 Dated: January 17, 2023 16 17 VIRGINIA K. DEMARCHI United States Magistrate Judge 18 19 20 21 22 23 24 25 26 27 28 The Court previously dismissed plaintiffs’ claims under the Lanham Act and the California Constitution, as well their claim for declaratory judgment, for failure to state a claim for relief. Dkt. No. 107. 6 2

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