Peterson et al v. Aaron's, Inc. et al

Filing 42

ORDER granting in part and denying in part 25 Defendant Aspen Way's Motion to Dismiss for Failure to State a Claim; granting in part and denying in part 26 Defendant Aaron's Motion to Dismiss for Failure to State a Claim. Signed by Judge Thomas W. Thrash, Jr on 6/3/2015. (ss)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
MICHAEL PETERSON, et al.,
Plaintiffs,
v.

CIVIL ACTION FILE
NO. 1:14-CV-1919-TWT

AARON’S, INC., et al.,
Defendants.

OPINION AND ORDER

The Plaintiffs claim that the Defendant Aspen Way Enterprises, Inc. unlawfully
accessed their computers from a remote location and collected private information
stored therein. The Plaintiffs allege that Aspen Way accomplished this by means of
a program which it installs on the computers before leasing or selling them to its
customers. It is before the Court on the Defendant Aspen Way Enterprises, Inc.’s
Motion to Dismiss [Doc. 25] and the Defendant Aaron’s, Inc.’s Motion to Dismiss
[Doc. 26]. For the reasons set forth below, the Defendant Aspen Way Enterprises,
Inc.’s Motion to Dismiss [Doc. 25] is GRANTED in part and DENIED in part and the
Defendant Aaron’s, Inc.’s Motion to Dismiss [Doc. 26] is GRANTED in part and
DENIED in part.
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I. Background
The Defendant Aspen Way Enterprises, Inc. – a Montana-based franchisee of
the Defendant Aaron’s, Inc.1 – is in the business of, inter alia, leasing and selling
personal computers. This case is about software that Aspen Way allegedly installs on
its lease-purchase computers.2 This software – called PC Rental Agent – allows Aspen
Way to remotely access web-camera photographs, user activity logs, and other private
information stored on the lease-purchase computers.3 Aspen Way allegedly does not
notify its customers that this software is installed on the computers.4
The Plaintiffs Michael Peterson and Matthew Lyons – residents of Colorado
and Oklahoma, respectively5 – were lease-purchasers of computers from Aspen Way’s
Colorado retail store. They claim that Aspen Way, through the PC Rental Agent
software, remotely accessed their computers and retrieved private information. They
brought suit against Aspen Way and Aaron’s, Inc., asserting state law claims for (1)

1

Compl. ¶ 9.

2

Compl. ¶ 47.

3

Compl. ¶ 41.

4

Compl. ¶ 47.

5

Compl. ¶¶ 5-6.

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violation of the Georgia Computer Systems Protection Act (“GCSPA”) and (2)
common law invasion of privacy.
II. Legal Standard
A plaintiff may survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6) if the
factual allegations in the Complaint give rise to a plausible claim for relief.6 For a
claim to be plausible, the supporting factual matter must establish more than a mere
possibility that the plaintiff is entitled to relief.7 In determining whether a plaintiff has
met this burden, the Court must assume all of the factual allegations in the Complaint
to be true. The Court, however, need not accept as true any legal conclusions found
in the Complaint.8

6

See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007) (“Factual allegations must be enough to raise a
right to relief above the speculative level . . . on the assumption that all the allegations
in the complaint are true (even if doubtful in fact).”).
7

See Iqbal, 556 U.S. at 678.

8

See id.; Twombly, 550 U.S. at 555 (A “plaintiff’s obligation to provide
the grounds of his entitle[ment] to relief requires more than labels and conclusions,
and a formulaic recitation of the elements of a cause of action will not do.”) (internal
quotation marks omitted).
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III. Discussion
A. GCSPA
The Defendants argue that the GCSPA does not apply extra-territorially. And
thus, according to the Defendants, because all of the alleged unlawful acts took place
outside of Georgia, the GCSPA claims must be dismissed. Generally, Courts may not
“assume[] ... that the [legislature of Georgia] attempted to enact legislation having an
extraterritorial effect.”9 Here, no part of the GCSPA indicates that it applies
extra-territorially. And based on the Amended Complaint, none of the alleged conduct
giving rise to the Plaintiffs’ claims has any relation to the state of Georgia. As the
Defendants point out, the Plaintiffs are residents of Colorado and Oklahoma, and
Aspen Way – a Montana-based franchisee – leased computers to the Plaintiffs out of
its Colorado retail store. In addition, the Plaintiffs do not allege that Aspen Way
conducted any of the alleged unlawful acts from Georgia.
In response, the Plaintiffs argue that, based on Georgia’s choice of law rules,
the GCSPA may apply. This misses the point. The Court is determining whether the
statute, by its text, provides a remedy for the wrongful acts alleged by the Plaintiffs.
Thus, the question is one of statutory interpretation: does the GCSPA provide a

9

National Union Fire Ins. Co. v. Marty, 197 Ga. App. 642, 643 (1990)
(internal quotation marks omitted).
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remedy for culpable acts and subsequent injuries that took place outside of Georgia?
The Eastern District of Michigan confronted a similar issue when it had to determine
whether the Michigan Builders’ Trust Fund Act applied to projects located outside of
the state of Michigan. Prior to addressing the issue, the court noted:
It is necessary to set forth the distinction between conflict of laws
principles and statutory interpretation. A conflict of laws inquiry is
necessary only if there are two relevant forums with divergent laws. This
occurs only if the court determines that both forums’ legislators intended
their law to apply to the situation. In other words, the court interprets
both forums’ laws; if both apply, the court moves on to a conflict of laws
determination. Here . . . it is only necessary to engage in a statutory
analysis to determine the scope of the [Michigan Builders’ Trust Fund
Act]—i.e., to see if the [Michigan Builders’ Trust Fund Act] applies.10
The Plaintiffs then argue that the class members they seek to represent live in a
number of states, and possibly even Georgia. This may be true, but the question here
is whether the Plaintiffs Peterson and Lyons have stated a plausible claim for relief
under the GCSPA. Because they have not, their GCSPA claims against all of the
Defendants must be dismissed.
B. Common Law Invasion of Privacy
The Plaintiffs assert a common law claim for unreasonable intrusion of
seclusion. The “‘unreasonable intrusion’ aspect of the invasion of privacy involves a

10

Accu-Tech Corp. v. Jackson, 352 F. Supp. 2d 831, 834 n.5 (E.D. Mich.
2005) (emphasis added).
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prying or intrusion, which would be offensive or objectionable to a reasonable person,
into a person’s private concerns.”11 Generally, to “show the tort of unreasonable
intrusion, a plaintiff must show a physical intrusion which is analogous to a
trespass.”12 But “this ‘physical’ requirement can be met by showing that the defendant
conducted surveillance on the plaintiff or otherwise monitored [plaintiff’s]
activities.”13 Here, the Plaintiffs have alleged that Aspen Way leased/sold computers
to them which, without the Plaintiffs’ knowledge, contained software that allowed
Aspen Way to access their private information. In a similar case, this Court found that
such an intrusion was “unreasonable”:
[T]he Plaintiff alleges that the Defendant leased a computer to her
without informing her that the computer was equipped with software that
would allow the Defendant to monitor the Plaintiff’s activities. The
Plaintiff further alleges that the Defendant accessed financial
information, personal information, and even images of the Plaintiff at her
computer. These are allegations of potential intrusions on privacy that
would be “offensive or objectionable to a reasonable person.”14

11

Yarbray v. Southern Bell Tel. & Tel. Co., 261 Ga. 703, 705 (1991).

12

Sitton v. Print Direction, Inc., 312 Ga. App. 365, 369 (2011) (internal
quotation marks omitted).
13

Id. (internal quotation marks omitted).

14

Sneed v. SEI/Aaron’s, Inc., No. 1:13-CV-982-TWT, 2013 WL 6669276,
at *2 (N.D. Ga. Dec. 18, 2013).
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In response, Aspen Way argues that it installed PC Rental Agent on the
computers it leased/sold in order to “track down a lost or stolen computer or a
computer whose lessee was in default” and that this does not constitute “an
unreasonable ‘intrusion.’”15 But assuming the Plaintiffs’ allegations to be true, as the
Court must, Aspen Way did not use the PC Rental Agent software for only this limited
purpose. It allegedly used the software to access the Plaintiffs’ computers – without
permission – and collect private information. Accordingly, Aspen Way’s motion to
dismiss the Plaintiffs’ common law intrusion of privacy claim must be denied.
However, the Court must still determine whether the Plaintiffs have asserted a
plausible common law invasion of privacy claim against Aaron’s, Inc. The Plaintiffs
do not allege that Aaron’s, Inc. installed PC Rental Agent on their computers and/or
used PC Rental Agent to collect their private information. According to the Amended
Complaint, the Defendant Aspen Way – an independently owned and operated
business – engaged in these acts.16 Thus, the Plaintiffs’ allegations do not support a

15

Aspen Way’s Mot. to Dismiss, at 13 (emphasis added).

16

Compl. ¶ 40 (“Once PC Rental Agent is installed on a Lease-Purchase
computer, it permits the installer – in this case Aspen Way – to remotely install and
or activate over the Internet the ‘Detective Mode’ feature.”) (emphasis added); Compl.
¶ 66 (“Plaintiffs are attorneys who took ownership of several computers through a
lease purchase agreement with Aspen Way . . . in order to conduct business for their
law firm.”) (emphasis added).
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direct invasion of privacy claim against Aaron’s, Inc. However, the Plaintiffs claim
that there are two ways in which Aaron’s, Inc. may be jointly liable for the invasion
of privacy claim asserted against Aspen Way.
First, the Plaintiffs argue that Aaron’s, Inc. is liable because it conspired with
Aspen Way to access the Plaintiffs’ computers and collect their private information.
To “recover damages based on a civil conspiracy, a plaintiff must show that two or
more persons combined either to do some act which is a tort, or else to do some lawful
act by methods which constitute a tort.”17 The “essential element of the alleged
conspiracy is proof of a common design establishing that two or more persons in any
manner, either positively or tacitly, arrive at a mutual understanding as to how they
will accomplish an unlawful design.”18 Members “of the conspiracy are jointly and
severally liable for acts of co-conspirators done in furtherance of the conspiracy.”19
However, “[w]here it is sought to impose civil liability for a conspiracy, the
conspiracy of itself furnishes no cause of action.”20 Here, the Plaintiffs fail to

17

McIntee v. Deramus, 313 Ga. App. 653, 656 (2012) (internal quotation
marks omitted).
18

Id. (internal quotation marks omitted).

19

Id.

20

Savannah Coll. of Art & Design, Inc. v. School of Visual Arts of
Savannah Inc., 219 Ga. App. 296, 297 (1995).
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adequately allege that Aspen Way and Aaron’s, Inc. agreed to engage in the alleged
unlawful acts. Other than a conclusory conspiracy allegation, the Complaint contains
no other supporting factual matter.21 And as the Eleventh Circuit noted, “labels and
legal conclusions couched as factual allegations enjoy no presumption of truth and
offer no support to the sufficiency of the complaint.”22
The Plaintiffs then argue that Aaron’s, Inc. aided and abetted Aspen Way’s
surveillance of its customers, and is thus liable for tort claims asserted against the
latter. Georgia courts “recognize the principle in the law of torts that persons acting
in concert under [certain] situations may be liable for the acts of others.”23 Generally,
“[f]or harm resulting to a third person from the tortious conduct of another, a person
is liable if he (a) orders or induces such conduct, knowing of the conditions under
which the act is done or intending the consequences which ensue, or (b) knows that
the other’s conduct constitutes a breach of duty and gives substantial assistance or

21

The allegations referenced by the Plaintiffs in their Response Brief are
insufficient. The Plaintiffs alleged that Aaron’s, Inc. promoted PC Rental Agent to
Aspen Way. Pls.’ Resp. to Aaron’s, Inc.’s Mot. to Dismiss, at 9. But this does not
mean that Aaron’s, Inc. and Aspen Way reached an agreement whereby the latter
would use PC Rental Agent to collect the Plaintiffs’ private information. Thus, this
allegation does nothing to render the Plaintiffs’ conspiracy allegation plausible.
22

Gunder’s Auto Ctr. v. State Farm Mut. Auto. Ins. Co., 422 Fed. Appx.
819, 821 (11th Cir. 2011).
23

Madden v. Fulton Cnty., 102 Ga. App. 19, 21-22 (1960).

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encouragement to the other so to conduct himself.”24 Subsections “(b) and (c) . . .
require substantial aid, or . . . substantial assistance to be found, and such action must
be a substantial factor in the resulting tort by a third person tortfeasor which injured
the plaintiff.”25 Here, the Plaintiffs adequately allege that Aaron’s, Inc. knew that
Aspen Way was invading its customers’ privacy and provided substantial assistance
which aided Aspen Way’s unlawful acts. According to the Amended Complaint,
Aaron’s, Inc.: (1) promoted PC Rental Agent to Aspen Way,26 (2) trained Aspen Way
personnel on the use of PC Rental Agent,27 (3) granted Aspen Way permission to use
the PC Rental Agent websites “by opening a portal on the Aaron’s intranet, allowing
[Aspen Way] to access and use PC Rental Agent . . . and thereafter illegally spy on”
its customers,28 and (4) “provided Aspen Way with assistance with the use of antivirus software in relation to PC Rental Agent.”29 To establish scienter, the Plaintiffs
allege that Aaron’s, Inc. was informed, by several of its employees, that “PC Rental

24

Id. at 22 (internal quotation marks omitted).

25

Id.

26

Compl. ¶ 37.

27

Compl. ¶ 38.

28

Compl. ¶ 57.

29

Compl. ¶ 38.

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Agent®, which Aspen Way was using, was very intrusive, key-logging all the
customer’s key strokes, transmitting images of the customers’ screenshots, and
transmitting photographs of computer users taken through the customers’ webcams.”30
In response, Aaron’s, Inc. contends that Georgia law does not recognize “aiding
and abetting” liability for a common law invasion of privacy claim. They claim that,
in Insight Technology, Inc. v. FreightCheck, LLC,31 the Georgia Court of Appeals laid
out an exhaustive list of tort claims for which a party may be liable through a theory
of “aiding and abetting,” and that this list did not include invasion of privacy. But the
question in Insight Technology was whether there was an independent aiding and
abetting claim for breach of a fiduciary duty.32 As part of its analysis, the Georgia
Court of Appeals laid out a non-exhaustive list of torts for which an independent
aiding and abetting claim may exist.33 Here, the aiding and abetting argument is a
means by which Aaron’s Inc. may be found jointly liable for the invasion of privacy
claim asserted against Aspen Way. The Plaintiffs need not establish an independent

30

Compl. ¶ 59.

31

280 Ga. App. 19 (2006).

32

See id. at 23.

33

See id. at 24.

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aiding and abetting claim. Accordingly, Aaron’s, Inc.’s Motion to Dismiss the
Plaintiffs’ invasion of privacy claim should be denied.
IV. Conclusion
For these reasons, the Court GRANTS in part and DENIES in part the
Defendant Aspen Way Enterprises, Inc.’s Motion to Dismiss [Doc. 25] and GRANTS
in part and DENIES in part the Defendant Aaron’s, Inc.’s Motion to Dismiss [Doc.
26].
SO ORDERED, this 3 day of June, 2015.

/s/Thomas W. Thrash
THOMAS W. THRASH, JR.
United States District Judge

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