Brown v. Intelius, Inc.
MEMORANDUM AND ORDER IT IS HEREBY ORDERED that Defendants motion to dismiss is GRANTED. (Doc. No. 14.) A separate Order of Dismissal shall accompany this Memorandum and Order.. Signed by District Judge Audrey G. Fleissig on 11/21/12. (JWJ)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
MICHAEL G. BROWN, individually and
on behalf of all other similarly situated
persons and entities,
Case No. 4:12CV00852 AGF
MEMORANDUM AND ORDER
Plaintiff Michael G. Brown, individually and on behalf of all other similarly
situated persons and entities, brings this putative class action against Defendant, Intelius,
Inc., for damages allegedly sustained as a result of deceptive advertising that appeared on
Defendant’s website. The matter is before the Court on Defendant’s motion to dismiss
Plaintiff’s complaint for failure to state claims upon which relief can be granted. For the
reasons set forth below, the Court will grant Defendant’s motion.
According to Plaintiff’s complaint, Defendant is a business that provides personal
and private information about individuals to paying customers. In December 2010
Plaintiff contracted with Defendant through its website, http://intelius.com, seeking
information on individuals that Defendant claimed it could provide, including information
on individuals’ whereabouts. The complaint alleges that Defendant provided Plaintiff
with information about certain individuals, including their current whereabouts, criminal
history, property ownership, social network history, and relatives. Defendant delivered
the information, and Plaintiff accepted and paid for it.1 The information was for
Plaintiff’s personal or household use. At no time did Defendant hold a license to engage
in business in the State of Missouri as a private investigator agency, nor was it ever in the
process of obtaining such a license.
In Count I of his seven-count complaint, Plaintiff seeks rescission of his contract
with Defendant. Plaintiff asserts that the agreement was implicitly conditioned on
Defendant being licensed as a private investigator business under Missouri Revised
Statutes § 324.1104.2 Plaintiff claims that by not being licensed, Defendant illegally sold
and provided investigations, and that Plaintiff suffered damages in the form of fees paid.
In Count II, Plaintiff alleges that it is unjust to allow Defendant to retain the money
it has received for investigations that it was not licensed to undertake. In Count III,
The amount paid is not specified in the complaint.
This section provides that any person engaging in a private investigator
business must be licensed. Section 324.1100 (16) defines private investigator business as:
the furnishing of, making of, or agreeing to make, any investigation for the
purpose of obtaining information pertaining to:
* * *
(b) The identity, habits, conduct, business, occupation, honesty, integrity,
credibility, knowledge, trustworthiness, efficiency, loyalty, activity,
movement, whereabouts, affiliations, associations, transactions, acts,
reputation, or character of any person;
* * *
(e) Sale of personal identification information to the public . . . .
Plaintiff alleges that Defendant was unjustly enriched by accepting and retaining
Plaintiff’s payments in exchange for providing information that was illegal to provide.
Count IV of the complaint alleges that Defendant breached an implied condition of
the contract with Plaintiff by failing to be licensed. Plaintiff claims that the true value of
the information provided was nothing because Defendant was providing services for
which it was not licensed. In Count V, Plaintiff alleges that Defendant negligently
misrepresented itself as licensed by omission, and as a result, Plaintiff suffered damage
and economic harm because the information Defendant furnished was worthless due to
Defendant’s failure to be properly licensed.
Count VI of the complaint (mistakenly labeled Count V) claims that Defendant
violated Missouri’s Merchandising Practices Act, Mo. Rev. Stat. § 407.020, by
concealing and omitting the fact that it was not licensed as a private investigator business.
Again, Plaintiff claims to have suffered damages because the information provided to him
was worth nothing. And Count VII of the complaint (mistakenly labeled Count VI)
requests an injunction against Defendant, prohibiting it from collecting money in
exchange for private investigation information and from engaging in business as a private
investigator business until it is so licensed.
Defendant, in support of its motion to dismiss, argues that it does not fall under the
ambit of § 324.1104 because its business is providing public-record searches over the
Internet, and thus, the language of the statute does not apply. Defendant claims that its
databases allow customers to perform data verification and person, property, and address
location, and that the information in the databases is taken from public sources.
Defendant argues alternatively that § 324.1104 does not create a private right of action
and that no private right of action can be implied.
Defendant attached a copy of the “Terms & Conditions” that governed Plaintiff’s
contract with Defendant.3 The relevant provisions state:
1. Access to Intelius. Upon registration, [Defendant] grants you a
nontransferable, nonexclusive license to access our databases and the
information contained in the databases, solely for the purpose of performing
data verification, person, property and address location and related searches
for qualified individual commercial use only . . . .
7. Disclaimer of Warranties. The information in the [Defendant’s]
databases has been compiled from public records and other proprietary
sources for the specific purposes of (1) locating individuals, property and
businesses, and/or (2) providing general background information about
individuals and businesses for verification purposes. Neither [Defendant]
nor any of our data suppliers represents or warrants that the Information is
current, complete, or accurate. [Defendant] HEREBY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES REGARDING THE
PERFORMANCE OF THE SERVICE AND THE ACCURACY,
Generally, when considering a motion to dismiss where the court is presented
with and considers matters outside of the pleadings, the motion must be treated as one for
summary judgment. Fed. R. Civ. P. 12(d). However, the court does not need to convert
the motion if the matters presented are incorporated by reference, are integral to the
claim, or are exhibits whose authenticity is unquestioned. Miller v. Redwood Toxicology
Lab., Inc., 688 F.3d 928, 931 (8th Cir. 2012). Here the Terms & Conditions are integral
to the claims because they govern the contract that Plaintiff and Defendant entered into.
Plaintiff does not dispute the authenticity of the Terms & Conditions in his response to
Defendant’s motion to dismiss.
CURRENCY, OR COMPLETENESS OF THE INFORMATION,
INCLUDING (WITHOUT LIMITATION) ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ADDITIONALLY, UNDER NO CIRCUMSTANCES SHALL WE BE
LIABLE TO YOU FOR ANY DAMAGES WHATSOEVER, INCLUDING
(WITHOUT LIMITATION) ANY DIRECT, SPECIAL, INCIDENTAL,
EXEMPLARY OR CONSEQUENTIAL DAMAGES, LOST PROFITS,
OR ANY OTHER CLAIMS OF YOURS OR THIRD PARTIES, EVEN IF
WE HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. You assume all risks associated with the use of our database
(Doc. No. 15-2.)
Defendant maintains that the Terms & Conditions demonstrate that Defendant
permitted Plaintiff access to database information, and that Defendant did not perform
any “investigation” as that term is used in §324.1104. Defendant further argues that, even
if a private right of action can be implied under § 324.1104, Plaintiff’s complaint fails to
state a claim because Plaintiff makes only conclusory allegations and states no facts
showing that he suffered any financial harm. Lastly, Defendant argues that Plaintiff’s
claims are barred by the Communications Decency Act (“CDA”), 47 U.S.C. § 230, which
grants Internet service providers (“ISPs”) immunity in any cause of action based on
information originating with a third-party user of the service.
Plaintiff responds that the language of Missouri’s private investigator statute does
cover Defendant, and that Plaintiff is not seeking to recover under the statute, but is using
the statute as the basis for his common law claims. Plaintiff argues that the facts alleged
in the complaint, accepted as true, meet federal pleading requirements. Plaintiff posits
that he has suffered damages because the information he received has no value.
Missouri, by having a licensing requirement, is “seeking to ensure a certain level of
reliability and qualification in the field of private investigation.” (Doc. No. 20 at 10.)
Thus, Plaintiff argues, “if information has no reliability . . . [it] has no value.” Id.
Plaintiff claims that Defendant and himself were not in peri delicto, and that as the less
guilty party he may recover all fees paid. Lastly, Plaintiff argues that the
Communications Decency Act does not apply because that act applies to actions sounding
in libel or slander.
To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to “‘state a claim to relief that is plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). “‘A claim has facial plausibility when the plaintiff [has pleaded] factual content
that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged. A pleading that offers labels and conclusions or a formulaic
recitation of the elements of a cause of action will not do.’” Cox v. Mortg. Elec.
Registration Sys., Inc., 685 F.3d 663, 668 (8th Cir. 2012) (quoting Iqbal, 556 U.S. at
This Court is sitting in diversity. Absent controlling law from the highest court of
the state on an issue, a federal court sitting in diversity must attempt to predict what the
state supreme court would decide if it were to address the issue; in pursuing such an
endeavor, the federal court may consider relevant state precedent, analogous decisions,
considered dicta, and any other reliable data. Raines v. Safeco Ins. Co. of Am., 637 F.3d
872, 875 (8th Cir. 2011); Council Tower Ass’n v. Axis Specialty Ins. Co., 630 F.3d 725,
728 (8th Cir. 2011).
This Court believes that the Missouri Supreme Court would find that Defendant
does not need to obtain a private investigator business license to provide the services it
provided to Plaintiff. As noted above, under Mo. Rev. Stat. § 324.1104, any person
engaging in a private investigator business must be licensed. As noted above,
§ 324.1100 (16) defines “private investigator business” as,
the furnishing of, making of, or agreeing to make, any investigation for the
purpose of obtaining information pertaining to: . . . (b) The identity, habits,
conduct, business, occupation, honesty, integrity, credibility, knowledge,
trustworthiness, efficiency, loyalty, activity, movement, whereabouts,
affiliations, associations, transactions, acts, reputation, or character of any
person; . . . (e) Sale of personal identification information to the public . . . .
Section 324.1100 does not define “investigation.” When words are not used in a
technical sense, the Missouri Supreme Court gives them their plain and ordinary meaning.
Mo. Prosecuting Attorneys v. Barton Cnty., 311 S.W.3d 737, 742 (Mo. 2010). As did the
Missouri Supreme Court, in Brown v. Carnahan, 370 S.W.3d 637, 649 (Mo. 2012), this
Court notes that Webster’s Third New International Dictionary defines “investigation” as
a “detailed examination . . . study . . . research . . . official probe,” and defines
“investigate” as “to observe or study closely . . . to conduct an official inquiry.” See id.4
Here, the Court believes that the Missouri Supreme Court would conclude that
Defendant did not furnish, make, or agree to make an “investigation” for Plaintiff.
Defendant provided Plaintiff access to databases that contained information. Plaintiff did
not pay Defendant to “study” or “research” specific people. The information that Plaintiff
received was by virtue of his access to and his searches on Defendant’s databases.
Because Defendant did not provide an investigation for Plaintiff, Defendant is not a
private investigator business and thus is not required to be licensed under § 324.1104.
The Court further believes that the Missouri Supreme Court would conclude that
Plaintiff’s allegations of damages are insufficient as to the claims in Counts IV (breach of
contract), V (misrepresentation), and VI (violation of the MMPA), each of which includes
the element of damages. See, e.g., Hoover v. Mercy Health, ___ S.W.3d ___, No. ED
97495, 2012 WL 2549485, at *4 (Mo. Ct. App. July 3, 2012) (“An ascertainable loss of
money or property is an essential element of a cause of action brought under the
MMPA.”). Even assuming that Defendant was required to be licensed, Plaintiff has
failed to allege how acquiring information from an unlicensed investigator has caused
Plaintiff harm. As Plaintiff admits, his purchases were for his own personal and/or
household use, and Plaintiff does not assert that the information he received was
The court was interpreting Mo. Const. art. IV, sec. 13 to determine the extent
of the state auditor’s authority to “make . . . audits and investigations.”
incorrect. Plaintiff has provided no case, nor has the Court found any, that suggests that
Plaintiff may recover damages for receiving accurate information from an unlicensed
private investigator business because of the absence of a license.
Furthermore, Defendant, in its Terms & Conditions, expressly disclaimed any
representation or warranty regarding the accuracy of the information on its databases, and
Plaintiff agreed to the Terms & Conditions when he contracted with Defendant. Lastly,
no valid cause of action has been pled to support injunctive relief. See, e.g., Fletcher v.
Conoco Pipe Line Co., 129 F. Supp. 2d 1255, 1264 (W.D. Mo. 2001) (explaining that
there is no injunctive cause of action under Missouri or federal law; rather a plaintiff must
allege some wrongful conduct for which an injunction is an appropriate remedy.)
Although Defendant also raised the CDA in support of its motion to dismiss, the
Court does not believe that the CDA applies here. Under the CDA, “[n]o provider or user
of an interactive computer service shall be treated as the publisher or speaker of any
information provided by another information content provider,” 47 U.S.C. § 230(c)(1),
and expressly preempts any state law to the contrary, id. § 230(e)(3). The Act grants
Internet service providers (“ISPs”) with immunity from common law actions for
defamation. Johnson v. Arden, 614 F.3d 785, 791 (8th Cir. 2010). Even assuming that
Defendant is an ISP, Plaintiff is not seeking to hold Defendant liable for the statements of
IT IS HEREBY ORDERED that Defendant’s motion to dismiss is GRANTED.
(Doc. No. 14.)
A separate Order of Dismissal shall accompany this Memorandum and Order.
AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated on this 21st day of November, 2012
The Court need not address Defendant’s argument that § 324.1104 does not
create a private right of action for clients of private investigator businesses, because as
Plaintiff argues, he is not seeking to recover damages under that statute, but rather under
the MMPA and theories of common law.
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