Balderas v. Tiny Lab Productions

CourtDistrict Court, D. New Mexico
DecidedMarch 24, 2020
Docket1:18-cv-00854
StatusUnknown

This text of Balderas v. Tiny Lab Productions (Balderas v. Tiny Lab Productions) is published on Counsel Stack Legal Research, covering District Court, D. New Mexico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Balderas v. Tiny Lab Productions, (D.N.M. 2020).

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF NEW MEXICO

STATE OF NEW MEXICO EX REL. HECTOR BALDERAS, ATTORNEY GENERAL,

Plaintiff,

v. No. CIV 18-854 MV/JFR

TINY LAB PRODUCTIONS; TWITTER INC.; MOPUB, INC.; GOOGLE, INC.; ADMOB, INC.; AERSERV LLC; INMOBI PTE LTD.; APPLOVIN CORPORATION; and IRONSOURCE USA, INC.

Defendants.

MEMORANDUM OPINION AND ORDER THIS MATTER comes before the Court on Defendant Twitter and MoPub’s Motion to Dismiss the Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(2) [Doc. 46], Defendant Applovin’s Motion to Dismiss the Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(2) [Doc. 48], and Defendant Inmobi and AerServ’s Motion to Dismiss the Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(2) [Doc. 49] (collectively, the “Motions to Dismiss for Lack of Personal Jurisdiction”). The Court, having considered the Motions and relevant law, finds that the Motions are not well-taken and will be denied. BACKGROUND The relevant facts, as alleged in the Complaint and demonstrated by the Defendants’ affidavits, are as follows. Tiny Lab Productions is a developer of child-directed, mobile game applications (“apps”), including Fun Kid Racing, Candy Land Racing, Baby Toilet Race: Cleanup Fun, and GummyBear and Friends Speed Racing. Compl. ¶ 3. During the relevant time period, Tiny Lab’s apps were available for download in the Google Play Store, operated by Google. Id. ¶ 12. Tiny Lab is headquartered in Lithuania. Id. Google is headquartered in California. Id. ¶ 15. Twitter, MoPub, Inc., AdMob, Inc., AerServ LLC, InMobi Pte Ltd., Applovin, Corporation, and ironSource USA (collectively, the “SDK Defendants”) are advertising

companies that sold their proprietary software development kits (“SDKs”) to Tiny Labs for installation and use in its gaming apps. Id. ¶ 13. The SDKs knew that these Tiny Lab gaming apps were directed to children. Id. ¶ 212. All of the SDK Defendants are headquartered in California. Id. ¶¶ 14-18. When a Tiny Lab app is downloaded onto a child’s device in New Mexico, the SDK Defendants’ SDKs are also installed as app components. Id. ¶ 5. Once so embedded, while a child in New Mexico plays one of the apps, the SDK Defendants’ SDK collects personal information about that child and tracks the child’s online behavior to profile the child for targeted advertising. Id. ¶¶ 43-46. This happens without the knowledge or consent of the child’s

parents. Id. ¶ 44. Specifically, as soon as a child in New Mexico opens up a Tiny Lab app on her device and it connects to the internet, the app connects to servers, including the SDK Defendants’ servers. Id. ¶ 55. The SDK Defendants’ embedded SDKs then begin sending data about the child to the SDK Defendants’ respective servers. Id. As the child plays the app, the SDKs continue to communicate with the SDK Defendants’ servers, sending requests, or “calls” to their servers for advertisements targeted to the child playing the app. Id. ¶ 56. With each request from the embedded software, the child’s personal information is transmitted to the SDK Defendants’ servers, including her location in New Mexico. Id. The SDK servers store and analyze that information to enable continued tracking of the child. Id. Based on these alleged facts, the State of New Mexico (the “State”) commenced the instant action in this Court, asserting a federal statutory claim against all Defendants (Tiny Labs, Google, and the SDK Defendants) for violation of the Children’s Online Privacy Protection Act

(“COPPA”), along with a state statutory claim against all Defendants for violations of the New Mexico Unfair Practices Act, a state statutory claim against Google for additional violations of the New Mexico Unfair Practices Act, and a state common law claim against all Defendants for intrusion upon seclusion. Id. ¶¶ 207-248. Thereafter, some of the SDK Defendants, namely, Twitter, MoPub, AppLovin, AerServ, and InMobi (collectively, the “Personal Jurisdiction (‘PJ’) Defendants”) filed the instant Motions to Dismiss for Lack of Jurisdiction. The State filed one “Omnibus Opposition” to PJ Defendants’ Motions to Dismiss for Lack of Jurisdiction [Doc. 64], and PJ Defendants filed one “Consolidated Reply” [Doc. 72].

STANDARD “[W]hen the court’s jurisdiction is contested, the plaintiff has the burden of proving jurisdiction exists.” Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995). Where, as here, “there has been no evidentiary hearing, and the motion to dismiss for lack of jurisdiction is decided on the basis of affidavits and other written material, the plaintiff need only make a prima facie showing that jurisdiction exists.” Id. “The allegations in the complaint must be taken as true to the extent they are uncontroverted by the defendants’ affidavits.” Id. Further, “[i]f the parties present conflicting affidavits, all factual disputes must be resolved in the plaintiff’s favor, and the plaintiff’s prima facie showing is sufficient notwithstanding the contrary presentation by the moving party.” Id. The court’s “task is to determine whether the plaintiff’s allegations, as supported by affidavits, make a prima facie showing of personal jurisdiction.” Id. DISCUSSION In their Motions to Dismiss for Lack of Jurisdiction, PJ Defendants argue that this Court has neither general nor specific jurisdiction over them, and that the Court thus must dismiss the

instant action as against them for lack of personal jurisdiction. In its Omnibus Opposition, the State argues that PJ Defendants apply the wrong standard in their Motions, because in this case, jurisdiction can be invoked based on nationwide service of process, rather than under “the minimum contacts analysis spelled out in International Shoe Co. v. Washington, 326 U.S. 310 (1945).” Klein v. Cornelius, 786 F.3d 1310, 1318 (10th Cir. 2015). As set forth herein, the Court agrees with the State as to the appropriate test for determining whether jurisdiction exists over PJ Defendants, and finds that, under this test as it has been articulated by the Tenth Circuit, the State has made a prima facie showing of personal jurisdiction. The Two-Part Personal Jurisdiction Test

The personal jurisdiction test “begins with two questions.” Dudnikov v. Chalk & Vermillion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008). First, the court asks “whether any applicable statute authorizes the service of process on defendants.” Id. Second, the court “examines whether the exercise of such statutory jurisdiction comports with constitutional due process demands.” Id. COPPA as the Basis for Nationwide Service of Process Here, the applicable statute, COPPA, provides that “[i]n any case in which the attorney general of a State has reason to believe that an interest of the residents of that State has been or is threatened or adversely affected by the engagement of any person in a practice that violates any regulation of the [Federal Trade] Commission prescribed under [COPPA], the State, as parens patriae, may bring a civil action on behalf of the residents of the State in a district court of the United States of appropriate jurisdiction.” 15 U.S.C. § 6504(a)(1).

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Balderas v. Tiny Lab Productions, Counsel Stack Legal Research, https://law.counselstack.com/opinion/balderas-v-tiny-lab-productions-nmd-2020.