1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ANNETTE CODY, Case No. 23-cv-00562-AMO
8 Plaintiff, ORDER GRANTING MOTION TO 9 v. DISMISS AND DENYING MOTION FOR LEAVE TO FILE AMICUS 10 RING LLC, et al., CURIAE BRIEF 11 Defendants. Re: Dkt. No. 25, 39
12 13 Before the Court is Defendant Ring LLC’s (“Ring”) motion to dismiss and National Retail 14 Federation’s (“NRF”) motion for leave to file amicus curiae brief. The matters are fully briefed 15 and suitable for decision without oral argument. See Civil L.R. 7-1(b). Having read the parties’ 16 papers and carefully considered their arguments and the relevant legal authority, the Court hereby 17 GRANTS Defendant’s motion to dismiss and DENIES NRF’s motion for leave to file amicus 18 brief for the following reasons. 19 I. BACKGROUND 20 Defendant Ring manufactures and sells smart home and home security devices.1 ECF 19 21 (“FAC”) ¶ 5. In September of 2022, Plaintiff Annette Cody (“Cody”) visited Ring’s website 22 through the web browser on her smart phone and had a brief conversation through the chat feature 23 with a customer representative from Ring. Id. ¶ 21. 24 Ring enables and allows a third party, Kustomer, Inc., a subsidiary of Meta, to intercept 25 chats between customers and Ring. Id. ¶ 10. Kustomer’s application program is “plugged into” 26
27 1 As it must, the Court accepts Cody’s allegations in the complaint as true and construes the 1 Ring’s website. Id. ¶ 11. When chat messages are sent to Ring, they are “first routed through 2 [Kustomer’s] server . . . to analyze and collect customer-support agent interactions in real time . . . 3 as they occur.” Id. ¶ 12. When Cody used the website, Ring “caused the internet communication 4 . . . to be recorded” and “secretly allow[ed], aid[ed], and abett[ed] [Kustomer] to intercept and 5 eavesdrop on the conversations during transmission, and then exploit the data for their mutual 6 gain.” Id. ¶¶ 23, 35. 7 “Meta identifies ‘user interests’ by monitoring a collection of ‘offsite’ user activity,” then 8 “generates revenue by selling advertising space through its subsidiaries’ ability to identify those 9 offsite user interests,” and finally “after harvesting the chat transcripts for valuable data, Meta’s 10 brands bombard the unsuspecting Website visitors with targeted advertising.” Id. ¶ 15. Kustomer 11 “exploit[s], monetize[es], and use[s]” the data. Id. ¶ 18. 12 On February 8, 2023, Cody filed a putative class action complaint against Ring and Does 1 13 through 25. ECF 1. On April 16, 2023, in response to Ring’s first motion to dismiss, Cody filed a 14 first amended complaint alleging two violations of the California Invasion of Privacy Act 15 (“CIPA”), Cal. Penal Code, §§ 631(a), 632.7. ECF 19. Ring filed the motion to dismiss at issue 16 on May 1, 2023. ECF 25. 17 II. LEGAL STANDARD 18 Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint may be 19 dismissed for failure to state a claim for which relief may be granted. Fed. R. Civ. P. 12(b)(6). 20 Rule 12(b)(6) applies when a complaint lacks either a “cognizable legal theory” or “sufficient facts 21 alleged” under such a theory. Godecke v. Kinetic Concepts, Inc., 937 F.3d 1201, 1208 (9th Cir. 22 2019) (citation omitted). Whether a complaint contains sufficient factual allegations depends on 23 whether it pleads enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. 24 Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). 25 A claim is plausible “when the plaintiff pleads factual content that allows the court to draw the 26 reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678. When 27 evaluating a motion to dismiss, the court “accept[s] factual allegations in the complaint as true and 1 F.3d at 1031. However, “allegations in a complaint . . . may not simply recite the elements of a 2 cause of action [and] must contain sufficient allegations of underlying facts to give fair notice and 3 to enable the opposing party to defend itself effectively.” Levitt v. Yelp! Inc., 765 F.3d 1123, 1135 4 (9th Cir. 2014) (citations omitted). The Court may dismiss a claim “where there is either a lack of 5 a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal claim.” 6 Hinds Invs., L.P. v. Angioli, 654 F.3d 846, 850 (9th Cir. 2011). 7 If a court dismisses a complaint for failure to state a claim, it should “freely give leave” to 8 amend “when justice so requires.” Fed. R. Civ. P. 15(a)(2). A court has discretion to deny leave 9 to amend due to “undue delay, bad faith or dilatory motive on the part of the movant, repeated 10 failure to cure deficiencies by amendment previously allowed, undue prejudice to the opposing 11 party by virtue of allowance of the amendment, [and] futility of amendment.” Leadsinger, Inc. v. 12 BMG Music Publ’g, 512 F.3d 522, 532 (9th Cir. 2008) (quoting Foman v. Davis, 371 U.S. 178, 13 182, (1962)). To determine whether amendment would be futile, courts examine whether the 14 complaint can be amended to cure the defect requiring dismissal “without contradicting any of the 15 allegations of [the] original complaint.” Reddy v. Litton Indus., Inc., 912 F.2d 291, 296-97 (9th 16 Cir. 1990). 17 III. DISCUSSION 18 A. Section 631 19 Ring argues that Cody’s claim under California Penal Code Section 631(a) fails on 20 multiple grounds: (1) Ring cannot be held liable for recording its own conversation; (2) Cody does 21 not allege tapping of a telephone line; (3) Cody’s allegations undermine any claim of interception 22 in transit; (4) Cody consented to any recording; and (5) Cody fails to state a claim for aiding and 23 abetting a third-party violation. ECF 25 at 13-26. 24 California Penal Code § 631(a) punishes any person who:
25 (1) “by means of any machine, instrument, or contrivance, or in any other matter, 26 intentionally taps, or makes any unauthorized connection . . . with any telegraph or telephone wire, line, cable, or instrument”; 27 (2) “willfully and without the consent of all parties to the communication, or in meaning of any message . . . while the same is in transit or passing over any wire, 1 line, or cable, or is being sent from, or received at any place within this state”; 2 (3) “uses, or attempts to use, in any manner, or for any purpose, or to communicate 3 in any way, any information so obtained”; or
4 (4) “aids, agrees with, employs, or conspires with any person or persons to unlawfully do, or permit, or cause to be done any of the acts or things mentioned 5 above in this section.” 6 Cal. Penal Code § 631(a) (emphasis added).
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ANNETTE CODY, Case No. 23-cv-00562-AMO
8 Plaintiff, ORDER GRANTING MOTION TO 9 v. DISMISS AND DENYING MOTION FOR LEAVE TO FILE AMICUS 10 RING LLC, et al., CURIAE BRIEF 11 Defendants. Re: Dkt. No. 25, 39
12 13 Before the Court is Defendant Ring LLC’s (“Ring”) motion to dismiss and National Retail 14 Federation’s (“NRF”) motion for leave to file amicus curiae brief. The matters are fully briefed 15 and suitable for decision without oral argument. See Civil L.R. 7-1(b). Having read the parties’ 16 papers and carefully considered their arguments and the relevant legal authority, the Court hereby 17 GRANTS Defendant’s motion to dismiss and DENIES NRF’s motion for leave to file amicus 18 brief for the following reasons. 19 I. BACKGROUND 20 Defendant Ring manufactures and sells smart home and home security devices.1 ECF 19 21 (“FAC”) ¶ 5. In September of 2022, Plaintiff Annette Cody (“Cody”) visited Ring’s website 22 through the web browser on her smart phone and had a brief conversation through the chat feature 23 with a customer representative from Ring. Id. ¶ 21. 24 Ring enables and allows a third party, Kustomer, Inc., a subsidiary of Meta, to intercept 25 chats between customers and Ring. Id. ¶ 10. Kustomer’s application program is “plugged into” 26
27 1 As it must, the Court accepts Cody’s allegations in the complaint as true and construes the 1 Ring’s website. Id. ¶ 11. When chat messages are sent to Ring, they are “first routed through 2 [Kustomer’s] server . . . to analyze and collect customer-support agent interactions in real time . . . 3 as they occur.” Id. ¶ 12. When Cody used the website, Ring “caused the internet communication 4 . . . to be recorded” and “secretly allow[ed], aid[ed], and abett[ed] [Kustomer] to intercept and 5 eavesdrop on the conversations during transmission, and then exploit the data for their mutual 6 gain.” Id. ¶¶ 23, 35. 7 “Meta identifies ‘user interests’ by monitoring a collection of ‘offsite’ user activity,” then 8 “generates revenue by selling advertising space through its subsidiaries’ ability to identify those 9 offsite user interests,” and finally “after harvesting the chat transcripts for valuable data, Meta’s 10 brands bombard the unsuspecting Website visitors with targeted advertising.” Id. ¶ 15. Kustomer 11 “exploit[s], monetize[es], and use[s]” the data. Id. ¶ 18. 12 On February 8, 2023, Cody filed a putative class action complaint against Ring and Does 1 13 through 25. ECF 1. On April 16, 2023, in response to Ring’s first motion to dismiss, Cody filed a 14 first amended complaint alleging two violations of the California Invasion of Privacy Act 15 (“CIPA”), Cal. Penal Code, §§ 631(a), 632.7. ECF 19. Ring filed the motion to dismiss at issue 16 on May 1, 2023. ECF 25. 17 II. LEGAL STANDARD 18 Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint may be 19 dismissed for failure to state a claim for which relief may be granted. Fed. R. Civ. P. 12(b)(6). 20 Rule 12(b)(6) applies when a complaint lacks either a “cognizable legal theory” or “sufficient facts 21 alleged” under such a theory. Godecke v. Kinetic Concepts, Inc., 937 F.3d 1201, 1208 (9th Cir. 22 2019) (citation omitted). Whether a complaint contains sufficient factual allegations depends on 23 whether it pleads enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. 24 Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). 25 A claim is plausible “when the plaintiff pleads factual content that allows the court to draw the 26 reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678. When 27 evaluating a motion to dismiss, the court “accept[s] factual allegations in the complaint as true and 1 F.3d at 1031. However, “allegations in a complaint . . . may not simply recite the elements of a 2 cause of action [and] must contain sufficient allegations of underlying facts to give fair notice and 3 to enable the opposing party to defend itself effectively.” Levitt v. Yelp! Inc., 765 F.3d 1123, 1135 4 (9th Cir. 2014) (citations omitted). The Court may dismiss a claim “where there is either a lack of 5 a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal claim.” 6 Hinds Invs., L.P. v. Angioli, 654 F.3d 846, 850 (9th Cir. 2011). 7 If a court dismisses a complaint for failure to state a claim, it should “freely give leave” to 8 amend “when justice so requires.” Fed. R. Civ. P. 15(a)(2). A court has discretion to deny leave 9 to amend due to “undue delay, bad faith or dilatory motive on the part of the movant, repeated 10 failure to cure deficiencies by amendment previously allowed, undue prejudice to the opposing 11 party by virtue of allowance of the amendment, [and] futility of amendment.” Leadsinger, Inc. v. 12 BMG Music Publ’g, 512 F.3d 522, 532 (9th Cir. 2008) (quoting Foman v. Davis, 371 U.S. 178, 13 182, (1962)). To determine whether amendment would be futile, courts examine whether the 14 complaint can be amended to cure the defect requiring dismissal “without contradicting any of the 15 allegations of [the] original complaint.” Reddy v. Litton Indus., Inc., 912 F.2d 291, 296-97 (9th 16 Cir. 1990). 17 III. DISCUSSION 18 A. Section 631 19 Ring argues that Cody’s claim under California Penal Code Section 631(a) fails on 20 multiple grounds: (1) Ring cannot be held liable for recording its own conversation; (2) Cody does 21 not allege tapping of a telephone line; (3) Cody’s allegations undermine any claim of interception 22 in transit; (4) Cody consented to any recording; and (5) Cody fails to state a claim for aiding and 23 abetting a third-party violation. ECF 25 at 13-26. 24 California Penal Code § 631(a) punishes any person who:
25 (1) “by means of any machine, instrument, or contrivance, or in any other matter, 26 intentionally taps, or makes any unauthorized connection . . . with any telegraph or telephone wire, line, cable, or instrument”; 27 (2) “willfully and without the consent of all parties to the communication, or in meaning of any message . . . while the same is in transit or passing over any wire, 1 line, or cable, or is being sent from, or received at any place within this state”; 2 (3) “uses, or attempts to use, in any manner, or for any purpose, or to communicate 3 in any way, any information so obtained”; or
4 (4) “aids, agrees with, employs, or conspires with any person or persons to unlawfully do, or permit, or cause to be done any of the acts or things mentioned 5 above in this section.” 6 Cal. Penal Code § 631(a) (emphasis added). The California Supreme Court has clarified 7 that this provision contains three operative clauses protecting against “three distinct and 8 mutually independent patterns of conduct”: (i) “intentional wiretapping,” (ii) “willfully 9 attempting to learn the contents or meaning of a communication in transit over a wire,” 10 and (iii) “attempting to use or communicate information obtained as a result of engaging 11 in either of the two previous activities.” Tavernetti v. Superior Court, 22 Cal. 3d 187, 12 192 (1978). 13 Cody does not dispute that Ring cannot be held directly liable under the first three clauses 14 of Section 631(a). See ECF 32 (“Response”) at 12-36. Nor could she. Section 631 of California 15 Penal Code “appl[ies] only to eavesdropping by a third party and not to recording by a participant 16 to a conversation.” Warden v. Kahn, 99 Cal. App. 3d 805, 811 (1979). “Only a third party can 17 listen to a conversation secretly.” Graham v. Noom, Inc., 533 F. Supp. 3d 823, 831 (N.D. Cal. 18 2021) (“Noom”) (citing Rogers v. Urlich, 52 Cal. App. 3d 894, 899 (1975)). Thus, to the extent 19 that Cody alleges that Ring directly violated Section 631(a)’s first, second, or third clause, those 20 claims must fail. 21 Cody contends that Ring is vicariously liable under the fourth clause of Section 631(a) for 22 aiding and abetting the third-party chat provider’s violations of the first, second, and third clauses 23 of Section 631(a). Id. at 12, 26. The Court addresses each liability theory in turn. 24 1. Clause One 25 Under California law, statutory interpretation “begins with the words themselves, giving 26 them ‘their plain and commonsense meaning,’ because the words of a legal text ‘generally provide 27 1 (9th Cir. 2020) (interpreting a California statute) (citation omitted). The plain terms of Section 2 631(a)’s first clause prohibit intentionally eavesdropping “with any telegraph or telephone wire” 3 or with an “instrument of any internal telephone communication system.” Cal. Penal Code § 4 631(a). 5 Cody alleges that she used the web browser on a smart phone to access Ring’s website. 6 FAC ¶ 21. Clause one of Section 631(a) prohibits telephonic wiretapping, which does not apply to 7 the internet, and so cannot support Cody’s claims. See Williams v. What If Holdings, LLC, No. C 8 22-03780 WHA, 2022 WL 17869275, at *2 (N.D. Cal. Dec. 22, 2022) (“the first clause of Section 9 631(a) concerns telephonic wiretapping specifically, which does not apply to the context of the 10 internet”); Valenzuela v. Keurig Green Mountain, Inc., No. 22-CV-09042-JSC, 2023 WL 11 3707181, at *2 (N.D. Cal. May 24, 2023) (“Keurig”) (holding that the plain text of the Section 12 631(a)’s first clause “does not prohibit the non-telephonic conduct” of using a smart phone’s 13 internet capabilities); In re Google Assistant Priv. Litig., 457 F. Supp. 3d 797, 825 (N.D. Cal. 14 2020) (concluding that “the plain text of [Cal. Penal Code § 631(a)] expressly requires that the 15 unauthorized ‘connection’ be made with ‘any telegraph or telephone wire, line, cable, or 16 instrument’”). Thus, based on the plain text of the first clause, Cody’s claim fails. 17 Moreover, in recognizing the distinction between the language of clause one and two, 18 courts have applied the second clause to internet communications. See, e.g., Matera v. Google 19 Inc., No. 15-CV-04062-LHK, 2016 WL 8200619, at *18 (N.D. Cal. Aug. 12, 2016) (finding that 20 the “difference in coverage between the first and second clauses suggests that the Legislature 21 intended two separate clauses applying to different types of communications” and that the second 22 clause was not limited to telephone or telegraph communications); Keurig, 2023 WL 3707181, at 23 *3 (analyzing clause two for internet communications). 24 Plaintiff’s arguments to the contrary are unpersuasive. Cody contends that the first clause 25 applies to cellular phone communications because “cellular phone communications are wire 26 communications for purposes of the federal Wiretap act.” Response at 13 (citing In re United 27 States for an Ord. Authorizing Roving Interception of Oral Commc’ns, 349 F.3d 1132, 1139 (9th 1 smartphone’s internet capabilities, not its telephonic capabilities. FAC ¶ 21. As the statute only 2 applies to telephone and telegraph technologies, Cody’s claims fail. 3 Cody also argues that CIPA should be interpreted to apply to new technologies. Response 4 at 14 (citing Apple Inc. v. Superior Ct., 56 Cal. 4th 128, 131 (2013)). However, Cody fails to 5 account for CIPA’s multiple amendments, including in 2011 and 2022, and the Legislature has not 6 updated clause one to include internet technologies. See Cal. Penal Code § 631 (amended by 7 Stats. 2011, c. 15 (A.B. 109), § 428; Stats. 2022 c. 27 (S.B. 1272) § 1). Thus, contrary to Cody’s 8 arguments, the statute does not “predate” internet technology. See Licea v. Am. Eagle Outfitters, 9 Inc., No. ED-CV-221702-MWFJPR, 2023 WL 2469630, at *6 (C.D. Cal. Mar. 7, 2023) (“[t]he 10 fact that the Legislature has had an opportunity to amend section 631(a) to take into account 11 privacy issues raised by new technologies like internet messaging is indicative of its intent not to 12 expand protections”); Keurig, 2023 WL 3707181, at *3 (same). 13 Cody next argues that “the California Supreme Court has construed CIPA . . . [to] 14 provide[] the greatest privacy protection.” Response at 15 (quoting Matera, 2016 WL 8200619, at 15 *19). However, the California Supreme Court “regularly reads statutes to apply to new 16 technologies where such a reading would not conflict with the statutory scheme.” Matera, 2016 17 WL 8200619, at *20 (emphasis added). Here, Cody’s desired interpretation of the first clause 18 directly conflicts with the statutory text, which restricts liability to telephone and telegraph 19 technology. Accordingly, Cody’s claim cannot proceed under the first clause of Section 631. 20 2. Clause Two 21 The second clause of Section 631(a) applies if a third party reads or learns the content of 22 communications without the consent of all parties, “while” the communication is “in transit . . . or 23 is being sent from, or received” within California. Cal. Penal Code § 631(a). The Court examines 24 whether Cody has sufficiently alleged lack of consent and the transit requirement, and whether 25 Ring can utilize the party exception. 26 a. Consent 27 “Generally, consent must be express, but consent may be implied where there are 1 United States v. Staves, 383 F.3d 977, 981 (9th Cir. 2004) (citations omitted). Cody alleges that 2 she did not know that Ring was recording her conversation, and that Ring “did not obtain [Cody’s] 3 or the Class members’ express or implied consent” for the intrusions. FAC ¶¶ 23-24. Ring’s 4 arguments to the contrary do not show that Cody consented to being recorded. 5 Ring argues that Cody “intended to be recorded” because she admits that she acted as a 6 “tester” to see if Ring would record her. ECF 25 at 19. This argument fails. Ring cites no cases 7 indicating that a party’s similar lawsuits against other companies implies consent to being 8 recorded by the company in the instant litigation. 9 Ring also argues that Cody impliedly consented to her webchats being recorded because 10 she typed out the messages. ECF 25 at 18-19 (citing Smith v. LoanMe, Inc., 11 Cal. 5th 183, 194 11 n.4 (2021)) (“[t]he circumstances involved with certain kinds of communications may lead to a 12 reasonable inference that a party sending a communication has consented to having it recorded by 13 the intended recipient — recordation would be expected with a facsimile or text transmission, for 14 example”). However, the Court need not rely on the dicta in a footnote in Smith, which assessed 15 whether Section 632.7 of the Penal Code applies to parties to a communication. 11 Cal. 5th at 16 187-88, 194. 17 Ring also asks the Court to take judicial notice of the privacy notice disclosures on its 18 website to suggest that Cody was aware that Ring would record and analyze her chat transcripts. 19 ECF 25 at 19 (citing ECF 25-1 at 13-18). Even if the Court takes judicial notice of the webpages, 20 Ring fails to cite any cases in which merely having a privacy policy online is sufficient to show 21 consent under CIPA. Ring’s citation to a District of Montana case is not binding and 22 unpersuasive. ECF 25 at 20 (citing Mortensen v. Bresnan Commc’n, LLC, 2010 WL 5140454, at 23 *5 (D. Mont. Dec. 13, 2010)). There, the company informed plaintiffs on three occasions of its 24 monitoring and possible transmission to third parties, including in a privacy notice, an online 25 subscriber agreement specifically stating that accepting the service means agreeing to all the 26 terms, and an opt-out link. Mortensen, 2010 WL 5140454, at *4-5. No such circumstances 27 existed here. 1 Cody accessed Ring’s privacy policy prior to sending her chats, and “whether the privacy policy 2 contains sufficient notice of recording . . . are facts that must be developed and asserted at a later 3 stage of litigation.” Martin v. Sephora USA, Inc., No. 122-CV101355-JLTSAB, 2023 WL 4 2717636, at *13 (E.D. Cal. Mar. 30, 2023). Accordingly, Cody has sufficiently pled lack of 5 consent. 6 b. Interception 7 Ring also moves to dismiss on the grounds that Cody fails to satisfy the timing requirement 8 in the second clause. An eavesdropper must listen to a communication “while the same is in 9 transit or passing over any wire, line, or cable, or is being sent from, or received at any place 10 within this state.” Cal. Penal Code § 631(a) (emphasis added). Cody alleges that the third party’s 11 application program is “plugged into” Ring’s website and allows chats to be routed “in real 12 time . . . as they occur.” FAC ¶¶ 11-12. 13 Cody’s conclusory allegations restating the pleading requirement of real-time interception 14 fail to provide specific factual allegations. See Rodriguez v. Google LLC, No. 20-CV-04688-RS, 15 2022 WL 214552, at *2 (N.D. Cal. Jan. 25, 2022) (“[u]sing the word ‘intercept’ repeatedly is 16 simply not enough without the addition of specific facts that make it plausible Google is 17 intercepting [plaintiff’s] data in transit”). Cody alleges that the third-party software is “plugged 18 into” Ring’s website, so that when a chat message is sent to Ring, it is “first routed through 19 [Kustomer’s] server.” FAC ¶¶ 11-12. These vague allegations fail to explain how the software 20 works or how the interception occurs.2 See, e.g., Quigley v. Yelp, Inc., No. 17-CV-03771-RS, 21 2018 WL 7204066, at *4 (N.D. Cal. Jan. 22, 2018) (plaintiff failed to plead unlawful interception 22 of communications where he “does not allege with particularity how or when any defendant 23 became aware of his communications”). 24
25 2 Cody spends pages in her opposition to the motion to dismiss citing a string of (out of state) cases for the proposition that “automatic routing software can satisfy the contemporaneous 26 transmission requirement” of Section 631(a). Response at 18-22. That may be so, but it fails to address the fundamental pleading deficiencies here: the lack of specificity of Cody’s allegations. 27 See Twombly, 550 U.S. at 555 (a plaintiff must provide “more than labels and conclusions, and a 1 In the alternative, Cody argues that the “Second Clause Applies to Intercepted 2 Communications Sent From or Received at Any Place Within California.” Response at 25. 3 However, Cody fails to acknowledge that the key word “while” applies to the entire clause. Cal. 4 Penal Code § 631(a). Cody argues that the Supreme Court in Ribas interprets the phrase 5 disjunctively. Response at 25. However, the Ribas Court explained that there may be a prima 6 facie violation of Section 631 where a defendant eavesdrops on a conversation “while the 7 communication was either ‘in transit’ or was ‘being sent from’ and ‘received at’ a place within this 8 state.” Ribas v. Clark, 38 Cal. 3d 355, 360 (1985). This interpretation leaves the 9 contemporaneous requirement intact. Id.; see, e.g., Keurig, 2023 WL 3707181, at *6 (“[p]laintiff 10 cannot avoid the simultaneity argument merely because she sends or receives a message in 11 California”). Thus, Cody fails to allege sufficient facts showing that Kustomer intercepted 12 messages in real time. 13 c. The Party Exception 14 Ring additionally argues that Cody’s allegations demonstrate that Kustomer “operated as 15 an extension of Ring,” therefore precluding derivative liability. ECF 25 at 24. Though a person 16 who is a “party” to a communication is exempt from liability under Section 631, In re Facebook, 17 Inc. Internet Tracking Litig., 956 F.3d 589, 607 (9th Cir. 2020); see Warden, 99 Cal. App. 3d at 18 811 (Section 631 “has been held to apply only to eavesdropping by a third party and not to 19 recording by a participant to a conversation”), a vendor hired by a website may act as a third-party 20 eavesdropper if they secretly record conversations in real time. See Javier v. Assurance IQ, LLC, 21 649 F. Supp. 3d 891, 898-900 (N.D. Cal. 2023) (N.D. Cal. Jan. 5, 2023) (analyzing two sets of 22 California cases in assessing whether a third party may be considered an eavesdropper); see, e.g., 23 Revitch v. New Moosejaw, LLC, No. 18-CV-06827-VC, 2019 WL 5485330, at *1 (N.D. Cal. Oct. 24 23, 2019) (“Moosejaw”) (holding that plaintiff adequately alleges that company acted as a third 25 party “because the code embedded into the Moosejaw.com pages functioned as a wiretap that 26 redirected [plaintiff’s] communications to [the third party] while he browsed the site”); see also In 27 re Facebook, Inc. Internet Tracking Litig., 956 F.3d at 608 (concluding that Facebook was not 1 communications). 2 Some cases have held that software vendors may be considered “extension[s]” of the 3 websites that employ them where the third party only does what the party to the communication 4 directs. See, e.g., Noom, 533 F. Supp. 3d at 832 (distinguishing Moosejaw and In re Facebook 5 because the third parties in those cases “intercepted and used the data” for their own benefit while 6 the third-party vendor in Noom acted as a “tool” allowing Noom to “record and analyze its own 7 data,” and there were “no allegations . . . that [the vendor] intercepted and used the data itself”); 8 see also Williams, 2022 WL 17869275 (“a key distinction [in determining whether the vendor can 9 be considered a third party] is whether or not the alleged third-party software provider aggregates 10 or otherwise processes the recorded information, which might suggest that the software vendor 11 independently “uses” the gathered data in some way”). However, the Court rejects that 12 interpretation of Section 631 because it adds requirements about the “intentions and usage of the 13 prospective third party” that are not present in Section 631’s second clause, and it would make the 14 third clause (penalizing “use”) superfluous. Javier, 649 F. Supp. 3d at 900. Accordingly, the 15 Court adopts the reasoning in Javier, and holds that a vendor hired by a website may act as a third- 16 party eavesdropper if it secretly records conversations in real time. 17 Thus, the Court must finally determine whether Cody has stated facts supporting 18 Kustomer’s “capability to use its record of the interaction for [another] purpose.” Javier, 649 F. 19 Supp. 3d at 900 (citing Ribas, 38 Cal. 3d at 360-61) (explaining that a company is an 20 “unannounced second auditor” when, unlike a tape recorder, it has an “independent capability to 21 divulge the recording for any other purpose but that of its owner”). Cody’s allegations about the 22 third party’s actions are generalized and vague. Cody alleges that Meta (which owns Kustomer) 23 engages in the practice of “monitoring” user activity, selling advertising space, and “harvesting the 24 chat transcripts for valuable data.” FAC ¶¶ 10, 15. In support of these generalized allegations, 25 Cody alleges that Ring, Kustomer, and Meta all “profit from secretly exploiting the private chat 26 data.” Id. ¶ 17. Cody alleges that Ring “intentionally caused the internet communication” to be 27 recorded by “voluntarily embedding the software code for Third-Party Spyware Company’s 1 sufficient factual allegations to support an inference that Kustomer is capable of using the 2 intercepted information for another purpose.3 3 As Cody has not alleged facts supporting the timing requirement of the second clause and 4 has not alleged that Kustomer has the ability to use its record of the chat for another purpose, she 5 fails to state a claim under the second clause of Section 631(a). 6 3. Clauses Three and Four 7 In sum, Cody fails to state a claim under the first and second clauses of Section 631(a). As 8 Cody failed to allege facts suggesting that Ring used or communicated any information obtained 9 through a violation of the first or second clauses, she has also failed to plead a violation of the 10 third clause. See In re Google Assistant., 457 F. Supp. 3d at 827.4 Similarly, as Cody fails to 11 establish an underlying third-party violation, she cannot allege aiding and abetting liability. See 12 People v. Perez, 35 Cal. 4th 1219, 1225 (2005) (“absent proof of a predicate offense, . . . an aiding 13 and abetting theory cannot be sustained”). The Court therefore DISMISSES Cody’s claims under 14 Section 631(a). 15 B. Section 632.7 16 Ring also seeks to dismiss Cody’s claim under Section 632.7. Section 632.7 of 17 California’s Penal Code imposes liability on every person who:
18 without the consent of all parties to a communication, intercepts or receives and intentionally records, or assists in the interception or reception and intentional 19 recordation of, a communication transmitted between two cellular radio 20 telephones, a cellular radio telephone and a landline telephone, two cordless telephones, a cordless telephone and a landline telephone, or a cordless telephone 21 and a cellular radio telephone . . .
22 Cal. Penal Code § 632.7(a). 23
24 3 The Bloomberg Law post incorporated by reference in the amended complaint says nothing about Ring or about Meta or Kustomer using Ring data to create targeted advertising. FAC ¶ 14; 25 ECF 25 at 23; ECF 26 at 3-4; ECF 32-1 (Ex. G) at 43.
26 4 Cody also fails to oppose this argument, and therefore concedes it. See Ardente, Inc. v. Shanley, No. C 07-4479 MHP, 2010 WL 546485, at *6 (N.D. Cal. Feb. 9, 2010) (“Plaintiff fails to respond 27 to this argument and therefore concedes it through silence.”); see also Keurig, 2023 WL 3707181, 1 Cody alleges that she used the web browser on her smartphone to access Ring’s website. 2 FAC ¶¶ 4, 21. The fact that she used a smart phone to access the internet does not fit within 3 Section 632.7’s statutory reach. See Licea, LLC, 2023 WL 2415592, at *12 (quoting Mastel v. 4 Miniclip SA, 549 F. Supp. 3d 1129, 1135 (E.D. Cal. 2021)) (“[a]lthough iPhones contain the word 5 ‘phone’ in their name, and have the capability of performing telephonic functions, they are, in 6 reality, small computers”). Indeed, the statute very clearly refers to different types of telephone 7 technology, not the internet. 8 Cody asks the Court to “broadly construe” the term ‘landline phone’ in Section 632.7(a) 9 “functionally as encompassing Defendant’s computer equipment, which connected with Plaintiff’s 10 smart phone[.] . . . ” Response at 28. However, it is not the Court’s role to engage in statutory re- 11 writing. Cody also argues that Section 632.7 broadly defines communications to include “voice, 12 data, or image[s], including facsimile.” Id. (citing Cal. Penal Code § 632.7(d)(3)). The fact that 13 the definitional provision of “communication” includes many forms does not change the statutory 14 text requiring communications transmitted between two telephones. Cody’s proffered 15 construction would contradict the very terms of the statute which explicitly dictate that 16 communication between two telephones is required. The Court DISMISSES Cody’s claim under 17 Section 632.7(a). 18 C. MOTION FOR LEAVE TO FILE AMICUS BRIEF 19 The National Retail Federation (“NRF”) moves for leave to file an amicus brief. ECF 39. 20 The “classic role” of amicus curiae is to assist a court in a case of public interest by 21 “supplementing the efforts of counsel, and drawing the court’s attention to law that escaped 22 consideration.” Miller-Wohl Co. v. Comm’r of Labor & Indus. State of Mont., 694 F.2d 203, 204 23 (9th Cir. 1982). It is “within the Court’s discretion” whether to allow amici to file a brief, and 24 courts generally exercise “great liberality” in permitting amicus briefs. California by & through 25 Becerra v. United States Dep’t of the Interior, 381 F. Supp. 3d 1153, 1164 (N.D. Cal. 2019) 26 (“Becerra”) (citation omitted). Cody objects to the National Retail Federation’s (“NRF”) 27 proposed amicus brief because it echoes arguments in Ring’s motion to dismiss and would 1 amicus brief raises the same issues as the parties’ briefs. The salient question is whether such brief 2 || is helpful to the Court.” Becerra, 381 F. Supp. 3d at 1164. In this case, NRF’s brief is not useful 3 || to the Court as it provides no additional insight or authorities. Accordingly, the Court DENIES 4 || NRF’s motion to file an amicus brief. 5 || IV. CONCLUSION 6 For the foregoing reasons, the Court GRANTS Defendant’s motion to dismiss □□□□□□□□□□□ 7 || Section 631(a) claim, with leave to amend. Plaintiff's second amended complaint must be filed by 8 March 25, 2024. No additional parties or claims may be added without leave of Court or 9 stipulation of Defendant. However, because Plaintiff cannot amend the complaint to allege that 10 || communication through a website chat feature is between two telephones, and any amendment ll would be futile (see Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1298 (9th Cir.1998)), the 12 || Court GRANTS Defendant’s motion to dismiss Plaintiff's Section 632.7 claim with prejudice. 5 13 The Court DENIES the motion for leave to file amicus brief. 14 IT IS SO ORDERED. a 16 Dated: February 22, 2024
(Nraceh Ndelis> ARACELI MARTINEZ-OLGUIN 19 United States District Judge 20 21 22 23 24 25 26 27 28