James v. Allstate Insurance Company

CourtDistrict Court, N.D. California
DecidedDecember 22, 2023
Docket3:23-cv-01931
StatusUnknown

This text of James v. Allstate Insurance Company (James v. Allstate Insurance Company) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
James v. Allstate Insurance Company, (N.D. Cal. 2023).

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 CONRAD JAMES, Case No. 3:23-cv-01931-JSC

8 Plaintiff, ORDER RE: MOTIONS TO DISMISS v. 9 Re: Dkt. Nos. 37, 38 10 ALLSTATE INSURANCE COMPANY, et al., 11 Defendants.

12 13 Conrad James brings this putative class action against Allstate, an insurance company, and 14 Heap, a software service provider, for violations of the California Invasion of Privacy Act 15 (“CIPA”) §§ 631, 632.7, California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 16 17200 et seq., and the California Constitution’s right to privacy. Defendants move to dismiss 17 under Federal Rule of Civil Procedure 12(b)(6). (Dkt. Nos. 37, 38.1) After carefully reviewing 18 the papers submitted and having had the benefit of oral argument on December 21, 2023, the 19 Court GRANTS Defendants’ motions to dismiss. Drawing all reasonable inferences from the 20 amended complaint’s allegations in Plaintiff’s favor, Plaintiff does not plausibly allege 21 Defendants’ liability. 22 BACKGROUND 23 In November and December 2022, Plaintiff, while in California, used his computer and 24 mobile phone to access Allstate’s website and search for an insurance quote. (Dkt. No. 34 at ¶¶ 25 48, 49.) Plaintiff’s electronic communications were recorded in real time “to attempt to learn the 26 identity, email address, zip code, age, height, weight, use of prescription medications and tobacco 27 1 products, and other [Personally Identifiable Information] PII and [Personal Health Information] 2 PHI of Plaintiff while he sought an insurance quote.” (Id. at ¶ 50.) Plaintiff was not aware “his 3 keystrokes, mouse clicks, and other electronic communications, including the information 4 described above, were being intercepted in real time” and disclosed to a third party, Heap; “nor did 5 Plaintiff consent to share his private information with Heap.” (Id. at ¶ 51.) 6 Heap is a software as a service company that “provides software which monitors and 7 records a website user’s activity on a webpage.” (Id. at ¶ 20.) “To obtain a quote on an Allstate 8 insurance plan, consumers fill out a form online at Allstate.com” by clicking the “get a quote” 9 button. (Id. at ¶ 30.) Allstate uses Heap’s JavaScript and when customers click the “get a quote” 10 button and answer questions about their medical health, the “responses are automatically sent to 11 Heap.” (Id. at ¶¶ 31-32.) “Heap provides data retention to its customers and charges a fee for 12 storing and retaining its customers’ data.” (Id. at ¶ 26.) “Users who visit Allstate’s website to get 13 an insurance quote are not put on notice of its Privacy Statement, the Terms of Use, or provided 14 with any other notification that the sensitive information they are submitting is being recorded by 15 Allstate or Heap or shared by Allstate with Heap or any other third party.” (Id. at ¶ 35.) 16 Plaintiff filed this putative class action in the San Francisco County Superior Court 17 bringing claims under California Penal Code § 631, California’s Unfair Competition Law, and for 18 invasion of privacy under the California Constitution. (Dkt. No. 1-1.) Defendants removed the 19 action to federal court under the Class Action Fairness Act, 28 U.S.C. § 1332(d). (Dkt. No. 1.) 20 Shortly thereafter, Defendants separately moved to dismiss for failure to state a claim under 21 Federal Rule of Civil Procedure 12(b)(6). (Dkt. Nos. 28, 29.) The parties stipulated to Plaintiff 22 filing an amended complaint adding a claim under California Penal Code § 632.7. (Dkt. No. 32.) 23 Plaintiff then filed his Amended Complaint and Defendants again moved to dismiss. (Dkt. Nos. 24 34, 37, 38.) 25 DISCUSSION 26 This case is one of many throughout district courts in California challenging the use of 27 third-party software to record website visitors’ activity without their knowledge. Plaintiff alleges 1 (“CIPA”), California Penal Code Section 631 et seq., and an invasion of privacy under the 2 California Constitution. 3 I. Section 631 4 Section 631(a) of the California Penal Code penalizes:

5 Any person who, by means of any machine, instrument, or contrivance, or in any other manner, intentionally taps, or makes any 6 unauthorized connection, whether physically, electrically, acoustically, inductively, or otherwise, with any telegraph or 7 telephone wire, line, cable, or instrument, including the wire, line, cable, or instrument of any internal telephonic communication 8 system,

9 or

10 who willfully and without the consent of all parties to the communication, or in any unauthorized manner, reads, or attempts to 11 read, or to learn the contents or meaning of any message, report, or communication while the same is in transit or passing over any wire, 12 line, or cable, or is being sent from, or received at any place within this state; 13 or 14 who uses, or attempts to use, in any manner, or for any purpose, or to 15 communicate in any way, any information so obtained,

16 or

17 who aids, agrees with, employs, or conspires with any person or persons to unlawfully do, or permit, or cause to be done any of the 18 acts or things mentioned above in this section[.] 19 Cal. Penal Code § 631(a) (line breaks added). The statute “prescribes . . . penalties for three 20 distinct and mutually independent patterns of conduct: intentional wiretapping, willfully 21 attempting to learn the contents or meaning of a communication in transit over a wire, and 22 attempting to use or communicate information obtained as a result of engaging in either of the two 23 previous activities.” Tavernetti v. Super. Ct., 22 Cal. 3d 187, 192 (1978). 24 Plaintiff contends Heap is directly liable under the first and second clauses (patterns of 25 conduct), and Allstate is liable under fourth clause based on aiding, agreeing with, and conspiring 26 with Heap to violate Section 631(a). 2 27 1 A. Section 631(a)—Clause One 2 Heap insists Plaintiff’s claim under the first clause of Section 631(a) fails because it only 3 protects communications that are made over a “wire, line, or cable”—not communications over a 4 smartphone or computer as alleged here. Indeed, the plain text of the statute “expressly requires 5 that the unauthorized ‘connection’ be made with ‘any telegraph or telephone wire, line, cable, or 6 instrument.’” In re Google Assistant Priv. Litig., 457 F. Supp. 3d 797, 825 (N.D. Cal. 2020) 7 (quoting Cal. Penal Code § 631(a)). Plaintiff’s reliance on Javier v. Assurance IQ, LLC, No. 21- 8 16351, 2022 WL 1744107, at *1 (9th Cir. May 31, 2022), is unpersuasive. Javier stated:

9 Though written in terms of wiretapping, Section 631(a) applies to Internet communications. It makes liable anyone who “reads, or 10 attempts to read, or to learn the contents” of a communication “without the consent of all parties to the communication.” Cal. Penal 11 Code § 631(a). The district court held that consent under Section 631(a) is valid even if it is given after the communication has taken 12 place. We disagree. 13 Id. In stating 631(a) applies to the internet, Javier was discussing and quoting from the second 14 clause: “reads, or attempts to read, or to learn the contents” of a communication “without the 15 consent of all parties to the communication.” As only the second clause contains that language, 16 including any “consent” requirement, and as each clause is “distinct” and “independent,” 17 Tavernetti, 22 Cal.

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James v. Allstate Insurance Company, Counsel Stack Legal Research, https://law.counselstack.com/opinion/james-v-allstate-insurance-company-cand-2023.