Mills v. Saks.com LLC

CourtDistrict Court, S.D. New York
DecidedJanuary 6, 2025
Docket1:23-cv-10638
StatusUnknown

This text of Mills v. Saks.com LLC (Mills v. Saks.com LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mills v. Saks.com LLC, (S.D.N.Y. 2025).

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK FAN MILLS, individually and on behalf of all others similarly situated, Plaintiffs, OPINION & ORDER – against – 23 Civ. 10638 (ER) SAKS.COM LLC, Defendant. RAMOS, D.J.: Fan Mills brings suit against Saks.com LLC (“Saks”) alleging a violation of Arizona’s Telephone, Utility and Communication Service Records Act. Doc. 29 ¶ 1; ARIZ. REV. STAT. ANN. § 44-1376 (the “Arizona Statute”). Saks now moves to dismiss for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. Doc. 31 at 6. For the reasons discussed below, Saks’ motion to dismiss is GRANTED. I. BACKGROUND A. Factual Background Fan Mills is an Arizona resident who alleges that she opened promotional emails from Saks from 2017 to October 2023. Doc. 29 ¶¶ 7–8. Mills alleges that Saks embedded a spy pixel1 in its promotional emails, which collected information from its recipients such as when the email was read, where it was read, whether and to whom the email was forwarded, their IP address, and other personal details. Id. ¶ 4. Mills concedes that she may have signed up to receive emails from Saks, Doc. 36 at 1, but she alleges each time she opened an email, Saks collected her personal information without her consent. Doc. 29 ¶¶ 9, 10.

1 Mills explains that spy pixels are trackers embedded in emails that relay some of the recipients’ personal information to the sender. Doc. 29 ¶ 4. Mills alleges that Saks’ collection of her information is a violation of the Arizona Statute, which includes a private right of action. See id. ¶¶ 1, 28. �e Arizona Statute states that it is a crime for a person to “[k]nowingly procure, attempt to procure, solicit or conspire with another to procure a public utility record, a telephone record or communication service record of any resident of this state without the authorization of the customer to whom the record pertains or by fraudulent, deceptive or false means.” A.R.S. § 44-1376.01. �e parties agree that the Arizona Statue was passed after a similar, but narrower, federal statute, the Telephone Records and Privacy Protection Act of 2006 (TRPPA) was passed. Doc. 29 ¶¶ 27–28. �e federal statute was enacted after a scandal involving the company Hewlett Packard, which, in trying to identify a leak, engaged in pretexting2 and tracking the paths of emails sent to targeted recipients. Id. ¶¶ 21–23. Congress passed the TRPPA to criminalize pretexting, and the Arizona statute went further to criminalize both pretexting and collecting information that would create a “communication service record” without the recipient’s consent. Id. ¶ 28. �e statute defines a communication service record as including: subscriber information, including name, billing or installation ad- dress, length of service, payment method, telephone number, elec- tronic account identification and associated screen names, toll bills or access logs, records of the path of an electronic communication between the point of origin and the point of delivery and the nature of the communication service provided, such as . . . electronic mail . . . . A.R.S. § 44-1376(1). Mills alleges that the data Saks collected from its marketing emails without her consent constitutes a communication service record, and therefore, that Saks has violated the Arizona statute. Doc. 29 ¶¶ 56–57. In particular, Mills argues that Saks’ actions caused a concrete, intangible harm sufficient to give her Article III standing because its actions had a “close relationship” to a harm “traditionally recognized as

2 “[P]retexting is obtaining certain forms of information under false pretenses. Mainly this relates to the gathering of telephone records and financial information . . . .” Andrew B. Serwin, Information Security and Privacy: A Guide to Federal and State Law and Compliance, § 15:1, 2024–2025 ed., (2024). providing a basis for a lawsuit in American courts.” Doc. 33 at 5 (citing TransUnion LLC v. Ramirez, 594 U.S. 413, 440 (2021)). Specifically, Mills asserts that Saks’ actions are similar to the common law tort of intrusion upon seclusion, a form privacy invasion, which has been found to give plaintiffs standing in certain circumstances. Id. at 3; see also Restatement (Second) of Torts § 652B (Am. Law Inst. 1977). Saks argues that Mills does not have standing to assert this claim because she fails to allege a concrete injury and, in the alternative, that she fails to state a claim under the Arizona Statute. Doc. 31 at 7–8, 12. Specifically, as to standing, Saks claims that Mills does not plead facts sufficient to establish a concrete injury. Doc. 31 at 7. Saks compares its email pixel technology to commonly-used “read receipt” technology, which notifies senders whether their email was read, and maintains that the technology would not rise to a level “highly offensive to a reasonable person.” See id. at 8–9; see also Restatement (Second) of Torts § 652B (Am. Law Inst. 1977). �erefore, its technology would not constitute intrusion upon seclusion, and thus not be considered an intangible, concrete harm sufficient to assert standing. Saks alternatively argues that Mills has failed to state a claim for relief under the Arizona statute. Doc. 31 at 12. Saks alleges that the information it collects does not constitute a “communication service record” as defined by the statute. Id. Saks also states that in contrast to the Hewlett Packard scandal where the company collected information with an intent to deceive, Mills voluntarily provided her email to Saks and it simply collected read receipts. Id. at 8, 13. Saks also argues that even if the Court were to find that it procured a “communication service record,” its actions still would not violate the statute as the statute permits such records “[a]s may be necessarily incident to the rendition of the service . . . .” Doc. 31 at 13–14; see also A.R.S. § 44-1376.02(B)(3). Saks asserts that its Privacy Policy allows that: Saks may use the information collected as necessary to, inter alia, validate, deliver, and track customers’ orders; to enhance customers’ online shopping experience; and to measure and improve the effectiveness and performance of Saks’ sites, products and services, and customer service, each of which is integral to and necessary for Saks to maintain its online shopping platform. Doc. 31 at 13–14; see also Doc. 21-3. �erefore, Saks argues that its actions fall under the rendition of services exemption under the statute. Doc. 31 at 13–14. B. Procedural History Mills filed the instant suit on December 6, 2023. Doc. 1. On April 10, 2024, Saks moved to dismiss Mills’ complaint. Doc. 19. Mills then filed her first amended complaint (“FAC”) on May 17, 2024. Doc. 29. On June 7, 2024, Saks moved to dismiss the FAC for lack of subject matter jurisdiction for failure to sufficiently allege standing and failure to state a claim. Doc. 30. II. LEGAL STANDARD A. Rule 12(b)(1) Under Rule 12(b)(1), a court must dismiss an action for lack of subject matter jurisdiction if it “lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000) (citing Fed. R. Civ. P. 12(b)(1)). When a defendant moves to dismiss a case under rules 12(b)(1) and 12(b)(6), the Court must consider the 12(b)(1) motion first before it makes a decision on the merits.

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Mills v. Saks.com LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mills-v-sakscom-llc-nysd-2025.