Russo v. Microsoft Corporation

District Court, N.D. California·Decided June 30, 2021·No. 4:20-cv-04818·Unknown

Opinion

FRANK D. RUSSO, ET AL., CASE NO. 4:20-cv-04818-YGR

Plaintiffs, ORDER GRANTING DEFENDANT vs. MICROSOFT CORPORATION’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Re: Dkt. No. 25 Defendant.

Plaintiffs Frank D. Russo; Koonan Litigation Consulting, LLC; and Sumner M. Davenport & Associates, LLC (collectively, “Plaintiffs”) bring this class action against Defendant Microsoft Corporation for violation of privacy laws. (Dkt. No. 29 (“Comp.”).) Plaintiffs allege violations of (1) the Wiretap Act, 18 U.S.C. § 2511, et seq., (2) the Stored Communications Act (“SCA”), 18 U.S. C. § 2701 et seq., (3) the Washington Consumer Protection Act (“WCPA”), Wash. Rev. Code 9,73.010 et seq., (4) Washington Privacy Act (“WPA”), Wash. Rev. Code 9.73.010 et seq., and (5) intrusion upon seclusion under Washington law. Now before the Court is Microsoft’s motion to dismiss. (Dkt. No. 25 (“Mot.”).) Having considered the papers submitted and the pleadings in this action, and for the reasons below, the Court hereby GRANTS IN PART and DENIES IN PART the motion to dismiss.1 Plaintiffs use Microsoft’s software to conduct business. Mr. Russo uses Microsoft 365 Business Standard for his sole proprietorship, Russo Meditation & Law, to provide mediation, arbitration, and alternative dispute resolution services to clients. (Comp. ¶¶ 13-15.) Koonan Litigation Consulting, LLC employs Microsoft 356 Business Basic to provide advice on “all aspects of litigation.” (Id. ¶¶ 20-23.) Sumner M. Davenport & Associates, LLC similarly uses Microsoft 365 Business Basic to provide marketing services. (Id. ¶¶ 28-34.) Each product provides cloud-based access to Microsoft’s Office software suite for a monthly subscription fee. (Id. ¶ 46.) Plaintiffs allege that Microsoft (1) shared its business customers’ data with Facebook, (2) shared its business customers data with third-party developers, (3) shared its business customers’ data with subcontractors to support Microsoft’s products, and (4) used business customers’ data to develop and sell new products and services through their software without consent. (Id. ¶ 1.) Although the precise nature of plaintiffs’ claims lacks clarity, the complaint appears to quote from various documents related to different features.2 First, with respect to Facebook data sharing, plaintiffs quote from a technical document describing “Facebook Contact Sync,” which “shares information in your Outlook Contacts folder with Facebook and imports your Facebook friends’ contact information into your Outlook Contacts folder.” (Id. ¶ 76; Dkt. No. 25-1 at 12.) Although the complaint acknowledges that this feature can be disabled, it states that “the damage has already been done” at that point because “[o]nce contacts are transferred to Facebook, they cannot be deleted from Facebook’s system except by Facebook.” (Comp. ¶ 76.) Second, with respect to third-party developers, plaintiffs apparently refer to “Microsoft Graph,” which allows developers to “build smarter apps” for Windows using APIs that “model and represent people in Microsoft 365 services,” including by “perform[ing] searches for people who are relevant to the signed-in user and have expressed an interest in communicating with that user over certain ‘topics.’” (Id. ¶ 84; Dkt. No. 25-1 at 51, 53.) Although plaintiffs apparently acknowledge that this feature requires user permission, they allege that “Microsoft nonetheless transmits [a] non-consenting business customer’s data to third-party developers if another Office 365 user consented to the application.” (Comp. ¶ 82 (emphasis in original); see Dkt. No. 25-1 at

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