LICEA v. VITACOST COM INC 10 (2023)

ORDER GRANTING MOTION TO DISMISS

[ECF No. 6]

Pending is a motion to dismiss filed by Defendant Vitacost.com, Inc. (“Vitacost”), for lack of personal jurisdiction and for failure to state a claim. ECF No. 6. As set forth below, the Court grants the motion based on failure to state a claim.

I. BACKGROUND

On October 21, 2022, Plaintiff Jose Licea filed a putative class action Complaint against Defendant Vitacost.com in San Diego Superior Court. ECF No. 1, Ex. 1 (“Compl.”). Defendant removed the case to federal court on November 25, 2022. ECF No. 1.

Plaintiff is an individual residing in California. Compl. ¶ 4. In its notice of removal, Vitacost states that it is a Delaware corporation with its principal place of business in Florida. ECF No. 1 at 3.

The Complaint alleges as follows. Plaintiff is a “tester” who “works to ensure that companies abide by the privacy obligations imposed by California law.” Compl. ¶ 16. Defendant owns, operates, and/or controls a website, www.vitacost.com. Id. at p. 2. “Within the last year, Plaintiff visited Defendant's Website,” and using Plaintiff's smart phone and the Website's chat feature, “had a conversation with Defendant.” Id. ¶ 18. Without obtaining consent from website visitors, Defendant “secretly wiretaps” the conversations of those who use the chat feature on its website. Id. at p. 2. Defendant also “allows a third party to eavesdrop.” Id. ¶ 10. More specifically, Defendant permits a third-party vendor, NiceCXone, “to use a software device or contrivance to secretly intercept (during transmission and in real time), eavesdrop upon, and store transcripts of Defendant's chat communications with unsuspecting website visitors.” Id. ¶ 12.

Plaintiff asserts two claims for violations of the California Invasion of Privacy Act (“CIPA”), California Penal Code §§ 631 and 632.7, and seeks to certify a class of “All persons within California who within the statute of limitations period: (1) communicated with Defendant via the chat feature on Defendant's website using a cellular telephone, and (2) whose communications were recorded and/or eavesdropped upon without prior consent.” Id. ¶ 22. Plaintiff seeks damages and injunctive relief. Id. at p. 9.

On January 2, 2023, Vitacost filed a motion to dismiss for lack of personal jurisdiction and for failure to state a claim. ECF No. 6. The motion has been fully briefed ECF Nos. 7–8.

II. LEGAL STANDARD

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) “tests the legal sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). To survive a 12(b)(6) motion, a plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The Court “disregard[s] ‘[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.’ ” Telesaurus VPC, LLC v. Power, 623 F.3d 998, 1003 (9th Cir. 2010) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678–79, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). “After eliminating such unsupported legal conclusions, we identify ‘well-pleaded factual allegations,’ which we assume to be true, ‘and then determine whether they plausibly give rise to an entitlement to relief.’ ” Id.

III. DISCUSSION

A. Plaintiff's Claim Under § 631

Section 631 of the California Penal Code imposes liability on any person:

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

[2] who willfully and without the consent of all parties to the communication, or in any unauthorized manner, reads, or attempts to 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, line, or cable, or is being sent from, or received at any place within this state; or

[3] who uses, or attempts to use, in any manner, or for any purpose, or to communicate in any way, any information so obtained, or

[4] 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 acts or things mentioned above in this section[.]

Cal. Pen. Code § 631(a) (numbering and formatting added for reference). Courts have interpreted Section 631(a) to contain three operative clauses, which cover “three distinct and mutually independent patterns of conduct”: (1) “intentional wiretapping,” (2) “willfully attempting to learn the contents or meaning of a communication in transit over a wire,” and (3) “attempting to use or communicate information obtained as a result of engaging in either of the two previous activities.” Mastel v. Miniclip SA, 549 F. Supp. 3d 1129, 1134 (E.D. Cal. 2021) (citing Tavernetti v. Super. Ct., 22 Cal.3d 187, 192, 148 Cal.Rptr. 883, 583 P.2d 737 (1978)). Additionally, Section 631(a) contains a fourth basis for liability, for anyone “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” other three bases for liability. Id. (citing Cal. Penal Code § 631(a)).

1. Eavesdropping on or recording one's own conversation

Plaintiff alleges that Defendant is liable under the first, second, and third clauses of Section 631(a), because Defendant uses software to “record and eavesdrop upon” communications between Defendant and class members. Compl. ¶¶ 28-31. In moving to dismiss, Defendant argues that a party cannot be liable under Section 631(a) for eavesdropping or recording its own conversation. ECF No. 6 at 12. The Court agrees.

As an initial matter, Plaintiff's allegation that Defendant “eavesdrops” on its own conversations without consent is incoherent. A party to a conversation—whether face-to-face, or through sounds or typed characters transmitted over some medium—is not listening in to a conversation; instead, the party is having a conversation. To the extent Plaintiff is alleging that Defendant, by receiving communications that were directed to Defendant, is thereby “eavesdropping” on those same communications, the allegations lack any merit. By that standard, Plaintiff would equally be “eavesdropping” on the same conversation.

Plaintiff's separate allegation that Defendant “records” its own conversations without consent runs counter to case law. A party to a conversation is not liable under Section 631(a) for recording its own conversation. In re Facebook, Inc. Internet Tracking Litig., 956 F.3d 589, 607 (9th Cir. 2020) (citing Warden v. Kahn, 99 Cal. App. 3d 805, 811, 160 Cal.Rptr. 471 (Ct. App. 1979)) (“[S]ection 631 ․ has been held to apply only to eavesdropping by a third-party and not to recording by a participant to a conversation.”); Rogers v. Ulrich, 52 Cal. App. 3d 894, 897-98, 125 Cal.Rptr. 306 (Ct. App. 1975) (holding that Section 631(a) did not apply to participant recording and noting that “[i]t is never a secret to one party to a conversation that the other party is listening to the conversation; only a third-party can listen secretly to a private conversation.”). See also Saleh v. Nike, 562 F. Supp. 3d 503, 516 (C.D. Cal. 2021) (“Section 631(a) contains an exemption from liability for a person who is a ‘party’ to a communication, where a party to a communication cannot be held to wiretap another party to the same communication.”); Javier v. Assurance IQ, LLC, No. 20-CV-02860-CRB, ––– F.Supp.3d ––––, ––––, 2023 WL 114225 at *4 (N.D. Cal. Jan. 5, 2023) (affirming that a party to a conversation cannot be held liable as an eavesdropper); Graham v. Noom, 533 F.Supp.3d 823, 831 (N.D. Cal. 2021) (“[A] party to a communication can record it (and is not eavesdropping when it does).”); Williams v. What If Holdings, LLC, No. C 22-03780 WHA, 2022 WL 17869275 at *2 (N.D. Cal. Dec. 22, 2022) (“Parties to a conversation cannot eavesdrop on their own conversation[.]”); Licea v. Cinmar, LLC, ––– F. Supp. 3d ––––, ––––, 2023 WL 2415592, at *7 (C.D. Cal. Mar. 7, 2023) (“It is clear that Defendant was a party to the purported conversation with Plaintiffs and, as such, cannot be held liable under the second clause of section 631(a).”); Esparza v. Lenox Corp., No. C 22-09004 WHA, 2023 WL 2541352, at *2 (N.D. Cal. Mar. 16, 2023) (“Because defendant is party to the communication in question, defendant's own recordation of the chat conversation cannot give rise to liability under Section 631(a).”); Cody v. Boscov's, Inc., No. 8:22-cv-01434-SSS-KKx, ––– F.Supp.3d ––––, ––––, 2023 WL 2338302, at *2 (C.D. Cal. Mar. 2, 2023) (“Defendant was a party to the customer chats at issue in Plaintiff's complaint. Thus, under this well-established ‘party exception,’ Plaintiff's claim that Defendant is directly liable for wiretapping fails and amendment would be futile.”); Membrila v. Receivables Performance Mgmt., LLC, No. 09-CV-2790-IEG (RBB), 2010 WL 1407274, at *2 (S.D. Cal. Apr. 6, 2010) (“Plaintiff's claim for violation of Section 631 fails, because this section applies only to eavesdropping by a third-party and not to recording by a participant to a conversation.”); Martin v. Sephora USA, Inc., No. 122CV01355JLTSAB, 2023 WL 2717636, at *7 (E.D. Cal. Mar. 30, 2023), report and recommendation adopted, No. 1:22-cv-01355-JLT-SAB, 2023 WL 3061957 (E.D. Cal. Apr. 24, 2023) (“[T]o the extent Plaintiff alleges Defendant recorded its own communications with her, Plaintiff fails to state a claim against [Defendant] under the first provision of Section 631(a) as a matter of law.”).

Additionally, in the context of texted chat communications that a smartphone user directs to a website, the Court finds Plaintiff's allegation of “recording” as incoherent as its allegation of “eavesdropping.” Such communications are, by their very nature, recorded. It is only by composing and fixing a message, and then by transmitting that recorded message, that communication through a chat feature could occur. Each party to a chat communication necessarily records that party's own message in sending it to the other party. The sender's consent to recording in this manner is self-evident. And once again, by Plaintiff's standard, Plaintiff himself would equally be “recording” his chat conversation with Defendant.

2. Aiding and abetting

Plaintiff also alleges that Defendant “aided[ and] abetted at least one third party to eavesdrop upon such conversations and in real time.” Compl. ¶ 31. Plaintiff asserts that “[t]o enable the eavesdropping, Defendant allows at least one independent third-party vendor (on information and believe, NiceCXone) to use a software device or contrivance to secretly intercept (during transmission and in real time), eavesdrop upon, and store transcripts of Defendant's chat communications with unsuspecting website visitors.” Id. ¶ 12.

Plaintiff has not pleaded that NiceCXone violated Section 631(a). Plaintiff thereby fails to plead an aiding and abetting claim against Defendant for aiding and abetting NiceCXone. See Johnson v. Blue Nile, Inc., No. 20-cv-08183-LB, 2021 WL 1312771, at *2 (N.D. Cal. Apr. 8, 2021) (holding that the third-party vendor was not a third-party eavesdropper and therefore defendant was not liable as an aider and abettor); Martin, 2023 WL 2717636, at *12 (E.D. Cal. Mar. 30, 2023) (holding that the plaintiff had not sufficiently alleged that either of the vendors was a third-party eavesdropper and therefore had not “alleged facts sufficient to establish derivative liability against” the defendant).

Additionally, Plaintiff alleges that Defendant provided access, as to Defendant's communications with its customers, to NiceCXone as Defendant's “third-party vendor.” Compl. ¶ 12. In other words, Plaintiff alleges that Defendant is paying NiceCXone, as a vendor, for the service that NiceCXone provides to obtain and store these communications, id., rather than in furtherance of NiceCXone's own independent use of these communications. This Court agrees with those decisions holding that a website owner that engages a vendor to record website-based communications for the website owner's own purposes is not thereby aiding and abetting eavesdropping by a third party in violation of Section 631(a). See Graham, 533 F. Supp. 3d at 832-33 (“[A]s a service provider, [third-party vendor] is an extension of [Defendant]. It provides a tool – like a tape recorder ․ that allows [Defendant] to record and analyze its own data in aid of [Defendant's] business. It is not a third-party eavesdropper. As a result, [Defendant] is not liable for aiding and abetting [vendor's] wrongdoing because there is no wrongdoing.”); Martin, 2023 WL 2717636, at *13 (E.D. Cal. Mar. 30, 2023) (“[C]aselaw supports the contention that a third-party vendor that is deemed to merely facilitate customer chats as an extension of the company does not trigger derivative liability under § 631(a).”); Johnson, 2021 WL 1312771, at *1 (determining that third-party vendor that used “session replay” software to record website activities of defendant's visitors was an extension of defendant); Yale v. Clicktale, Inc., No. 20-cv-07575-LB, 2021 WL 1428400, at *1, *3 (N.D. Cal. Apr. 15, 2021) (holding plaintiff did not plausibly plead Section 631(a) violation against vendor that provided “Event-Triggered Recorder” software that logs visitor activity for web sites); Cody, ––– F.Supp.3d at ––––, 2023 WL 2338302, at *2 (“Plaintiff must provide facts suggesting that [the vendors] are recording Defendant's customers' information for some use or potential future use beyond simply supplying this information back to Defendant.”); Williams, 2022 WL 17869275, at *4 (“In sum, the facts as pled show that [vendor's software] functioned as a recorder, and not as an eavesdropper. [Third-party vendor] is not liable for wiretapping under Section 631(a) for providing a software tool, and the fact that [website owner] used software rather than a physical recording device for the same function does not mean that it aided and abetted wiretapping.”); Cinmar, ––– F.Supp.3d at ––––, 2023 WL 2415592, at *8 (“Courts have determined that software like the alleged code employed by Defendant which intercepts in real time and stores transcripts is more akin to a tape recorder ․ than a friend against the door,” not violative of Section 631(a)); Licea v. American Eagle Outfitters, No. EDCV 22-1702, ––– F.Supp.3d ––––, ––––, 2023 WL 2469630, at *8 (C.D. Cal. Mar. 7, 2023) (“Accordingly, Defendant is entitled to the party exemption applied to the second clause of [S]ection 631(a), as Plaintiff fails to plead that the alleged third-party acted independently from Defendant as to constitute an unannounced auditor under California law.”).

Accordingly, Plaintiff fails to state a claim for aiding and abetting in violation of Section 631(a).

B. Claim Under § 632.7

Section 632.7 of the California Penal Code imposes liability on:

Every person who, without the consent of all of the parties to a communication, intercepts or receives and intentionally records, or assists in the interception or reception and intentional recordation of, a communication transmitted between two cellular radio telephones, a cellular radio telephone and a landline telephone, two cordless telephones, a cordless telephone and a landline telephone, or a cordless telephone and a cellular radio telephone[.]

Cal. Penal Code § 632.7(a).

Defendant argues that Section 632.7, by its plain terms, does not apply to online chats. ECF No. 6 at 20; ECF No. 8 at 9. Plaintiff, on the other hand, urges the Court to broadly construe the statutory language of “landline telephone” to include within its scope “Defendant's computer equipment, which connected with Plaintiff's smart phone to transmit and receive Plaintiff's chat communications.” ECF No. 7 at 22.

California law instructs the Court to begin statutory interpretation “with the words [of the statute] themselves, giving them ‘their plain and commonsense meaning,’ because the words of a legal text ‘generally provide the most reliable indicator of [the enacting body's] intent.’ ” Herrera v. Zumiez, Inc., 953 F.3d 1063, 1071 (9th Cir. 2020) (quoting Murphy v. Kenneth Cole Prods., Inc., 40 Cal.4th 1094, 1103, 56 Cal.Rptr.3d 880, 155 P.3d 284 (2007)).

Applying this standard, the Court concludes that Defendant's website is simply not a “landline telephone.” Section 632.7 does not apply to the communications at issue here. See Valenzuela v. Keurig Green Mountain, Inc., No. 22-CV-09042-JSC, ––– F.Supp.3d ––––, ––––, 2023 WL 3707181, at *6 (N.D. Cal. May 24, 2023) (rejecting Plaintiff's argument that Section 632.7 applies to messages sent via chat feature; “Plaintiff again invites the Court to engage in statutory re-writing to update § 632.7 for the internet era by interpreting ‘landline’ broadly. But that is not this Court's role. The statute has clear terms.”); Martin, 2023 WL 2717636, at *14 (holding that plaintiff failed to state a claim under Section 632.7 based on use of her smartphone to communicate with defendant's website; “she has not alleged that Defendant also used a cellular radio, cordless, or landline telephone on the other side of the communication. To the contrary, Plaintiff concedes in her opposition briefing that Defendant received the communication through computer equipment.”).

Indeed, Plaintiff's use of his smartphone—not to make a phone call, but rather to engage the chat feature of Defendant's website—arguably independently places Plaintiff's own device outside the scope of a “cellular radio telephone.” See Cinmar, ––– F.Supp.3d at –––– – ––––, 2023 WL 2415592, at *12-13 (“[T]he Court agrees with the reasoning in Mastel v. Miniclip that ‘although iPhones contain the word ‘phone’ in their name,’ Plaintiff was using ‘a feature of the portion of the iPhone that functions as a computer, not the phone.’ ․ The Court determines that [S]ection 632.7 was intended to apply to a narrow set of communication over telephone technology. Plaintiffs' allegation that they used a smart phone or a Wi-Fi-enabled laptop does not meet this standard.”) (quoting Mastel, 549 F. Supp. 3d 1129, 1135 (E.D. Cal. 2021)); Martin, 2023 WL 2717636, at *14 (“express[ing] skepticism” that Section 632.7's reference to a “cellular radio telephone” includes a smartphone using a chat feature; dismissing plaintiff's Section 632.7 claim). As there is no violation of Section 632.7 here, Defendant cannot be liable for aiding and abetting its vendor. Plaintiff therefore fails to state a claim under Section 632.7.

IV. CONCLUSION

For the foregoing reasons, Defendant's motion to dismiss is GRANTED. Plaintiff has not asked for leave to amend, and the Court is skeptical that the deficiencies identified above can be cured through amendment. Plaintiff may, however, seek leave to amend his complaint, and shall have fourteen (14) days from the date of this Order to file a motion to amend complying with the applicable Local Rules and the undersigned's Chambers Civil Procedures. If Plaintiff does not file a motion by the deadline, the case will be closed.

IT IS SO ORDERED.

Robert S. Huie, United States District Judge