Judge Daniel M. Crowley, Case Number: 23STCV04925, Date: 2023-08-30 Tentative Ruling

Defendant Brooklyn Bedding LLC (“Brooklyn Bedding”) (“Defendant”) demurs to the 1st and 2nd causes of action in Plaintiff Miguel Licea’s (“Licea”) (“Plaintiff”) complaint (“Complaint”). (Notice of Demurrer, pg. 2; C.C.P. §430.10(e).)

Defendant’s 8/14/23 request for judicial notice of (1) Minute Order granting motion for judgment on the pleadings in Licea v. Sunroad Auto Holding Corp. (S.D. Sup. Ct., Aug. 3, 2023) No. 2022-00046821(D-RJN, Exh. 4); (2) Order granting motion to dismiss in Esparza v. UAG Escondido A1 Inc. (S.D. Cal., July 27, 2023, No. 23-0102) 2023 WL 4834945 (R-RJN, Exh. 5); (3) Order granting motion to dismiss in Licea v. Vitacost.com, Inc. (S.D. Cal., July 24, 2023, No. 22-1854) 2023 WL 5086893 (D-RJN, Exh. 6); and (4) Minute Order adopting Tentative Ruling in Garcia v. Samsung Electronics America Inc. (S.D. Sup. Ct., July 14, 2023) No. 2023-00005775, (D-RJN, Exh. 7) is granted. However, the Court does not take judicial notice of truth of the matters asserted in the documents.

Defendant’s 8/14/23 request for judicial notice of the Tentative Ruling in Garcia v. Samsung Electronics America Inc. (S.D. Sup. Ct., July 13, 2023) No. 2023-00005775, is denied.

Plaintiff’s 8/17/23 request for judicial notice of (1) Senate Committee on Judiciary, Bill Analysis of Assembly Bill No. 2465 (1991-1992 Regular Session), As Amended June 1, 1992 (Date of hearing: June 9, 1992) (P-RJN, Exh. 1); (2) Minute Order filed on July 24, 2023, in Licea v. Jockey Int’l, Inc., No. 23STCV02906 (Cal. Super. Ct., Aug. 11, 2023) [overruling demurrer as to both section 631(a) and section 632.7 claims] (P-RJN, Exh. 2); and (3) Minute Order filed on July 24, 2023, in Licea v. The Men’s Wearhouse, LLC, No. 23STCV02964 (Cal. Super. Ct., July 24, 2023) [overruling demurrer as to both section 631(a) and section 632.7 claims] (P-RJN, Exh. 3), is granted. However, the Court does not take judicial notice of truth of the matters asserted in the documents.

Plaintiff’s 8/17/23 request for judicial notice of the Tentative Ruling and Portal Minute Order filed on July 19, 2023, in Licea v. Malwarebytes Inc., No. CIV SB 2224245 (Cal. Super. Ct. San Bernardino, July 19, 2023) is denied.

Before filing a demurrer, the moving party must meet and confer in person or by telephone with the party who filed the pleading to attempt to reach an agreement that would resolve the objections to the pleading and obviate the need for filing the demurrer. (C.C.P. §430.41.)

Defendant’s counsel filed a declaration stating she met and conferred with Plaintiff’s counsel by telephone on June 1, 2023, regarding the issues presented in the instant demurer and were unable to resolve the objections raised in the demurrer. (Decl. of Metral ¶2.) Defendant’s counsel’s declaration is sufficient per the requirements of C.C.P. §430.41(a). (C.C.P. §430.41(a).) Therefore, the Court will consider the instant demurrer.

Plaintiff filed his operative Complaint on March 6, 2023, against Defendant alleging two causes of action for violation of the California Invasion of Privacy Act (“CIPA”): (1) Penal Code §631; and (2) Penal Code §632.7.

Defendant filed the instant demurrer on June 23, 2023. Plaintiff filed his opposition on August 17, 2023. As of the date of this hearing Defendant has not filed a reply.

Defendant demurs on the basis that Plaintiff’s 1st and 2nd causes of action fail to state facts sufficient to constitute causes of action against Defendant. (Demurrer, pg. 2.)

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Insurance Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hospital District (1992) 2 Cal.4th 962, 967.)

Any person who, by means of any machine, instrument, or contrivance, or in any other manner, [i] 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 [ii] 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 [iii] who uses, or attempts to use, in any manner, or for any purpose, or to communicate in any way, any information so obtained, or [iv] 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, is punishable by a fine not exceeding two thousand five hundred dollars ($2,500), or by imprisonment in the county jail not exceeding one year, or by imprisonment pursuant to subdivision (h) of Section 1170, or by both a fine and imprisonment in the county jail or pursuant to subdivision (h) of Section 1170. If the person has previously been convicted of a violation of this section or Section 632, 632.5, 632.6, 632.7, or 636, the offense is punishable by a fine not exceeding ten thousand dollars ($10,000), or by imprisonment in the county jail not exceeding one year, or by imprisonment pursuant to subdivision (h) of Section 1170, or by both that fine and imprisonment.

Plaintiff alleges Defendant has conspired with an independent third party to embed software code that functions as a device and contrivance into its website. (Complaint ¶10.) Plaintiff alleges the third party can then intercept, record, and create transcripts of all conversations using the website chat feature – even when such conversations are private and deeply personal. (Complaint ¶10.)

Plaintiff alleges Defendant’s scheme works as follows: first, Defendant enables an independent, for-profit third-party company (“Zendesk”) to intercept, record, and eavesdrop upon private chat conversations with customers. (Complaint ¶11.) Second, that third party “integrates” with subsidiaries of Meta, Inc., by sharing the data from those chat transcripts with Meta. (Complaint ¶11.) Third, Meta sells targeting advertising to companies based in part upon the data from the chat transcripts. (Complaint ¶11.) Fourth and finally, unsuspecting customers are then bombarded with targeted internet advertising based upon their previous, private chats with Defendant. (Complaint ¶11.)

Plaintiff alleges the third party’s independent manipulation, monetization, and exploitation of the data gathered from the intercepted chat transcripts makes it more than a mere “extension” of Defendant. (Complaint ¶12.) Plaintiff alleges Defendant neither informed visitors of this conduct nor obtained their consent to these intrusions. (Complaint ¶13.) Plaintiff alleges given the nature of Defendant’s business, visitors often share highly sensitive personal data with Defendant via the website chat feature. (Complaint ¶13.) Plaintiff alleges Defendant’s conduct is illegal, offensive, and contrary to visitor expectations. (Complaint ¶13.)

Plaintiff alleges he is a consumer privacy advocate with dual motivations for initiating a conversation with Defendant. (Complaint ¶14.) Plaintiff alleges first that he was genuinely interested in learning more about the goods and services offered by Defendant. (Complaint ¶14.) Plaintiff alleges second that he is a “tester” who works to ensure that companies abide by the privacy obligations imposed by California law. (Complaint ¶14.) Plaintiff alleges within the last year and while in California, Plaintiff visited Defendant’s Website. (Complaint ¶16.) Plaintiff alleges he used a smart phone (a cellular telephones with an integrated computer to enable web browsing) and had a confidential conversation with Defendant using the chat feature on Defendant’s website. (Complaint ¶16.) Plaintiff alleges as such, his communications with Defendant were transmitted from a “cellular radio telephone.” (Complaint ¶16.)

Plaintiff alleges Defendant did not inform Plaintiff that Defendant was secretly allowing, aiding, and abetting a third party to intercept and eavesdrop on Plaintiff’s communications in real time. (Complaint ¶18.) Plaintiff alleges he did not learn that Defendant allowed a third party to eavesdrop upon and exploit data from the conversation until after the conversation was completed and highly technical research was completed. (Complaint ¶18.) Plaintiff alleges Defendant did not obtain express or implied consent to wiretap or allow third parties to eavesdrop on visitor conversations, nor did Plaintiff know at the time of the conversation that Defendant was secretly wiretapping them and allowing third parties to eavesdrop on them. (Complaint ¶19.)

Plaintiff alleges the software embedded on Defendant’s Website to record and eavesdrop upon the communications qualifies as a “machine, instrument, contrivance, or . . . other manner” used to engage in the prohibited conduct alleged herein. (Complaint ¶25.) Plaintiff alleges at all relevant times, Defendant intentionally enabled, aided, and abetted an independent third party to intercept and eavesdrop upon plaintiff’s conversations during transmission and in real time. (Complaint ¶26.) Plaintiff alleges he did not expressly or impliedly consent to any of Defendant’s actions. (Complaint ¶27.)

Plaintiff sufficiently alleges a cause of action for violation of Penal Code §631. Plaintiff alleges Defendant’s chat provider interacts with chat data beyond merely recording users’ chat communications. (Complaint ¶¶11-12.) Plaintiff alleges the intercepted communication at issue was sent from California. (Complaint ¶4.) Further, the Ninth Circuit has consistently held cellular phone communications are wire communications for the federal Wiretap Act, and “courts have looked at cases analyzing the Wiretap Act as informative of section 631(a).” (Licea v. Cinmar, LLC (C.D. Cal. Mar. 7, 2023) 2023 WL 2415592, at *9; In the Matter of the Application of the United States for an Order Authorizing the Roving Interception of Oral Communications (9th Cir. 2003) 349 F.3d 1132, 1139 [“cellular telephone service, despite its apparent wireless nature, is within §2510(1)’s definition of ‘wire communication’ because cellular service uses wire and cable connections to connect calls”].) Plaintiff sufficiently alleges Defendant has provided substantial assistance to the third-party chat provider by embedding the chat provider’s software code into the code for Defendant’s Website without obtaining its users’ informed consent. (Complaint ¶¶10-12, 18-19.)

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, shall be punished by a fine not exceeding two thousand five hundred dollars ($2,500), or by imprisonment in a county jail not exceeding one year, or in the state prison, or by both that fine and imprisonment. If the person has been convicted previously of a violation of this section or of Section 631, 632, 632.5, 632.6, or 636, the person shall be punished by a fine not exceeding ten thousand dollars ($10,000), by imprisonment in a county jail not exceeding one year, or in the state prison, or by both that fine and imprisonment.

Penal Code §632.7 is to be broadly construed to effectuate its purpose, “to protect the right of privacy of the people of this state.” (Pen. Code §630); Leader v. Cords (2010) 182 Cal.App.4th 1588, 1598.) The common law rule of lenity does not apply. (Pen. Code §4.)

Plaintiff alleges he communicated with Defendant using telephony subject to the mandates and prohibitions of section 632.7. (Complaint ¶32.) Plaintiff alleges Defendant recorded telephony communication without the consent of all parties to the communication in violation of section 632.7. (Complaint ¶33.) Plaintiff alleges Defendant also aided and abetted a third party in the interception, reception, and/or intentional recordation of in violation of section 632.7. entitling Plaintiff to injunctive relief and statutory damages. (Complaint ¶33.)

Plaintiff sufficiently alleges a cause of action for violation of §632.7. Plaintiff alleges he did not know at the time of the conversation that Defendant was secretly wiretapping them and allowing third parties to eavesdrop of them. (Complaint ¶19.) Defendant’s argument that Plaintiff’s smartphone is not covered by §632.7 is contrary to the California Supreme Court’s view as expressed in Smith v. LoanMe, Inc. (2021) 11 Cal.5th 183, 202 n.10, which expressly acknowledges that smartphones are covered by §632.7.

Hon. Daniel M. Crowley

Judge of the Superior Court