Judge: Gregory Keosian, Case: 23STCV20314, Date: 2024-01-26 Tentative Ruling
Case Number: 23STCV20314 Hearing Date: January 26, 2024 Dept: 61
Defendant
Books-A-Million, Inc.’s Demurrer and Motion to Strike Portions of the Complaint
is SUSTAINED as to the second cause of action, with leave to amend, OVERRULED
as to the first cause of action, and GRANTED with leave to amend as to the
prayer for punitive damages.
Plaintiff to give notice.
I.
DEMURRER
A demurrer should be sustained only where the defects appear
on the face of the pleading or are judicially noticed. (Code Civ. Pro., §§
430.30, et seq.) In particular, as is
relevant here, a court should sustain a demurrer if a complaint does not allege
facts that are legally sufficient to constitute a cause of action. (See
id. § 430.10, subd. (e).) As the Supreme Court held in Blank v. Kirwan (1985) 39 Cal.3d 311:
“We treat the demurrer as admitting all material facts properly pleaded, but
not contentions, deductions or conclusions of fact or law. . . . Further, we
give the complaint a reasonable interpretation, reading it as a whole and its
parts in their context.” (Id. at
p. 318; see also Hahn. v. Mirda
(2007) 147 Cal.App.4th 740, 747 [“A demurrer tests the pleadings alone and not
the evidence or other extrinsic matters. Therefore, it lies only where the
defects appear on the face of the pleading or are judicially noticed.
[Citation.]”)
“In determining whether the complaint is sufficient as
against the demurrer … if on consideration of all the facts stated it appears
the plaintiff is entitled to any relief at the hands of the court against the
defendants the complaint will be held good although the facts may not be
clearly stated.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)
“A demurrer
for uncertainty is strictly construed, even where a complaint is in some
respects uncertain, because ambiguities can be clarified under modern discovery
procedures.” (Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612,
616.) Such demurrers “are disfavored,
and are granted only if the pleading is so incomprehensible that a defendant
cannot reasonably respond.” (Mahan v.
Charles W. Chan Insurance Agency, Inc. (2017) 14 Cal.App.5th 841, 848.)
A demurrer should not be sustained without leave to amend if
the complaint, liberally construed, can state a cause of action under any
theory or if there is a reasonable possibility the defect can be cured by
amendment. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p.
1081.) The demurrer also may be sustained without leave to amend where the
nature of the defects and previous unsuccessful attempts to plead render it
probable plaintiff cannot state a cause of action. (Krawitz v. Rusch
(1989) 209 Cal.App.3d 957, 967.)
Defendant Books-A-Million, Inc. (Defendant) demurrers to
Plaintiff Drew Hunthausen’s (Plaintiff) two claims for violations of Penal Code
§ 631 and Penal Code § 502, based on Defendant’s use of a third-party platform
(Zendesk) to operate the chatbox feature on its website.
Penal Code § 631 prescribes penalties for any person who
engages in the four following acts:
1.
“intentionally taps, or makes any unauthorized
connection . . . with any telegraph or telephone wire, line, cable, or
instrument, including the wire, line, cable, or instrument of any internal
telephonic communication system”’
2.
“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,” and who does so “willfully and without the
consent of all parties to the communication”;
3.
“uses, or attempts to use, in any manner, or for any
purpose, or to communicate in any way, any information so obtained”; or
4.
“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.”
(Penal Code § 631, subd. (a).) Plaintiff alleges that the
third party software on Defendant’s website is an instrument or contrivance to
eavesdrop on users’ communications into the chatbox. (Complaint ¶ 17.)
Defendant argues that, as a party
to the communications at issue, it is not directly liable for any violation of
section 631. (Demurrer at pp. 5–6.) This is because “Section 631 was aimed at
one aspect of the privacy problem — eavesdropping, or the secret monitoring of
conversations by third parties.” (Ribas v. Clark (1985) 38 Cal.3d 355,
359.) Defendant also argues that it cannot be liable for aiding a third-party’s
reading of Plaintiff’s messages, or using the them for its own purposes, because
a website owner’s use of a third party recordation software is not actionable
unless the third party “aggregates or otherwise processes the recorded
information.” (Demurrer at p. 7, citing Williams v. What If Holdings, LLC
(N.D. Cal., Dec. 22, 2022, No. C 22-03780 WHA) 2022 WL 17869275, at *3.)
Defendant relies on Graham v. Noom, Inc. (N.D. Cal.
2021) 533 F.Supp.3d 823, which held as follows regarding application of Penal
Code § 631 to a website using a third-party software service:
FullStory [the third party] is a
vendor that provides a software service that captures its clients’ data, hosts
it on FullStory's servers, and allows the clients to analyze their data. Unlike
NaviStone's and Facebook's aggregation of data for resale, there are no
allegations here that FullStory intercepted and used the data itself. Instead,
as a service provider, FullStory is an extension of Noom [the defendant
website].. It provides a tool . . . that allows Noom to record and analyze its
own data in aid of Noom's business.
(Graham,
supra, 533 F.Supp.3d at pp. 832–833.) Other authority is in line with
this framing of the law:
Our relevant inquiry here is whether a website
owner's usage of third-party recordation software can be considered equivalent
to having hired a third party to record. That inquiry thus determines whether
or not the software provider can be considered a third party in the first place
for purposes of a Section 631(a) analysis. Judge Laurel Beeler's reasoning in
deciding a series of factually similar cases is instructive: a key distinction
is whether or not the alleged third-party software provider aggregates or
otherwise processes the recorded information, which might suggest that the
software vendor independently “uses” the gathered data in some way.
(Williams
v. What If Holdings, LLC (N.D. Cal., Dec. 22, 2022, No. C 22-03780 WHA)
2022 WL 17869275, at *3.)
Defendant’s argument is unpersuasive. First, the rule
announced by the above authority is not universally adopted. The argument that
the third-party recorder is not eavesdropping if it is only providing
software-as-a-service has been criticized as “imply[ing] that any third party
who surreptitiously recorded a conversation between two parties would not violate
§ 631(a) so long as it was recording the conversation at the direction and for
the benefit of a party.” (Saleh v. Nike, Inc. (C.D. Cal. 2021) 562 F.Supp.3d
503, 520.) Even under the rule that Defendant articulates, the Complaint
alleges that Zendesk is not merely a recorder: “Once zendesk.com gains access
to the user's information, it stores it for its own purposes.” (Complaint ¶
10.) There is thus insufficient basis to sustain the demurrer to the first
cause of action.
Defendant’s demurrer to the second cause of action under
Penal Code § 502 rests upon two arguments: that Plaintiff has not pleaded that
he is the owner or lessee of any computer or computer system as defined in the
statute, or that he has suffered any damage or loss from the conduct alleged.
(Demurrer at p. 10.)
Plaintiff’s claims under Penal Code § 502 rely on the
following provisions, which apply penalties to anyone who:
(1)
Knowingly accesses and without permission alters, damages, deletes, destroys,
or otherwise uses any data, computer, computer system, or computer network in
order to either (A) devise or execute any scheme or artifice to defraud,
deceive, or extort, or (B) wrongfully control or obtain money, property, or
data.
(2)
Knowingly accesses and without permission takes, copies, or makes use of any
data from a computer, computer system, or computer network, or takes or copies
any supporting documentation, whether existing or residing internal or external
to a computer, computer system, or computer network.
Plaintiff alleges
that Defendant violated these provisions “[b]y collecting personal identifiers,
unique device identifiers, characteristics such as age, gender, location
details, including, IP addresses; various details about website usage, such as
links clicked, page views, searches; inferences, and other information.”
(Complaint ¶ 23.)
Defendant’s argument as to the absence of allegations
relating to Plaintiff’s ownership or leasing of a computer is unpersuasive, as
the allegations concerning Defendant’s access of the website adequately imply
Plaintiff’s access to a computer. However, Defendant is correct that Plaintiff
does not allege “damage or loss” as would allow him to bring a claim under
Penal Code § 502, subd. (e)(1).
The demurrer is therefore SUSTAINED with leave to amend as
to the second cause of action, and OVERRULED as to the first cause of action.
II.
MOTION TO
STRIKE
Any
party, within the time allowed to respond to a pleading, may serve and file a
notice of motion to strike the whole or any part thereof. (Code Civ. Proc., §
435(b)(1)). The notice of motion to strike a portion of a pleading shall quote
in full the portions sought to be stricken except where the motion is to strike
an entire paragraph, cause of action, count or defense. (California Rules of
Court Rule 3.1322.)
The grounds for a motion to
strike shall appear on the face of the challenged pleading or form any matter
of which the court is required to take judicial notice. (Code Civ. Proc., §
437(a)). The court then may strike out any irrelevant, false, or improper
matter inserted in any pleading and strike out all or any part of any pleading
not drawn or filed in conformity with the laws of this state, a court rule, or
an order of the court. (Code Civ. Proc., § 436.) When the defect which
justifies striking a complaint is capable of cure, the court should allow leave
to amend. (Perlman v. Municipal Court
(1979) 99 Cal.App.3d 568, 575.)
Defendants move to strike the
prayer for punitive damages on the grounds that it does not contain sufficient
facts to support malice or oppression, and further does not allege corporate
ratification. (Motion at pp.
Punitive damages are allowed in non-contract cases when a
defendant is guilty of “oppression, fraud, or malice . . . .” (Civ. Code §
3294, subd. (a).) The terms are defined as:
“Malice”
means conduct which is intended by the defendant to cause injury to the
plaintiff or despicable conduct which is carried on by the defendant with a
willful and conscious disregard of the rights or safety of others.
“Oppression”
means despicable conduct that subjects a person to cruel and unjust hardship in
conscious disregard of that person's rights.
“Fraud”
means an intentional misrepresentation, deceit, or concealment of a material
fact known to the defendant with the intention on the part of the defendant of
thereby depriving a person of property or legal rights or otherwise causing
injury.
(Civ. Code § 3294, subd. (c).)
Something more than the mere commission of a
tort is always required for punitive damages. (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894.) Proof of
negligence, gross negligence, or recklessness is insufficient to warrant an
award of punitive damages. (Dawes v.
Sup.Ct. (Mardian) (1980) 111 Cal.App.3d 82, 88–89.) Punitive damages may be
recovered in an action for negligence or other nonintentional torts if the
plaintiff pleads and proves that the defendant acted with the state of mind
described as “conscious disregard” of the potential dangers to others. (Pfeifer v. John Crane, Inc. (2013) 220
Cal.App.4th 1270, 1299.) When malice is based on a defendant’s conscious
disregard of Plaintiff’s rights, the conduct must be both despicable and
willful. (College Hospital v. Superior
Court (1994) 8 Cal.4th 794, 713 (“College
Hospital”).)
Defendant is correct that the Complaint does
not support a prayer for punitive damages. Plaintiff does not allege facts to
support any allegation that Defendant, by using Zendesk, intended to cause
injury to himself, conduct carried out with conscious disregard of his rights,
despicable conduct, or conduct subjecting him to cruel and unjust hardship. Nor
does Plaintiff allege corporate ratification of the conduct alleged under Civil
Code § 3294, subd. (b).
The motion to strike is GRANTED with leave
to amend as to the prayer for punitive damages.