Judge Holly J. Fujie, Case Number: 23STCV08874, Date: 2023-10-24 Tentative Ruling

Plaintiff filed a complaint arising from the alleged interception of Plaintiff’s chats on Defendant’s website, alleging causes of action for: (1) violations of the California Invasion of Privacy Act (“CIPA”) pursuant to California Penal Code, Section 631; and (2) violations of the CIPA pursuant to California Penal Code, Section 632.7.

On September 20, 2023, Defendant filed and served a demurrer to the first and second causes of action in the complaint, as well as a motion to strike portions of the complaint. Both the demurrer and motion to strike are set forth in the same motion. As to the demurrer to the first cause of action, Defendant contends that it cannot be subject to derivative CIPA liability because: (1) the complaint does not allege predicate/direct CIPA liability; (2) the CIPA “party exception” applies to Defendant’s vendors; and (3) the asserted chat was not intercepted as required for predicate/direct CIPA liability. As to the second cause of action, Defendant contends that such cause of action fails because: (1) Penal Code section 632.7 does not apply to use of a smart phone to access the Internet; and (2) Penal Code section 632.7 requires the subject communication to occur between two phones.

Initially, the Court finds that Plaintiff has failed to oppose the motion to strike. Plaintiff’s opposition does not address Defendant’s arguments raised in support of striking portions of the complaint. The Court therefore finds that Plaintiff has conceded to such arguments under Moulton Niguel Water Dist. v. Colombo (2003) 111 Cal.App.4th 1210, 1215.

Also, while Plaintiff contends that the demurrer should be overruled because it is untimely, Plaintiff cites no legal authority to support such argument and the Court finds that Plaintiff has waived such contention under Moulton Niguel Water Dist. v. Colombo, supra, 111 Cal.App.4th 1210, 1215. The Court therefore will address the merits of the demurrer. The Court will also address the motion to strike in this ruling.

The Court DENIES Plaintiff’s Request for Judicial Notice as to Exhibits 1 and 2 therein, as well as Composite Exhibit 2. Such requests seek judicial notice of rulings by another Department in this Superior Court and by a Department in the San Bernardino Superior Court. Citations or reliance on unpublished superior court cases are improper. (Rittiman v. Public Utilities Com. (2022) 80 Cal.App.5th 1018, 1043, fn. 18.)

The Court GRANTS Plaintiff’s Request for Judicial Notice was to Exhibit 4, which is attached to Plaintiff’s Request for Judicial Notice. (Evid. Code § 452, 453.)

A demurrer tests the sufficiency of a complaint as a matter of law. (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.) The court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. (Id.) In testing the sufficiency of the complaint, the court must assume the truth of (1) the properly pleaded factual allegations; (2) facts that can be reasonably inferred from those expressly pleaded; and (3) judicially noticed matters. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905.) Accordingly, “[w]hether the plaintiff will be able to prove the pleaded facts is irrelevant to ruling upon the demurrer.” (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609-10.) A general demurrer may be taken to a complaint where “[t]he pleading does not state facts sufficient to constitute a cause of action.” (Code Civ. Proc. § 430.10(e).) Although Courts construe pleadings liberally, sufficient facts must be alleged to support the allegations plead to survive a demurrer. (Rakestraw v. California Physicians' Serv. (2000) 81 Cal.App.4th 39, 43.)

Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Id.) If there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend. (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245).

Defendant contends that the first cause of action in the complaint is insufficiently alleged because Defendant cannot be subject to derivative liability. Plaintiff contends that the first cause of action is sufficient because it alleges that Defendant’s chat provider violated the second and third clauses of California Penal Code, Section 631. Initially, the Court finds that the complaint only alleges that Defendant violated the third prong of Penal Code section 631. (Complaint at ¶ 24.) Also, while the parties rely on numerous conflicting decisions of Federal District Courts in support of their respective arguments, such cases are not binding on this Court although they are entitled to great weight. (People v. Bocanegra (2023) 90 Cal.App.5th 1236, 1255, fn. 7.)

California Penal Code, Section 631 has been interpreted by California courts as containing three different clauses which cover three distinct and mutually independent patterns of conduct. (Valenzuela v. Nationwide Mutual Insurance Co., 2023 WL 5266033 at *3 (C.D. Cal. August 14, 2023).) The three patterns of conduct that Section 631 prohibits are: (1) intentional wiretapping; (2) 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 previous two activities. (Id.) In addition to these three clauses, Section 631 contains an aiding provision which imposes liability on anyone who aids, agrees with, employes, or conspires with any person or persons in violating the three clauses above. (Id.)

The second clause of Penal Code section 631 is violated where a party 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, cable, or is being sent from, or received at any place within this state. (Id.)

A party to a conversation cannot logically be liable for eavesdropping on a conversation, so a party to a communication is not liable for learning the contents of that communication. (Id. at *4.) When a party intends to communicate with a second party, and a computer code automatically directs the communication to an additional third party, the third party is not construed as a party to the communication, so the party exception does not shield the third party. (Id.) Where it is alleged that a third party has violated California Penal Code, Section 631, it follows that the entity who engaged such third party is liable for a violation under California Penal Code, Section 631. (Id.) The protections of Penal Code section 631 extend explicitly to the beginnings and ends of communications, so there is no reason to consider the first part of an electronic communication beyond the statute’s reach. (Revitch v. New Moosejaw, LLC, 2019 WL 5485330 at *2 (N.D. Cal. October 29, 2019).)

The Court finds that a discussion of Valenzuela is instructive. In Valenzuela, plaintiff utilized a chat feature on defendant insurance company’s website to communicate with defendant; however, unbeknownst to plaintiff, defendant employed a third-party company to embed code into the website, which allowed the third-party company to monitor and store chat conversations. No consent was obtained to share the chat conversations. In Valenzuela, plaintiff brought a claim for violation of California Penal Code, Section 631 against defendant insurance company but not the third-party. A motion to dismiss for failure to state a claim was filed by defendant as to the Section 631 claim.

In holding that plaintiff stated a claim against defendant insurance company for aiding a violation of Penal Code section 631, the Valenzuela court stated that plaintiff alleged that: (1) the third-party used the data it collected from the chats; and (2) defendant insurance company contracted with the third-party in order to benefit from its data harvesting for financial gain. The Valenzuela court opined that the facts alleged were sufficient to show that the third-party violated the third clause of Penal Code section 631. The Valenzuela court further held that plaintiff had sufficiently alleged that defendant insurance company aided the actions of the third-party because it engaged the third-party for the purpose of intercepting messages for financial gain. Additionally, the Valenzuela court opined that plaintiff alleged defendant’s facilitation of the embedding of the third-party code into defendant’s website. The Valenzuela court therefore found that the allegations were sufficient to state a claim for aiding a violation of California Penal Code, Section 631.

Here, the complaint alleges that: (1) Defendant allowed a third-party spyware company called Attentive to covertly embed code into Defendant’s chat feature (Complaint, ¶ 10); (2) the secret code enables and allows Attentive to secretly intercept in real time, eavesdrop upon, and store transcripts of Defendant’s chat communications with unsuspecting website visitors (Id.); (3) Defendant neither informs visitors of this conduct nor obtains their consent to these intrusions (Id.) ; (4) Attentive exploited, monetized, and used the data it gathered through the chat feature in real time (Id., ¶ 18); and (5) the use of the embedded code in Defendant’s chat feature was for financial profit (Id., ¶¶ 13-17). Plaintiff alleges that he used his smart phone to visit Defendant’s website. (Id., ¶ 19.)

Initially, the Court rejects Defendant’s contention that it cannot be subject to derivative liability under California Penal Code, Section 631(a). The complaint sufficiently alleges facts showing that Attentive violated the second clause of California Penal Code, Section 631. (Id., ¶¶ 11-13, 20-22.) Due to the complaint alleging facts sufficient to show a violation of the second clause of Penal Code section 631, Plaintiff has stated facts sufficient to constitute a violation by Attentive of the third clause of Penal Code section 631. (Valenzuela v. Nationwide Mutual Insurance Co., supra, at *6.) Plaintiff has also stated facts alleging that Defendant aided the violations of Attentive. (Id., ¶¶ 10, 24-30.) The facts here are akin to those in Valenzuela and Plaintiff has thus stated a valid cause of action.

The demurrer of Defendant to the first cause of action is OVERRULED as Plaintiff has stated a cause of action for violation of California Penal Code, Section 631.

Defendant contends that the second cause of action in the complaint fails because California Penal Code, Section 632.7 does not apply to use of a smart phone to access the Internet. Plaintiff contends that the complaint plausibly alleges a claim under California Penal Code, Section 632.7.

Under California Penal Code, Section 632.7(a), it is a crime when a person without the consent of all 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 a cellular or cordless telephone and another telephone. (Smith v. LoanMe, Inc. (2021) 11 Cal.App.5th 183.) Communication includes, but is not limited, to communications transmitted by voice, data, or image, including facsimile. (Cal. Pen. Code § 632.7(d)(3).) Where a party bases a violation of Penal Code section 632.7 on the use of a chat feature on a website, such claim will be deemed insufficient. (Valenzuela v. Nationwide Mutual Insurance Co., supra, at *6.)

Here, the complaint alleges that “Defendant’s chat communications from its website are transmitted to website visitors by either cellular telephony or landline telephony.”[1] (Complaint, ¶ 20.) As to the second cause of action, the complaint alleges that “Plaintiff communicated with Defendant using telephony subject to the mandates and prohibitions of Section 632.7” and “Defendant’s communication from the chat feature on its website is transmitted via telephony subject to the mandates and prohibitions of Section 632.7.” (Id., ¶¶ 32-33.)

The Court finds that the second cause of action is insufficiently alleged pursuant to Valenzuela. The complaint is based on the alleged interception and eavesdropping of chat messages on Defendant’s website. Plaintiff does not explicitly allege that the chat correspondence between the parties was via telephone as required by Penal Code section 632.7. Plaintiff has not stated a cause of action for violation of California Penal Code, Section 632.7.

The demurrer of Defendant to the second cause of action in the complaint is SUSTAINED with 20 days leave to amend.

Due to the lack of any opposition as to Defendant’s motion to strike, the Court GRANTS Defendant’s motion to strike with 20 days leave to amend under Moulton Niguel Water Dist. v. Colombo, supra, 111 Cal.App.4th 1210, 1215.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court

[1] Multiple typographical errors are present in the complaint. Plaintiff uses the word “telephony” where the Court believes Plaintiff meant to use the word “telephone.”