Judge Richard S. Whitney, Case Number: 37-2023-00013708-CU-CR-CTL, Date: 2024-04-05 Tentative Ruling

Judge: Richard S. Whitney, Case: 37-2023-00013708-CU-CR-CTL, Date: 2024-04-05 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - April 03, 2024

04/05/2024 10:30:00 AM C-68 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Richard S. Whitney

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Civil - Unlimited Civil Rights Demurrer / Motion to Strike 37-2023-00013708-CU-CR-CTL LICEA VS BOOKS-A-MILLION INC [IMAGED] CAUSAL DOCUMENT/DATE FILED:

TENTATIVE RULING: DEFENDANT BOOKS-A-MILLION, INC.'S DEMURRER TO PLAINTIFF'S FIRST AMENDED COMPLAINT ('FAC') is SUSTAINED, in part, and OVERRULED, in part.

Defendant BOOKS-A-MILLION, INC. dba BOOKSAMILLION.COM ('Defendant') asserts Plaintiff MIGUEL LICEA's ('Plaintiff') FAC fails to properly allege any violation under the CALIFORNIA INVASION OF PRIVACY ACT ('CIPA'). 'In determining whether the complaint states facts sufficient to constitute a cause of action, the trial court may consider all material facts pleaded in the complaint and those arising by reasonable implication therefrom; it may not consider contentions, deductions or conclusions of fact or law.' (SLPR, L.L.C. v. San Diego Unified Port District (2020) 49 Cal.App.5th 284, 316.) When considering a demurrer, '[t]he pleading must be read as if it contained all matters of which the court could properly take judicial notice even in the face of allegations in the pleading to the contrary.' (Weiner v. Mitchell, Silberberg & Knupp (1980) 114 Cal.App.3d 39, 47.) '[W]e give the pleading a reasonable interpretation by reading it as a whole and all of its parts in their context.' (Mead v. Sanwa Bank California (1998) 61 Cal.App.4th 561, 564.) 'If the facts appearing in the attached exhibit contradict those expressly pleaded, those in the exhibit are given precedence.' (Id. at 567–568.) 'A complaint must contain '[a] statement of the facts constituting the cause of action, in ordinary and concise language.' (§ 425.10, subd. (a)(1).) This fact-pleading requirement obligates the plaintiff to allege ultimate facts that 'as a whole apprise[ ] the adversary of the factual basis of the claim.

[Citations.]' (Medical Marijuana, Inc. v. ProjectCBD.com (2020) 46 Cal.App.5th 869, 886 [Citation omitted].) Defendant asserts Plaintiff must plead with particularity the elements of a statutory cause of action, citing Carter v. Prime Healthcare Paradise Valley LLC (2011) 198 Cal.App.4th 396, which cited Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771 for the proposition that 'statutory causes of action must be pleaded with particularity.' (Id. at 790.) The California Supreme Court in Covenant Care cited Lopez v. Southern Cal. Rapid Transit Dist. (1985) 40 Cal.3d 780, another California Supreme Court case, for support. Lopez stated 'because under the Tort Claims Act all governmental tort liability is based on statute, the general rule that statutory causes of action must be pleaded with particularity is applicable.' (Lopez v. Southern Cal. Rapid Transit Dist. (1985) 40 Cal.3d 780, 795.) Plaintiff cites Committee On Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, for support that particularity is not required. 'The pleading of fraud, however, is also the last remaining habitat of the common law notion that a complaint should be sufficiently specific that the court can weed out nonmeritorious actions on the basis of the pleadings.' (Committee On Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216–217 [Emphasis added].) Plaintiff fails to acknowledge this is not a common law action. However, the Court notes that Carter and Covenant Care are cases Calendar No.: Event ID: TENTATIVE RULINGS

3039753 CASE NUMBER: CASE TITLE: LICEA VS BOOKS-A-MILLION INC [IMAGED] 37-2023-00013708-CU-CR-CTL involving heighten remedies of attorney's fees and punitive damages where it is necessary to meet the 'standards set forth in subdivision (b) of Section 3294 of the Civil Code regarding the imposition of punitive damages on an employer based upon the acts of an employee shall be satisfied before any damages or attorney's fees permitted under this section may be imposed against an employer.' (Welf. & Inst. Code, § 15657(c).) This case does not involve the same heighten remedies. (Pen. Code, § 631.) Defendant correctly argues this Court did not give Plaintiff leave to amend as to the second cause of action. This Court's ruling stated 'the Court grants Plaintiff ten (10) days leave to amend as to the first cause of action, but not the second cause of action.' (ROA # 26.) It is the rule that when a trial court sustains a demurrer with leave to amend, the scope of the grant of leave is ordinarily a limited one. It gives the pleader an opportunity to cure the defects in the particular causes of action to which the demurrer was sustained, but that is all. (People ex rel. Dept. Pub. Wks. v. Clausen (1967) 248 Cal.App.2d 770, 785–786, 57 Cal.Rptr. 227.) 'The plaintiff may not amend the complaint to add a new cause of action without having obtained permission to do so, unless the new cause of action is within the scope of the order granting leave to amend.' (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023, 111 Cal.Rptr.3d 20.) (Community Water Coalition v. Santa Cruz County Local Agency Formation Com. (2011) 200 Cal.App.4th 1317, 1329.) 'Following an order sustaining a demurrer or a motion for judgment on the pleadings with leave to amend, the plaintiff may amend his or her complaint only as authorized by the court's order.' (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023.) Plaintiff was permitted to amend the first cause of action, but not the second cause of action. Plaintiff's inclusion of the second cause of action in the FAC is improper. The demurrer is sustained to the second cause of action.

The first cause of action is based on Penal Code section 631. Penal Code section 631(a) provides: Any person who, by means of any machine, instrument, or contrivance, or in any other manner, [1] 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, 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.

(Pen. Code, § 631(a) [Clause numbering and bolding added].) 'Subdivision (a) of section 631 prescribes criminal penalties for three distinct and mutually independent patterns of conduct: intentional wiretapping, wilfully attempting to learn the contents or meaning of a communication in transit over a wire, and attempting to use or communicate information obtained as a result of engaging in either of the previous two activities.' (Tavernetti v. Superior Court (1978) 22 Cal.3d 187, 192.) The fourth clause of § 631(a) imputes liability against anyone 'who aids, agrees with, employs, or Calendar No.: Event ID: TENTATIVE RULINGS

3039753 CASE NUMBER: CASE TITLE: LICEA VS BOOKS-A-MILLION INC [IMAGED] 37-2023-00013708-CU-CR-CTL conspires with any person or persons to unlawfully do, or permit, or cause to be done any of the' other three bases for liability. Cal. Penal Code § 631(a). Thus, while a party to a communication may record the communication without triggering § 631(a) liability, it will be subject to derivative liability where the third party is liable for recording the communications in violation of the first, second or third clauses of § 631(a).

(Martin v. Sephora USA, Inc. (E.D. Cal., Mar. 30, 2023, No. 122CV01355JLTSAB) 2023 WL 2717636, at *12, report and recommendation adopted (E.D. Cal., Apr. 24, 2023, No. 122CV01355JLTSAB) 2023 WL 3061957.) The Court agrees that the first clause of Penal Code section 631(a) does not apply to the internet, such that Plaintiff's allegations of accessing Defendant's website via a smartphone are insufficient. (Williams v. What If Holdings, LLC (N.D. Cal., Dec. 22, 2022, No. C 22-03780 WHA) 2022 WL 17869275, at *2; In re Google Assistant Privacy Litigation (N.D. Cal. 2020) 457 F.Supp.3d 797, 825–826; Licea v. Cinmar, LLC (C.D. Cal., Mar. 7, 2023, No. CV 22-6454-MWF (JEM)) 2023 WL 2415592, at *5.) Therefore, Defendant's liability based on allegedly aiding and abetting 'the Third Party Spyware Company and Meta/Facebook to intercept, eavesdrop upon, learn, share, and monetize the contents of Defendant's chat conversations' depends on whether the second and third clauses of Penal Code section 631(a) were violated. (FAC, ¶ 25.) The second clause of Penal Code section 631(a) requires an attempt to read or learn the information 'while the same is in transit...or is being sent from, or received at any place within this state.' The third clause of Penal Code section 631(a) requires use or an attempted use of the information obtained.

Plaintiff alleges that '[t]o enable the eavesdropping, Defendant has allowed a third party to covertly embed code into Defendant's chat feature.' (FAC, ¶ 10.) 'The secret code is a type of automatic routing software that automatically acquires and transmits user chat communications to the Third Party Spyware Company without any active input from either Defendant's employees, agents, or human representatives or the Third Party Spyware Company's employees, agents, or human representatives. Third Party Spyware Company acquired website visitors' chat communications by rerouting them to computer servers that it owns, controls, and maintains.' (FAC, ¶ 11.) 'The secret code enables and allows the Third Party Spyware Company to secretly intercept in real time, eavesdrop upon, and store transcripts of Defendant's chat communications with unsuspecting website visitors – even when such conversations are private and personal.' (FAC, ¶ 11.) 'The chat function is run from the Third Party Spyware's servers but allows for chat functionality on Defendant's Website. In other words, the Third-Party Spyware Company runs the Chat service from its own servers, but customers interact with the chat service on Defendant's Website so it appears to users that they are communicating with a company representative of Defendant.' (FAC, ¶ 12.) 'The Third Party Spyware Company's chat software is 'integrated' with Meta, Inc./Facebook. This integration allows various software sub-systems to share data to operate as a unified system.' (FAC, ¶ 15.) Plaintiff alleges Meta monitors ''offsite' user activity such as website visits and interactions (including private chat communications between Defendant and visitors)' and 'Defendant has secretly installed the Facebook 'pixel' software on its website – a tool widely regarded as spyware – that allows both Defendant and Meta/Facebook to track activities on Defendant's website, including interaction with the chat feature.' (FAC, ¶ 16.) '[A]fter the chat transcripts intercepted by the Third Party Spyware Company are provided to Meta/Facebook through integration and via the Facebook pixel spyware, Meta/Facebook and others bombard the unsuspecting website visitors with targeted advertising based upon the user's website visits and chat interactions.' (FAC, ¶ 16.) 'The Third Party Spyware Company's exploitation, monetization, use of, and interaction with the data it gathers through the chat feature in real time makes it more than a mere 'extension' of Defendant.' (FAC, ¶ 18.) 'Within the last year, Plaintiff visited Defendant's Website. Plaintiff used a smart phone (a cellular telephone with integrated computers to enable web browsing).' (FAC, ¶ 20.) 'Defendant did not inform Plaintiff that Defendant was secretly allowing, aiding, and abetting the Third Party Spyware Company to Calendar No.: Event ID: TENTATIVE RULINGS

3039753 CASE NUMBER: CASE TITLE: LICEA VS BOOKS-A-MILLION INC [IMAGED] 37-2023-00013708-CU-CR-CTL intercept and eavesdrop on the conversations during transmission, or that the Third Party Spyware Company provided data from such transcripts to Meta through 'integration' with Meta software.' (FAC, ¶ 22.) Plaintiff alleges Third-Party Spyware Company's technology 'enables the Third-Party Spyware Company to analyze and collect customer-support agent interactions in real time to create live transcripts of communications as they occur, among other services.' (FAC, ¶ 13.) Plaintiff goes on to explain why a company such as Third-Party Spyware Company would want to analyze and collect such data. (FAC, ¶¶ 14-19.) Plaintiff now alleges 'Third Party Spyware Company attempted to use Plaintiff's communications with Defendant including for data analytics and marketing purpose,' which goes beyond being acting as mere recorder. (FAC, ¶ 18.) This cause of action in part turns on whether Third-Party Spyware Company's recording of any conversations moved beyond mere tape-recording capabilities. '[T]he question is whether the third party has 'the capability to use its record of the interaction for [another] purpose.' Javier, ––– F.Supp.3d at ––––, 2023 WL 114225, at *6 (emphasis in original). An eavesdropper has that capability. A tape-recorder (absent an operator) does not.' (Valenzuela v. Keurig Green Mountain, Inc. (N.D. Cal., May 24, 2023, No. 22-CV-09042-JSC) 2023 WL 3707181, at *4.) Here, Plaintiff alleges 'Third Party Spyware Company attempted to use Plaintiff's communications with Defendant including for data analytics and marketing purposes.' (FAC, ¶ 18.) Plaintiff also alleges '[t]he Third Party Spyware Company's exploitation, monetization, use of, and interaction with the data it gathers through the chat feature in real time makes it more than a mere 'extension' of Defendant.' (FAC, ¶ 18.) These allegations imply the 'Third Party Spyware Company' has the capability to be more than a recorder – it can attempt to analyze data for marketing purposes – and that it attempted to do so. (FAC, ¶ 18.) Defendant also asserts that the 'in transit' requirement in the second clause has not been met. Plaintiff alleges that 'Plaintiff's chat communications with Defendant were routed simultaneously to both Defendant and Third Party Spyware Company at the same time. The factual basis for Plaintiff's belief is that Third Party Spyware Company embedded code in Defendant's Website constitutes automatic routing software, which does not require any human representative of either Defendant or Third Party Spyware Company to actively intervene in order for Third Party Spyware Company to intercept and gain access to any chat communications of any user of Defendant's chat feature on its Website.' (FAC, ¶ 13.) Plaintiff also alleges '[w]hile physically within California in the past year, Plaintiff visited Defendant's Website using a smart phone and conducted a brief conversation with an agent of Defendant through the website chat feature. Plaintiff sent his chat communications to Defendant while using Defendant's Website from the state of California.' (FAC, ¶ 4.) While Plaintiff alleges the communications were sent from California and that the Third Party Spyware Company 'simultaneously' intercepted the communication, Plaintiff does not directly allege the Third Party Spyware Company 'read[], or attempt[ed] to read, or to learn the contents or meaning of any message, report, or communication.' (Pen. Code, § 631(a).) However, the Court finds that a reading of the FAC as a whole leads to the conclusion that Plaintiff has alleged an attempt to learn the contents of the communications because analyzing the data of the chat communications implies, at a minimum, an attempt to read the contents of the communications. For the chat communications to be used for marketing purposes, the chat communications must be read and understood on some level. Even if the attempt to read or learn the contents of the communications occurred later and not 'while in transit,' Plaintiff has alleged a violation under the third clause. Plaintiff has alleged the Third Party Spyware Company 'use[d], or attempt[ed] to use, in any manner, or for any purpose, or to communicate in any way, any information so obtained,' which Defendant aided and abetted. (Pen. Code, § 631(a); FAC, ¶ 25.) The Court finds Plaintiff has sufficiently alleged a violation under Penal Code section 631(a). The demurrer is overruled as to the first cause of action. Plaintiff's requests for judicial notice are granted to the extent permissible.

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