Judge: Teresa A. Beaudet, Case: 23STCV22390, Date: 2024-02-28 Tentative Ruling

Case Number: 23STCV22390    Hearing Date: February 28, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On September 18, 2023, Plaintiff Miguel A. Licea (“Plaintiff”) filed this action against Defendant The Finish Line, Inc., dba Finishline.com. The Complaint alleges causes of action for (1) violations of the California Invasion of Privacy Act - Penal Code § 631 and (2) violations of the California Invasion of Privacy Act - Penal Code § 632.7. 

The Finish Line Inc. (“Defendant”) now demurs to both causes of action of the Complaint. Plaintiff opposes.[1]

Requests for Judicial Notice

The Court denies Defendant’s requests for judicial notice filed in support of the demurrer and reply. As to Defendant’s request for judicial notice filed in support of the reply, the Court notes that “¿¿[t]he general rule of motion practice…is that new evidence is not permitted with reply papers.¿¿” (Jay v. Mahaffey¿(2013) 218 Cal.App.4th 1522, 1537¿.)

The Court denies Plaintiff’s request for judicial notice as to Exhibits 1-7 and 9-11. The Court grants Plaintiff’s request for judicial notice as to Exhibit 8.

Discussion

A.    Legal Standard

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. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)

B.    Allegations of the Complaint  

In the Complaint, Plaintiff alleges that “Defendant secretly enables and allows a third-party spyware company to eavesdrop on the private conversations of everyone who communicates through the chat feature at https://www.finishline.com/ (the ‘Website’). The spyware company then exploits and monetizes that data by sharing it with other third parties, who use the private chat data to bombard the unsuspecting visitor with targeted marketing.” (Compl., p. 2:2-6.)

Plaintiff alleges that “[t]o enable eavesdropping, Defendant paid a third party named Genesys Cloud Services Inc. to embed its chat technology code into the chat feature offered on Defendant’s Website. Indeed, whenever a consumer chats via Defendant’s Website, the chat is routed through Genesys’s servers so they may simultaneously collect a transcript of that chat, along with other user data, in real time and save it for later access.” (Compl., ¶ 10.)

Plaintiff alleges that “[w]ithin the last year, Plaintiff visited Defendant’s Website. Plaintiff – like all visitors – shared personal data and personally identifying information with Defendant via the Website chat feature.” (Compl., ¶ 23.) Plaintiff alleges that “Defendant did not inform Plaintiff that Defendant was secretly allowing, aiding, and abetting a third party to intercept and eavesdrop on the conversations during transmission, or that the third party provided data from such transcripts to Meta through ‘integration’ with Meta software.” (Compl., ¶ 25.)

C.    First Cause of Action

Plaintiff’s first cause of action is for violations of the California Invasion of Privacy Act, specifically, Penal Code section 631.

Penal Code section 631, subdivision (a) provides in pertinent part as follows:

“Any person 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 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 who uses, or attempts to use, in any manner, or for any purpose, or to communicate in any way, any information so obtained, or 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…” (Emphasis added.)

Plaintiff appears to allege that Defendant violated the foregoing underlined portion of Penal Code section 631, subdivision (a) “by ‘aiding, abetting, and conspiring’ to allow a third party to intercept, eavesdrop upon, learn, share, and monetize the contents of Defendant’s chat conversations.” (Compl., ¶ 28, emphasis omitted.)

In the demurrer, Defendant cites to Warden v. Kahn (1979) 99 Cal.App.3d 805, 811, where the Court of Appeal noted that “[i]nsofar as [Penal Code] section 631 is concerned, appellant’s claim is without merit. That section, which is quite ambiguous…has been held to apply only to eavesdropping by a third party and not to recording by a participant to a conversation.” Defendant asserts that here, “Plaintiff cannot (and does not) allege that [Defendant], by receiving a written chat message over the Internet, engaged in any unauthorized tapping or reading of a communication in transit as a ‘third party.’” (Demurrer at pp. 9:23-10:2.) But as set forth above, Penal Code section 631, subdivision (a) also concerns, inter alia, any person “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.” As discussed, Plaintiff alleges that “Defendant violates the third prong, as set forth above, by ‘aiding, abetting, and conspiring’ to allow a third party to intercept, eavesdrop upon, learn, share, and monetize the contents of Defendant’s chat conversations.” (Compl., ¶ 28.)

Defendant also asserts that “[n]or can a party to the conversation ‘aid and abet’ a third-party service provider. Instead, in order to be liable as a party to a conversation for aiding and abetting a third party with eavesdropping, the third parties must be independent parties who mined information and sold it for their own gain.” (Demurrer at p. 10:3-6.) But in support of this assertion, Defendant cites to non-binding federal district court cases. (See Demurrer at p. 10:3-19.)

In addition, Defendant argues that “Plaintiff fails to sufficiently allege that [Defendant] aided, agreed with, employed, or conspired with Genesys to unlawfully do, or permit, or cause to be done any of the acts or things in the first three clauses of Section 631(a)…” (Demurrer at p. 11:8-11.) Defendant cites to People v. Beeman (1984) 35 Cal.3d 547, 560, where the California Supreme Court “conclude[d] that the weight of authority and sound law require proof that an aider and abettor act with knowledge of the criminal purpose of the perpetrator and with an intent or purpose either of committing, or of encouraging or facilitating commission of, the offense.” (Emphasis in original.) Defendant asserts that “Plaintiff fails to allege Defendant had knowledge of Genesys’ supposed nefarious intentions when it licensed the Genesys chat feature, that Defendant knew anything of the sort when it ‘paid a third party named Genesys Cloud Services Inc. to embed its chat technology code into the chat feature offered on Defendant’s Website’ to ‘enable’ eavesdropping or the even more attenuated wrongful conduct vis-à-vis targeted advertising…” (Demurrer at p. 11:19-24.)

In the opposition, Plaintiff contends that “[t]he Court can infer Defendant’s knowledge based on the fact that the chat provider’s behavior constitutes eavesdropping that is actionable under section 631(a) of the Penal Code, which Defendant provided substantial assistance to the chat provider by deliberately (but covertly) embedding the latter’s software code into the code for Defendant’s Website without obtaining its users’ informed consent.” (Opp’n at p. 21:1-4.) But in support of this assertion, Plaintiff appears to cite to Licea v. Jockey Int'l, 2023 Cal. Super. LEXIS 69728, a non-binding superior court decision. (See Opp’n at p. 21:1-5.) Plaintiff does not appear to point to any factual allegations in the Complaint that Defendant acted with “knowledge of the criminal purpose of the perpetrator and with an intent or purpose either of committing, or of encouraging or facilitating commission of, the offense.” (People v. Beeman, supra, 35 Cal.3d at p. 560 [emphasis omitted].)

            In light of the foregoing, the Court sustains Defendant’s demurrer to the first cause of action of the Complaint. 

D.    Second Cause of Action

Plaintiff’s second cause of action is for violations of the California Invasion of Privacy Act, specifically, Penal Code section 632.7.

Penal Code section 632.7, subdivision (a) provides in pertinent part as follows:

“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…”

Plaintiff alleges in the second cause of action that “Plaintiff communicated with Defendant using telephony subject to the mandates and prohibitions of Section 632.7,” and that “Defendant recorded telephony communication without the consent of all parties to the communication in violation of Section 632.7.” (Compl., ¶¶ 35, 37.) Plaintiff alleges that “[w]ithin the last year, Plaintiff visited Defendant’s Website. Plaintiff – like all visitors – shared personal data and personally identifying information with Defendant via the Website chat feature. Plaintiff used a smart phone (a cellular telephone with integrated computers to enable web browsing).” (Compl., ¶ 23.)

In the demurrer, Defendant asserts, inter alia, that “Plaintiff does not and cannot allege that either [Defendant] or Genesys used a telephone on its side of the chat.” (Demurrer at p. 16:22-23.) Indeed, in the Complaint, Plaintiff alleges in a conclusory fashion that “Defendant’s communication from the chat feature on its website is transmitted via telephony subject to the mandates and prohibitions of Section 632.7.” (Compl., ¶ 36.) But Plaintiff does not appear to allege that there was any “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…” (Pen. Code, § 632.7, subd. (a).)

In the opposition, Plaintiff appears to cite to Penal Code section 632.7, subdivision (d)(3), which provides that “‘communication’ includes, but is not limited to, communications transmitted by voice, data, or image, including facsimile.” Plaintiff contends that “[g]iven that communications transmitted by ‘data,’ ‘image,’ or ‘facsimile,’ are within the scope of section 632.7, this strongly implies that the Legislature intended the undefined term, ‘landline telephone,’ in section 632.7(a) to be broadly construed.” (Opp’n at p. 21:19-22.) But Plaintiff does not then specify what he means by “broadly construing” the term “landline telephone.” In addition, Plaintiff does not cite any legal authority demonstrating that the term “landline telephone” as it is used in Penal Code section 632.7, subdivision (a) encompasses the “chat communications from a website” alleged here. (Compl., ¶ 24.)

As discussed, Penal Code section 632.7, subdivision (a) clearly provides that “[e]very 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.” (Emphasis added.) The Court does not find that Plaintiff has alleged that any such 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” exists here. (Pen. Code, § 632.7, subd. (a).)

Based on the foregoing, the Court sustains Defendant’s demurrer to the second cause of action of the Complaint.

Conclusion

Based on the foregoing, the Court sustains Defendant’s demurrer to the first and second causes of action of the Complaint, with leave to amend.

The Court orders Plaintiff to file and serve an amended complaint, if any, within 20 days of the date of this order. If no amended complaint is filed within 20 days, the Court orders

Defendant to file and serve a proposed judgment of dismissal within 30 days of the date of this order.¿Defendant is ordered to give notice of this order.   

DATED:  February 28, 2024                          ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court