Proposed Order re 78 MOTION to Dismiss Plaintiffs' Consolidated Amended Complaint and… — Plaid Privacy (Dkt. 80)

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Proposed order granting defendant Plaid Inc.'s motion to dismiss plaintiffs' Consolidated Amended Complaint, in In re Plaid Inc. Privacy Litigation, Master Docket No. 4:20-cv-03056-DMR, U.S. District Court for the Northern District of California, Oakland Division (Doc. 80, filed September 14, 2020). The proposed order would grant the motion with prejudice. Its stated grounds are that plaintiffs lack Article III standing for failure to plead an injury in fact, that the claims of certain named plaintiffs are time-barred, that plaintiffs have an adequate legal remedy so equitable remedies are dismissed, and that plaintiffs fail to state a claim under Federal Rule of Civil Procedure 12(b)(6). It then addresses causes of action under the CFAA, CDAFA, SCA and the California Anti-Phishing Act, among others.

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        Case 4:20-cv-03056-DMR    Document 80      Filed 09/14/20   Page 1 of 5


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                             UNITED STATES DISTRICT COURT
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                           NORTHERN DISTRICT OF CALIFORNIA
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                                    OAKLAND DIVISION
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     IN RE PLAID INC. PRIVACY LITIGATION        Master Docket No. 4:20-cv-03056-DMR
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                                                [PROPOSED] ORDER GRANTING
13   ______________________________________     DEFENDANT PLAID INC.’S MOTION TO
                                                DISMISS PLAINTIFFS’ CONSOLIDATED
14   THIS DOCUMENT RELATES TO:                  AMENDED COMPLAINT
15   ALL ACTIONS                                ORAL ARGUMENT REQUESTED
16                                              Action Filed: May 4, 2020
17                                              Judge: Hon. Donna M. Ryu
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       [PROPOSED] ORDER GRANTING DEFENDANT PLAID INC.’S MOTION TO DISMISS CONSOLIDATED
                   AMENDED COMPLAINT - MASTER DOCKET NO. 4:20-CV-03056-DMR
         Case 4:20-cv-03056-DMR            Document 80        Filed 09/14/20      Page 2 of 5


1           Defendant Plaid Inc. (“Plaid”) moves to dismiss Plaintiffs’ Consolidated Amended Complaint
2    (“CAC”). The Court, having considered all of the papers submitted by the parties, the relevant
3    authorities, and oral argument, hereby GRANTS Plaid’s Motion to Dismiss with prejudice.
4           First, the Court finds that Plaintiffs lack standing to assert any of the claims in their CAC
5    because they fail to plead an injury in fact sufficient to provide standing. See Lujan v. Defs. of
6    Wildlife, 504 U.S. 555, 560‒61 (1992); Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548 (2016).
7    Plaintiffs allege only speculative, abstract harms to their “dignitary and privacy rights” and highly
8    attenuated claims for potential economic damages which fail to satisfy the requirements of Article III
9    standing. See Whitmore v. Arkansas, 495 U.S. 149, 155-56 (1990). Plaintiffs also fail to sufficiently
10   plead causation or a redressable harm, both of which are also required elements for Article III
11   standing. For these reasons, Plaintiffs’ CAC is dismissed with prejudice.
12          Second, the following claims are time-barred by the relevant statutes of limitation as a matter
13   of law and must be dismissed with prejudice: all claims by Plaintiffs Curtis, Mitchell, Mullen, Sacks,
14   and Yeomelakis; all claims except Unfair Competition Law (“UCL”) claims by Plaintiffs
15   Schoeneman and Evans; and all claims by Plaintiff Umali (except his UCL-Coinbase claim).
16   Plaintiffs have failed to meet their burden of pleading facts to show that the statutes were tolled by
17   the discovery rule, fraudulent concealment, or equitable estoppel. See Mangum v. Action Collection
18   Serv., Inc., 575 F.3d 935, 940 (9th Cir. 2009); Hexcel Corp. v. Ineos Polymer, Inc., 681 F.3d 1055,
19   1060 (9th Cir. 2012); Diaz v. Safeway Inc., No. C-07-01902 RMW, 2007 WL 2793367, at *5 (N.D.
20   Cal. Sept. 26, 2007).
21          Third, because Plaintiffs have (and allege) an adequate legal remedy (monetary damages), and
22   do not allege the inadequacy of that remedy, Count 4 (for declaratory and injunctive relief), Count
23   Five (for unjust enrichment), and Count Six (for violation of California Business & Professions Code
24   § 17200 et seq.) are hereby dismissed with prejudice, as are all equitable remedies sought, including
25   restitution, disgorgement, and injunctive and declaratory relief. See Sonner v. Premier Nutrition
26   Corp., -- F.3d --, 2020 WL 4882896, at *7 (9th Cir. June 17, 2020).
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        [PROPOSED] ORDER GRANTING DEFENDANT PLAID INC.’S MOTION TO DISMISS CONSOLIDATED
                    AMENDED COMPLAINT - MASTER DOCKET NO. 4:20-CV-03056-DMR
         Case 4:20-cv-03056-DMR            Document 80        Filed 09/14/20      Page 3 of 5


1           Fourth, Plaintiffs fail to state a claim for any of their federal, state, or common law causes of
2    action under Federal Rule of Civil Procedure 12(b)(6). Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009);
3    Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
4           Collectively, Plaintiffs’ claims are not plausible in light of Plaid’s Privacy Policy and the
5    policies of the apps the Plaintiffs used to link to their bank accounts and other financial accounts,
6    because Plaid’s Privacy Policy details Plaid’s collection and use of data and other relevant activities.
7    CAC ¶ 71 (admitting that Plaid’s Privacy Policy discloses collection of account numbers, balances,
8    transactions, and other information). Indeed, each of Plaintiffs’ alleged omissions is not an omission,
9    but a demonstrably false misstatement (as shown by judicially-noticeable information) or an express
10   disclosure contained in the Privacy Policy.
11          Plaintiffs’ Sixth Cause of Action under the Unfair Competition Law (“UCL”) fails as a matter
12   of law. Plaintiffs fail to plausibly allege that they lost money or property. Birdsong v. Apple, Inc.,
13   590 F.3d 955, 959 (9th Cir. 2009). Moreover, Plaintiffs allege no unlawful, unfair, or fraudulent
14   business practice. Avila v. Countrywide Home Loans, 2010 WL 5071714, at *6 (N.D. Cal. Dec. 7,
15   2010); Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009); In re Tobacco II Cases, 46
16   Cal. 4th 298, 326 (2009).
17          Plaintiffs’ Second and Tenth Causes of Action under the CFAA (18 U.S.C. §§ 1030(a)(2), (4),
18   (5)(A)-(C), (6)) and the CDAFA (Cal. Penal Code §§ 502(c)(1)-(4), (6)-(8)) both fail as a matter of
19   law. These narrow statutes are intended “to punish hacking—the circumvention of technological
20   access barriers” and should not be transformed “from an anti-hacking statute into an expansive
21   misappropriation statute.” United States v. Nosal, 676 F.3d 854, 863, 857 (9th Cir. 2012); see also
22   Custom Packaging Supply, Inc. v. Phillips, 2015 WL 8334793, at *3 (C.D. Cal. Dec. 7, 2015).
23   Moreover, Plaintiffs have failed to plead any of the elements required under the many subsections of
24   both statutes, including tangible harm, an economic loss of at least $5,000, or that Plaid accessed a
25   computer or data without authorization. See, e.g., In re iPhone Application Litig., 844 F. Supp. 2d
26   1040, 1064 (N.D. Cal. 2012); Gonzales v. Uber Techs., Inc., 305 F. Supp. 3d 1078, 1090 (N.D. Cal.
27   2018); In re Apple & ATTM Antitrust Litig., No. C07-05152 JW, 2010 WL 3521965, at *7 (N.D. Cal.
28   July 8, 2010).

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        [PROPOSED] ORDER GRANTING DEFENDANT PLAID INC.’S MOTION TO DISMISS CONSOLIDATED
                    AMENDED COMPLAINT - MASTER DOCKET NO. 4:20-CV-03056-DMR
         Case 4:20-cv-03056-DMR            Document 80         Filed 09/14/20      Page 4 of 5


1           Plaintiffs’ Third Cause of Action under the SCA fails as a matter of law. The SCA does not
2    apply here as Plaintiffs have not alleged that the relevant financial institutions are facilities through
3    which an electronic communication service is provided. Backhaut v. Apple, Inc., 74 F. Supp. 3d
4    1033, 1041 (N.D. Cal. 2014). Moreover, Plaintiffs do not sufficiently allege Plaid accessed an
5    “electronic communication” under § 2701(a). Cline v. Reetz-Laiolo, 329 F. Supp. 3d 1000, 1044
6    (N.D. Cal. 2018). Finally, Plaintiffs do not plausibly allege Plaid intentionally accessed data without
7    authorization. Stern v. Weinstein, 512 F. App’x 701, 702 (9th Cir. 2013).
8           Plaintiffs’ First and Seventh Causes of Action for invasion of privacy and violation of
9    California’s constitution fail as a matter of law. Plaid’s disclosures undermine any allegation of a
10   reasonable expectation of privacy as required by these causes of action. In re Yahoo Mail Litig., 7 F.
11   Supp. 3d 1016, 1038 (N.D. Cal. 2014). Indeed, where data collection practices are disclosed to end
12   users, as they have been here, there is no reasonable expectation of privacy. See, e.g., TBG Ins.
13   Servs. Corp. v. Super. Ct., 96 Cal. App. 4th, 443, 452 (2002). Moreover, disclosure of personal or
14   financial information, without more, is not an egregious breach of social norms sufficient to establish
15   invasion of privacy. Low v. LinkedIn Corp., 900 F. Supp. 2d 1010, 1025 (N.D. Cal. 2012).
16          Plaintiffs’ Eighth Cause of Action under the California Anti-Phishing Act (Cal. Bus. & Prof.
17   Code § 22948.2) fails as a matter of law because it does not apply to Plaid, as Plaid is a legitimate
18   business, and is not engaged in phishing to “facilitate identity theft.” Cal. Bill Anal., S.B. 355 Sen.,
19   July 5, 2005.
20          Plaintiffs’ Ninth Cause of Action for deceit fails as a matter of law because they do not plead
21   the required elements, including a duty to disclose, intent to defraud, or reasonable reliance, with
22   particularity as required by Federal Rule of Civil Procedure 9(b). London v. New Albertson’s, Inc.,
23   No. 08-CV-1173 H (CAB), 2008 WL 4492642, at *7 (S.D. Cal. Sept. 30, 2008); O’Hara v. W. Seven
24   Trees Corp., 75 Cal. App. 3d 798, 804 (1977). Moreover, given Plaid’s disclosures in its Privacy
25   Policy, Plaintiffs cannot plausibly or specifically allege concealment of a material fact. Lewis v.
26   Google LLC, No. 20-CV-00085-SK, 2020 WL 2745253, at *14 (N.D. Cal. May 20, 2020).
27          Plaintiffs’ Fifth Cause of Action for unjust enrichment fails as a matter of law because “unjust
28   enrichment is a remedy and not an independent claim” and therefore must be “dismissed with

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        [PROPOSED] ORDER GRANTING DEFENDANT PLAID INC.’S MOTION TO DISMISS CONSOLIDATED
                    AMENDED COMPLAINT - MASTER DOCKET NO. 4:20-CV-03056-DMR
         Case 4:20-cv-03056-DMR            Document 80          Filed 09/14/20    Page 5 of 5


1    prejudice.” McLellan v. Fitbit, Inc., No. 3:16-cv-00036-JD, 2018 WL 2688781, at *4 (N.D. Cal. June
2    5, 2018). Even if construed as a quasi-contract cause of action, Plaintiffs “fail[] to sufficiently plead
3    an actionable misrepresentation or omission.” Rojas-Lozano v. Google, Inc., 159 F. Supp. 3d 1101,
4    1120 (N.D. Cal. 2016).
5           Plaintiffs’ Fourth Cause of Action for Declaratory and Injunctive Relief fails because
6    Plaintiffs have an adequate remedy at law and these are equitable remedies, not causes of action.
7    Curtis v. Option One Mortg. Corp., No. 109CV1982AWISMS, 2010 WL 1729770, at *8 (E.D. Cal.
8    Apr. 28, 2010); Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671 (1950); Simmons First
9    Nat’l Bank v. Lehman, No. 13-CV-02876-DMR, 2015 WL 1503437, at *7 (N.D. Cal. Apr. 1, 2015).
10   Moreover, because Plaintiffs’ request for a declaratory judgment derives from and depends on their
11   other causes of action, this derivative claim also fails. Jackson v. Atl. Sav. of Am., No. 13-cv-05755-
12   CW, 2014 WL 4802879, at *3-4 (N.D. Cal. Sept. 26, 2014).
13          Finally, because amendment would be futile and redundant, especially given that Plaintiffs,
14   represented by 12 law firms and 19 named plaintiffs, have already amended their 112-page CAC
15   once and consolidated five complaints, the matter shall be dismissed with prejudice. Sisseton-
16   Wahpeton Sioux Tribe v. United States, 90 F.3d 351, 356 (9th Cir. 1996). Indeed, amendment at this
17   state would be an improper “[sixth] bite at the apple.” Carter v. Bank of Am., NA, No. EDCV-15-
18   1474-MWF (DTBx), 2016 WL 6571264, at *4 (C.D. Cal. Jan. 20, 2016).
19          GOOD CAUSE APPEARING, IT IS HEREBY ORDERED THAT Plaid’s Motion to Dismiss
20   is GRANTED WITHOUT LEAVE TO AMEND. Plaintiffs’ Consolidated Amended Complaint is
21   hereby dismissed with prejudice, and judgment is entered in favor of Plaid and against Plaintiffs.
22          IT IS SO ORDERED.
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      DATE: ___________________________                      ______________________________________
24                                                                       Hon. Donna M. Ryu
                                                                    United States Magistrate Judge
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        [PROPOSED] ORDER GRANTING DEFENDANT PLAID INC.’S MOTION TO DISMISS CONSOLIDATED
                    AMENDED COMPLAINT - MASTER DOCKET NO. 4:20-CV-03056-DMR


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