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OPPOSITION/RESPONSE (re 83 MOTION to Continue Case Management Conference ) filed byCaroline… — Plaid Privacy (Dkt. 88)

No. 4:20-cv-03056-DMR · Doc. 88 · Docket on CourtListener

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Case 4:20-cv-03056-DMR Document 88 Filed 09/18/20 Page 1 of 8

1 HERRERA PURDY LLP LIEFF CABRASER HEIMANN &
Shawn M. Kennedy (SBN 218472) BERNSTEIN, LLP
2 skennedy@herrerapurdy.com Michael W. Sobol (SBN 194857)
Andrew M. Purdy (SBN 261912) msobol@lchb.com
3 apurdy@herrerapurdy.com Melissa Gardner (SBN 289096)
Bret D. Hembd (SBN 272826) mgardner@lchb.com
4 bhembd@herrerapurdy.com 275 Battery Street, 29th Floor
4590 MacArthur Blvd., Suite 500 San Francisco, CA 94111-3339
5 Newport Beach, CA 92660 Tel: (415) 956-1000
Tel: (949) 936-0900 Fax: (415) 956-1008
6 Fax: (855) 969-2050
BURNS CHAREST LLP
7 HERRERA PURDY LLP Warren T. Burns (Pro Hac Vice)
Nicomedes Sy Herrera (SBN 275332) wburns@burnscharest.com
8 nherrera@herrerapurdy.com Russell Herman (Pro Hac Vice)
Laura E. Seidl (SBN 269891) rherman@burnscharest.com
9 lseidl@herrerapurdy.com 900 Jackson Street, Suite 500
1300 Clay Street, Suite 600 Dallas, TX 75202
10 Oakland, CA 94612 Tel: (469) 904-4550
Tel: (510) 422-4700 Fax: (469) 444-5002
11 Fax: (855) 969-2050
BURNS CHAREST LLP
12 LIEFF CABRASER HEIMANN & Christopher J. Cormier (Pro Hac Vice)
BERNSTEIN, LLP ccormier@burnscharest.com
13 Rachel Geman (Pro Hac Vice) 4725 Wisconsin Avenue, NW, Suite 200
rgeman@lchb.com Washington, DC 20016
14 Rhea Ghosh (Pro Hac Vice) Tel: (202) 577-3977
rghosh@lchb.com Fax: (469) 444-5002
15 250 Hudson Street, 8th Floor
New York, NY 10013-1413
16 Tel: (212) 355-9500
Fax: (212) 355-9592
17
Interim Co-Lead Class Counsel
18

19 UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
20
OAKLAND DIVISION
21
IN RE PLAID INC. PRIVACY Master Docket No.: 4:20-cv-03056-DMR
22 LITIGATION
OPPOSITION TO DEFENDANT PLAID
23 INC.’S ADMINISTRATIVE MOTION
TO CONTINUE CASE MANAGEMENT
24 THIS DOCUMENT RELATES TO: CONFERENCE
ALL ACTIONS
25
Hon. Donna M. Ryu
26 Action Filed: May 4, 2020
Trial Date: None Set
27

OPP TO ADMIN MOT. TO CONTINUE CMC
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Case 4:20-cv-03056-DMR Document 88 Filed 09/18/20 Page 2 of 8

1 I. INTRODUCTION
2 Plaid’s motion to continue the October 7, 2020 Initial Case Management Conference (“CMC”) and
3 stay discovery—wrongly styled as an “Administrative Motion”1—should be denied as seeking delay for
4 delay’s sake. Plaid has not met its heavy burden to show that its motion to dismiss will resolve any, let
5 alone all, of the issues in the case—especially given the disputed factual issues at the core of the case
6 (and that pervade Plaid’s motion).
7 Plaintiffs allege that Plaid collects consumers’ highly personal information by accessing—and then
8 secretly monitoring—consumers’ bank account transactions. Plaid fails to obtain consumers’ consent for
9 this conduct, regularly going so far as to disguise itself as a financial institution. Plaintiffs also allege
10 that Plaid benefits from its systematic intrusion into consumers’ privacy to the detriment of consumers
11 in the form of judicially-recognized privacy and dignitary violations and economic harm. Dkt. No. 61,
12 Compl. at ¶¶ 1-7, 26-244 (“Compl.”). The Complaint is based on Plaintiffs’ thorough investigation that
13 relied, among other sources, on technical processing information, interviews, industry presentations,
14 responses to government requests for information, websites and user experience data, historical blog
15 posts (at least one that Plaid has now deleted), press articles, and the experiences of multiple consumers.
16 Plaid’s motion to dismiss (“MTD”) largely ignores these allegations and their bases, relies on fact-
17 based (and procedurally misplaced) arguments, and otherwise asserts that the detailed and
18 contextualized materials Plaintiffs rely on do not mean what they say. Dkt. No. 78. These are classic
19 arguments necessitating the development of an adequate factual record to see who is right. Plaid
20 practically admits as much. Motion at 3 (asking this Court to “disregard[]” the allegations because its
21 own version of facts “contradict[s] Plaintiffs’ claims”).
22 Finally, a stay will prejudice Plaintiffs: memories fade with time, and third-party discovery may be
23 lost, while Plaid’s misconduct continues. Plaid, however, will suffer no prejudice from participating in
24 standard steps to organize and proceed expeditiously with the litigation, and has ample options if any
25 particular discovery request is, in its view, objectionable.
26
1
Plaid’s request to stay discovery and modify deadlines set by the Federal Rules is not “the sort of
27 minor administrative matter” that justifies the filing of an Administrative Motion. See, e.g., Morgenstein
v. AT&T Mobility LLC, 2009 WL 3021177, at *2 (N.D. Cal. Sept. 17, 2009) (stay request inappropriate);
28 Grove v. Wells Fargo Fin. Cal., Inc., 606 F.3d 577, 582 (9th Cir. 2010) (request that fails to comport
with local rules may be summarily denied). Plaid’s motion can be denied for this reason alone.
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1 II. ARGUMENT
2 A. Legal Standard: A Heavy Burden to Justify a Stay.
3 “Had the Federal Rules contemplated that a motion to dismiss under Fed. R. Civ. Pro. 12(b)(6)
4 would stay discovery, the Rules would contain a provision to that effect. In fact, such a notion is directly
5 at odds with the need for expeditious resolution of litigation.” Gray v. First Winthrop Corp., 133 F.R.D.
6 39, 40 (N.D. Cal. 1990); Allen v. Protective Life Ins., No. 20-0530, 2020 WL 5074021, at *2 (E.D. Cal.
7 Aug. 27, 2020) (“delaying or prolonging discovery can create unnecessary litigation expenses and case
8 management problems”). “A party seeking a stay of discovery carries the heavy burden of making a
9 ‘strong showing’ why discovery should be denied.’” Gray, 133 F.R.D. at 40 (citation omitted); see
10 Wenger v. Monroe, 282 F.3d 1068, 1077 (9th Cir. 2002) (quoting Wood v. McEwen, 644 F.2d 797, 801
11 (9th Cir. 1981)) (stay warranted only when no factual issues are raised by the motion to dismiss,
12 discovery is not required to address issues raised by the motion to dismiss, and the court is “convinced
13 that the plaintiff will be unable to state a claim for relief”). Courts commonly use a two-prong test:
14 A moving party meets the good cause requirement of Federal Rule of Civil Procedure 26(c) when
the Court finds (1) the pending motion is potentially dispositive of the entire case, and (2) it can
15
be decided absent additional discovery.… The moving party must show a particular and specific
16 need for the protective order, as opposed to making stereotyped or conclusory statements.

17 Al Otro Lado. v. Nielsen, No. 17-2366, 2018 WL 679483, at *2 (S.D. Cal. Jan. 31, 2018); see also, e.g.,
18 Pac. Lumber Co. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 220 F.R.D. 349, 351 (N.D. Cal. 2003)
19 (denying motion to stay).2 Even if some claims are or may be dismissed, the possibility of amendment,
20 which courts grant liberally, renders a motion non-dispositive. See Singh v. Google, Inc., No. 16-03734,
21 2016 WL 10807598, at *2 (N.D. Cal. Nov. 4, 2016) (denying motion because “the Court would consider
22 whether leave to amend should be granted, rendering Google’s motion not dispositive.”); Nat'l Union
23 Fire Ins. Co. of Pittsburgh v. Res. Dev., No. 10-01324, 2010 WL 3746290, at * 1 (N.D. Cal. Sept. 18,
24 2010) (same).
25 B. Plaid’s Motion to Dismiss Will Not Dispose of this Case.
26 In applying the two-factor test, courts take only a “preliminary peek” at the merits of the pending
27
2
In Nielsen, cited by Plaid, the court granted the stay because, unlike here, there was an organizational
28 plaintiff that lacked standing to represent individual victims, and the plaintiff agreed the motion to
dismiss presented pure and dispositive questions of law.
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1 motion to dismiss. In re Nexus 6P Prod. Liab. Litig., No. 17-02185, 2018 WL 3036734, at *1-2 (N.D.
2 Cal. June 19, 2018) (citation omitted). Here, Plaid’s arguments confirm that its motion is non-dispositive
3 because they are intertwined with factual disputes that warrant the development of a full record. Even if
4 the Court were to dismiss any claim, Plaintiffs would and could seek leave to amend at this early stage.
5 Plaid’s specific arguments are addressed below:
6 • Timeliness. Plaid concedes that multiple Plaintiffs bring timely claims. MTD at 15; Compl. at ¶¶
100, 111, 178 (Plaintiffs’ data was first accessed as recently as 2019 and 2020). These Plaintiffs are
7 well within any statute of limitations for any claim. As to others, Plaid’s deceptive concealment of
8 its true purpose and conduct, to say nothing of its ongoing misconduct by continually accessing
consumers’ data long after their first log-in, creates factual issues as to all Plaintiffs. Compl. at ¶¶
9 239-44 (fact-based tolling, concealment, and estoppel).

10 • Connecting through Plaid. Plaid effectively concedes, as it must, that it collected data from
Plaintiffs. Motion at 2 (“even if [Plaintiffs] did connect through Plaid . . . .”). Yet Plaid at the same
11 time asserts the opposite: that Plaintiffs somehow failed to allege that Plaid connected to Plaintiffs’
bank accounts (in Plaid’s misleading phrasing, that they “used Plaid” to link to their bank accounts).
12 This is readily belied by the pleadings. In addition to the specific allegations about Plaid’s role in
13 connecting to banks when consumers use the apps at issue in the case (see, e.g., Compl. at ¶¶ 3-7,
26-31, 39, 66-77), Plaintiffs alleged (among other things): details about the specific Plaid-using app,
14 such as Venmo, that they signed up for and when they signed up; the specifics of the process of
linking to a bank;3 what each Plaintiff understood and intended at the time of log-in4 (versus the
15 reality of what Plaid was doing); what each Plaintiff would have done had they known the truth; how
the Plaintiff was injured; and details about other bank accounts linked to the Plaintiff’s account, such
16
as those of minor children, that Plaid also accessed. All Plaintiffs, contrary to Plaid’s suggestion
17 otherwise, also demand that Plaid purge the data about them and the Class. Compl. at ¶ 7 and Prayer
for Relief, D. Notably, if Plaid disputes that any particular Plaintiff accessed their bank through Plaid
18 when using one of Plaid’s apps, which Plaid has stopped short of claiming, and contrary to the
pleading, it can develop the record consistent therewith.
19
• Standing. Plaid argues that its challenge to standing gives its motion extra (or any) heft. Not so.
20 Here, Plaid’s specific challenge to standing is intertwined with its defense on the merits of a core
factual issue requiring a record: whether Plaintiffs’ privacy and dignitary interests have been
21
invaded. MTD at 12-14. Likewise, Plaintiffs have alleged various kinds of economic harm, see
22 Compl. at ¶¶ 208-235, and Plaid’s unjust enrichment establishes standing for the Plaintiffs whose
data Plaid used. In re Facebook, Inc. Internet Tracking Litig., 956 F.3d 589, 600 (9th Cir. 2020)
23 (“California law recognizes that individuals maintain an entitlement to unjustly earned profits, to
establish standing”). Plaid’s purported causation challenge simply repeats, in another guise, the false
24 suggestion that Plaintiffs do not claim Plaid accessed their accounts. Finally, Plaid’s conclusory
25
3
26 E.g., “Ms. Anderson does not recall being prompted to read any privacy policy from Plaid during the
process of logging into her bank account and does not recall having ever read any privacy policy from
27 Plaid when she linked her bank account.” Compl. at ¶ 101.
4
E.g., “When [Anderson] was prompted in the Venmo and Cash App apps to log into her bank account,
28 she believed she was doing so through an official connection with her bank . . . . [s]he was unaware that
she was providing her login credentials to Plaid.” Compl. at ¶ 102.
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1 redressability argument runs counter to decades, if not centuries, of common-law protections.
Violations of privacy rights satisfy standing, and have “long been actionable at common law.” Id. at
2 598 (internal quotations omitted). Plaid also ignores that Congress and the State of California have
3 codified specific types of privacy violations. Compl. at ¶¶ 270-312, 330, 349-378. Standing, which
looks to allegations and does not require resolving merits disputes, is handily satisfied. See
4 Campbell v. Facebook, Inc., 951 F.3d 1106, 1119 (9th Cir. 2020).

5 • Remedies. Plaid’s argument that Plaintiffs will be made whole by remedies at law, and are not
entitled to equitable remedies, is wrong for various reasons, among them that various of Plaintiffs’
6 claims allow monetary equitable relief such as restitution and injunctive relief (see, e.g., Compl. at
¶¶ 336-337), to say nothing of its being inconsistent with its standing argument. Yet this is not the
7 juncture to fashion remedies, and Plaid’s argument is irrelevant.
8 • Conclusory 12(b)(6) arguments. Plaid claims that Plaintiffs do not adequately state their claims,
9 but declines to raise specifics. Tellingly, as to various claims, Plaid disputes the allegations on the
merits but cannot claim that any element is not alleged. See, e.g., MTD at 33 (claiming the anti-
10 phishing law should not apply because Plaid “provides valuable services to end users at their request
and with their permission”). Again, these are factual defenses contrary to well-pleaded allegations,
11 not valid legal challenges. Plaintiffs will carefully respond to all of Plaid’s arguments in the
opposition, including those where Plaid wrongly states that an element of a claim is not properly
12
alleged. Overall, though, even if Plaid were correct about one or two claims—and it is not—the case
13 would go forward.

14 • Consent. Finally, Plaid drops all pretense of making legal arguments and simply proffers as a factual
matter that even if it takes consumers’ private data, the factual record shows consumers consented to
15 this. Motion at 3. Plaid repeats this bald assertion dozens of times throughout the MTD, even while
begging the question by pointing to irrelevant privacy policies and app screens that were not even in
16 place when Plaintiffs’ data was first accessed. Plaid thereby acknowledges the need for a record to
determine the issues in this case.
17

18 Accordingly, Plaid has not—and cannot—demonstrate that its motion to dismiss is potentially

19 dispositive of the entire case, and the motion for continuance should be denied. See, e.g., Garcia v.

20 Enter. Holdings, No. 14-0596, 2014 WL 4623007, at *3 (N.D. Cal. Sept. 15, 2014) (denying motion

21 because “Defendants have not convinced the Court that their motion [to dismiss] is meritorious or that it

22 will otherwise be granted without leave to amend, which courts grant liberally.”); Power Integrations,

23 Inc. v. Park, No. 16-02366, 2016 WL 10859441, at *2 (N.D. Cal. Dec. 2, 2016) (denying motion

24 because “it is unclear whether Park’s motion to dismiss will be dispositive of the entire case”).

25 C. A Stay Will Prejudice Plaintiffs.
26 It is standard practice in this District to hold the Initial CMC before the pleadings are resolved. The

27 Federal Rules provide that a pretrial conference expedites disposition or settlement of the action,

28 prevents delays and discourages waste, and improves the quality of the trial. Fed. R. Civ. P. 16(a).

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1 Plaid’s own concessions and the factual nature of its arguments show that no deviation from the rules is
2 warranted. To the contrary, Plaid’s ongoing attempts to delay the CMC and stay discovery are
3 needlessly preventing key early steps to ensure discovery is efficient.
4 Further, a stay would significantly prejudice Plaintiffs. Over time memories fade and evidence is
5 lost. Plaid touts its commitment to data preservation, but ignores that discovery will be sought from third
6 parties. Plaid also argues that discovery will be expensive and time-consuming, but participating in
7 discovery is not prejudice,5 and Plaid can make specific objections to specific discovery in the context of
8 a meet and confer and in accordance with this Court’s standing order on discovery disputes. Finally,
9 delaying discovery until well into 2021 would be particularly prejudicial given the continuing harm and
10 important injunctive relief that Plaintiffs seek.
11 D. Plaid’s Cases Are Distinguishable.
12 Notably, Plaid does not cite to any case with even roughly comparable facts and procedural posture.
13 Many of its cases involve pro se plaintiffs (e.g., Carter, Gibbs), including vexatious litigants (Ou-
14 Young). In many or most of Plaid’s other cases, the non-moving party agreed to or didn’t contest the stay
15 (e.g., Scandlon, Antman, Thomas), or the court had already dismissed the complaint (finding the motion
16 to dismiss to be meritorious) (e.g., Camacho, Perry). In yet another (Azad), the court had an
17 acknowledged practice of deferring the CMC. Plaintiffs respectfully submit that this Court should
18 instead adopt the framework used by the majority of the courts that disfavor a stay. Under that
19 framework, this case should move forward.
20 III. CONCLUSION
21 For the reasons set forth above and in the accompanying Declaration of Shawn M. Kennedy,
22 Plaintiffs respectfully request that Plaid’s request for a stay, and related request to vacate the CMC, be
23 denied, and that Plaid be ordered to engage in a Rule 26(f) conference immediately to permit the CMC
24 scheduled for October 7, 2020 to go forward, or alternatively for a CMC to go forward on a date soon
25 thereafter at the convenience of the Court.
26 5
See, e.g., Huene v. U.S. Dep’t of Treasury, I.R.S., No. 11-2110, 2013 WL 417747, at *8 (E.D. Cal. Jan.
27 31, 2013) (“That discovery may involve inconvenience and expense is not sufficient to support a stay of
discovery. Rather, a stay of discovery should only be ordered if the court is convinced that a plaintiff
28 will be unable to state a claim for relief.”).

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Case 4:20-cv-03056-DMR Document 88 Filed 09/18/20 Page 7 of 8

1
Dated: September 18, 2020 Respectfully submitted,
2

3 By: /s/ Rachel Geman
Rachel Geman
4
LIEFF CABRASER HEIMANN &
5 BERNSTEIN, LLP
6 Rachel Geman (Pro Hac Vice)
rgeman@lchb.com
7 Rhea Ghosh (Pro Hac Vice)
rghosh@lchb.com
8 250 Hudson Street, 8th Floor
New York, NY 10013-1413
9 Tel: (212) 355-9500
Fax: (212) 355-9592
10

11 LIEFF CABRASER HEIMANN &
BERNSTEIN, LLP
12 Michael W. Sobol (SBN 194857)
msobol@lchb.com
13 Melissa Gardner (SBN 289096)
mgardner@lchb.com
14
275 Battery Street, 29th Floor
15 San Francisco, CA 94111-3339
Tel: (415) 956-1000
16 Fax: (415) 956-1008

17
HERRERA PURDY LLP
18

19 By: /s/ Shawn Kennedy
Shawn M. Kennedy
20
Shawn M. Kennedy (SBN 218472)
21 skennedy@herrerapurdy.com
Andrew M. Purdy (SBN 261912)
22 apurdy@herrerapurdy.com
Bret D. Hembd (SBN 272826)
23
bhembd@herrerapurdy.com
24 4590 MacArthur Blvd., Suite 500
Newport Beach, CA 92660
25 Telephone: (949) 936-0900
Fax: (855) 969-2050
26

27 HERRERA PURDY LLP
Nicomedes Sy Herrera (SBN 275332)
28 nherrera@herrerapurdy.com

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Case 4:20-cv-03056-DMR Document 88 Filed 09/18/20 Page 8 of 8

1 Laura E. Seidl (SBN 269891)
lseidl@herrerapurdy.com
2 1300 Clay Street, Suite 600
3 Oakland, CA 94612
Telephone: (510) 422-4700
4 Fax: (855) 969-2050

5
BURNS CHAREST LLP
6

7 By: /s/ Christopher Cormier
Christopher J. Cormier
8
Christopher J. Cormier (Pro Hac Vice)
9 ccormier@burnscharest.com
4725 Wisconsin Avenue, NW
10
Washington, DC 20016
11 Tel: (202) 577-3977
Fax: (469) 444-5002
12
BURNS CHAREST LLP
13 Warren T. Burns (Pro Hac Vice)
wburns@burnscharest.com
14
Russell Herman (Pro Hac Vice)
15 rherman@burnscharest.com
900 Jackson Street, Suite 500
16 Dallas, TX 75202
Tel: (469) 904-4550
17 Fax: (469) 444-5002
18
Interim Co-Lead Class Counsel
19

-7- OPP TO ADMIN MOT. TO CONTINUE CMC
2042034.1 CASE NO. 4:20-CV-03056-DMR

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