Addi v. The Int'l Bus. Machs.

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LISA ADDI, individually and on behalf of all others similarly situated, Plaintiff, v. INTERNATIONAL BUSINESS MACHINES, INC., Defendant.

No. 23 Civ. 5203 (NSR)

United States District Court, S.D. New York

May 31, 2024

OPINION & ORDER

NELSON S. ROMAN, United States District Judge

Plaintiff Lisa Addi (“Plaintiff”) brings this action, on behalf of herself and all others similarly situated, against Defendant International Business Machines, Inc. (“Defendant”) for (1) violation of the Video Privacy Protection Act (“VPPA”), 18 U.S.C. § 2710, (2) the Maryland Wiretapping and Electronic Surveillance Act (“MWESA”), Md. Code Cts. &amp Jud. Proc. §§ 10401, et seq., and (3) unjust enrichment under New York law. (First Amended Complaint “FAC,” ECF No. 18, ¶¶ 108-144.)

Defendant moves to dismiss Plaintiff's FAC under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (the “Motion”, ECF No. 28.) For the following reasons Defendant's Motion is GRANTED in part and DEFERRED in part.

BACKGROUND

I. Factual Background

The following facts are taken from the FAC and assumed to be true for the purposes of Defendant's Motion.

IBM owns and operates weather.com. (FAC ¶¶ 2-5.) The Website provides a range of weather data, daily climate news, and disaster coverage. (Id. ¶ 20.) While weather.com delivers content through numerous channels, at issue here are “pre-recorded, weather-related content,” such as videos. (Id. ¶ 22.)

According to the FAC, when a user of weather.com creates an account and views a video, APIs facilitate the transmittal of certain user data-such as name, email, gender, and geolocation, and the name and URL of the video that the user viewed-to third parties mParticle, a customer analytics platform, and Xandr, a marketing and advertising platform. (Id. ¶¶ 28- 31.) APIs “enable[] companies to open up their applications' data and functionality to external third-party developers, business partners, and internal departments within their companies.” (Id. ¶ 27.) mParticle and Xandr are used by IBM to collect user data and increase revenue from video-based marketing and advertising on weather.com. (See id. ¶¶ 65-92.)

Plaintiff, a resident of Maryland, is a weather.com account holder. (Id. ¶ 7.) She alleges that she visited weather.com while located in Maryland and logged-in to her website account, and watched pre-recorded videos during the months of May and June 2023. (Id. ¶¶ 5, 7.) During these visits to weather.com, Plaintiff claims that IBM “transmitted [her] video-viewing information and personally identifying information (‘PII') to mParticle and []Xandr.” (Id. ¶¶ 5, 8-9.) Plaintiff avers that mParticle and Xandr used her information to “analyze and track [her] activity across the Website, target [her] with relevant advertising, and assist Defendant with revenue generation.” (Id. ¶ 10.) Plaintiff claims that she “never consented, agreed, nor otherwise permitted [IBM] to disclose her []information to third parties, or procure third parties to intercept her []information.” (Id. ¶ 12.)

Based on these allegations, Plaintiff asserts claims for violations of the VPPA and MWESA, and unjust enrichment. (Id. ¶¶ 108-144.) Plaintiff also purports to represent a nationwide class of all U.S. residents who visited weather.com during the statute of limitations period, as well as a Maryland-subclass. (Id. ¶¶ 98-99.)

II. Procedural History

Plaintiff filed the original Complaint on June 21, 2023. (ECF No. 5.) Defendant initially sought leave on August 14, 2023 (ECF No. 13) to bring a motion to dismiss the initial Complaint. Plaintiff responded on August 15, 2023 (ECF No. 14) opposing leave and informing the Court that she would avail herself of her right to amend as a matter of course pursuant to Federal Rule of Civil Procedure 15(a)(1)(B). The Court, inter alia, directed Plaintiff to file a FAC no later than September 5, 2023. (ECF No. 15). Plaintiff then filed the FAC on September 19, 2023. (ECF No. 18.)

On February 2, 2024, Defendant filed the instant Motion (ECF No. 28), as well as a memorandum of law (“Def.'s MoL”, ECF No. 29) and reply (“Def.'s Reply”, ECF No. 33), in support thereof. Plaintiff filed an opposition to Defendant's Motion. (“Pltf.'s Opp.”, ECF No. 31.)

LEGAL STANDARD

I. Rule 12(b)(1)

A claim is subject to dismissal under Rule 12(b)(1) if the Court lacks subject matter jurisdiction to adjudicate it pursuant to statute or constitutional authority. See Fed.R.Civ.P. 12(b)(1); Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). Where a party lacks standing to bring a claim, the court lacks subject matter jurisdiction over such claim. See SM Kids, LLC v. Google LLC, 963 F.3d 206, 210 (2d Cir. 2020); see also Anderson Grp., LLC v. City of Saratoga Springs, 805 F.3d 34, 44 (2d Cir. 2015) (standing is “threshold matter” in determining the court's jurisdiction to hear a case).

Article III standing requires a plaintiff to demonstrate that: (1) he has suffered a “concrete and particularized injury”; (2) the injury “is fairly traceable to the challenged conduct”; and (3) the injury “is likely to be redressed by a favorable judicial decision.” Hollingsworth v. Perry, 570 U.S. 693, 704 (2013) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992)). A plaintiff bears the burden of demonstrating his standing, Lujan, 504 U.S. at 561, including that he suffered a “concrete harm,” TransUnion LLC v. Ramirez, 141 S.Ct. 2190, 2200 (2021), by a preponderance of the evidence, Seaman v. National Collegiate Student Loan Trust 2007-2, 2023 WL 6290622, at *7 (S.D.N.Y., 2023). The Supreme Court in TransUnion held that, although Congress creates causes of action for violation of legal prohibitions or obligations, “under Article III, an injury in law is not an injury in fact. Only those plaintiffs who have been concretely harmed by a defendant's statutory violation may sue that private defendant over that violation in federal court,” id., 141 S.Ct. at 2205 (emphasis in original). As summarized in that decision, “no concrete harm, no standing,” id. at 2200, 2214.

II. Rule 12(b)(6)

To survive a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), for “failure to state a claim upon which relief can be granted,” a complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “Although for the purposes of a motion to dismiss [a court] must take all of the factual allegations in the complaint as true, [it is] ‘not bound to accept as true a legal conclusion couched as a factual allegation.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555).

The Court will accept the facts in a complaint as true “and then determine whether they plausibly give rise to an entitlement to relief.” Id. A claim is facially plausible when the factual content pleaded allows the Court “to draw a reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678. Ultimately, determining whether a complaint states a facially plausible claim upon which relief may be granted is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679.

DISCUSSION

I. Standing

Defendant contends that Plaintiff fails to allege any concrete injury sufficient to confer Article III standing under the VPPA or MWESA, and that her claims should be dismissed as a result. (Def.'s MoL at 11.) “As the party invoking federal jurisdiction, the plaintiff[] bear[s] the burden of demonstrating that [she] [has] standing.” TransUnion, 141 S.Ct. at 2207. “At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice, for on a motion to dismiss [courts] presume that general allegations embrace those specific facts that are necessary to support the claim.” Lujan, 504 U.S. at 561 (quotation marks and alteration omitted). Where, as here, a Rule 12(b)(1) motion challenges standing on the face of the pleadings and does not rely on outside evidence, “[t]he task of the district court is to determine whether the Pleading alleges facts that affirmatively and plausibly suggest that the plaintiff has standing to sue.” Carter v. HealthPort Techs., LLC, 822 F.3d 47, 56 (2d Cir. 2016) (quotation marks and brackets omitted).

The Supreme Court in TransUnion held that even where a federal statute provides for a right of action and statutory damages, the plaintiff does not have Article III standing unless she identifies a concrete harm that bears a “close relationship to a harm ‘traditionally' recognized as providing a basis for a lawsuit in American courts.” 141 S.Ct. at 2204. In addition to physical injury and monetary loss, the TransUnion court noted that traditionally recognized harms include “reputational harms, disclosure of private information, and intrusion upon seclusion.” Id.

The Court considers the question of standing under both the VPPA and MWESA in turn.

a. VPPA

The VPPA “creates a private right of action for plaintiffs to sue persons who disclose information about their video-watching habits.” Salazar v Nat'lBasketball Ass'n, 685 F.Supp.3d 232, 239 (S.D.N.Y. 2023) (citation omitted). The VPPA states that “[a] video tape service provider who knowingly discloses, to any person, personally identifiable information concerning any consumer of such provider shall be liable to the aggrieved person.” 18 U.S.C. § 2710(b)(1). “To state a claim under § 2710(b), a plaintiff must allege that (1) a defendant is a ‘video tape service provider,' (2) the defendant disclosed ‘personally identifiable information concerning any consumer' to ‘any person,' (3) the disclosure was made...