Best Carpet Values, Inc. v. Google, LLC

90 F.4th 962

BEST CARPET VALUES, INC.; Thomas D. Rutledge,on behalf of themselves and all others similarly situated, Plaintiffs-Appellees, v. GOOGLE, LLC, Defendant-Appellant.

No.22-15899

United States Court of Appeals, Ninth Circuit

Argued and Submitted September 13, 2023 San Francisco, California

Filed January 11, 2024

Appeal from the United States District Court for the Northern District of California, Edward J. Davila, District Judge, Presiding, D.C. No. 5:20-cv-04700-EJD

Fred A. Rowley Jr. (argued) and Victor H. Jih, Wilson Sonsini Goodrich & Rosati, Los Angeles, California; David Kramer, Dylan Byrd, and Dale R. Bish, Wilson Sonsini Goodrich & Rosati, Palo Alto, California; Paul N. Harold, Wilson Sonsini Goodrich & Rosati, Washington, D.C.; Ali Reza Rabbani, Paul Hastings LLP, Los Angeles, California; for Defendant- Appellant.

John A. Lawson (argued), Edelson PC, San Francisco, California; Ryan D. Andrews and Roger J. Perlstadt, Edelson PC, Chicago, Illinois; Alexander H. Schmidt, Alexander H. Schmidt, Colts

Neck, New Jersey; Eric J. Artrip, Mastando & Artrip LLC, Huntsville, Alabama; Asil Hashiri, Mashiri Law Firm APC, San Diego, California; for Plaintiffs-Appellees.

Before: J. Clifford Wallace, Sidney R. Thomas, and Danielle J. Forrest, Circuit Judges.

OPINION

WALLACE, Circuit Judge:

Google, LLC (Google) appeals from the district court's denial of its motion to dismiss Plaintiffs' putative class action asserting California state-law claims arising from Google's placement of search results on copies of their websites. We have jurisdiction over this timely interlocutory appeal pursuant to 28 U.S.C. § 1292(b). We reverse and remand with instructions to dismiss the Complaint.

I.

"At the motion to dismiss stage, we assume factual allegations stated in the Complaint filed by Plaintiff[s] to be true." Doe v. Internet Brands, Inc., 824 F.3d 846, 848 (9th Cir. 2016). Google provides internet services and products, most famously the google.com search engine, the Android mobile operating system, and the web browser Google Chrome. Google integrates "Search App" into its Android mobile operating system. The Search App enables a user to conduct internet searches directly from the home screen of their Android phone without opening a web browser. During the class period, Search App typically appeared as a search bar at the top of the Android home screen.

When a user typed a website address into the browser, Search App (like most web browsers) connected to the server hosting the website and "obtain[ed] a copy of the requested website page from the host web server." Search App then "deliver[ed] the copy to the user by translating the website's codes and recreating the website page on the user's . . . mobile device screen." If a user clicked a link on the page, the click was "transmitted back over the internet to the host web server, from which the hosted website [could] then transmit responsive information," such as a different website page. Plaintiffs explicitly alleged that "Google did not trespass on the source websites located on [Plaintiffs'] web servers."

Plaintiffs challenge the way Google displayed websites in Search App on Android phones from March 2018 to April 2020. During this period, Search App displayed the requested website page with a "frame" at the bottom of the page stating, for example, "VIEW 15 RELATED PAGES." The frame gave the user the option of clicking a button to expand the frame to display half-page banners advertising related websites, occupying up to eighty percent of the screen size and shadowing the remaining twenty percent. Alternatively, the user could scroll through the website to which they navigated as normal with the frame remaining in place at the bottom of the screen. The banners were not advertisements for which Google paid Plaintiffs, but instead results automatically generated by Google's algorithms and placed there without Plaintiffs' permission. Plaintiffs alleged that the "VIEW 15 RELATED PAGES" frame and (when expanded by the user) the half-page digests blocked important content on their websites. In the case of putative class representative Best Carpet Values, Inc. (Best Carpet), the results at times displayed in the frame included links to websites owned by Best Carpet's direct competitors and negative news stories about Best Carpet's owner. Plaintiffs argue that by displaying the frame and half-page digests, Google "occup[ied] valuable space" on the websites of class members that Google should have paid for because it "obtain[ed] all the benefits of advertising" from use of that space.

Plaintiffs filed a putative class action, asserting California state law claims for trespass to chattels, implied-in-law contract and unjust enrichment, and violation of California's Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200 et seq. Google moved to dismiss the operative Complaint for failure to state a claim upon which relief could be granted. The district court, drawing in part upon our decision in Kremen v. Cohen, 337 F.3d 1024 (9th Cir. 2003), mostly denied Google's motion to dismiss.¹ In response, Google moved to stay the proceedings and to certify the order for immediate interlocutory appeal under 28 U.S.C. § 1292(b). The district court granted Google's motions, and we granted Google's permission to file this appeal.

II.

"We review de novo a district court's denial of a motion to dismiss under Rule 12(b)(6)." Olympic Forest Coal. v. Coast Seafoods Co., 884 F.3d 901, 905 (9th Cir. 2018).

III.

The district court certified for our interlocutory review four "novel and difficult" questions of law that it believed were potentially dispositive of the case. We conclude that the first and third questions are indeed dispositive, thus we do not address the second or fourth.²

A.

As to the first question, "[w]hether [Kremen] should be extended to protect as chattel the copies of websites displayed on a user's screen," we answer in the negative.³

Trespass to chattels, "[d]ubbed by Prosser the 'little brother of conversion,' . . . allows recovery for interferences with possession of personal property 'not sufficiently important to be classed as conversion.' " Intel Corp. v. Hamidi, 30 Cal.4th 1342, 1350, 1 Cal.Rptr.3d 32, 71 P.3d 296 (2003), citing W. Page Keeton, et al., Prosser and Keeton on Law of Torts § 14, pp. 85-86 (5th ed. 1984). Although California law recognizes "property" in "every intangible benefit and prerogative susceptible of possession or disposition," Holistic Supplements, L.L.C. v. Stark, 61 Cal.App.5th 530, 548, 275 Cal.Rptr.3d 791 (2021) (internal quotations and citation omitted), it does not similarly call courts to use property law "to displace other, more suitable law" in every instance. Silvaco Data Sys. v. Intel Corp., 184 Cal.App.4th 210, 239 n.21, 109 Cal.Rptr.3d 27 (2010) (internal citation and quotation marks omitted).

We agree with the district court that the "chattels" at issue here are the copies of Plaintiffs' websites. Plaintiffs alleged so in their Complaint: "Website owners likewise have property rights . . . in the copies of their websites that appear on internet users' monitors and screens." Plaintiffs' attempt on appeal to eliminate the distinction between their proprietary websites and the copies of such websites is rejected. See Airs Aromatics LLC v. Op. Victoria's Secret Stores Brand Mgmt., Inc., 744 F.3d 595, 600 (9th Cir. 2014) ("A party cannot amend pleadings to directly contradic[t] an assertion made in the same proceeding.") (internal quotation marks and citation omitted, alteration in original). We thus root our trespass to chattels analysis in Plaintiffs' website copies.

Plaintiffs do not allege a possessory interest in copies of their websites sufficient to give rise to a trespass to chattels claim. Under California law, trespass to chattels "lies where an intentional interference with the possession of personal property" causes injury. Hamidi, 30 Cal.4th at 1350-51, 1 Cal.Rptr.3d 32, 71 P.3d 296 (emphasis added), quoting Thrifty-Tel, Inc. v. Bezenek, 46 Cal.App.4th 1559, 1566, 54 Cal.Rptr.2d 468 (1996). Plaintiffs assert only a conclusory allegation that they have "possessory interests" in the copies of their websites that are transmitted to a user's device upon a request from Search App. We do not accept this legal conclusion as true. See Whitaker v. Tesla Motors, Inc., 985 F.3d 1173, 1176 (9th Cir. 2021) (stating an adequate complaint must contain "well-pleaded facts, not legal conclusions"). Nor should we. Under Plaintiffs' theory, they maintain a possessory interest in an intangible copy that (1) is created when a user visits a website via the Search App, (2) exists on the user's device, and (3) is deleted by the user when they leave the page. Plaintiffs' possessory interest is thus entirely dependent on actions taken by an individual user unassociated with Plaintiffs or their websites. A possessory interest does not lie under these circumstances.

Nor do Plaintiffs allege a cognizable property interest in the website copies that may serve as the basis for a trespass to chattels claim.⁴ The district court's analysis to the contrary misreads both the governing law and Plaintiffs' Complaint. The district court reasoned that "[c]onsistent with [Kremen] and subsequently issued cases . . . a website can be the subject of a trespass to chattels claim." In Kremen, we held that the California law of conversion applied to an internet domain name, not the website itself or other intangible assets attendant to the website. See 337 F.3d at 1030. And Plaintiffs' Complaint highlights that a website copy and its domain name are different concepts, explaining that "[a] website is a digital document built with software and housed on a computer called a 'web server,' which is owned or controlled in part by the website's owner" while a domain name is a unique identifier "which enables an internet user to find the web server on which the website resides."...