Javier v. Assurance IQ, LLC

649 F.Supp.3d 891

Florentino JAVIER, Plaintiff, v. ASSURANCE IQ, LLC, et al., Defendants.

Case No. 20-cv-02860-CRB

United States District Court, N.D. California

Signed January 5, 2023

Max Stuart Roberts, Pro Hac Vice, Bursor and Fisher, P.A., New York, NY, Joel Dashiell Smith, Bursor & Fisher, P.A., Walnut Creek, CA, for Plaintiff.

Jonathan Hugh Blavin, Kelly Max Klaus, Virginia Grace Davis, Munger, Tolles and Olson LLP, San Francisco, CA, Rosemarie T. Ring, Gibson, Dunn & Crutcher LLP, San Francisco, CA, for Defendants.

ORDER GRANTING MOTION TO DISMISS

CHARLES R. BREYER, United States District Judge

Plaintiff Florentino Javier ("Javier") sues Assurance IQ, LLC, an insurance website operator, and ActiveProspect Inc., a software provider (together, "Defendants"), for violations of Section 631 the California Invasion of Privacy Act ("CIPA") and Invasion of Privacy under the California Constitution. See SAC (dkt. 38). Javier alleges that during his visit to Assurance's website, Nationalfamily.com, Defendants, through Active Prospect's software, "secretly observe[d] and record[ed] [his] keystrokes, mouse clicks, and other electronic communications." Id. ¶ 4.

After two prior orders on motions to dismiss before Judge White, which held that Javier consented to Defendants' information collection by assenting to Assurance's Privacy Policy at the end of his interaction with the website, the Ninth Circuit reversed, holding that Javier plausibly pleaded that he did not consent to any information collection that occurred prior to assenting to the Privacy Policy. Javier v. Assurance IQ, LLC, No. 21-16351, 2022 WL 1744107 (9th Cir. May 31, 2022). The Ninth Circuit did not reach "Defendants' other arguments, including whether Javier impliedly consented to the data collection, whether ActiveProspect is a third party under Section 631(a), and whether the statute of limitations has run." Id. at *2. Judge White ordered a third round of motion to dismiss briefing on those issues. After that briefing was completed, the case was reassigned to this Court.

Finding this matter suitable for resolution without oral argument pursuant to Civil Local Rule 7-1(b), and finding that Javier has failed to plead facts sufficient to invoke the delayed discovery doctrine, thus rendering his claims time-barred, the Court GRANTS Defendants' motion to dismiss.

I. BACKGROUND

A. Facts

Assurance runs an online platform for users to obtain life insurance quotes. SAC ¶¶ 6-9. A user enters information about their demographics, family situation, and medical history, and then clicks "View My Quote." Id. ¶¶ 38-45. At the final step, the website states that by clicking "View my Quote," the user provides an "electronic signature as an indication of . . . intent to agree to the website's Privacy Policy" and "Terms of Service." Id. ¶ 45.

Assurance partners with ActiveProspect to provide software for its website. Id. ¶¶ 29-31. ActiveProspect makes a software product called "TrustedForm," which is a "lead certification product that helps businesses comply with regulations like the [TCPA] . . . by documenting consumer consent." Id. ¶ 12. Specifically, TrustedForm is a piece of code that can be pasted into a form page to record "keystrokes, mouse clicks, data entry, and other electronic communications of visitors to websites," id. ¶ 21, and "begins the moment a user accesses or interacts with" a website. Id. ¶ 22. As a result, a website owner has a record of a users' entire interaction on its website, which is hosted on ActiveProspect's servers. Id. ¶ 57.

Javier visited Nationalfamily.com in January 2019. Id. ¶ 35. He entered all of the required information, including health data, and presumably later obtained a life insurance quote. Id. ¶ 38-45. In April 2020, Javier sent a letter through counsel "over purported violations of the Telephone Consumer Protection Act." Id. ¶ 51. The TrustedForm VideoReplay recording was produced to Javier's counsel in response to that letter. Id. Javier alleges that he had "no way of knowing Defendants had recorded his activities prior to the production of this recording because the video was private and exclusively in Defendants' possession." Id.

B. Procedural History

In March 2021, Judge White granted Defendants' first motion to dismiss, finding that Javier had consented to their collection of his information by clicking "View my Quote," because the conduct Javier complained of was disclosed in Assurance's Privacy Policy. Javier v. Assurance IQ, LLC, 20-cv-2860, 2021 WL 940319, at *2-3 (N.D. Cal. Mar. 9, 2021). After Javier filed the second amended complaint (the same complaint at issue in this order), Judge White again dismissed Javier's claims on the same grounds, this time without leave to amend. Javier v. Assurance IQ, LLC, 20-cv-2860, 2021 WL 3669343, at *3-4 (N.D. Cal. Aug. 6, 2021). Javier appealed this ruling to the Ninth Circuit,¹ and the Ninth Circuit reversed, holding that Javier did not consent under Section 631 to any information collection that occurred prior to assenting to the Privacy Policy. Javier, 2022 WL 1744107. The Ninth Circuit did not reach "Defendants' other arguments, including whether Javier impliedly consented to the data collection, whether ActiveProspect is a third party under Section 631(a), and whether the statute of limitations has run." Id. at *2. Judge White ordered a third round of motion to dismiss briefing on those issues. After that briefing was completed, this case was reassigned to this Court.

II. LEGAL STANDARD

Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint may be dismissed for failure to state a claim for which relief may be granted. Fed. R. Civ. P. 12(b)(6). Rule 12(b)(6) applies when a complaint lacks either a "cognizable legal theory" or "sufficient facts alleged" under such a theory. Godecke v. Kinetic Concepts, Inc., 937 F.3d 1201, 1208 (9th Cir. 2019). Whether a complaint contains sufficient factual allegations depends on whether it pleads enough facts to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim is plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678, 129 S.Ct. 1937. When evaluating a motion to dismiss, the Court "must presume all factual allegations of the complaint to be true and draw all reasonable inferences in favor of the nonmoving party." Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, it is "not bound to accept as true a legal conclusion couched as a factual allegation." Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986); Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994).

If a court dismisses a complaint for failure to state a claim, it should "freely give leave" to amend "when justice so requires." Fed. R. Civ. P. 15(a)(2). A court has discretion to deny leave to amend due to "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendment previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment." Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir. 2008) (quoting Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)). To determine whether amendment would be futile, courts examine whether the complaint can be amended to cure the defect requiring dismissal "without contradicting any of the allegations of [the] original complaint." Reddy v. Litton Indus., Inc., 912 F.2d 291, 296-97 (9th Cir. 1990).

III. DISCUSSION

The Court addresses Defendants' three arguments for dismissal of Javier's Section 631 claim in the following order: (1) Javier impliedly consented to Assurance and ActiveProspect's collection of his data; (2) ActiveProspect is an "extension" of Assurance, rather than a third-party eavesdropper; and (3) Javier failed to plead requisite facts to assert 4 delayed discovery, thus requiring dismissal on statute of limitations grounds.

A. Implied Consent

Defendants argue that Javier "impliedly consented to the data collection he now challenges from the moment he arrived at Assurance's website." Mot. (dkt. 58) at 5. Because, while he may have impliedly consented to Assurance's collection of his information, he did not impliedly consent to ActiveProspect doing so, this argument fails.

"In the wiretapping context, a finding of implied-in-fact consent requires 'circumstances indicating that the [party] knowingly agreed to the surveillance.' " Negro v. Superior Ct., 230 Cal. App. 4th 879, 892, 179 Cal.Rptr.3d 215 (2014) (quoting Griggs-Ryan v. Smith, 904 F.2d 112, 117 (1st Cir. 1990)). Such circumstances "will vary from case to case," but "will ordinarily include language or acts which tend to prove (or disprove) that a party knows of, or assents to, encroachments on the routine expectation that conversations are private." Griggs-Ryan, 904 F.2d at 117. "The typical case involves the user's continued use of a communication device or system after receiving notice that his or her communications may be intercepted." Negro, 230 Cal. App. 4th at 892, 179 Cal. Rptr.3d 215.

Defendants argue that three facts demonstrate implied consent here: (1) Javier visited a website to get an insurance quote, which would necessarily require "answering questions relevant to a quote tailored to him"; (2) he "kept moving through the webform" even as it displayed evidence that "the information he was entering was being collected and processed"; and (3) Javier's assent to the Privacy Policy via clicking the "View My Quote" button is " 'corroborative' of his earlier implied consent." Mot. at 6-7 (quoting United States v. Johnson, 875 F.3d 1265, 1278...