Kis v. Cognism Inc.

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NICHOLAS KIS, Plaintiff, v. COGNISM INC., Defendant.

No. 22-cv-05322-AMO

United States District Court, N.D. California

August 23, 2024

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

RE: DKT. NO. 45

ARACELI MARTÍNEZ-OLGUÍN, United States District Judge

Cognism Inc.'s motion to dismiss was heard before this Court on September 19, 2023. Having read the papers filed by the parties and carefully considered their arguments therein and those made at the hearing, as well as the relevant legal authority, the Court hereby GRANTS IN PARTS AND DENIES IN PART the motion to dismiss for the following reasons.

I. BACKGROUND^[1]

Defendant Cognism, Inc. (“Cognism”) owns and operates a website, cognism.com, that is a prospecting tool for business to business (“B2B”) salespeople and marketers. ECF 1 (“Compl.”) ¶¶ 1, 4. Cognism.com provides a searchable database with names, contact information, and other information about millions of professionals. Compl. ¶ 6. Cognism collects “community-sourced data” by installing software on subscribers' computers that “automatically captures, intercepts, and stores” all outgoing and incoming emails, and collects contact information from the signature blocks of emails. Compl. ¶ 20. Cognism.com subscriptions cost more than $10,000 per year. Compl. ¶ 14. Cognism offers free trials of cognism.com to potential subscribers, where the potential subscriber can search and view profiles in the database for a limited period of time or a limited number of contact information downloads. Compl. ¶¶ 9-10. Free trial users may download 25 profiles with personal information before they are required to purchase a subscription to view additional profiles. Compl. ¶ 10. Cognism used putative class members' names, likenesses, photographs, and personas in advertisements for its website subscriptions without their consent. Compl. ¶¶ 34, 39. Subscribers may also access information through the Kaspr plug-in, which is an internet browser extension that allows an individual searching on LinkedIn to view more information about an individual. Compl. ¶¶ 24, 26, 68.

Plaintiff Nicholas Kis sued Cognism on September 20, 2022, on behalf of himself and a putative class, alleging violations of (1) California's Right of Publicity Statute, Cal. Civ. Code § 3344, (2) the California Invasion of Privacy Act (“CIPA”), Cal. Pen. Code §§ 630 et seq., (3) appropriation of his name or likeness, and (4) the California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq. The instant motion followed.

II. DISCUSSION

Cognism moves to dismiss Plaintiff's claims under Federal Rule of Civil Procedure 12(b)(1) for lack of standing and Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. ECF 45 (“Mot.) at 14-32. Because the Article III standing issue goes to subject matter jurisdiction, the Court assesses it first.

A. Article III Standing

The Court evaluates challenges to Article III standing under Rule 12(b)(1), which governs motions to dismiss for lack of subject matter jurisdiction. Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011). Rule 12(b)(1) motions may be either facial, where the inquiry is confined to the allegations in the complaint, or factual, where the court is permitted to look beyond the complaint to extrinsic evidence. Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). When a defendant challenges jurisdiction “facially,” all material allegations in the complaint are assumed true, and the court determines whether the factual allegations are sufficient to invoke the court's subject matter jurisdiction. Id. When a defendant makes a factual challenge “by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004); see also Leite, 749 F.3d at 1121. The court need not presume the truthfulness of the plaintiff's allegations under a factual attack. Wood v. City of San Diego, 678 F.3d 1075, 1083 n.8 (9th Cir. 2012). Cognism brings both a facial and factual attack of the Court's subject matter jurisdiction.^[2]

“Article III confines the federal judicial power to the resolution of ‘Cases' and ‘Controversies.' For there to be a case or controversy under Article III, the plaintiff must have a ‘personal stake' in the case-in other words, standing.” TransUnion LLC v. Ramirez, 594 U.S. 413, 423 (2021) (citation omitted). To establish standing, “(1) the plaintiff [must have] suffered an injury in fact, i.e., one that is sufficiently ‘concrete and particularized' and ‘actual or imminent, not conjectural or hypothetical,' (2) the injury is ‘fairly traceable' to the challenged conduct, and (3) the injury is ‘likely' to be ‘redressed by a favorable decision.'” Bates v. United Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). “To establish an injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected interest' that is ‘concrete and particularized.'” In re Facebook, Inc. Internet Tracking Litig., 956 F.3d 589, 597 (9th Cir. 2020) (quoting Spokeo, Inc. v. Robins, 578 U.S. 330, 339 (2016), as revised (May 24, 2016)).

Cognism takes issue with the injury and traceability requirements. See Mot. (ECF 45) at 15-22. The Court begins with injury. Kis brings a statutory right of publicity claim and the analogous tort of misappropriation of a name or likeness.^[3] Compl. ¶¶ 98-104, 117-120. In determining whether an alleged harm is sufficiently concrete to confer Article III standing, the Supreme Court in TransUnion instructs that “courts should assess whether the alleged injury to the plaintiff has a ‘close relationship' to a harm ‘traditionally' recognized as providing a basis for a lawsuit in American courts,” such as physical harm, monetary harm, or various intangible harms. TransUnion, 594 U.S. at 424. This inquiry focuses on “whether plaintiffs have identified a close historical or common-law analogue for their asserted injury.... but does not require an exact duplicate in American history or tradition.” Id. A “concrete” injury may include tangible or intangible harms, so long as they are “‘real,' and not ‘abstract.'” Id. at 424-425. When a legislature had declared that an injury is legally redressable, courts “afford due respect” to that decision. Id. at 425. A legislature may “elevate” a legally protected interest into an injury for Article III purposes, though it cannot “us[e] its lawmaking power to transform something that is not remotely harmful into something that is.” Id. at 426 (citations omitted).

1. Claims at Common Law

Cognism argues that Kis fails to allege specific facts as to “how he was harmed,” “how he was foreclosed from capitalizing on his identity,” or “how he was deprived of the economic value of his identity[.]” Mot. at 16. Kis alleges injury for himself and putative class members through (1) “the unlawful taking of their valuable intellectual property”; (2) the invasion of their privacy rights protected by statute and common law”; (3) “Cognism's unlawful profiting from its exploitation of their names, personas, personal information, and the content of their emails”; and (4) “harm to peace of mind.” Compl. ¶ 42. Kis details that Cognism used his personal information without his consent, including his name, contact information, job title, place of work, and location to promote subscriptions to cognism.com. Compl. ¶¶ 1-3, 34. Cognism advertised subscriptions to its website by displaying Kis and putative class members' profiles, offering free trials with limited access to the platform, and offering subscriptions at $10,000 per year. Compl. ¶¶ 8-12, 14.

Plaintiffs' injury here has a “close relationship” to harms traditionally recognized at common law. See TransUnion, 594 U.S. at 424; In re Facebook, 956 F.3d at 598 (“[V]iolations of the right to privacy have long been actionable at common law.”) (citations omitted). A right to privacy “encompass[es] the individual's control of information concerning his or her person.” Eichenberger v. ESPN, Inc., 876 F.3d 979, 983 (9th Cir. 2017) (citation omitted); see also Patel v. Facebook, Inc., 932 F.3d 1264, 1272 n.6 (9th Cir. 2019) (the tort of “appropriation of the other's name or likeness” is one of four privacy torts traditionally recognized at common law) (citing Restatement (Second) of Torts § 652A(2) (1977)).

Kis alleges that Cognism misappropriated his name, likeness, and persona - a harm recognized at common law. Compl ¶¶ 56-58, 67; see U.S. Dep't of Just. v. Reps. Comm. For Freedom of Press, 489 U.S. 749, 763 (1989) (“both the common law and the literal understandings of privacy encompass the individual's control of information concerning his or her person”). Unjustly profiting from intellectual property is also a harm that was found to be sufficiently concrete at common law. See, e.g., In re Facebook, 956 F.3d at 600 (holding that allegations of unjust enrichment under the right-of-publicity statute are sufficient for Article III standing). Cognism argues that Kis was not injured because he is not a celebrity. Mot. at 18. However, an individual need not be a celebrity to suffer injury from the misappropriation of the person's name or likeness. See KNB Enterprises v. Matthews, 78 Cal.App.4th 362, 373 n.12 (2000) (concluding that “[u]nder California law, the statutory right of publicity [under Section 3344] exists for celebrity and non-celebrity plaintiffs alike.”); Dora v. Frontline Video, Inc., 15 Cal.App.4th 536, 542 (1993) (holding that “both celebrities and non-celebrities have the right...