Pena v. GameStop, Inc.

670 F.Supp.3d 1112

Vicente PENA, individually andon behalf of others similarly situated, Plaintiff, v. GAMESTOP, INC., Defendant.

Case No.: 22-CV-1635 JLS (MDD)

United States District Court, S.D. California

Signed April 27, 2023

Daniel G. Shay, Law Office of Daniel G. Shay, San Diego, CA, John J. Nelson, Milberg Coleman Bryson Phillips Grossman PLLC, San Diego, CA, Joshua Brandon Swigart, Swigart Law Group, APC, San Diego, CA, for Plaintiff.

Jui-Ting Anna Hsia, ZwillGen Law LLP, San Francisco, CA, Sheri B. Pan, ZwillGen PLLC, New York, NY, for Defendant.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

(ECF No. 8)

Janis L. Sammartino, United States District Judge

Presently before the Court is Defendant GameStop, Inc.'s ("Defendant" or "GameStop") Motion to Stay, Dismiss, or Transfer or in the Alternative Dismiss ("Mot.," ECF No. 8). Plaintiff Vicente Pena filed an Opposition to the Motion ("Opp'n," ECF No. 11), and Defendant filed a Reply in support of the Motion ("Reply," ECF No. 12), as well as three Notices of Supplemental Authority, see ECF No. 13 ("1st Supp."); ECF No. 16 ("2d Supp."); ECF No. 18 ("3d Supp."). Having carefully reviewed Plaintiff's Complaint ("Compl.," ECF No. 1), the Parties' arguments, and the law, the Court GRANTS the Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) and DISMISSES Plaintiff's Complaint WITHOUT PREJUDICE.

BACKGROUND¹

Defendant owns and operates the website www.GameStop.com. Compl. ¶ 24. A web chat feature on Defendant's website allows customers to communicate with Defendant concerning, for example, "questions about products, order issues, help with the site, etc." Id. ¶ 26. Plaintiff has used this feature on Defendant's website "[o]ver the last few years." Id. ¶ 25.

Defendant "covertly monitors, records, and creates secret transcripts of all communications through the chat feature on its website," without the knowledge of its customers. Id. ¶ 27. Defendant further "shares the secret transcripts with Zendesk, a third party that publicly boasts about its ability to harvest highly personal data from chat transcripts for sales and marketing purposes." Id. ¶ 28. Plaintiff asserts that this conduct injured him and other customers by invading their privacy. Id. ¶¶ 37-38.

Plaintiff initiated this putative class action on October 21, 2022, when he filed his Complaint. See generally id. He asserts claims for violations of the Federal Wiretap Act ("FWA"), 18 U.S.C. § 2510 et seq., and the California Invasion of Privacy Act ("CIPA"), Cal. Pen. Code § 631, on behalf of both a nationwide class as well as a California subclass comprising "persons . . . whose communications were intercepted by Defendant or its agents." See Compl. ¶¶ 1, 40-41.

On December 6, 2022, Defendant filed the instant Motion, asking the Court to either (i) stay, dismiss, or transfer these proceedings to the District Court for the Central District of California pursuant to the "first-to-file" rule of federal comity, or (ii) transfer the case pursuant to 28 U.S.C. § 1404(a), because another action "mak[ing] nearly identical allegations"—Licea v. GameStop, Inc., Case No. 5:22-cv-01562 (JGB-KK) (C.D. Cal.) (the "Licea action")—had been filed and pending in the Central District since September 6, 2022. ECF No. 8-1 ("Mot. Mem.") at 1.² However, on February 9, 2023, the plaintiff in the Licea action voluntarily dismissed that case. 1st Supp. at 1. As such, the "first-to-file" issue is moot and will not be addressed in this Order; likewise, Defendant's § 1404(a) argument that the interests of justice strongly favor transfer on the basis of the pending Licea action is moot.

Alternatively, Defendant's Motion requests that the Court dismiss the Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Mot. Mem. at 1. The Court addresses this request below.

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the defense that the complaint "fail[s] to state a claim upon which relief can be granted," generally referred to as a motion to dismiss. The Court evaluates whether a complaint states a cognizable legal theory and sufficient facts in light of Federal Rule of Civil Procedure 8(a), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." Although Rule 8 "does not require 'detailed factual allegations,' . . . it [does] demand more than an unadorned, the-defendant-unlawfully-harmed-me accusation." 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, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). In other words, "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)). A complaint will not suffice "if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.' " Iqbal, 556 U.S. at 677, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 557, 127 S.Ct. 1955).

To survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Id. (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955); see also Fed. R. Civ. P. 12(b)(6). A claim is facially plausible when the facts pled "allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 677, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). That is not to say that the claim must be probable, but there must be "more than a sheer possibility that a defendant has acted unlawfully." Id. Facts " 'merely consistent with' a defendant's liability" fall short of a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). This review requires context-specific analysis involving the Court's "judicial experience and common sense." Id. at 675, 129 S.Ct. 1937 (citation omitted). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not 'show[n]'—'that the pleader is entitled to relief.' " Id.

"In reviewing a Rule 12(b)(6) motion to dismiss, a district court must accept as true all facts alleged in the complaint, and draw all reasonable inferences in favor of the plaintiff." Wi-LAN Inc. v. LG Elecs., Inc., 382 F. Supp. 3d 1012, 1020 (S.D. Cal. 2019) (citing Retail Prop. Trust v. United Bhd. of Carpenters & Joiners of Am., 768 F.3d 938, 945 (9th Cir. 2014)). Where a complaint does not survive 12(b)(6) analysis, the Court will grant leave to amend unless it determines that no modified contention "consistent with the challenged pleading . . . [will] cure the deficiency." DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). "The Ninth Circuit has instructed that the policy favoring amendments 'is to be applied with extreme liberality.' " Abels v. JBC Legal Grp., P.C., 229 F.R.D. 152, 155 (N.D. Cal. 2005) (quoting Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990)).

ANALYSIS

Defendant asserts that Plaintiff fails to state a claim under either the FWA or CIPA because (i) as a matter of law, Defendant is exempt from liability pursuant to the "party exception" that applies to each statute; and (ii) Plaintiff fails to adequately plead that the alleged acts constitute "interception" under the relevant statutes and case law. See Mot. Mem. at 16-21.

"The Wiretap Act prohibits the unauthorized 'interception' of an 'electronic communication,' " as well as the intentional disclosure or use of such intercepted communications. In re Facebook, 956 F.3d 589, 606-07 (9th Cir. 2020) (quoting 18 U.S.C. §§ 2511(1)(a)-(e)). Likewise, CIPA makes the following three acts illegal: "(i) 'intentional wiretapping,' (ii) 'willfully attempting to learn the contents or meaning of a communication in transit over a wire,' and (iii) 'attempting to use or communicate information obtained as a result of engaging in either of the two previous activities.' " In re Google Assistant Priv. Litig., 457 F. Supp. 3d 797, 825 (N.D. Cal. 2020) (quoting Tavernetti v. Superior Court, 22 Cal. 3d 187, 192, 148 Cal.Rptr. 883, 583 P.2d 737 (1978)). " 'The analysis for a violation of CIPA is the same as that under the federal Wiretap Act.' " Brodsky v. Apple Inc., 445 F. Supp. 3d 110, 127 (N.D. Cal. 2020) (citing Cline v. Reetz-Laiolo, 329 F. Supp. 3d 1000, 1051 (N.D. Cal. 2018)).

Moreover, under both the FWA and CIPA, "[i]t shall not be unlawful . . . for a person . . . to intercept a[n] electronic communication where such person is a party to the communication," so long as such interception is not "for the purpose of committing any criminal or tortious act[.]" 18. U.S.C. § 2511(2)(d); see In re Facebook, Inc. Internet Tracking Litig., 956 F.3d 589, 607 (9th Cir. 2020) ("Both [the FWA and CIPA] contain an exemption from liability for a person who is a 'party' to the communication, whether acting under the color of law or not.") (citing 18 U.S.C. §§ 2511(2)(c), (d); Warden v. Kahn, 99 Cal. App. 3d 805, 811, 160 Cal.Rptr. 471 (1979)). "Courts perform the same analysis for both the Wiretap Act and CIPA regarding the party exemption." In re Facebook, 956 F.3d at 607 (citation omitted).

I. The "Party Exception"

The Court agrees with Defendant that Plaintiff's claims under both the FWA and CIPA fail as a matter of law because Defendant was the known and intended recipient of the communications sent by Plaintiff through the chat feature on Defendant's website such that each statute's "party exception" bars Defendant's liability.

Here, Plaintiff pleads that he and...