Stark v. Patreon, Inc.

635 F.Supp.3d 841

Brayden STARK, et al., Plaintiff, v. PATREON, INC., Defendant.

Case No. 22-cv-03131-JCS

United States District Court, N.D. California

Signed October 13, 2022

Adam E. Polk, Kimberly Macey, Trevor Taige Tan, Simon Seiver Grille, Girard Sharp LLP, San Francisco, CA, for Plaintiff.

Nathan Loy Walker, Gilbert Gordon Walton, William Fred Norton, Jr., Bree Hann, The Norton Law Firm PC, Oakland, CA, for Defendant.

ORDER REGARDING MOTION TO DISMISS

Re: Dkt. No. 21

JOSEPH C. SPERO, Chief Magistrate Judge

I. INTRODUCTION

Plaintiffs Brayden Stark, Judd Oostyen, Kevin Black, and Maryann Owens bring this putative class action against Defendant Patreon, Inc. asserting claims under the federal Video Privacy Protection Act ("VPPA") and California law based on Patreon's alleged sharing of user data with Facebook. Patreon moves to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim on which relief may be granted. The Court finds the matter suitable for resolution without oral argument and VACATES the hearing previously set for October 14, 2022. The case management conference previously set for the same time is CONTINUED to November 18, 2022 at 2:00 PM, to occur via Zoom webinar.

For the reasons discussed below, Patreon's motion is GRANTED as to Plaintiffs' claim under the VPPA, as well as a California claim to the extent it is directly derivative of their VPPA claim, which are dismissed with leave to amend. The motion is otherwise DENIED. Plaintiffs may file an amended complaint no later than October 27, 2022.¹

The Court does not reach the parties' constitutional arguments at this time, and the deadline for the United States to intervene remains set as November 4, 2022.

II. BACKGROUND

A. Allegations of the Complaint

Because the allegations of a complaint are generally taken as true in resolving a motion to dismiss under Rule 12(b)(6), this section summarizes Plaintiffs' allegations as if true. Nothing in this order should be construed as resolving any issue of fact that might be disputed.

Patreon allows its users or members to "access a variety of content on Patreon's website, including music, podcasts, and video content posted by content creators." Compl. (dkt. 1) ¶ 34. Plaintiffs assert that Patreon is therefore a "video tape service provider" as that term is defined in the VPPA "because it engaged in the business of delivering audiovisual materials that are similar to prerecorded video cassette tapes and those sales affect interstate or foreign commerce." Id. ¶ 65.

Plaintiffs Stark, Oostyen, and Black are current Patreon members and Facebook users. Id. ¶¶ 18, 21, 24. They pay Patreon subscription fees ranging from $5 to $15 per month and regularly watch video content on Patreon's website. Id. ¶¶ 19-26. Plaintiff Owens is a Facebook user and former Patreon member, who paid Patreon around $35 per month for two months in 2021 and regularly watched videos on Patreon's website during that time, but will not use Patreon in the future unless it takes greater steps to protect her privacy. Id. ¶¶ 27-30.

When users view video content on Patreon's website, Patreon transmits the title of the video they are viewing, as well as the user's Facebook ID ("FID") to Facebook, the ubiquitous social network, using a tracking tool created by Facebook called the "Pixel." Id. ¶¶ 35, 37, 40, 45. An FID can be used "to quickly and easily locate, access, and view the corresponding Facebook profile" of the user. Id. ¶ 38. "Facebook profiles may contain a Facebook user's name, gender, birthday, place of residence, career, educational history, a multitude of photos, and the content of a Facebook user's posts," among other information. Id. ¶ 39. The Pixel "is a snippet of programming code that, once installed on a webpage, sends information to Facebook," thus "allow[ing] website owners to track visitor actions on their websites for the purposes of sending the corresponding information to Facebook" so that the website owners can better target their products and advertising towards users and Facebook can compile more comprehensive profiles of its users. Id. ¶¶ 40-44.

Plaintiffs assert that they did not know of or authorize Patreon sharing their video usage information with Facebook and other third parties, id. ¶ 46, and that Patreon's "Terms of Use, . . . Privacy Policy, Data Practices, and . . . Cookie Policy" do not inform users "of Patreon's use of the Facebook Pixel or its practice of sharing Users' personal information and video content choices with Facebook and other third parties," id. ¶ 47. In any event, Patreon never obtained a standalone agreement from users to share that information as required by the VPPA. Id. ¶ 48.

Plaintiffs contend that they and other putative class members suffered harm in that Patreon shared data that users expected would be kept private, users lost the potential to obtain any value for that data themselves, and users paid greater subscription fees to Patreon than they would have if they had known how Patreon was sharing their data. Id. ¶¶ 49-54.

Plaintiffs assert the following claims: (1) violation of the VPPA, id. ¶¶ 63-73; (2) violation of the "unlawful," "unfair," and "fraudulent" prongs of California's Unfair Competition Law (the "UCL"), id. ¶¶ 74-88; (3) violation of California's Consumer Legal Remedies Act (the "CLRA"), id. ¶¶ 89-98; and (4) unjust enrichment, id. ¶¶ 99-104.

B. Request for Judicial Notice

Patreon requests that the Court take judicial notice of the various versions of its terms of use, privacy policy, and cookie policy that were in effect during the period at issue, arguing that Plaintiffs' complaint incorporates those documents by reference. See generally Request for Judicial Notice ("RJN," dkt. 23).² The terms of use describe Patreon's business as connecting individual "creators" with fans, who pay membership fees to the creators for access to content and merchandise that the creators provide through Patreon's website, with Patreon taking a cut of those membership fees in return for providing its platform and payment processing. See, e.g., RJN Ex. 1 at 1, 3-6. The privacy policy states that users provide personal information including their names and email addresses, e.g., RJN Ex. 5 at 2, that Patreon automatically collects information as users navigate the site and through third-party analytics, including information about the pages users visit and how they interact with the website, id. at 5, and that Patreon shares user data with, among other recipients, its "service providers," including companies Patreon contracts with for "analysing [sic] data trends" and "increasing [Patreon's] brand awareness and user engagement with marketing initiatives," id. at 11. The privacy policy notes that the service providers with which Patreon shares data "are obligated by contract to safeguard any of your data they receive from [Patreon] to the same extent that Patreon protects it." Id. at 12.

Plaintiffs oppose the request for judicial notice, arguing that Patreon cannot offer documents outside the complaint to dispute Plaintiffs' allegations. Opp'n (dkt. 31) at 6 n.1, 9.

C. The Parties' Arguments

Patreon moves to dismiss all of Plaintiffs' claims. See generally Mot. (dkt. 21). With respect to the VPPA, Patreon contends that Plaintiffs have not offered sufficient factual allegations to show that the videos they viewed on Patreon's website "were 'similar' to prerecorded video cassette tapes" as required by the statute," or "that Patreon is 'engaged in the business of renting, selling, or delivering' such audio visual materials." Id. at 7 (quoting 18 U.S.C. § 2710(a)(4)). According to Patreon, the terms of use make clear that its business is instead "providing a membership platform" to connect creators and fans, which in Patreon's view is distinct from the business of renting, selling, or delivering videos. Id. at 7-8. Patreon notes that many entities and businesses that are not primarily engaged in renting or delivering videos provide video content through the internet. Id. at 8. Patreon also argues that Plaintiffs have not sufficiently alleged that it "disclosed information to Facebook that identified them individually," nor that "knowingly" transmitted any such information. Id. at 9-10.

Plaintiffs contend that the VPPA's use of "similar audio visual materials" has been construed broadly and not limited to videocassettes or other physical media. Opp'n at 4-5. They also argue that their allegations regarding Patreon's business model, allowing video content to be delivered from creators to their subscription-paying supporters is a business of "delivering" videos within the meaning of the statute. Id. at 6-7. Plaintiffs further contend that they have adequately alleged that Patreon shared personal information because a Facebook user's FID is sufficient to identify that individual, and that Patreon knew what information it was sharing when it installed the Pixel on its website. Id. at 8, 9-10. According to Plaintiffs, even if the Court considers the terms of use and other policies that Patreon offers for judicial notice, those documents do not show compliance with the VPPA's required procedure for obtaining user consent to share information. Id. at 8-9.

In its reply, Patreon notes that Plaintiffs have not specifically alleged that the videos they watched were prerecorded rather than broadcast live, and reiterates its view that videos are provided by the content creators who use Patreon's service rather than by Patreon itself. Reply (dkt. 35) at 2-3. Patreon also argues that Plaintiffs have not plausibly alleged that an FID discloses a user's identity, nor that Patreon actually knew either that the Pixel tool it implemented transmitted FIDs or that the specific plaintiffs in this case had Facebook accounts. Id. at 3-5.

Patreon also argues that the VPPA is unconstitutional both facially and as applied, as a restriction of speech in violation of the First...