Valenzuela v. Nationwide Mut. Ins. Co.

686 F.Supp.3d 969

Sonya VALENZUELA, individually andon behalf of all others similarly situated, Plaintiff, v. NATIONWIDE MUTUAL INSURANCE CO.,an Ohio corporation; and Does 1 through 25, inclusive, Defendants.

Case No.: 2:22-cv-06177-MEMF-SK

United States District Court, C.D. California

Signed August 14, 2023

Scott J. Ferrell, David W. Reid, Victoria C. Knowles, Pacific Trial Attorneys APC, Newport Beach, CA, for Plaintiff.

Joel D. Siegel, Paul M. Kakuske, Pooja L. Shah, Dentons U.S. LLP, Los Angeles, CA, Sonia Renee Martin, Dentons U.S. LLP, Oakland, CA, for Defendant Nationwide Mutual Insurance Co.

ORDER GRANTING IN PART MOTION TO DISMISS FIRST AMENDED COMPLAINT; GRANTING REQUEST FOR JUDICIAL NOTICE [ECF NO. 12, 13]

MAAME EWUSI-MENSAH FRIMPONG, United States District Judge

Before the Court are a Motion to Dismiss the First Amended Complaint (ECF No. 12) and a Request for Judicial Notice (ECF No. 13) filed by Defendant Nationwide Mutual Insurance Co. For the reasons stated herein, the Court GRANTS the Request for Judicial Notice and GRANTS IN PART the Motion to Dismiss the First Amended Complaint.

BACKGROUND

I. Factual Background¹

Plaintiff Sonya Valenzuela ("Valenzuela") is a citizen of California. ¶ 4. Defendant Nationwide Mutual Insurance Co. ("Nationwide") is an Ohio corporation that does business with California residents. ¶¶ 3, 5.

Nationwide operates a website, www.nationwide.com ("the Website"). See Introduction. The Website includes a chat feature, which allows customers to have conversations with Nationwide. ¶¶ 9, 11, 14. Visitors to the Website share sensitive personal data with Nationwide through this chat feature. ¶ 14.

Nationwide pays a third-party company—"Akamai," a/k/a "Kustomer"—to embed code in to the Website which allows Akamai to monitor and store the conversations that occur through the chat feature. ¶ 11. Akamai is not a defendant or otherwise a party to this litigation. Nationwide contracted with Akamai in part because Akamai specializes in harvesting data from conversations for financial gain. ¶ 12. Nationwide does not inform customers who use the chat feature that this monitoring of conversations, storing of transcripts, or data harvesting occurs. ¶¶ 13, 17. Nor does Nationwide obtain customers' consent. ¶ 13.

Valenzuela visited the website at an unspecified time "within the statute of limitations period." ¶ 16. Valenzuela used, among other devices, a smart phone to visit the Website. ¶ 33. Valenzuela communicated with Nationwide using a smartphone or similar device enabled with cellular technology. Id.

II. Procedural History

Valenzuela filed her Complaint in Los Angeles County Superior Court on July 26, 2022. See ECF No. 1-1 ("Complaint" or "Compl."). Nationwide removed the action to this Court on August 30, 2022. See ECF No. 1 ("Notice of Removal").

Valenzuela filed a First Amended Complaint on September 20, 2022. ECF No. 9 ("FAC"). Valenzuela alleges two causes of action: (1) Violations of the California Invasion of Privacy Act pursuant to California Penal Code § 631 ("Section 631"); and (2) Violations of the California Invasion of Privacy Act pursuant to § 632.7 ("Section 632.7"). Valenzuela brings this suit as a purported class action. See FAC. She asserts that the class is "All persons within California who within the statute of limitations period: (1) communicated with Defendant via the chat feature on Defendant's Website using cellular or landline telephony, and (2) whose communications were recorded and/or eavesdropped upon without prior consent." FAC ¶ 20. The Court has not yet ruled on class certification. See generally ECF Nos. 1-20.

Nationwide filed its Motion to Dismiss the First Amended Complaint and Memorandum of Points and Authorities in support on October 14, 2022. ECF No. 12 ("Motion"); ECF No. 12-1 ("MPA"). Also on October 14, 2022, Nationwide filed a Request for Judicial Notice in Support of its Motion, along with fourteen documents that Nationwide requests the Court take notice of. ECF No. 13 ("Request for Judicial Notice" or "RJN"); ECF No. 13-1 ("RJN Exhibits"). Valenzuela filed an Opposition to the Motion and an Opposition to the Request for Judicial Notice on May 4, 2023. ECF No. 17 ("MTD Opp'n"); ECF No. 17-1 ("RJN Opp'n"). Nationwide filed a Reply in Support of the Motion to Dismiss and a Reply in Support of the Request for Judicial Notice on May 11, 2023. ECF No. 18 ("MTD Reply"); ECF No. 19 ("RJN Reply"). Nationwide filed a Notice of Supplemental Authority on May 30, 2023. ECF No. 22. Nationwide filed a second Notice of Supplemental Authority on July 18, 2023. ECF No. 27.

The Court held a hearing on the Motion to Dismiss and Request for Judicial Notice on June 15, 2023.

REQUEST FOR JUDICIAL NOTICE

I. Applicable Law

A court may judicially notice facts that: "(1) [are] generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). Under this standard, courts may judicially notice "undisputed matters of public record," but generally may not notice "disputed facts stated in public records." Lee v. City of Los Angeles, 250 F.3d 668, 690 (9th Cir. 2001), overruled on other grounds by Galbraith v. County of Santa Clara, 307 F.3d 1119, 1125-26 (9th Cir. 2002).

II. Discussion

Here, Nationwide requests judicial notice of fourteen documents, the RJN Exhibits, which Nationwide describes as complaints filed by Valenzuela in Los Angeles County Superior Court and the United States District Court for the Central District of California. See RJN at 2-3. Valenzuela disputes the relevance of these documents, and notes that "[t]here is no prohibition against suing multiple parties in different lawsuits for separate and distinct" violations of the law.² See RJN Opp'n at 1-2. However, Valenzuela does not dispute that the RJN Exhibits are indeed what Nationwide describes them as. See generally RJN Opp'n.

The Court finds that it is an undisputed matter of public record that the RJN Exhibits exist and were filed by Valenzuela in various courts as Nationwide describes. See Lee, 250 F.3d at 690. Accordingly, the Court will take judicial notice that these documents exist and are as Nationwide describes. See id. (a court may take judicial notice of the "existence" of a court document, "which is not subject to reasonable dispute over its authenticity."). The Request for Judicial Notice is GRANTED.

MOTION TO DISMISS

I. Applicable Law

Nationwide brings its Motion pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6)"). See Motion at 2. Federal Rule of Civil Procedure 12(b)(6) allows a party to seek to dismiss a complaint for "failure to state a claim upon which relief can be granted." "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.' " 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 has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. Labels, conclusions, and "formulaic recitation of the elements of a cause of action" are insufficient. Twombly, 550 U.S. at 555, 127 S.Ct. 1955.

The determination of whether a complaint satisfies the plausibility standard is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679, 129 S.Ct. 1937. Generally, a court must accept the factual allegations in the pleadings as true and view them in the light most favorable to the plaintiff. Park v. Thompson, 851 F.3d 910, 918 (9th Cir. 2017); Lee v. City of Los Angeles, 250 F.3d 668, 679 (9th Cir. 2001). But a court is "not bound to accept as true a legal conclusion couched as a factual allegation." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955).

A properly pleaded complaint must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Although fair notice alone is not sufficient—a complaint must also plausibly state a claim as described above—fair notice is necessary for a complaint to survive a Rule 12 Motion. See id.

As a general rule, leave to amend a dismissed complaint should be freely granted unless it is clear the complaint could not be saved by any amendment. Fed. R. Civ. P. 15(a); Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). A "district court may dismiss without leave where a plaintiff's proposed amendments would fail to cure the pleading deficiencies and amendment would be futile." Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1041 (9th Cir. 2011).

II. Discussion

Valenzuela brings claims under two different sections of the California Invasion of Privacy Act (CIPA), Section 631 and Section 632.7. See Compl. ¶¶ 26-37. Although Section 631 and Section 632.7 are Penal Code statutes, the Penal Code authorizes civil liability for violations. See Cal. Penal Code § 637.2.

Nationwide's Motion seeks dismissal of both claims. See MPA at 8. As discussed below, the Court finds that Valenzuela has stated a claim under Section 631 but has not stated a claim under Section 632.7.

A. Valenzuela has stated a claim that Nationwide aided Akamai in violating Section 631 (first cause of action).

Section 631 has been interpreted by California courts as containing three different clauses which cover "three distinct and mutually independent patterns of conduct."³ Tavernetti v. Superior Ct., 22 Cal. 3d 187, 192, 148 Cal.Rptr. 883, 583 P.2d 737 (1978). The three patterns of conduct that Section 631 prohibits are: (1) "intentional...