Order Submitted MatterCal. Super. - 6th Dist.August 9, 2019Envelope: 4812514 l7 18 19 20 2| 22 23 24 25 26 27 28 ATTILA CSUPO, et al., Plaintiffs, vs. ALPHABET, INC., Defendant. #va the Court CA County oi Santa Clara ‘ DEPUTY e Jae Vizconde SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA Case No.: 19CV352557 ORDER AFTER HEARING ON JULY l7, 2020 Demurrer by Defendant Alphabet, Inc. to the First Amended Complaint The above-entitled matter came on regularly for hearing 0n Friday, July 17, 2020 at 9:00 am. in Department 1 (Complex Civil Litigation), the Honorable Brian C. Walsh presiding. A tentative ruling was issued prior to the hearing. The appearances are as stated in the record. Having reviewed and considered the written submissions 0f all parties and the oral argument presented at the hearing, and being fully advised, the Court orders as follows: This is a putative class action for conversion and quantum meruit, alleging that defendant Alphabet, Inc.’s (“Google”) Android operating system and mobile phone applications passively transfer data using class members’ cellular data allowances without their consent. /// Csupo, et al. v. Alphabet, [nc., Superior Court ofCalifomia, County ofStmta Clara, Case No. 19CV352557 Order Afler Hearing on July I 7, 2020 [Demurrer to the First Amended Complaint] 20 21 22 23 24 2S 26 27 28 Before the Court is Google’s demurrer t0 both claims alleged in the operative Amended Complaint for failure t0 state a Claim. (See Code Civ. Proc., § 430.10, subd. (6).) Plaintiffs Oppose the demurrer. I. Allegations 0f the Operative Complaint Google owns and programs the most popular mobile platform in the world, the Android operating system. (Amended Complaint, fl 17.) Android works 0n a variety 0f mobile devices, including smartphones and tablets. (Ibid) Many 0f the most popular mobile device manufacturers preinstall Android and a suite 0f Google’s mobile applications, 0r “apps,” 011 devices they sell. (Id, 1] 22.) Plaintiffs are California residents who purchased Android mobile devices that they use with monthly cellular data plans from different carriers (namely, AT&T, T-Mobile, Verizon, and Sprint). (Amended Complaint, 1H] 8~10.) The devices they purchased were preloaded with Google’s Android Operating system and a suite 0f its mobile apps and widgets. (Id, 1] 23.) Under their cellular data plans, plaintiffs pay their carriers each month for data allowances, Which are either unlimited 0r fixed. (Id, 1] 26.) When users have a fixed cellular data allowance and exceed it, they are typically charged an overage fee; with a so-called “unlimited” plan, they are still typically subj ect t0 usage quotas and Will have their cellular connection speeds throttled if they exceed such quotas, destroying some fimctionality (such as Video streaming) and significantly impairing overall performance. ([bia’.) When users do not wish t0 use their cellular networks 0r are unable t0 use them, mobile devices can also transfer and receive information over the internet through Wi-Fi connections. (Id, 1] 25.) Many cost-conscious users maximize their time 0n Wi-Fi and use their cellular networks only when Wi-Fi connections are unavailable in order t0 “save” the cellular data allowances available under their monthly carrier plans. (Ibid) Plaintiffs allege that they have property interests in their cellular data allowances. (Amended Complaint, fl 27.) Each quantum 0f an allowance has a fair market value determined by market forces, and plaintiffs have the right t0 exclude others from using their allowances and to determine how to use their allowances and grant, access t0 others through their mobile device C'supo, e! 0/, u Alphabet Ina, Superior Court afCalifiN'nia, Coum'y ofSanm Clam, Case N0. 19CV352557 2 Order/lfier Hearing 0n July I 7, 2020 [Demurrer lo the First Amended Complaint] 24 25 26 27 28 activity. (Ibid) For example, users can grant others access t0 their data allowances and even sell unused allowances through mobile “hotspots.” (Id, 1] 28.) While users impliedly consent t0 the use 0f their cellular data allowances in many situations-for example, when they actively engage with applications that require intemet access while connected only by their cellular plan-plaintiffs allege that Google misappropriates their data allowances through “passive transfers,” meaning information transfers that occur in the background and d0 not result from users’ direct engagement with Google products 0n their devices. (Amended Complaint, 1H] 29-3 1 .) The information acquired by Google through this practice supports the company’s product development and lucrative targeted advertising business. (Id, 1] 7.) Plaintiffs allege that none 0f the policies governing individuals’ use 0f Google’s operating system, apps, 01' widgets disclose that Google appropriates users’ cellular data allowances t0 transmit information when they are not actively using its products. (1d,, 1H] 32-37.) Nevertheless, Google designed its operating system and applications t0 extract large volumes 0f infonnation from users’ devices in this fashion. (1d,, 11 38.) These passive transfers occur in a variety 0f ways, including when mobile devices are in a completely idle state, meaning they are stationary, untouched, and with all apps closed. (1d,, 1H 39-47.) Such transfers are significantly more frequent 0n Android devices than during comparable use 0f an iPhone without Android 0r Google applications installed. (Id, 1H] 42-47.) Although Google could program its software t0 aIlow users t0 enable passive transfers only when they are 0n Wi-Fi connections, it instead has chosen t0 simply take advantage 0f users’ cellular data allowances. (Id, 1] 40.) Based 011 these allegations, plaintiffs bring claims for (1) conversion and (2) quantum memit 0n behalfof a putative Class 0f Californians “who have used mobile devices running the Android operating system t0 access the internet through cellular data plans provided by mobile carriers.” (Amended Complaint, 1] 49.) They seek an award Ofthe value 0f the cellular data allowances Google used t0 obtain information for its own benefit. (1d,, 1[ 72.) / / / / / / / / / Cmpo, et (7f. v. Alphabet. Ina. Superior Court ofCalifbrnia, County ofSanm Clam, Case N0. 19CV352557 3 Order Affer Hearing 0n July 17, 2020 [Dcmurrer t0 the Firs: Amended Complaint] 19 20 21 22 23 25 26 27 28 II. Legal Standard The function of a demurrer is t0 test the legal sufficiency 0f a pleading. (Tm. Of Capital Wholesale Elec. Etc, Fund v, Shearson Lehman Bros. (1990) 221 Cal.App.3d 617, 621 .) Consequently, “[a] demurrer reaches only t0 the contents 0f the pleading and such matters as may be considered under the doctrine ijudicial notice.” (South Shore Land C0. v. Petersen (1964) 226 Cal.App.2d 725, 732, internal citations and quotations omitted; see also Code Civ. Proc., § 430.30, subd. (21).) “It is not the ordinary function 0f a demurrer t0 test the tmth 0f the plaintiff’s allegations 0r the accuracy with which he describes the defendant’s conduct. Thus, the facts alleged in the pleading are deemed t0 be true, however improbable they may be.” (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958, internal citations and quotations omittad.) In ruling 0n a demurrer, the allegations 0f the complaint must be liberally construed, with a View t0 substantial justice between the parties. (Glennen v. Allergan, Inc. (201 6) 247 Cal.App.4th 1, 6.) Neveflhelesg while “[a] demurrer admits all facts properly pleaded, [it does] not [admit] contentions, deductions 0r conclusions 0f law 0r fact.” (George v. Automobile Club ofSouflzern Caljfbrnia (201 1) 201 Cal.App.4th 1112, 1120.) A demurrer will lie where the allegations and matters subj ect to judicial notice clearly disclose a defense 01‘ bar t0 recovery. (Casterson v. Superior Court (Cardoso) (2002) 101 Cal.App.4th 177, 183.) III. Request for Judicial Notice In support 0f its demun‘er, Google requests judicial notice 0f its Terms 0f Service and certain incorporated policies and disclosures. This request, which is unopposed, is GRANTED. (Evid. Code, § 452, subd. (11); Marina Tenants Assn. v. Deauville Marina Development C0. (1986) 181 Cal.App.3d 122, 130 [judicial notice 0f a complete lease was appropriate where complaint relied 0n portions 0f the lease].) / / / / / / / / / Csupo, e! al. V‘ Alphabet, Inca. Superior Court ofCaiifinmia, County ofSanm C/ara, Case N0» 19CV352557 4 OrderAfter Hearing 0n Jm'y 1 7, 2020 [Dcmurrer m [he Firs! Amended Compiamr] 20 21 22 23 24 26 27 28 IV. Analysis Google urges that plaintiffs fail t0 state a claim for conversion because they consented t0 the alleged data use and fail t0 allege a cognizable propefiy interest in their data allowances, interference with any such interest by Google, 01‘ damages resulting from Google’s practices. It contends that because plaintiffs’ claim for quantum meruit is derivative 0f their claim for conversion, the quantum memit claim fails as well. A. Consent As an initial matter, Google contends that plaintiffs consented t0 the data use at issue by accepting Google’s Privacy Policy, which is incorporated by reference in its Terms 0f Sewice. As alleged in the Amended Complaint, these documents govern the use 0f the Google services at issue and form a contract between the partiesv (Amended Complaint, 1W 32-33.) The Privacy Policy states: We collect information about the apps, browsers, and devices you use t0 access Google services. We collect this information when a Google sewice 0n your device contacts our sewers-for example, when you install an app from the Play Store 01‘ when a service checks for automatic updates. If you’re using an Android device with Google apps, your device periodically contacts Google servers t0 provide information aboutyour device and connection t0 our services. (Amended Complaint, 11 34, emphasis added.) Google contends that the emphasized language constitutes an “overarching consent” t0 Google periodically sending data from a user’s Android device t0 Google’s server. However, as urged by plaintiffs, such consent is limited t0 the sending 0f “infonnation about [a user’s] device and connection t0 [Google’s] services,” which the Privacy Policy goes 0n t0 explain “includes things like your device type, carrier name, crash reports, and which apps you’ve installed.” The allegations 0f the Amended Complaint suggest that a much broader range ofinformation is collected by Google, and plaintiffs urge in their opposition that this is so.‘ (See Opp., p. 18, fn. 5.) Users’ consent t0 some data transfers does not establish that any and all transfers by Google 1 Indeed, Google’s Privacy Policy itself confirms that Google collects other categories 0f information. While the assefiedly “overarching consent" discussed above is set forth in a section of the Privacy Policy discussing Google’s collection of infonnation about “Your apps, browsers, and devices,” other sections ofthe policy address Google’s collection 0f information about “Your activity” and “Your location information.” Csupo, er al. M Alphabet, Ina, Superior Court ofC'alafomia. County ofSrmm Clam, Case N0. 19CV352557 OrderAficr Hearing 0n Jmfy 1 7, 2020 [Demurrer £0 [he First Amended C0mp1m'nt] 2] 22 23 24 26 27 28 were authorized. (See Duke v. Superior Court (Klis) (2017) 18 Cal.App.5th 490, 506 [“Ifa defendant is authorized t0 make a specific use 0f a plaintiff’s property, use in excess 0f that authorized may subj ect the defendant t0 liability for conversion, if such use seriously violates another’s right t0 control the use 0f the property.”], quoting Thomas et 31., Cal. Civil Practice Guide: Torts (2017) Methods 0f Converting Property, § 15:8.) Google further argues that plaintiffs agreed t0 a range 0f more specific data transfers as set forth in other terms and disclosures (for example, that Google’s Chrome web browser may automatically send information t0 Google in order t0 check for updates and that users’ devices will send usage and crash reports t0 Google t0 help improve the Android system). Again, however, whether these disclosures, taken together, address all 0f the data transfers that Google carries out is a factual issue that cannot be resolved based 011 the allegations 0f the Amended Complaint alone, and one that Google does not attempt t0 comprehensively address in the memoranda supporting its demun‘er. Because a demun‘er does not lie as t0 a pofiion 0f a cause 0f action (Daniels v. Select Poriffolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1167), Google’s demurrer 0n the ground that plaintiffs consented t0 the data transfers at issue must fail. Google correctly notes that lack of consent is an element ofa conversion claim that plaintiffs Will ultimately bear the burden t0 prove (CACI N0. 2100 (2020 rev.)); however, at this juncture they need only allege the ultimate fact that they did not consent t0 the transfers at issue (see Birke v. Oalwvooa’ Worldwide (2009) 169 Ca1.App.4th 1540, 1548 [with limited exceptions, the mles ofpleading require n0 more than “general allegati0n[s] 0f ultimate fact”]). Because Google’s demun‘er 011 this ground fails for the reasons discussed above, the Coun need not address plaintiffs’ arguments that any consent they provided to data transfers was limited t0 transfers initiated by active use 0f their devices 01‘ t0 transfers over Wi-Fi, as Opposed t0 using cellular data allowances. B. Property Interest Google also (lemurs 0n the ground that cellular data allowances are not propeny capable 0f conversion. Csupo, et (ll. v. Aiphabet, 1nd,, Superior Court ofCaIij‘bl'nia, County QfSanla Clam, Case N0. 19CV352557 6 Order Afier Hearing on July 1' 7, 2020 [Demurrer t0 1/16 First Amended Complaint] l9 20 21 22 23 24 25 26 27 28 As recently described by the Supreme Court 0f California, “[c]0nversi0n is an ‘ancient theory 0f recovery’ with roots in the common law action 0f trover” (a remedy against a finder 0f lost goods who refused t0 return them t0 the owner). (Van's v. Lamperr (2019) 7 Cal.5th 1 14], 1 150, citations omitted.) Today, the tort “is understood more generally as ‘the wrongful exercise 0f dominion over personal property 0f another.’ ” ([bz’d.) “As it has developed in California, the tort comprises three elements: ‘(a) plaintiff’s ownership 0r right t0 possession 0f personal property, (b) defendant’s disposition 0f property in a manner inconsistent with plaintiff’s property rights, and (c) resulting damages.’ ” ([bz’d.) California’s Civil Code defines property rights “very broadly” (GS. Rasmussen & Associates, Inc. v. Kaiitta Flying Service, Inc, (9th Cir. 1992) 958 F.2d 896, 902) t0 constitute “the right 0f one 0r more persons t0 possess [a thing] and use it t0 the exclusion ofothers.” (Civ. Code, § 654; see also Civ. Code, § 655 [“There may be ownership 0f all inanimate things which are capable 0f appropriation 0r 0fmanual delivery; 0f all domestic animals; of all obligations; 0f such products 0f labor 01' skill as the composition 0f an author, the good will 0f a business, trade marks and signs, and 0f rights created 0r granted by statute.”]; Civ. Code, § 663 [“Every kind 0f property that is not real is personal.”].) “Although the question was once the matter 0f some controversy, California law now holds that property subject t0 a conversion claim need not be tangible in form; intangible property interests, too, can be converted.” (Van's v. Lampert, supra, 7 Ca1.5th at pp. 1151.) “Neither legal titls nor absolute ownership 0f the property is necessary.” (Farmers Ins. Exchange v. Zerin (1997) 53 Ca1.App.4th 445, 452.) T0 state a claim for conversion, “[a] party need only allege it is entitled t0 immediate possession ar the time Qf conversion.” (Ibid, italics original, internal citations and quotations omitted.) Thus, when it comes t0 intangible property, the key question is “whether someone is entitled t0 exclusive use 01' possession 0f the thing in question.” (GS. Rasmussen & Associates, Inc. v. Kalitta Flying Service, Ina, supra, 958 F.2d at p. 902.) “[T]he ‘specific thing’ at issue must be a thing t0 which the plaintiff has a right 0f ownership 0r possession-a right With which the defendant has interfered by Virtue 0f its own disposition 0f the propefiy.” (Van's v. Lamper’t, supra, 7 Cal.5th at p. 115 1 .) InteIpreting California law, the Court 0f Appeals for the Ninth Csupo, er (1/. v. A/phaber, Ina, Superior Cour! Q/‘Cafgfomm, County ofSanta Clam, Case N0. 19CV352557 7 Order Afler Hearing on July l7, 2020 [Demur‘rer t0 the First Amended Complaint] 24 25 26 27 28 Circuit has identified “three criteria [that] must be met before the law will recognize a property right: First, there must be an interest capable 0f precise definition; second, it must be capable 0f exclusive possession 0r control; and third, the putative owner must have established a legitimate claim to exclusivity.” (GS. RaSmussen & Associates, Inc. v. Kalizra Flving Service, Ina, supra, 958 F.2d at p. 903.) California courts have found that rights including a state liquor license, rights t0 water and electricity, rights in a professional football franchise, and rights t0 a book title constitute property rights. (Id. at pp. 902-903; see also Hernandez v. Lopez (2009) 180 Cal.App.4th 932 [restaurant owners stated a claim for conversion or trespass against prospective buyers 0f a restaurant who purported t0 resell the restaurant t0 a third party without satisfying the terms 0f their own purchase].) Similarly, federal cases hold that rights t0 operate a modified plane pursuant t0 a “Supplemental Type Certificate” (GS. Rasmussen & Associates, Inc. v. Kalz'tta Flying Service, Ina, supra, 958 F.2d 896) and rights afforded t0 a registrant 0f an internet domain name (Kramer; v. Cohen (9th Cir. 2003) 337 F.3d 1024, 1030) are property rights supporting a claim for conversion. (But see 1n re Forchion (201 1) 198 Cal.App.4th 1284, 1308 [stating in dictum that “a domain name is not property, but rather the product 0f a contract for services between the registrant and the regist1‘a1"’].) By contrast, in Moore v. Regents 0f University QfCaszomia (1990) 51 Ca1.3d 120, the Califomia Supreme Court held that where a patient “clearly did not expect to retain possession 0f his cells following their removal” and had no ownership interest in the cells 0r derivative products under applicable law, the patient did not have a property interest in the cells that would support a claim for conversion. (Moore v. Regents Qf University qf'Caléfomia (1990) 51 Cal.3d 120, 136437.) In deciding whether t0 apply “a very general theory 0f liability [such as conversion] in a new context” (Moore v. Regents ofUniverSity QfCalifomia, supra, 51 €211.36 at pp. 135-136), coufls have considered the policy concerns raised (ibid) as well as the availability 0f other remedies for the harm alleged (Voris v. Lampert, supra, 7 Ca1.5th at pp. 1156-1 157). While recognizing that it may be inappropriate t0 mcognize a claim for conversion where “newer economic tofis have developed that may better take into account the nature and uses ofintangible property, the interests at stake, and the appropriate measure 0f damages,” courts have confinned Csupa. el (1!. v. AJp/mbct, Ina, Superior Court ofCa/ifbmia, County Qmeztu Clara, Case N0. 19CV352557 8 Order Afier Hearing 0n July 1 7, 2020 [Demurrer Io the First Amended Complaint] 20 2| 22 25 26 27 28 that “if the law 0f conversion can be adapted t0 particular types ofintangible propefiy and will not displace other, more suitable law, it may be appropriate to do so.” (Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 210, quoting Fremont Indemnity C0. v. Fremont Genera! Corp. (2007) 148 Cal.App.4th 97, 124-125.) One type 0f intangible property that commonly supports a claim for conversion in California is money. But the law has been careful t0 distinguish proper claims for the conversion 0f money from other types 0f monetary claims more appropriately dealt with under other theories of recovery. Thus, although our law has dispensed with the 01d requirement that “each coin 0r bill be earmarked,” it remains the case that “money cannot be the subject 0f an action for conversion unless a specific sum capable 0f identification is involved.” (Van's v, Lampert, supra, 7 Cal.5th at p. 1 151; citations omitted.) The simple failure t0 pay money owed does not constitute conversion; rather, “cases recognizing claims for the conversion 0fmoney typically involve those Who have misappropriated, commingled, 0r misapplied specific funds held for the benefit 0f others.” (Ibid. at pp. 1 151~1 152, intemal citations and quotations omitted.) Thus, “a mere contractual right 0f payment, without more, will not suffice” t0 create a property interest supporting a claim for conversion. (Farmers Ins. Exchange v. Zerin, supra, 53 Cal.App.4th at p. 452.) “Contractual provisions may, 0f course, determine whether the plaintiff has a possessory right t0 certain funds in the defendant’s hands.” (Vorz‘S v, Lampert, supra, 7 Cal.5th at p. 1152 [holding that an employee’s claim to earned wages is not one for conversion; “The employee’s claim is not that the employer has wrongfully exercised dominion over a specifically identifiable pot 0f money that already beiongs t0 the employee. . .. Rather, the employee’s claim is that the employer failed t0 reach into its own funds t0 satisfy its debt.”].) Here, plaintiffs allege they have propeny interests in their data allowances and have the right t0 exclude others from using them. (Amended Complaint, 1] 27.) The telms 0f their contracts with their carriers, which may 01' may not support these allegations, are not before the Court? Google contends that a mere contractual right can never support a claim for conversion, 2 Google’s attempts 10 characterize the nature 0f cell phone data plans and their features are unsupported by any request for judicial notice and must be disregarded at this juncture. Csupo, e! (II. v. Alphabet, 1:70,, Superior Court QfCaizfornz'a, County Qmezm Cfnm, Case N0, 19CV352557 9 Order Afier Hearing 0n July I 7, 2020 [Dcmurrer to t/ze First Amended Complaint] 26 27 28 citing authority addressing a “contractual right ofpayment.” (Farmers Ins. Exchange v. Zerin, supra, 53 Cal.App.4th at p. 452, emphasis added.) However, as stated above, “[C]011t1‘actua1 provisions may,” in fact, “determine Whether the plaintiff has a possessory right” t0 certain property, including intangible property such as money. (Van's v. Lamperr, supra, 7 Cal.5th at p. 1152.) Welco Electronics, Inc, v. Mora (2014) 223 Cal.App.4th 202 is illustrative in this regard. There, the Court 0f Appeal affirmed a judgment 0f conversion against a service provider who wrongfully made charges t0 plaintiff’ s credit card account, which were paid t0 the service provider. The Court 0f Appeal explained: Plaintiff had a property right in its credit card account because plaintiff‘s interest was specific, plaintiff had control over its credit card account, and plaintiff had an exclusive claim t0 the balance in the account. (See Kremen v. Cohen, supra, 337 F.3d at p. 1030.) Defendant Obtained the money from the credit card company. As a result, plaintiff became indebted t0 the credit card company. Thus, part 0f plaintiff’s credit balance with the credit card company was taken by defendant, and what resulted was an “unauthorized transfer” to defendant 0f plaintiff’s property rights-z'.e., money from the available credit line belonging to plaintiff with the credit card company. [(Citation.)] That the taking was something that affected plaintiff’s rights with a third party does not mean that there has not been a conversion 0f intangible property. (Welco Electronics, Inc. v. Mora, supra, 223 Cal.App.4t11 at pp. 21 14412, emphasis added.) Welco specifically rej ected the argument that the defendant’s actions were akin t0 a dispute over monies owed under a contract: Without citing t0 legal authority, defendant contends that if the misappropriation 0f a credit card that occurred here constitutes a conversion, then any transaction involving a credit card that leads t0 a dispute is subject t0 a cause 0f action for conversion. Defendant gives examples 0f what might be conversions under this hypothesis: persons using a credit card t0 purchase 0r pay for goods, medical bills, 01‘ lawyer bills, and disputes later afise regarding the quality of the goods, fault concerning the medical treatment, 0r the appropriateness 0f the legal bills. This argument lacks merit. A person’s willing use 0f a credit card t0 pay for goods 0r services has no relationship t0 what occurred here. Plaintiff did not consent t0 its credit card 0r its information being used by 0r 0n behalf 0f defendant. This case does not involve “the simple failure t0 pay money 0wed[, which] does not constitute conversion”, 1101‘ does it concern a simple overcharge, which also does not constitute a conversion. (Welco Electronics, Inc. v. Mora, supra, 223 Cal.App.4th at p. 215, citations omitted.) Csupo. e! al. v. A/plmbel, Ina, Superior Court QfCalrfomia, County ofSanm Clam, Case N0. 19CV352557 Order Afler Hearing 0n July 1 7, 2020 [Dcmurrer t0 the First Amended Complaint] 23 24 25 27 28 Here, assuming that plaintiffs correctly characterize their rights t0 their data allowances, they are akin t0 the credit balance at issue in Welco. (See also Fremont Indemnity C0. v. Fremont General Corp, supra, 148 Ca1.App.4th at pp. 125-126 [recognizing claim for conversion 0f a net operating loss; 0n demurrer “we need not decide whether in these Circumstances the cause of action should differ in any material respect from a traditional conversion action”]; In re Easysaver Rewards Litigation (S.D. Cal. 2010) 737 F.Supp.2d 1159, 1180 [plaintiffs stated a claim for conversion based 0n the misappropriation 0f their payment information, which was used t0 make unauthorized debits from their financial accounts]; Izsak v. Dmflkings, Inc. (ND. 111. 2016) 191 F.Supp.3d 900, 909, fn. 6 [dismissing conversion claim based 0n the receipt 0f unsolicited text messages without prejudice, applying a de mz‘m‘mz’s doctrine, but noting that with different allegations as t0 injury-wsuch as data overage chargesfla plaintiff might be able t0 state such a claim].) While intangible, the allowances are capable 0f precise definition, at least conceptually} and are alleged t0 be subject t0 plaintiffs’ exclusive control. T0 take a simpler example than the theory alleged by plaintiffs, if a defendant gained totally unauthorized access t0 plaintiffs’ data allowances and used thsm for its own benefit, these actions would suppofi a claim for conversion. (See Thrafly-Tel, Inc. v. Bezenek (1996) 46 Cal.App.4th 1559 [phone company’s judgment against plaintiffs whose teenage sons used plaintiffs’ account infomlation t0 make long distance phone calls without paying for them upheld 0n a theory 0f trespass t0 chattels, ifnot conversion]; see also DIRECTV, Inc. v. Pahnke (ED. Cal. 2005) 405 F.Supp.2d 1182, 1189~1 190 [defendant liable for conversion based 011 unauthorized interception 0f satellite broadcastj.) 1t is unclear what other, “more suitable law” (Welco Electronics, Inc. v. Mora, supra, 223 Cal.App.4th at p. 210) would apply in such a case, and n0 policy concerns would appear t0 caution against the adaptation 0f the tort 0f conversion t0 this context. 3 Google itself states in its reply brief that “Mike money, the purported property at issue is an intangible right measured in discrete ullilS-in this case, the amount 0f Plaintiffs’ cellular data allowances used for ‘passive’ data transfers t0 Google.” C'supo, er (1/. v. Alphabet, Ina, Superior Court ofCalifm'nia, Comply afS'rmm Clam, Case N0. 19CV352557 l 1 Order After Hearing on July 17, 2020 [Demurrer £0 the First Amended Compfainf] 20 2| 22 23 24 26 27 28 The theory alleged by plaintiffs is less straightforward, because it acknowledges that plaintiffs consented t0 Google’s use 0f their data allowances for some purposes. Google analogizes plaintiffs” themy t0 an overcharge theory, an analogy which some courts have relied 0n t0 rej ect a conversion claim with little analysis. (See McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1492 [stating that “Plaintiffs cite n0 authority for the proposition that a cause 0f action for conversion may be based 0n an overcharge” and apparently deeming the argument waived].) 111 the Court’s view, these authorities simply recognize the proposition that circumstances “involv[ing] a simple creditor-debtor relationship, in which defendants are allegefl tp have violated their obligations t0 repay the subj ect debts” 0r disputes over a mere contractual right t0 payment d0 not support a claim 0f conversion. (Kim v. Westmoore Partners, Inc. (201 1) 201 Cal.App.4th 267, 285; see also Worldwide Travel, Inc. v. Travelmare US, Inc. (S.D. Ca1., Mar. 9, 2015, N0. 14-CV-00155-BAS DHB) 2015 WL 1013704, at *10 [distinguishing Welco where plaintiffs alleged a dispute over' the amount and appropriateness 0f charges they generally authorized defendants t0 collect in exchange for advertising services].) In such cases, the plaintiff can pursue a claim for breach 0f contract 01' other more appropriate cause 0f action t0 recover monies owed. Here, by contrast, n0 monetary debt 0r financial transaction between the parties is at issue, and it is not apparent what remedy plaintiffs would have for Google’s unauthorized use 0f their data allowances, if not an action for conversion. The Court is not persuaded that simply because the scope 0f plaintiffs’ consent t0 Google’s use 0f their data allowances is disputed, plaintiffs cannot state a claim for conversion. (See Bally v. State Farm Life Insurance Company (ND. Cal., Aug. 19, 2019, N0. 18-CV~04954- CRB) 2019 WL 3891 149, at *4 [recognizing conversion claim despite dispute over which deductions were authorized by the pafiies’ contract]; Brighton Trustees v. Transamerica Life Insurance Company (CD. CELL, NOV. 4, 2019, N0. 219CV04210CASGJSX) 2019 WL 5784925, at *10-11 [dispute over scope 0f consent did not prevent plaintiffs from stating a claim for conversion; “This is therefore not a case where, like the relationship between a bank and depositor, the relationship between plaintiffs and Transamerica ‘is that 0f a debtor and creditor.’ ”’]; Welis Fargo Bank, National Association. v. Transamerica Liflz Insurance Csupo, er al. v. Alphabet, Ina, Superior Court ofCa/ifbrnia. County qf'Sanm Clam, Case N0. 1 90/352557 12 OrderAfler Hearing onJuZy 1 7, 2020 [Demurrer to the First Amended Complaint] 22 23 24 25 Company (CD. Cal., Feb. 19, 2020, N0. 219CV06478CASGJSX) 2020 WL 833518, at *12 [following Brighton Trustees].) Finally, analogizing t0 cases involving the conversion 0f money, Google contends that plaintiffs have not identified the exact amount 0f data at issue in their complaint. The Court assumes without deciding that, as in cases involving monetary conversion, plaintiffs must identify the quantity 0f data allowances converted by Google in order t0 obtain a judgment 0n their Claim. However, Google cites only an unpublished federal decision t0 support its argument that such a showing must be made at the pleading stage.4 The Court concludes that this requirement is not properly imposed until plaintiffs have had the benefit 0f some discovery. Accepting plaintiffs’ characterization 0f their rights in their data allowances-as it must at this juncture-the Court finds that plaintiffs plead an intangible propeny interest supporting their claim for conversion. C. Interference with Plaintiffs’ Property Rights and Resulting Harm Google further contends that plaintiffs fail t0 allege it interfered with any property interest in their data allowances 01' caused damage as a result. It correctly notes that plaintiffs d0 not allege whether they have unlimited 01' fixed data allowances, and urges that even if they have fixed allowances, plaintiffs would not be damaged by Google’s conduct unless it caused them t0 incur overage fees 01' actually interfered with their own use 0f dams Plaintiffs respond that, 4 California authorities. have applied this requirement at summary judgment. (See PCO, Inc. v. Clwistensen, Milieu Fink, Jacobs, Glaser, Wei] & Shapira LLP (2007) 150 Cal‘AppAth 384, 3967397 [affirming summary adjudication 0f conversion claim in favor 0f defendant where evidence 0f the sum removed from a residence “reflects amounts varying by millions 0f dollars”]; Vu v. Caig’fomia Commerce Club, Inc. (1997) 58 Cal,App.4th 229, 235 [affirming summary judgment for defendant in card-cheating case due t0 failure t0 identify Specific sums converted: “[T]he gist of plaintiffs” case was that much 0f the money they lost was taken by persons other than the club 01' its employees Any amounts the club may have taken (e.g., Pan~Nine bets confiscated upon discovery 0f cheating) also were not identified.”] .) 5 Consistent with Google’s argument, plaintiffs allege two potential theories 0f interference and/or harm in only hypothetical terms: When users have a fixed cellular data allowance and exceed it, they are typically charged an overage fee. When users have a so-called “unlimited” plan, they are still typically subject t0 quotas 0n their usage and will have their cellular connection speeds throttled if they exceed such quotas. When throttled to reduced speeds, a number 0f functionalities can be lost entirely (Such as video streaming), and [he overall performance 0f the device can be Significantly impaired. Csupo, c! a]. v. Alphabet, Ina, Superior Court Qf'Crzlgforrzirz, Courzry ofSanta Clam, Case N0. 19CV352557 13 Order Afler Hearing 0n July I 7, 2020 [Demm‘rer t0 the First Amended Complaint] 19 20 21 25 26 27 28 because Civil Code section 3336 establishes the market value 0f the property converted as the presumptive measure 0f damages in an action for conversion, they need not allege that they suffered monetary damages 0r suffered any degradation in their service quality. Google’s argument is addressed t0 both the second and third elements of conversion: (2) defendant’s disposition 0f propefly in a manner inconsistent with plaintiff’s property rights and (3) resulting damages. (Van's v. Lamperr, supra, 7 Cal.5th at p. 1150.) With regard t0 the second element, conversion requires “substantial interference 0r ‘an exertion 0f wrongful dominion over the personal propefly 0f another in denial 0f 0r inconsistent with his rights therein.” ” (Heaps v. Heaps (2004) 124 Cal.App.4t11 286, 292, quoting George v. Bekins Van (E: Storage C0. (1949) 33 Cal.2d 834, 837.) “An action for conversion will lie only where the interference is substantial in nature, so that a plaintiff may be able t0 recover the full value 0f the property, in essence forcing a defendant to buy the propefly.” (See Gregory v. City 0f Vallejo (ED. Cal. 2014) 63 F.Supp.3d 117'], 1180, citing Zaslow v. Kroenerr, 29 Ca1.2d 541, 550.) “Where the conduct complained 0f does not amount t0 a substantial interference with possession 01' the right thereto, but consists 0f intemleddling with 01‘ use 0f 01' damages to the personal propefiy, the owner has a cause 0f action for trespass 0r case, and may recover only the actual damages suffered by reason 0f the impairment 0f the property 0r the loss 0f its use." (Zaslow 1A Kroenert, supra, 29 Cal.2d at pp. 55 1-552; see also Thrifty-Tel, Inc. v. Bezenek, supra, 46 Cal.App.4th at pp. 1566-1567; Jordan v. Talbot (1961) 55 Cal.2d 597, 610.) Plaintiffs d0 not squarely address this second element 0f conversion in their opposition papers. However, they argue that conversion does not require interference that entirely prevents a propefiy owner from using his 0r her property, pointing t0 cases involving the conversion 0f licenses and other intangible property capable 0f concument use. (See GS. Rasmussen & Associates, Inc. v. Kalifia Flying Sewice, Ina, supra, 958 F.2d at p. 906 [Supplemental Type Certificate holder stated a claim for conversion where he was “denied a retum on his investment as a condition for granting [the defendant] the right t0 use his STC”]; DIRECTV, Inc. v. Pa/mke, (Amended Complaint, 1] 26.) 1n their opposition, plaintiffs make it clear that they d0 not rely 011 these potential theofies 0f injury at this time, but lake the position that Google’s use of their data allowances constitutes conversion even in the absence 0f such interference 0r harm. CsupoJ er al. v. Alphabet. Ina, Superior Court afCa/Ij‘bmia, County ofSrmm Clam, Case N0. 1’9CV352557 14 OrderAfler Hearing 0n July I 7, 2020 [Demm‘rer t0 the First Amended Complaint] 25 26 27 28 supra, 405 F.Supp.2d at pp. 1 189~1 190 [wrongful interception 0f satellite broadcast which plaintiff had the right t0 distribute constituted conversion].) Google correctly notes that these cases reflect little reasoning with regard to the issue 0f substantial interference. Still, they support plaintiffs’ position that the use 0f data allowances plaintiffs’ have the exclusive right t0 control, without their consent, satisfies the second element 0f the tort 0f conversion. The Court finds that this requirement is satisfied: plaintiffs allege that Google has substantially interfered with their data allowances by using tham without plaintiffs’ consent, contrary t0 plaintiffs’ rights t0 control the use 0f their allowances. Plaintiffs still must allege the separate, third element 0f injury 0r “damages.” Although the words “injury” and “damage” ofien are used interchangeably, a distinction may be made. “Injuw” refers t0 the fact of harm suffered by the plaintiff due to the defendant’s conduct. “Damages” refers t0 the monetary sum that the plaintiff may be awarded as compensation for the injury. T0 recover in tort, the plaintiff must prove the fact 0f proximately caused injury with reasonable certainty. [Otherwise], the plaintiff cannot recover regardless 0f how much evidence was introduced t0 show the measure of the recovery sought by the plaintiff (Lueter v. State QfCalifornia (2002) 94 Cal.App.4th 1285, 13024303; see also Donahue Schriber Realty Group, Inc. v. Nu Creation Outreach (2014) 232 Cal.App.4th 1171, 1184 [“damage is not an essential element 0f a cause 0f action for trespass t0 real property,” although harm is].) Civil Code section 3336 provides that “[t]he detriment caused by the wrongful conversion 0f personal property is presumed t0 be:” First--The value 0f the property at the time 0f the conversion, with the interest from that time, 0r, an amount sufficient t0 indemnify the party injured for the loss which is the natural, reasonable and proximate result of the wrongful act complained 0f and which a proper degree 0f prudence 011 his part would not have averted; and Second--A fair compensation for the time and money properly expended in pursuit 0f the property. “Civil Code section 3336 sets out the presumptive measure 0f damages in conversion, which is rebuttable. . ..” (Dakota Gardens Apartment Investors B v. Pudwill (1977) 75 Csupo, et (1/. u Alphabet. [nag Superior Court ofCalg'fomia, County ofSanm Ciara, Case N0. 19CV352557 15 OrderAfler Hearing rm July I 7, 2020 [Demm'rer lo [lac Firs! Amended Complaint] Cal.App.3d 346, 351, emphasis added.) Section 3336 “does not provide that a plaintiff alleging conversion is entitled to a presumption 0f injury. A conversion plaintiff in California court must still prove ‘the fact 0f proximately caused injury’ ” 01' harm. (Opperman v. Path, Inc. (ND. Cal. 2015) 84 F.Supp.3d 962, 990, citing Lueter v. State ofCalifornia, supra, 94 Ca1.App.4th at p. 1303.) “ ‘Harm,’ under the Restatement Second 0f T0113 means ‘the existence 0f loss 01‘ detriment in fact ofany kind t0 a person ....’ (Rest.2d Torts, § 7, subd. (2), italics added)” (Potter v. Firestone Tire & Rubber C0. (1993) 6 Cal.4th 965, 1006.) Having reviewed the authorities discussed by plaintiffs at oral argument, the Court is persuaded that the hann required t0 support a claim for conversion is slight, and plaintiffs have satisfied this element here by alleging that they wers prevented from using themselves, sharing, 01' even selling the data used by Google. (See Amended Complaint, 1] 27-28.) As noted by plaintiffs, in Lueter v. State 0f Cali ornia, the Court oprpeal affirmed a judgment 0f $1.50 0n a conversion claim against a law enforcement agency that investigated a motor vehicle accident, whose employees had taken a piece 0f plaintiffs’ tire tread from the scene 0f the accident and discarded it. (See Luster v, State Qdelg‘fbrnM, supra, 94 Cal.App.4th at pp. 1288-1289.) While the court held that the plaintiffs were not entitled t0 “spoliation damages” flowing from their inability t0 use the evidence t0 defend themselves against a lawsuit by other motorists injured in the crash, it confirmed that an award 0f “the value 0f the converted property” is generally an appropriate measure 0f damages in a conversion action. (Id. at p. 1302.) Although this issue was not addressed by the Court 0f Appeal, plaintiffs correctly note that the piece 0f tire tread at issue in Leuter would have had little practical value t0 the plaintiffs in that case, other than as evidence in the lawsuit against them. Still, an award 0f damages in the amount 0f $ 1 .Sprresumably, the value Ofthe tread as determined by the qu'y--was suppofied. In addition t0 Lueter, plaintiffs again cite the federal cases involving the conversion 0f a Supplemental Type Certificate (GS. Rasmussen & Associates, Inc. v. Kalirm Flying Service, Ina, supra, 958 F.2d at p. 906) and a right t0 distribute satellite broadcasting (DIRECTV, Inc. v. Pa/mke, supra, 405 F.Supp.2d at pp. 1189-1 190) t0 support their position. The Court observes CSitpo, <3! a}. u Alphabet, Ina, Superior Court ofCa/szrmfa, Comfy ofS'anta Clam, Case No. 19CV352557 16 Order After Hearing 0n July 1 7, 2020 [Demurrer to the Firs! Amended Complaint] h) 10 12 13 14 16 17 18 I9 20 21 that those cases involve essentially unique forms of intangible property that the plaintiffs were in the business 0f salling t0 others, such that the injury inflicted by a potential customer’s conversion 0f the property without paying for it is apparent. Still, injury was found in these cases even though the plaintiffs presumably retained access t0 some version 0f the certificata and satellite feed at issue, similar t0 the potentially unlimited data allowances here. In any event, here, as in these federal cases, plaintiffs allege that there is a market for the propeny at issue. Plaintiffs accordingly allege the interference and harm required t0 state a claim for conversion. Google’s demuu‘er t0 the first cause 0f action will accordingly be overruled. Finally, plaintiffs argue at length that Civil Code section 33376 “does not permit Google t0 escape liability for conversion by claiming it applied the convened property t0 Plaintiffs’ benefit.” Under that section, “a defendant cannot rebut the presumption [0f the measure 0f damages established by section 3336] by claiming that he applied the converted property to plaintiff” s benefit when he took unlawful possession 0f the property from the baginning.” (Dakota Gardens Apartment Investors B v. Pudwill, supra, 75 Cal.App.3d at p. 352,) “Consequently, t.he effect 0f section 3337 is 1‘0 prevent mitigation when property is stolen from the plaintiff and subsequently applied t0 his benefit.” ([bz'd. , emphasis added.) While it may otherwise be relevant t0 this case, section 3337 does not impact the requirement that plaintiffs plead the element 0f inj ury 01' harm t0 state a Claim 1001‘ conversion, and the Court does not rely 0n this provision in overruling Google’s demurrer. D. Quantum Mcruit Finally, Google urges that plaintiffs’ second cause 0f action for quantum meruit must stand 01‘ fall With the first cause Ofaction. (See McBride v. Boughton (2004) 123 Cal.App.4t11 379, 394 [“When a common count is used as an alternative way 0f seeking the same recovery demanded in a specific cause 0f action, and is based 011 the same facts, the common count is demurrable ifthe cause 0f action is demurrable.”].) However, the first cause 0f action survives 5 Section 3337 provides that “[t]he presumption declared by the last section cannot be repelled, in favor 0f one whose possession was wrongful from the beginning, by his subsequent application 0f the property t0 the benefit 0f the owner, without his consent.” Csupo, ez‘ m". v. Alphabet, 1110., Superior Com? ofCafI'form‘a, County omezfa CJam, Case N0. 19CV352557 17 Order Aji‘er Hearing 0n Juiy I 7, 2020 [Denuu‘rer Io the First Amended Complainfl 19 2O 21 for the reasons discussed above. As Google raises no other grounds in support 0f it's demurrer t0 plaintiffs’ claim for quantum memit, the demurrer must be overmled as t0 this claim as well. V. Conclusion and Order Google’s demurrer t0 the Amended Complaint is OVERRULED. £31,, (i 9%sz Honorable Brian C. Walsh Judge 0fthe Superior Conn 1T IS SO ORDERED. Dated: m ’3ch Csupo, e: al. v. Alphabet, Inc” Superior Court Qan/zfomia, County ofSama Clam, Case No. 19CV352557 '8 Order/ffter Hearing 0n July I 71 2020 [Dcnrzn’l'cr t0 {lie First Amended Complaint] SUPERIOR COURT OF CALIFORNIA COUNTY 0F SANTA CLARA DOWNTOWN COURTHOUSE 191 NORTH FIRST STREET SAN JOSE, CALIFORNIA 951 13 CIVIL DIVISION 9,”..AUG 2 4 2020 FILE copY . "Cler; mof the Court SUPGF'QL'COU CA County oi Santa 0mm BY I f / DEPUTY K gm Jee VizcondeRE: Csupo, et al. v. Alphabet, Inc. r” Case Number: 190V352557 PROOF OF SERVICE ORDER AFTER HEARING ON JULY 17, 2020 ( Demurrer by Defendant Alphabet, Inc. to the First Amended Complaint ) was delivered to the parties listed below the above entitled case as set forth in the sworn decIaration below. If you, a party represented by you, 0r a witness t0 be called 0n behalf of that party need an accommodation under the American with Disabilities Act, please contact the Court Administrator's office at (408) 882-2700, or use the Court's TDD line (408) 882-2690 0r the VoicefTDD California Relay Service (800) 735-2922. DECLARATION OF SERVICE BY MAIL: | declare that 1 served this notice by enclosing a true copy in a sealed envelope. addressed to each person whose name is shown below, and by depositing the envelope with postage fully prepaid, in the United States Mail at San Jose, CA on August 24, 2020. CLERK OF THE COURT, by Ann Vizconde, Deputy, cc: Ann M Ravel Fairmont Plaza10th Floor 50 West San Fernando Street San Jose CA 95113 Whitty Somvichian 101 California 8t 5th Fl San Francisco CA 94111-5800 CW-9027 REV 12/08/16 PROOF 0F SERVICE
