Cohen et al v. Facebook, Inc.

MOTION to Dismiss Class Action Complaint

N.D. Cal.January 11, 2011

COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS COOLEY LLP MICHAEL G. RHODES (116127) (rhodesmg@cooley.com) MATTHEW D. BROWN (196972) (brownmd@cooley.com) 101 California Street, 5th Floor San Francisco, CA 94111-5800 Telephone: (415) 693-2000 Facsimile: (415) 693-2222 Attorneys for Defendant FACEBOOK, INC. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION ROBYN COHEN, SHANNON STOLLER, CHRISTOPER MARSHALL, BRYAN SIGLOCK, and DEBRA LEWIN, individually and on behalf of others similarly situated, Plaintiffs, v. FACEBOOK, INC., a Delaware corporation, Defendant. Case No. 10-cv-05282-RS FACEBOOK, INC.’S MOTION TO DISMISS CLASS ACTION COMPLAINT F.R.C.P. 12(b)(6) Date: March 3, 2011 Time: 1:30 p.m. Courtroom: 3 Judge: Richard Seeborg Trial Date: None Set Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 1 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS Page i. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS NOTICE OF MOTION AND MOTION TO DISMISS ...............................................................1 STATEMENT OF RELIEF SOUGHT ........................................................................................1 STATEMENT OF ISSUES TO BE DECIDED ...........................................................................1 MEMORANDUM OF POINTS AND AUTHORITIES ..............................................................2 I. INTRODUCTION...........................................................................................................2 II. STATEMENT OF FACTS ..............................................................................................3 III. APPLICABLE STANDARDS.........................................................................................5 IV. ARGUMENT ..................................................................................................................6 A. Plaintiffs Fail to State a Claim for Common Law or Statutory Misappropriation of the Right of Publicity (First and Second Claims for Relief)..................................................................................................................6 1. Plaintiffs consented to the use of their names and/or likenesses in association with services on Facebook......................................................7 2. Plaintiffs fail to allege that they suffered any injury, a necessary element under both the common law and section 3344..............................9 3. Plaintiffs fail to allege that Facebook used their names and/or likenesses for an “advantage” as required by both the common law and section 3344.....................................................................................10 B. Plaintiffs Cannot State a Claim Under 15 U.S.C. § 1125(a)(1)(A) Since They Cannot Allege a Commercial Interest in Their Name Akin to a Trademark, or Any Injury to Such a Commercial Interest (Third Claim for Relief)................................................................................................................12 C. Plaintiffs Fail to State a Claim for Violation of California Business and Professions Code Section 17200 (Fourth Claim for Relief).................................15 V. CONCLUSION .............................................................................................................18 Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 2 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS TABLE OF AUTHORITIES Page(s) CASES Animal Legal Defense Fund v. Mendes, 160 Cal. App. 4th 136 (2008) ..............................................................................................15 Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) ..........................................................................................................5 Barrus v. Sylvania, 55 F.3d 468 (9th Cir. 1995) ...................................................................................... 12,13, 14 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .................................................................................................. 5, 10, 13 Californians for Disability Rights v. Mervyn’s, LLC, 39 Cal. 4th 223 (2006).........................................................................................................15 Camacho v. Auto. Club of S. Cal., 142 Cal. App. 4th 1394 (2006) ............................................................................................16 Cel-Tech Commc’ns., Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163 (1999).........................................................................................................16 Colligan v. Activities Club of New York, Ltd., 442 F.2d 686 (2d Cir. 1972) ................................................................................................14 Condit v. Star Editorial, Inc., 259 F. Supp. 2d 1046 (E.D. Cal. 2003) ..................................................................... 12,13, 14 Craigslist, Inc. v. Naturemarket, Inc., 694 F. Supp. 2d 1039 (N.D. Cal. 2010)..................................................................................7 Cromer v. Lounsbury Chiropractic Offices, Inc., 866 F. Supp. 960 (S.D. W. Va. 1994) ..................................................................................15 Davis v. Ford Motor Credit Co., 179 Cal. App. 4th 581 (2009) ..............................................................................................16 Drum v. San Fernando Valley Bar Ass’n, 182 Cal. App. 4th 247 (2010) ..............................................................................................17 Engalla v. Permanente Med. Group, Inc., 15 Cal. 4th 951 (1997).........................................................................................................17 Facebook, Inc. v. Power Ventures, Inc., No. C 08-05780 JW, 2010 WL 3291750 (N.D. Cal. July 20, 2010)........................................7 Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 3 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS Freeman v. Time, Inc., 68 F.3d 285 (9th Cir. 1995) .................................................................................................18 Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) .............................................................................................17 Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134 (2003).......................................................................................................18 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ............................................................................................................16 Mortensen v. Bresnan Commc’n, LLC, No. CV 10-13-BLG-RFC, 2010 WL 5140454 (D. Mont. Dec. 13, 2010) ...............................9 Navarro v. Block, 250 F.3d 729 (9th Cir. 2001) .................................................................................................5 Newcombe v. Adolf Coors Co., 157 F.3d 686 (9th Cir. 1998) ..................................................................................... 6, 10, 11 Ott v. Ingenix, Inc., 333 F. Appx. 342 (9th Cir. 2009)................................................................................... 13, 14 Pesina v. Midway Mfg. Co., 948 F. Supp. 40 (N.D. Ill. 1996) ..........................................................................................15 Slivinsky v. Watkins-Johnson Co., 221 Cal. App. 3d 799 (1990) ...........................................................................................9, 10 Smith v. Montoro, 648 F.2d 602 (9th Cir. 1981) ...............................................................................................13 Swartz v. KPMG LLP, 476 F.3d 756 (9th Cir. 2007) .............................................................................................5, 7 Troyk v. Farmers Group, Inc., 171 Cal. App. 4th 1305 (2009) ............................................................................................15 Van Ness v. Blue Cross of Cal., 87 Cal. App. 4th 364 (2001) ................................................................................................18 Waits v. Frito-Lay, Inc., 978 F.2d 1093 (9th Cir. 1992) ....................................................................................... 12, 13 White v. Samsung Electronics America, Inc., 971 F.2d 1395 (9th Cir. 1992) .............................................................................................13 Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 4 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iv. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS Whiteside v. Tenet Healthcare Corp., 101 Cal. App. 4th 693 (2001) ..............................................................................................16 William H. Morris v. Group W, Inc., 66 F.3d 255 (9th Cir. 1995) .................................................................................................12 STATUTES 15 U.S.C. § 45(n) ................................................................................................................................16 § 1125(a)(1) .................................................................................................................passim § 1125(a)(1)(A) ............................................................................................................. 12, 14 § 1127 ........................................................................................................................... 13, 14 California Business and Professions Code § 17200 ........................................................................................................................passim § 17204 ...............................................................................................................................15 California Civil Code § 3344 ..........................................................................................................................passim OTHER AUTHORITIES Federal Rule of Civil Procedure 9(b) .....................................................................................................................................17 12(b)(6)................................................................................................................... 1, 5, 7, 13 Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 5 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS NOTICE OF MOTION AND MOTION TO DISMISS TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on March 3, 2011 at 1:30 p.m. or as soon thereafter as this motion may be heard in the above-entitled court, located at 450 Golden Gate Avenue, San Francisco, California, in Courtroom 3 (17th Floor), Defendant Facebook, Inc. (“Facebook”) will move to dismiss the Class Action Complaint (the “Complaint”) filed by Plaintiffs. Facebook’s Motion is made pursuant to Federal Rule of Civil Procedure 12(b)(6) and is based on this Notice of Motion and Motion, the accompanying Memorandum of Points and Authorities, the Request for Judicial Notice, the Declaration of Ana Yang and accompanying Exhibits filed herewith, and all pleadings and papers on file in this matter, and upon such other matters as may be presented to the Court at the time of the hearing or otherwise. STATEMENT OF RELIEF SOUGHT Facebook seeks an order, pursuant to Federal Rule of Civil Procedure 12(b)(6), dismissing Plaintiffs’ Complaint and each of the four Claims for Relief alleged therein for failure to state a claim upon which relief can be granted. STATEMENT OF ISSUES TO BE DECIDED 1. Because the Complaint fails to state a claim upon which relief can be granted under the California statute on misappropriation of the right of publicity, Civil Code section 3344, should the First Claim for Relief be dismissed? 2. Because the Complaint fails to state a claim upon which relief can be granted under California common law on misappropriation of the right of publicity, should the Second Claim for Relief be dismissed? 3. Because the Complaint fails to state a claim upon which relief can be granted under 15 U.S.C. § 1125(a)(1), should the Third Claim for Relief be dismissed? 4. Because the Complaint fails to state a claim upon which relief can be granted under California Business and Professions Code section 17200, should the Fourth Claim for Relief be dismissed? Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 6 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Facebook is a social network that enables users to connect and share content with their family and friends. On Facebook’s website, each Facebook user (“User”) creates a personal network of Facebook “friends” and also creates a profile page on which to post information that the User wants to share, and on which the User’s friends can also post greetings and other information. To create a profile, a User need only submit his or her name, age, gender, and a valid email address; the User may also, but is not required to, upload a “profile picture.” Facebook enables Users to share information and comments about virtually anything—such as vacation photos, news about their day, or opinions about world events. Users can connect with friends down the street or continents away. Users can also use Facebook to re-connect with old friends who they have lost touch with—a college roommate or a distant cousin. Building a network of friends and maintaining those connections is one of the most fundamental purposes behind Facebook. Facebook is, and has always been, a free service. Each of the named Plaintiffs is alleged to be a Facebook User. Their allegations pertain to the “Friend Finder” service on the Facebook website, which helps Users find their friends so they can connect with them. The Complaint alleges that Facebook published Plaintiffs’ names and/or likenesses in connection with the “Friend Finder” service, thereby violating Plaintiffs’ common law and statutory publicity rights (California Civil Code section 3344), Lanham Act section 1125(a)(1) (preventing false associations with goods or services), and California Business and Professions Code section 17200. Plaintiffs allege that Facebook uses “Friend Finder” to encourage Users to build a larger network of friends, which increases Facebook’s User population, thereby enabling Facebook to demand a higher price for advertising on the website. Plaintiffs’ four claims fail as a matter of law. First, Plaintiffs’ common law and statutory misappropriation claims fail because Plaintiffs consented to the use of their names and/or likenesses in association with Facebook services by registering for and using Facebook. Indeed, the very contractual terms and Facebook principles and policies to which Plaintiffs refer in the Complaint give Facebook permission to use their names and likenesses in the manner alleged. Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 7 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS Further, Plaintiffs have not alleged any injury, nor have they alleged that Facebook used their names and/or likenesses for its “advantage” in the manner required by law. Second, Plaintiffs do not have standing to bring a false association claim under the Lanham Act since they have not and cannot allege a “commercial interest” in their names and/or likenesses that Facebook’s alleged use could have injured, nor have they alleged any actual injury to such a commercial interest. Third, Plaintiffs do not and cannot allege they suffered “injury in fact” and “lost money or property” as a result of unfair competition, and, as such, they lack standing to bring a claim under Business and Professions Code section 17200. Moreover, the Complaint fails to allege facts that would support such a cause of action under the “unlawful,” “unfair,” or “fraudulent” prongs of section 17200. Accordingly, the Complaint should be dismissed for failure to state a claim. II. STATEMENT OF FACTS1 Facebook operates one of the most popular social networking sites in the world. (Compl. ¶ 6.) On Facebook’s website, anyone with access to a computer and an Internet connection can become a Facebook user and create a personal profile page. (Id. ¶¶ 6, 21, 22.) The profile page must include a name, and may, but need not, include a “profile picture” chosen and uploaded by the User.2 On Users’ profile pages, Users can post any information or content they wish, including their interests, education, or updates about what they are doing that day (i.e., “status updates”). (Id. ¶ 22.) Users may also communicate and connect with their friends. (Id. ¶ 21.) To do so, one User must send a request to another Facebook User with whom he wishes to connect, asking the other User to accept him as a “friend.” Once friends, they can both see items on each other’s profile pages. (Id.) For example, friends can see each other’s photos, videos, groups on Facebook to which they belong, or anything else the User chooses to share. (Id. ¶ 22.) Users can 1 This Statement of Facts is based on the allegations in the Complaint, which Facebook assumes as true for purposes of this motion but which Facebook does not thereby admit. 2 Users can and do use a range of photos for their profile pictures, including pets, cars, nature scenes, etc. The Complaint does not allege that the named Plaintiffs uploaded a profile picture that was an actual “likeness” of themselves. The Complaint does not provide information sufficient to confirm Plaintiffs are Facebook users or to locate their profile pages. Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 8 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS also communicate on Facebook through various messaging features, including chat, personal messaging, wall posts, and status updates. (Id.) Facebook is, and has always been, a free service. Facebook earns revenue by selling space on the website for advertisements that appear on the right side of the page a User may be viewing. (Id. ¶¶ 7, 24, 27.) Advertisers can target their advertisements to Facebook Users based on various anonymous demographic criteria (e.g., age, gender, home state, interests). (Id. ¶ 26.) To obtain this space, advertisers place bids. (Id. ¶ 28.) The “Friend Finder” lets a User search through the User’s email contacts to identify people the User may know who are also Facebook Users. (Compl. ¶ 33.) If there is a match, the “Friend Finder” will alert the User, who may then request that the parties become friends. (Id. ¶ 10.) To utilize the service, the User opens the “Friend Finder” application, which contains the User’s e-mail address, and also provides his or her e-mail password, permitting Facebook to search the e-mail contacts within that e-mail account. (Id. ¶ 33.) When a User chooses to use “Friend Finder,” Facebook informs the User that “[w]e may use the email addresses you upload through this importer to help you connect with friends, including using this information to generate Suggestions for you and your contacts on Facebook.” (Id.) Plaintiffs allege that Facebook employs “Friend Finder” to increase Facebook’s user population in order to increase the revenue it can earn by selling advertising space. (Id. ¶¶ 25, 37.) Plaintiffs complain that Facebook promotes the “Friend Finder” service by posting the names and/or likenesses of friends on the User’s profile page. (Id. ¶ 34.) They allege that along with this posting, Facebook includes words to the effect that the User’s friends “‘found friends using the Friend Finder,’ and suggesting that the User also ‘Give it a try!’” (Id.) Plaintiffs allege that Facebook used their names and/or likenesses, allegedly without their consent, in such postings and that this use constitutes misappropriation of the right of publicity, a violation of the Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 9 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS Lanham Act, and a violation of California Business and Professions Code § 17200.3 (Id.) Plaintiffs allege, without elaboration or specificity, that these actions caused them to suffer “injury-in-fact.” (Id. ¶ 38.) III. APPLICABLE STANDARDS A court may dismiss a claim under Rule 12(b)(6) when “there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In deciding a motion under Rule 12(b)(6), “all material allegations of the complaint are accepted as true, as well as all reasonable inferences to be drawn from them.” Id. However, as the Supreme Court recently emphasized, “labels and conclusions, and a formulaic recitation of the elements of a cause of action will not” survive a motion to dismiss. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “[A] complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ 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.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). A plaintiff must therefore plead “more than a sheer possibility that a defendant has acted unlawfully.” Id. at 1949. A complaint must “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 545. Additionally, “in order to ‘[p]revent[] plaintiffs from surviving a Rule 12(b)(6) motion by deliberately omitting . . . documents upon which their claims are based,’ a court may consider a writing referenced in a complaint but not explicitly incorporated therein if the complaint relies on the document and its authenticity is unquestioned.” See Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). As discussed in greater detail in the accompanying Request for Judicial Notice filed herewith, the Complaint references and relies on the Facebook Principles, Statement of 3 Plaintiffs also allege in passing, on information and belief, that Facebook sometimes uses Users’ e-mail contacts to solicit persons who are not yet Facebook Users to join. There is no suggestion that this was allegedly the case for any of the named Plaintiffs. (Id. ¶¶ 10, 33.) In any event, the Complaint admits that the terms on Facebook’s website inform Users that Facebook reserves the right to use email contacts uploaded through the Friend Finder service to ask people to join Facebook. (Id. ¶ 33.) Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 10 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS Rights and Responsibilities, and Privacy Policy (see Compl. ¶¶ 9, 31, 33), which, under the applicable legal principles, the Court may properly consider in ruling on this motion.4 IV. ARGUMENT Plaintiffs allege that Facebook violated their common law and statutory (California Civil Code section 3344) publicity rights, Lanham Act section 1125(a)(1) (preventing false associations with goods or services), and California Business and Professions Code section 17200 when it allegedly published their names and/or likenesses in association with the “Friend Finder” service. As discussed below, for each of these four Claims for Relief, Plaintiffs fail to state a claim and, accordingly, the Complaint should be dismissed. A. Plaintiffs Fail to State a Claim for Common Law or Statutory Misappropriation of the Right of Publicity (First and Second Claims for Relief). To state a claim for common law misappropriation, Plaintiffs must allege “(1) the defendant’s use of the plaintiff’s identity; (2) the appropriation of plaintiff’s name or likeness to defendant’s advantage, commercially or otherwise; (3) lack of consent; and (4) resulting injury.” Newcombe v. Adolf Coors Co., 157 F.3d 686, 692 (9th Cir. 1998). In addition to these elements, to state a claim for statutory misappropriation under California Civil Code section 3344, Plaintiffs must also allege “(1) a ‘knowing’ use; (2) for purposes of advertising, and (3) a direct connection between the use and the commercial purpose.” Id. Plaintiffs fail to state a claim for either a common law or statutory violation because (i) Plaintiffs consented to Facebook’s use of their name and/or likeness in connection with Facebook services; (ii) Plaintiffs have not alleged any injury, a necessary element of both claims; and (iii) Plaintiffs fail to allege that Facebook used their names and/or likenesses for its “advantage” as interpreted by the Ninth Circuit. Therefore, Plaintiffs’ First and Second Claims for Relief should be dismissed. 4 What the Complaint refers to as Facebook’s “terms” (Compl. ¶ 33), Facebook formally refers to as the “Statement of Rights and Responsibilities.” The SRR can be found by clicking on a link titled “Terms” at the bottom of the Facebook webpage. (See Declaration of Ana Yang (“Yang Decl.”), filed herewith, ¶ 2, Ex. A.) The SRR, Principles, and Privacy Policy are attached as Exhibits A to C to the Yang Declaration. Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 11 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS 1. Plaintiffs consented to the use of their names and/or likenesses in association with services on Facebook. Plaintiffs allege that they never “consented to the use of their name[s], photograph[s] or likeness[es]” in connection with the “Friend Finder” service. This assertion, however, is contradicted by the very contractual terms and Facebook principles and policies to which Plaintiffs refer in the Complaint. These terms give Facebook the permission to use Plaintiffs’ names and/or likenesses in exactly the manner Plaintiffs allege. As referenced by the Complaint, all Facebook Users are bound by Facebook’s “terms” which the company formally calls its “Statement of Rights and Responsibilities” (“SRR”). (Compl. ¶ 33.) Facebook also has a “Privacy Policy” which describes Users’ privacy controls and which Users are encouraged to read and understand. (Id. ¶ 31.)5 The first statement within the SRR informs Users that it “governs [Facebook’s] relationship with users and others who interact with Facebook. By using or accessing Facebook, you agree to this Statement.” (Yang Decl. Ex. A.) As recently acknowledged in an unpublished opinion in this Court, when a party “accesses or uses” Facebook’s website, these terms are binding. See Facebook, Inc. v. Power Ventures, Inc., No. C 08-05780 JW, 2010 WL 3291750, at *7 n.20 (N.D. Cal. July 20, 2010) (stating that “in the act of accessing or using the Facebook website alone, [defendant] Power acceded to the Terms of Use and became bound by them”); see also Craigslist, Inc. v. Naturemarket, Inc. 694 F. Supp. 2d 1039, 1052 (N.D. Cal. 2010) (holding that party consented to forum selection clause in website’s terms of service where terms were condition to accessing website). Plaintiffs allege that they are Facebook Users (Compl. ¶¶ 14-18) and thus they are bound by the SRR. 5 The Complaint also refers to the “Facebook Principles” (Compl. ¶¶ 9, 31), which themselves refer to the rights and responsibilities embodied by the SRR and the privacy controls described by the Privacy Policy. (Yang Decl. Ex. B). As discussed in the Request for Judicial Notice filed herewith, the Court may and should take judicial notice of these three documents “in order to ‘[p]revent[] plaintiffs from surviving a Rule 12(b)(6) motion by deliberately omitting . . . documents upon which their claims are based.’” See Swartz, 476 F.3d at 763. Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 12 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS Though Plaintiffs allege use of their names and/or likenesses was without consent, the SRR contains terms which expressly permit Facebook to use a User’s name and/or likeness in the manner alleged. First, the section titled “Sharing Your Content and Information” states: “For content that is covered by intellectual property rights, like photos and videos (‘IP content’), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (‘IP License’).” (Yang Decl. Ex. A, § 2.) This contractual term unambiguously gives Facebook the right to use any photos, including Plaintiffs’ profile photos, in any manner on Facebook, subject to Users’ privacy and application settings. Furthermore, the terms of the Facebook SRR and Privacy Policy inform Users that, unlike other content they post on Facebook, they cannot limit the use of their names and/or profile photos in association with general services provided by Facebook.6 This is because Facebook is a social networking service, the very purpose of which is to enable people to connect with one another. The SRR refers Users to the Privacy Policy and informs them that it contains “important disclosures about how you can use Facebook to share with others and how we collect and can use your content and information. We encourage you to read the Privacy Policy, and to use it to help make informed decisions.” (Yang Decl. Ex. A, § 1) (emphasis added).) The Privacy Policy specifically informs users that “Facebook is designed to make it easy for you to find and connect with others. For this reason, your name and profile picture do not have privacy settings. If you are uncomfortable with sharing your profile picture, you should delete it (or not add one). You can also control who can find you when searching on Facebook or on public search engines using the Applications and Websites privacy setting.” (Id. Ex. C, § 3.) Users are also informed, in the section titled “How We Use Your Information. We use the information we collect to provide our services and features to you . . . .” (Id. Ex. C, § 5.) As acknowledged by the Complaint, “Friend 6 Users may opt out of having their names and/or profile photos associated with certain services related to advertisements of third-party goods and services on Facebook. (Yang Decl. Ex. C, § 5.) Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 13 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS Finder” is a “service offered by Facebook” (Compl. ¶ 33) which assists in the fundamental purpose of the website: to enable Users to find and connect with friends. As evident from the above terms, both the SRR and the Privacy Policy inform Users that Facebook will use their names and/or likenesses in connection with the services Facebook provides, including “Friend Finder,” and use of the Facebook website constitutes consent to such uses. See Mortensen v. Bresnan Commc’n, LLC, No. CV 10-13-BLG-RFC, 2010 WL 5140454, at *5 (D. Mont. Dec. 13, 2010) (dismissing claims where online subscriber agreement and privacy policy both disclosed the manner in which user’s information would be utilized to provide content or services on the website.) Because Plaintiffs’ assertion they did not consent is contradicted by the very terms the Complaint relies on, they have not and cannot state a claim under either the common law or statutory right of publicity and these claims should be dismissed.7 2. Plaintiffs fail to allege that they suffered any injury, a necessary element under both the common law and section 3344. Even if Plaintiffs had not consented to the use of their names and/or likenesses in association with the “Friend Finder” service, their misappropriation claims fail to allege the injury necessary to state a claim. Under both the common law and section 3344, Plaintiffs must adequately allege injury, which is a necessary element of both causes of action. See Slivinsky v. Watkins-Johnson Co., 221 Cal. App. 3d 799, 807 (1990) (dismissing plaintiffs’ common law and statutory misappropriation claims because she failed to allege defendants’ use of her name caused 7 To the extent Plaintiffs suggest that the alleged use of Users’ names and/or likenesses to “promote” the “Friend Finder” service (Compl. ¶¶ 34, 36, 53) constitutes “advertising,” Facebook disputes that characterization. Even so, Plaintiffs’ claims still fail because Plaintiffs gave Facebook permission to use their names and likenesses in connection with advertising. The SRR, in the section titled “About Advertisements and Other Commercial Content Served or Enhanced by Facebook,” states “You can use your privacy settings to limit how your name and profile picture may be associated with commercial, sponsored, or related content (such as a brand you like) served or enhanced by us. You give us permission to use your name and profile picture in connection with that content, subject to the limits you place.” (Yang Decl. Ex. A, § 10) (emphasis added). Even if the statements alleged by Plaintiffs constituted “advertisements,” Plaintiffs expressly gave Facebook permission to use their name and/or likeness in connection with such advertising content by utilizing the website. Therefore, the first two claims for relief should be dismissed. Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 14 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS her any injury). The Complaint makes only one conclusory allegation regarding Plaintiffs’ injuries, stating merely that Plaintiffs suffered “injury-in-fact”—a legal conclusion, not a description of Plaintiffs’ actual injury. (Compl. ¶ 38.) A motion to dismiss does not assume the truth of conclusions of fact or law. See Twombly, 550 U.S. at 555. Instead, the Complaint must make factual allegations of injuries that would support such a legal finding. The Complaint alleges no facts that would support a finding of injury. At most, the Complaint alleges that Plaintiffs’ names and/or likenesses were shown on the Facebook profile pages of people who were already in their existing e-mail contacts, persons that they were acquainted with outside of Facebook and had connected with as friends on Facebook. It is hard to see how displaying Plaintiffs’ names and/or likenesses in association with a service offered by Facebook, to persons who are Plaintiffs’ existing Facebook friends, could cause any injury sufficient to sustain a claim for misappropriation, but in any event Plaintiffs do not even try. Failure to allege injury is fatal to both common law and section 3344 misappropriation claims. In fact, “[r]esulting injury is the sine qua non of a cause of action for misappropriation of name.” Slivinsky, 221 Cal. App. 3d at 807. As Plaintiffs fail to allege any injury at all, both of their misappropriation claims should be dismissed. 3. Plaintiffs fail to allege that Facebook used their names and/or likenesses for an “advantage” as required by both the common law and section 3344. Both the common law and section 3344 distinguish between the use of a name or likeness for a party’s own benefit, which may be actionable, and an incidental use of that name or likeness, which is not. Plaintiffs do not state a claim, therefore, unless they allege the former— i.e., facts demonstrating that Facebook uses their names and likenesses for its “advantage, commercially or otherwise.” See Newcombe, 157 F.3d at 692; Cal. Civ. Code § 3344(a). The Ninth Circuit has defined this element as it relates to those who publish advertisements. In Newcombe, the court considered a misappropriation claim against Time Magazine and the Coors Brewing Co., arising from an advertisement that used the image of a famous baseball player in a Coors advertisement without his consent. Id. at 693. In analyzing the claim, the court held that because the image was part of the beer advertisement, plaintiff had adequately demonstrated the Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 15 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS use was for the advantage of Coors (i.e., to sell more beer). It held, however, that use of the likeness “could not be said to have directly benefited Time” because “the benefit [Time] received—payment for the advertising space—was unrelated to the contents of the advertisement.” Id. In short, Time Magazine received the same benefit (payment for advertising space) regardless of the ad’s content or efficacy. Like Time Magazine, Facebook is not an advertiser, nor does it earn revenues from the sale of the advertised product. Rather, third parties use Facebook to display their advertisements and Facebook earns revenue by selling advertising space. (Compl. ¶ 21.) As the Ninth Circuit held in Newcombe, this sort of second-degree financial benefit is not the type of “advantage,” “commercial or otherwise,” that is actionable under the common law or section 3344. See Newcombe, 157 F.3d at 692. Nor does the Complaint adequately allege that the association of Users’ names or likenesses with the “Friend Finder” service, allegedly to increase its user base, is for Facebook’s “advantage.” The Complaint does not allege that a User’s name or likeness is associated with any product or that Facebook receives direct revenue from the use of the name and/or likeness in association with “Friend Finder.” Instead, it acknowledges that Facebook earns revenue by selling space on its website to third-party advertisers. (Compl. ¶ 25.) It analogizes Facebook to “Free TV” wherein a television station makes its profits from advertisements and also tries to increase its viewer population. (Id.) As evident from the Newcombe decision, however, the sale of advertising space is not an “advantage” as contemplated by California misappropriation law. For instance, under Plaintiffs’ theory, a television station would be liable for misappropriation any time it ran a spot encouraging viewers to tune to and watch an episode of a popular TV program that included snippets of the program and likenesses of the actors. Undoubtedly, the television station is running the ad to encourage a larger viewership by which it may be able to increase the amount it can charge for advertising. Under Plaintiffs’ theory of misappropriation law, this would be enough of an “advantage” to permit suit, presumably by every actor on the program. As Newcombe makes clear, this is not the law. Attenuated benefits like increased advertising that are several degrees of separation away from the use of the name and likeness Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 16 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS itself are not an “advantage” under California law. For this reason as well, Plaintiffs’ misappropriation claims should be dismissed. B. Plaintiffs Cannot State a Claim Under 15 U.S.C. § 1125(a)(1)(A) Since They Cannot Allege a Commercial Interest in Their Name Akin to a Trademark, or Any Injury to Such a Commercial Interest (Third Claim for Relief). Under established Ninth Circuit precedent, Plaintiffs cannot bring a claim under the Lanham Act on the facts alleged because Plaintiffs have not and cannot allege any “commercial interest” in the use of their names and or likenesses that has been injured by Facebook’s actions. Without such a commercial interest and injury to that interest, Plaintiffs do not have standing under § 1125(a)(1)(A), a statute whose purpose is to protect persons and activities engaged in commerce. Section 1125(a)(1), has two distinct prongs prohibiting false advertising and false representations. Under either prong, to state a prima facie claim, Plaintiffs must allege “(1) false or deceptive advertisements and representations to customers; (2) which advertisements and representations actually deceive a significant portion of the consuming public; and (3) injury caused by such conduct.” See William H. Morris v. Group W, Inc., 66 F.3d 255, 257 (9th Cir. 1995). Plaintiffs claim violation of subsection (A)8—often referred to as a “false association” claim—asserting that the alleged use of their name and/or likeness in association with the “Friend Finder” service constituted a “false endorsement.” (Compl. ¶ 38.) In order to sustain such a claim, Plaintiffs must allege some present “commercial interest” that was injured by Defendant’s actions. See Waits v. Frito-Lay, Inc., 978 F.2d 1093, 1110 (9th Cir. 1992); Barrus v. Sylvania, 55 F.3d 468, 469 (9th Cir. 1995); Condit v. Star Editorial, Inc., 259 F. Supp. 2d 1046, 1054 (E.D. Cal. 2003) (citing Ninth Circuit precedent requiring as a “prerequisite” to a false association claim that the “identity have commercial value at the time of 8 “(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which – (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.” 15 U.S.C. § 1125(a)(1)(A). Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 17 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS the disputed publication”). Otherwise, a dismissal of the claim for lack of standing under Federal Rule of Civil Procedure 12(b)(6) is proper. Id. at 470. This requirement is consistent with the intent expressed within the Lanham Act itself, “to regulate commerce within the control of Congress by making actionable the deceptive and misleading use of marks in such commerce . . . to protect persons engaged in such commerce against unfair competition.” 15 U.S.C. § 1127; see also Waits, 978 F.2d at 1108 (noting the “express purpose of the Lanham Act is the protect commercial parties”). A party without any commercial interest cannot allege an interest protected by the Lanham Act.9 See Waits, 978 F.2d at 1108. Plaintiffs do not have standing to bring a claim under § 1125(a)(1) because they have failed to allege a present commercial interest that Defendants allegedly injured. The Complaint contains no allegation that the named Plaintiffs’ identities have commercial value. Further, aside from a recitation of the legal conclusion that Facebook’s acts caused Plaintiffs “injury-in-fact” (Compl. ¶ 38), the Complaint is devoid of any allegation of injury. It is well established that such a “formulaic recitation” of a legal conclusion without supporting factual allegations will not survive a motion to dismiss. Twombly, 550 U.S. at 555. In fact, case law establishes that Plaintiffs, as private persons and consumers, cannot allege an injury to any commercial interest. In interpreting whether a plaintiff has a commercial interest sufficient to confer standing under §1125(a)(1), the Ninth Circuit first considers whether the plaintiff’s identity is “akin to . . . that of a trademark holder.” See Waits, 978 F.2d at 1110; Barrus, 55 F.3d at 469; Ott v. Ingenix, Inc., 333 F. Appx. 342, 343 (9th Cir. 2009); see also White v. Samsung Electronics America, Inc., 971 F.2d 1395, 1400 (9th Cir. 1992) (holding that “trademark” in § 1125(a) claims means a celebrity’s “persona,” which is only actionable if the persona is strong enough to rise to a level of recognition in society that would cause confusion as 9 The commercial interest must be present at the time of the publication. See Smith v. Montoro, 648 F.2d 602, 608 (9th Cir. 1981); see also Condit, 259 F. Supp. 2d at 1051-52 (discussing authority requiring plaintiffs to at least “allege an existing intent to commercialize an interest in identity” to have standing under the Lanham Act). This “present interest” requirement adheres to trademark law’s historic origins, requiring “that a mark must be in commercial use before the trademark can be registered.” Condit, 259 F. Supp. 2d at 1052. Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 18 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS to whether they were endorsing the product); Condit, 259 F. Supp. 2d at 1054 (dismissing plaintiff’s false association claim because she had not alleged her “persona has commercial value” akin to a trademark or that she intended to use her identity to create such value). The term “trademark” is defined by the statute as “any word, name, symbol, or device . . . which a person has a bona fide intention to use in commerce.” 15 U.S.C. § 1127. In analyzing whether a name or likeness has a commercial interest “akin” to a trademark, the Ninth Circuit and its lower courts have held that consumers and private persons not engaged in commerce of their identity do not meet this definition. For instance in Barrus v. Sylvania, the Ninth Circuit considered a complaint brought by consumers who alleged that statements by a light bulb manufacturer were false and misleading under subsection (B). Barrus, 55 F.2d at 469. After carefully reviewing § 1125(a)(1) standing under Ninth Circuit precedent, the court concluded that “[a]s consumers, they have alleged neither commercial injury nor competitive injury” and therefore lacked standing. Additionally, in Ott v. Ingenix, Inc., the Ninth Circuit considered whether a former employee could allege a § 1125(a)(1)(A) claim for his ex-company’s false representation that he would serve as a consultant on a project. Ott, 333 Fed. Appx. at 343. The court held that the use of a name or professional identity without allegations that they constitute “a ‘trademark’ or the ‘equivalent of a trademark (either through secondary meaning or otherwise)’” did not demonstrate the requisite commercial injury. Id. Similarly, the Eastern District of California considered a false association claim brought by the wife of a United States Congressman. See Condit, 259 F. Supp. 2d at 1048. Plaintiff alleged that a false news story attributed to her constituted a false association claim under § 1125(a)(1)(A) of the Lanham Act. Id. at 1050. The court concluded that as a private person not normally engaged in the commerce of her identity, without factual allegations that plaintiff had some present intent to use her identity “akin to a trademark,” she failed to state a claim. Id. at 1054. In so holding, the court cited to a number of other circuits which require a “commercial interest” that is not met by a private citizen who is not engaged in commerce of their identity. Id. at 1051 (“[c]ase law has not recognized the extension of [§ 1125(a)(1)] claims to protect individual non-commercial image or identity”) (citing Colligan v. Activities Club of New York, Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 19 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS Ltd., 442 F.2d 686, 692 (2d Cir. 1972) (holding § 1125(a)(1) claims are limited to commercial parties); Pesina v. Midway Mfg. Co. 948 F. Supp. 40, 43 (N.D. Ill. 1996) (holding plaintiff must “demonstrate that [s]he was a ‘celebrity’ when defendants used [her] persona, name and likeness; otherwise, [her] identity does not constitute an economic interest protectable under the Lanham Act.”); Cromer v. Lounsbury Chiropractic Offices, Inc. 866 F. Supp. 960, 963-64 (S.D. W. Va. 1994) (noting “for this court to hold that such [personal] interests are also embraced by the Lanham Act would be to expand the scope of that Act beyond anything its drafters intended”)). Here, the Complaint contains absolutely no allegation of any commercial interest Plaintiffs have in their names and/or likenesses, much less any allegation that they have used or may be able to use their identities in a manner akin to a trademark. The Complaint likewise contains no factual allegations regarding any injury to such an interest. Plaintiffs thus do not have standing to bring a claim under §1125(a)(1) of the Lanham Act and their Third Claim for Relief should be dismissed. C. Plaintiffs Fail to State a Claim for Violation of California Business and Professions Code Section 17200 (Fourth Claim for Relief). For several reasons, Plaintiffs’ Fourth Claim for Relief, under California’s Unfair Competition Law (the “UCL”), Business and Professions Code section 17200, fails to state a claim upon which relief can be granted. First, Plaintiffs lack standing to sue under the UCL because they have not alleged, and cannot allege, that they “suffered injury in fact and ha[ve] lost money or property as a result of such unfair competition.” Cal. Bus. & Prof. Code § 17204; see also Californians for Disability Rights v. Mervyn’s, LLC, 39 Cal. 4th 223, 227 (2006); Animal Legal Defense Fund v. Mendes, 160 Cal. App. 4th 136, 145, 148 (2008). Plaintiffs’ conclusory allegation that “Plaintiffs have suffered injury-in-fact” (Compl. ¶ 38) and their request in the Prayer for Relief for “actual damages to each class member,” without any factual allegations suggesting that such injury exists or is imminent, is insufficient to satisfy this element. Plaintiffs also have not alleged that they lost any money or property, nor could they as Facebook is, and always has been, a free service. See Troyk v. Farmers Group, Inc., 171 Cal. App. 4th 1305, 1346 (2009) (the California proposition Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 20 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS adding the “injury in fact” requirement referred specifically to the standing requirements of the United States Constitution, which include “actual or imminent, not ‘conjectural’ or ‘hypothetical’” injury) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). Second, Plaintiffs have not sufficiently alleged that Facebook acted “unlawfully” in contravention of the UCL. Plaintiffs purport to bring claims for alleged violation their common law and statutory publicity rights, as well as the false association section of the Lanham Act. However, as shown above, Plaintiffs have failed to allege facts sufficient to state those claims, and thus Plaintiffs’ claim under the “unlawful” prong of section 17200 necessarily fails as well. See Whiteside v. Tenet Healthcare Corp., 101 Cal. App. 4th 693, 706 (2001) (“unlawful” claim under UCL fails where there is no claim based on underlying statute). Third, Plaintiffs have not alleged facts showing that Facebook acted “unfairly” within the meaning of the UCL. California courts have held that in order to state a claim for an “unfair” business practice in the context of a UCL consumer action,10 a plaintiff must allege facts sufficient to establish: (1) substantial consumer injury; (2) that the injury is not outweighed by countervailing benefits to consumers; and (3) that the injury is one that consumers could not reasonably have avoided. Camacho v. Auto. Club of S. Cal., 142 Cal. App. 4th 1394, 1403 (2006) (referring to factors under section 5 of Federal Trade Commission Act, codified at 15 U.S.C. § 45(n)); accord Davis v. Ford Motor Credit Co., 179 Cal. App. 4th 581, 596 (2009). But, as discussed above, Plaintiffs have not sufficiently pled any injury, let alone a “substantial” injury. Nor have they suggested that any such injury is “not outweighed by countervailing benefits to consumers.” On the contrary, they acknowledge that via “Friend Finder” Users can connect with 10 In Cel-Tech Commc’ns., Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163, 185 (1999), the California Supreme Court reviewed definitions of “unfair” that had been developed by the lower courts and concluded they were “too amorphous and provide[d] too little guidance to courts and businesses.” The Court adopted a test for competitor actions, but did not decide what test should apply in consumer actions. Id. at 186-87. Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 21 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS other Facebook Users (Compl. ¶ 33), one of the primary reasons people join. Therefore, Plaintiffs’ claim under the “unfair” prong of section 17200 should be dismissed.11 Fourth, Plaintiffs have not alleged that Facebook is liable under the “fraudulent” prong of section 17200 (see Compl. ¶¶ 70-76), and, even if they had, Plaintiffs have not alleged facts that would state a claim under that prong. Claims brought under the “fraud” prong of the UCL must be pled with particularity under Federal Rule of Civil Procedure 9(b). See Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009) (claims brought under the fraud prong of the UCL must be pled with specificity, stating “with particularity the circumstances that constitute the fraud” including the “who, what, when, where, and how’ of the misconduct charged”). To state a claim, the Complaint must allege with particularity facts demonstrating (1) a misrepresentation, (2) knowledge of its falsity, (3) intent to induce reliance, (4) that the reliance was justified, and (5) damages. Id. at 1126 (citing Engalla v. Permanente Med. Group, Inc., 15 Cal. 4th 951, 974 (1997)). The Complaint does not allege with specificity which acts or statements by Facebook were purportedly fraudulent or constituted misrepresentations, that Facebook intended to induce Plaintiffs’ reliance, or the manner in which they purportedly induced some action by the named Plaintiffs. Nor does the Complaint allege when statements about the “Friend Finder” service were purportedly made to Plaintiffs, nor when their own names and/or likenesses were used, if ever. In short, the Complaint does nothing to describe the “circumstances” surrounding any alleged fraud, and thus fails to state a claim. Further, a claim under the “fraud” prong could not survive given the clear language on the Facebook website. (See supra § IV(A)(1).) Where explanatory language is clear and 11 After Cel-Tech, courts have used two other tests. Drum v. San Fernando Valley Bar Ass’n, 182 Cal. App. 4th 247, 256 (2010). One requires that the unfair conduct be contrary to some legislatively declared public policy that is “tethered to specific constitutional, statutory, or regulatory provisions.” The other, essentially a pre-Cel-Tech test, requires that the business practice be “immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers” and that the court “weigh the utility of the defendant’s conduct against the gravity of the harm to the alleged victim.” Id. at 256-57. Plaintiffs fail to allege unfairness under either test, as they allege neither a legislatively declared public policy limiting Facebook’s use of information voluntarily posted by users that is “tethered to specific constitutional, statutory, or regulatory provision” nor harm substantial enough to outweigh the utility of Facebook’s services. Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 22 of 23 COOLEY LLP ATTORNEYS AT LAW SAN FRANCISCO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18. FACEBOOK’S MOTION TO DISMISS CLASS ACTION COMPLAINT CASE NO. 10-CV-05282-RS unambiguous, the language defeats a fraud claim under section 17200 as a matter of law. See Freeman v. Time, Inc. 68 F.3d 285, 289 (9th Cir. 1995) (affirming dismissal of UCL claims where plaintiff could have learned terms by doing a “sufficient reading” of the mailer); Van Ness v. Blue Cross of Cal., 87 Cal. App. 4th 364, 376 (2001) (dismissing claim that insurance policy was deceptive under fraud prong of 17200 where the policy “clearly stated the terms of coverage”). As discussed above, the SRR informs Users that by using the website they give Facebook a “non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content [including photos] that [Users] post on or in connection with Facebook.” (Yang Decl. Ex. A, § 2.) In addition, the Privacy Policy informs Users that “your name and profile picture do not have privacy settings,” and that Facebook will “use the information we collect to provide our services and features to you . . . .” (Id. Ex. C, §§ 3, 5.) Because the SRR and Privacy Policy disclose in multiple places that Users’ names and/or likenesses may be used in association with Facebook services, and that using the website constitutes consent to such use, Plaintiffs cannot allege that Facebook made a false representation regarding the use. Finally, Plaintiffs cannot assert a claim for monetary relief. Under the UCL, monetary relief is limited to restitution, see Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1148 (2003), and Plaintiffs do not and cannot allege they paid money to Facebook. V. CONCLUSION For the foregoing reasons, Plaintiffs’ Class Action Complaint should be dismissed. Dated: January 11, 2011 COOLEY LLP /s/ Matthew D. Brown Matthew D. Brown (196972) Attorneys for Defendant FACEBOOK, INC. Case 3:10-cv-05282-RS Document 11 Filed 01/11/11 Page 23 of 23