Case 4:19-cv-04577-JSW Document 77 Filed 09/02/21 Page 1 of 6
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`FUMIKO LOPEZ, et al.,
`Plaintiffs,
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`v.
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`APPLE, INC.,
`Defendant.
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`Case No. 19-cv-04577-JSW
`
`
`ORDER GRANTING IN PART AND
`DENYING IN PART APPLE’S
`MOTION TO DISMISS
`Re: Dkt. No. 71
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`Now before the Court is the motion to dismiss the revised second amended class action
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`complaint filed by the defendant Apple, Inc. (“Apple”). The Court has considered the parties’
`papers, relevant legal authority, and the record in this case, and it finds the motion suitable for
`disposition without oral argument. N.D. Civ. L.R. 7-1(b). The Court GRANTS IN PART and
`DENIES IN PART Apple’s motion.
`
`BACKGROUND
`Plaintiffs Fumiko Lopez, Fumiko Lopez as guardian of minor A.L., Lishomwa Henry,
`Joseph Harms, John Pappas, and David Yacubian (collectively, “Plaintiffs”) bring this consumer
`class action against defendant Apple, Inc. (“Apple”) alleging that Apple’s voice-activated “Siri”
`software intercepts speech in violation of privacy. Namely, Plaintiffs allege that Siri is routinely
`triggered by “accidental activations” when the user neither intends nor expects it to be “listening”
`and thereafter records voice conversations. Moreover, Plaintiffs allege that Apple discloses these
`accidentally-recorded conversations to third-party contractors as part of a “quality improvement
`program.” (Dkt. No. 70 (“SAC”) ¶¶ 4-5.)
`Plaintiffs bring claims under the Wiretap Act, 18 U.S.C. § 2510, et seq.; the California
`Invasion of Privacy Act (“CIPA”), Cal. Penal Code § 632; intrusion upon seclusion; invasion of
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`Case 4:19-cv-04577-JSW Document 77 Filed 09/02/21 Page 2 of 6
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`privacy under the California Constitution; breach of contract; the California Unfair Competition
`Law (“UCL”), Cal. Bus. & Prof. Code § 17200, et seq.; and for declaratory and equitable relief
`under the Declaratory Judgment Act, 28 U.S.C. § 2201, et seq.
`The Court will address additional facts as necessary in its analysis.
`ANALYSIS
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`A.
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`Legal Standard on Motion to Dismiss.
`A motion to dismiss is proper under Federal Rule of Civil Procedure 12(b)(6) where the
`pleadings fail to state a claim upon which relief can be granted. The Court’s “inquiry is limited to
`the allegations in the complaint, which are accepted as true and construed in the light most
`favorable to the plaintiff.” Lazy Y Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).
`Even under the liberal pleading standard of Federal Rule of Civil Procedure 8(a)(2), “a plaintiff’s
`obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and
`conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell
`Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted).
`Pursuant to Twombly, a plaintiff must not merely allege conduct that is conceivable but
`must instead allege “enough facts to state a claim to relief that is plausible on its face.” Id. at 570.
`“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, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). Where the allegations are
`insufficient to state a claim, a court should grant leave to amend, unless amendment would be
`futile. See, e.g., Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990); Cook, Perkiss &
`Liehe, Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 246-47 (9th Cir. 1990).
`As a general rule, “a district court may not consider any material beyond the pleadings in
`ruling on a Rule 12(b)(6) motion.” Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir. 2001) (citation
`omitted)). An exception is documents subject to judicial notice which the Court may consider
`without converting a motion to dismiss to one for summary judgment. See Mack v. South Bay
`Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986) (overruled on other grounds by Astoria Fed.
`Sav. & Loan Ass’n v. Solimino, 501 U.S. 104 (1991)).
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`Case 4:19-cv-04577-JSW Document 77 Filed 09/02/21 Page 3 of 6
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`B.
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`Analysis.
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`1.
`Plaintiffs Have Partly Remedied Deficiencies.
`In the previous iteration of motion to dismiss briefing, the Court found the claims largely
`well-pled, but dismissed the complaint for failure to allege that Plaintiffs’ particular confidential
`communications were intercepted.1 (Dkt. No. 65 (“Order”).) Because Plaintiffs did not allege that
`they themselves suffered from accidental activation in settings where confidential communications
`could be intercepted, they failed to show standing or state claims for laws that require a reasonable
`expectation of privacy. (Id. at 4-7, 9, 16, 18-20.) The Court also dismissed the UCL claim for
`failure to allege economic injury, including that they “actually purchased the devices” and “saw
`Apple’s representations.” (Id. at 21.)
`In the revised version of the complaint, Plaintiffs seek to remedy these defects by adding
`factual allegations regarding their use of Siri-enabled devices. Plaintiffs Lopez and A.L. allege
`that they charge their devices in private settings (such as the bedroom) and have received targeted
`advertisements based on private conversations that took place near the devices, (SAC ¶¶ 16-17);
`Plaintiff Henry claims that his phone accidentally activated “at least once a week” while he used
`his device “primarily at home” and reports similar targeted advertising, (id. ¶¶ 22-26); Plaintiff
`Harms alleges that he observed Siri automatically triggering in May 2019 while having a private
`conversation inside his bedroom, (id. ¶ 34); Plaintiff Pappas alleges that he talked to his physician
`in the presence of his device in December 2020 and received targeted advertising tailored to his
`condition and branded drug afterward, (id. ¶ 41); and Plaintiff Yacubian alleges that he observed
`accidental activations in private settings, such as the bedroom. (Id. ¶ 47.)
`On balance, the Court finds that these allegations plausibly show that Plaintiffs’ private
`communications were intercepted. First, Plaintiffs Henry, Harms, and Yacubian allege specific
`incidents where Siri activation occurred in private settings. Apple faults Plaintiffs for not alleging
`the contents of their communications, but the private setting alone is enough to show a reasonable
`expectation of privacy. See Flanagan v. Flanagan, 27 Cal. 4th 2002, 774-75 (2002). Second, the
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`1 The Court dismissed claims under the Stored Communications Act, 18 U.S.C. §§ 2701 and 2702,
`and Section 631(a) of CIPA as legally insufficient. Plaintiffs no longer assert these claims.
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`Case 4:19-cv-04577-JSW Document 77 Filed 09/02/21 Page 4 of 6
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`targeted advertising claims, while attenuated, are rendered plausible by the unique nature of oral
`communications. While advertising tracking abounds online, there are far fewer ways to intercept
`oral communications taking place in person. 2 Thus, drawing all inferences in favor of Plaintiffs,
`the complaint plausibly alleges that targeted advertising arose from Siri interception, rather than
`another commercial auditory interception device.3
`As for dissemination, the allegations remain sparse. Nevertheless, because the information
`regarding third-party contractors’ review of Siri recordings lies exclusively in Apple’s possession,
`Plaintiffs’ allegations of interception are sufficient at this stage. See Soo Park v. Thompson, 851
`F.3d 910, 928 (9th Cir. 2017) (Twombly “does not prevent a plaintiff from pleading facts alleged
`upon information and belief where the facts are peculiarly within the possession and control of the
`defendant” (quoting Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010))); Slack v.
`Int’l Union of Operating Eng’rs, 83 F. Supp. 3d 890, 900 (N.D. Cal. 2015) (“Because details of
`the precise nature of Defendants’ management practice rests solely in the hands of Defendants at
`this juncture, greater specificity is not required at this pleading stage.”).
`That said, Plaintiffs still have not alleged economic injury. Some Plaintiffs allege that they
`saw Apple’s representations while purchasing devices, but they do not rely on the representations
`for their economic injury. (E.g., SAC ¶ 22.) Instead, Plaintiffs claim that they stopped using Siri
`or purchased a new phone out of concern over interception, which “rendered a valuable aspect of
`Plaintiffs’ devices useless.” (Id. ¶ 48; Dkt. No. 72 (“Opp.”) at 9.) This injury is expressly based
`on a benefit-of-the-bargain theory. (Opp. at 8.) That theory, however, requires reliance on the
`alleged misrepresentation. See Birdson v. Apple Inc., No. C. 06-02280 JW, 2008 WL 7359917, at
`*6 (N.D. Cal. June 13, 2008), aff’d 590 F.3d 955 (9th Cir. 2009); see also Backhaut v. Apple, Inc.,
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`2 Apple relies on representations in privacy documents that Siri recordings are “not used to build a
`marketing profile” or “sold to anyone.” (Dkt. No. 71-4 (“As Siri, Dictation and Privacy”) at 1.)
`However, these are the exact documents that Plaintiffs contend include misrepresentations. (SAC
`¶¶ 171-72.) Thus, the Court does not assume the truth of their contents. The request for judicial
`notice is otherwise GRANTED as to exhibits A through D for the reasons stated previously. (Dkt.
`No. 71-7; Order at 10 n.4.)
` Apple also argues that Plaintiffs’ allegations that targeted advertisements continued after Siri was
`deactivated belies their claims. (SAC ¶ 20.) The Court disagrees. Once data is released to
`advertisers, targeted advertising may persist even after data collection has stopped.
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`74 F. Supp. 3d 1033, 1047-48 (N.D. Cal. 2014) (rejecting a claim that plaintiffs “paid more for
`iPhones that they would have if they had known” of the challenged conduct absent reliance).
`Here, if Plaintiffs had purchased devices based on a subjective belief that their privacy
`would be protected and stopped using Siri after finding out otherwise, they would not have a claim
`under the UCL. That is because a plaintiff “must do more than allege that she did not receive the
`benefit she thought she was obtaining. The plaintiff must show that she did not receive a benefit
`for which she actually bargained.” McGee v. S-L Snacks Nat’l, 982 F.3d 700. 706 (9th Cir. 2020)
`(emphases in original). Plaintiffs have adequately alleged that Apple made such representations,
`but unless they saw and relied on the representations when making a purchase, they have not paid
`more than in a world without the statements. Hence, a critical element of causation is absent. See
`Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 326 (2011).
`Accordingly, Plaintiffs have adequately alleged standing for purposes of the privacy
`claims, but do not alleged economic injury for purposes of the UCL. That claim is dismissed.
`Because Plaintiffs have alleged interception of confidential communications, they have stated a
`claim under the Wiretap Act, CIPA, and the California Constitution, as well as for breach of
`contract and declaratory judgment.
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`2.
`Apple’s Remaining Arguments Are Unpersuasive.
`Apple also raises additional arguments that the Court has previously rejected. The Court
`incorporates the analysis from the previous Order, but briefly re-addresses the issues.
`First, Apple argues that it did not “intentionally” intercept communications because the
`complaint now alleges that Siri alerts users when activated and mentions an article that discusses
`reduced error rates.4 (SAC ¶¶ 25, 34, 47, 72; see Dkt. No. 71-6.) As the Court explained, this
`issue is “close,” but Plaintiffs state a claim under a theory that “Apple knows of the accidental
`Siri triggers and, instead of deleting the resulting messages, sends them to contractors to improve
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`4 The article is mentioned twice in the complaint, which is not enough to incorporate by reference.
`See Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 1002 (9th Cir 2018) (the “mere mention”
`of a document is not enough). Even if the Court considered it, the “error rate” appears to refer to
`correctly interpreting speech, not accidental triggers, so it does not directly relate to the challenged
`conduct here.
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`Case 4:19-cv-04577-JSW Document 77 Filed 09/02/21 Page 6 of 6
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`Siri’s functioning.” (Order at 8.) The fact of alerting users to the activation does not change
`matters; the disputed conduct takes place after the accidental recording.
`Second, Apple argues that Plaintiffs provided consent based on the same Siri activation
`alert noted above. Drawing all inferences in favor of Plaintiffs, they did not consent. Plaintiffs
`allege only that they were able to observe Siri being accidentally activated (including, in one case,
`by being asked what Plaintiff was searching for). (SAC ¶¶ 25, 34, 47.) That does not indicate that
`Plaintiff provided consent to the recording, that they observed activation in every instance, or that
`recording did not take place prior to their observation.
`Third, Apple argues that Plaintiffs have not pled a privacy violation under the California
`Constitution because two of the Plaintiffs knew of the accidental activations and the data was not
`directly associated with any user. The Court has already rejected these arguments; they are only
`“two elements” of a “fact-intensive inquiry” for evaluating the “offensiveness” of a privacy
`intrusion under California law. (Order at 18.) The Court has also already rejected the breach of
`contract and UCL arguments, which are the same as in the previous motion, and incorporates its
`prior analysis here. (Id. at 19-20.)
`Accordingly, the Court does not dismiss the claims on these grounds.
`CONCLUSION
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`For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART Apple’s
`motion to dismiss with leave to amend. Plaintiff shall file and serve an amended complaint or a
`statement that no such amended complaint shall be filed within twenty days of the date of this
`Order. Defendants shall file their response within twenty days thereafter. Any motion to dismiss
`shall be limited to the issue of economic injury under the UCL.
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`IT IS SO ORDERED.
`Dated: September 2, 2021
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`______________________________________
`JEFFREY S. WHITE
`United States District Judge
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