Case 5:16-md-02752-LHK Document 94 Filed 05/22/17 Page 1 of 48 1 Ann Marie Mortimer (SBN 169077) [email protected] 2 Jason J. Kim (SBN 221476) [email protected] 3 Kirk A. Hornbeck (SBN 241708) [email protected] 4 HUNTON & WILLIAMS LLP 5 550 South Hope Street, Suite 2000 Los Angeles, California 90071-2627 6 Telephone: (213) 532-2000 Facsimile: (213) 532-2020 7 Samuel A. Danon (admitted pro hac vice ) 8 [email protected] John J. Delionado (admitted pro hac vice ) 9 jdeliona [email protected] HUNTON & WILLIAMS LLP 10 1111 Brickell Avenue, Suite 2500 11 Miami, Florida 33143 Telephone: (305) 810-2500 12 Facsimile: (305) 810-2460 13 Attorneys for Defendants Yahoo! Inc. and 14 Aabaco Small Business, LLC 15 UNITED STATES DISTRICT COURT Hunton & Williams LLP LLP Williams Hunton & 16 550 South Hope Street, Suite 2000 2000 Suite Street, Hope South 550 NORTHERN DISTRICT OF CALIFORNIA - SAN JOSE DIVISION Los Angeles, California 90071-2627 90071-2627 California Los Angeles, 17 IN RE: YAHOO! CUSTOMER DATA CASE NO.: 16-MD-02752-LHK 18 SECURITY BREACH LITIGATION DEFENDANTS YAHOO! INC. AND 19 AABACO SMALL BUSINESS, LLC’S: 20 (1) NOTICE OF MOTION AND MOTION TO DISMISS; AND 21 (2) MEMORANDUM OF POINTS AND 22 AUTHORITIES IN SUPPORT THEREOF 23 [Request for Judicial Notice and [Proposed] 24 Order filed concurrently herewith] 25 Date: August 24, 2017 Time: 1:30 p.m. 26 Courtroom: 8, 4th Floor Judge: Hon. Lucy H. Koh 27 28 NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT, Case No. 16-MD-02752-LHK Case 5:16-md-02752-LHK Document 94 Filed 05/22/17 Page 2 of 48 1 TO ALL PARTIES AND THEIR COUNSEL OF RECORD: 2 PLEASE TAKE NOTICE THAT , on August 24, 2017, at 1:30 p.m., or as soon thereafter 3 as this matter may be heard before the Honorable Lucy H. Koh, in Courtroom 8 of the United States 4 District Court of California, located at 280 South First Street, 4th Floor, San Jose, California 95113, 5 Defendants Yahoo! Inc. (“Yahoo”) and Aabaco Small Business, LLC (“Aabaco”) (together, 6 “Defendants”) will and hereby do move this Court for an order dismissing Plaintiffs’ Consolidated 7 Class Action Complaint (the “Complaint”) in its entirety. 8 This Motion is made on multiple grounds under Rules 12(b)(1) and 12(b)(6) of the Federal 9 Rules of Civil Procedure: 10 First , each of Plaintiffs’ claims fails because they have not and cannot plausibly allege any 11 injury or damages, much less injury or damages that are traceable to Defendants’ alleged conduct— 12 requisite elements of Article III standing and each of the claims. 13 Second , Plaintiffs fail to state a claim under California’s unfair competition laws, as they 14 have not pled any unlawful, unfair, or fraudulent conduct on the part of Defendants. Nor can they 15 obtain the remedies sought. 16 Third , Plaintiffs fail to state a claim under the Consumer Legal Remedies Act (“CLRA”). Hunton & Williams LLP LLP Williams Hunton & 550 South Hope Street, Suite 2000 2000 Suite Street, Hope South 550 Los Angeles, California 90071-2627 90071-2627 California Los Angeles, 17 Plaintiffs are not “consumers” under the statute, as they did not “purchase or lease” a covered 18 “good” or “service” under the CLRA. Plaintiffs also have failed to plead fraudulent conduct on the 19 part of Yahoo, much less with the requisite degree of particularity. 20 Fourth , Plaintiffs fail to state a claim under the Customer Records Act (“CRA”). As an 21 initial matter, the non-California resident Plaintiffs lack statutory standing under the CRA. 22 Similarly, CRA notice was not required in connection with the alleged 2013 Breach, as the CRA did 23 not cover “online account” information at that time. Likewise, the CRA does not apply to the 24 Forged Cookie Breach, as it did not expose any covered information. Moreover, Plaintiffs fail to 25 allege notification-delay damages—rather, Plaintiffs merely purport to allege damages resulting 26 from the alleged breaches themselves. Plaintiffs’ requested statutory penalties under Section 27 1798.84(c) of the Civil Code are unavailable, as those penalties are limited to alleged violations of 28 1 NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT, Case No. 16-MD-02752-LHK Case 5:16-md-02752-LHK Document 94 Filed 05/22/17 Page 3 of 48 1 California’s “Shine the Light” law (which Plaintiffs do not plead). Last, Plaintiffs plead no basis for 2 injunctive relief in connection with alleged harms flowing from past breaches. 3 Fifth , Plaintiffs fail to state a claim under the Stored Communications Act (“SCA”), as 4 Defendants did not “knowingly” divulge Plaintiffs’ alleged information; Plaintiffs admit it was 5 stolen by third parties. Similarly, the alleged Forged Cookie Breach falls outside the ambit of the 6 SCA, as none of the information contained in the cookies included covered “content.” 7 Sixth , Plaintiffs fail to state a claim under Online Privacy Protection Act (“OPPA”), which 8 does not provide a private right of action. Beyond that, OPPA applies only to California residents, 9 which excludes Essar, the Ridolfos, Garg, Rivlin, Granot and Neff. And the only two remaining 10 Plaintiffs fail to state a claim nonetheless because they are not “consumers”—they did not “purchase 11 or lease” anything from Yahoo. 12 Seventh , Plaintiffs fail to state a claim under any of their contract theories. They have not 13 alleged a breach of any express or implied terms; nor can they use an implied covenant theory to 14 impose new obligations on Defendants. Even still, Plaintiffs cannot plead the requisite damages, as 15 any consequential damages flowing from the alleged breaches are barred under the terms of service 16 to which Plaintiffs agreed. Hunton & Williams LLP LLP Williams Hunton & 550 South Hope Street, Suite 2000 2000 Suite Street, Hope South 550 Los Angeles, California 90071-2627 90071-2627 California Los Angeles, 17 Eighth , Plaintiff Brian Neff fails to state a claim for fraudulent inducement, as he fails to 18 plead any actionable fraud or reliance, much less with the requisite particularity. 19 Ninth , Plaintiffs’ negligence theories—negligent misrepresentation and negligence—fail 20 under the economic loss rule. 21 Tenth , Plaintiffs cannot bring claims on behalf of the Australia, Venezuela and Spain Classes, 22 as those individuals are bound by terms of service that require them to bring their claims under 23 different laws and in different fora. 24 Finally , Plaintiffs have not pled entitlement to declaratory relief. Their conclusory assertions 25 that provisions in Defendants’ respective terms of service are “unconscionable and unenforceable” 26 are just that. 27 28 2 NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT, Case No. 16-MD-02752-LHK Case 5:16-md-02752-LHK Document 94 Filed 05/22/17 Page 4 of 48 1 This Motion will be based upon this Notice of Motion and Motion, the accompanying 2 Memorandum of Points and Authorities, the Request for Judicial Notice filed concurrently herewith, 3 the pleadings and papers on file, and upon such oral argument as may be made at the hearing. 4 5 Dated: May 22, 2017 HUNTON & WILLIAMS LLP 6 By: /s/ Ann Marie Mortimer 7 Ann Marie Mortimer Attorneys for Defendants 8 Yahoo! Inc. and Aabaco Small Business, LLC 9 10 11 12 13 14 15 16 Hunton & Williams LLP LLP Williams Hunton & 550 South Hope Street, Suite 2000 2000 Suite Street, Hope South 550 Los Angeles, California 90071-2627 90071-2627 California Los Angeles, 17 18 19 20 21 22 23 24 25 26 27 28 3 NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT, Case No. 16-MD-02752-LHK Case 5:16-md-02752-LHK Document 94 Filed 05/22/17 Page 5 of 48 1 TABLE OF CONTENTS 2 I. INTRODUCTION ................................................................................................................ 1 3 II. STATEMENT OF ISSUES TO BE DECIDED ..................................................................... 3 4 III. FACTUAL BACKGROUND ............................................................................................... 3 5 IV. LEGAL ARGUMENT .......................................................................................................... 7 6 A. Plaintiffs Fail To Meet Their Threshold Burden Under Article III. ............................ 7 7 1. Plaintiffs Fail To Allege Injury-In-Fact Sufficient To Show Standing. ........... 8 8 2. Plaintiffs Fail To Plead Facts Sufficient For Traceability. .............................. 9 9 a. There Is No Causal Connection Between The Information Stolen And The Injuries Claimed...................................................... 10 10 b. Plaintiffs Have Failed To Plead Facts To Link Breaches From 11 2013 And 2014 To Injury Today, And Other Causes Exist. .............. 12 12 c. Yahoo Is Not Liable For Theft Of Publicly Available 13 Information. ..................................................................................... 13 14 B. Plaintiffs’ Claims Fail Under Rule 12(b)(6). ............................................................ 13 15 1. Plaintiffs Fail To State A Claim For A UCL Violation. ................................ 14 16 a. Plaintiffs’ Allegations Do Not Establish An “Unlawful” Act. ........... 14 Hunton & Williams LLP LLP Williams Hunton & 550 South Hope Street, Suite 2000 2000 Suite Street, Hope South 550 Los Angeles, California 90071-2627 90071-2627 California Los Angeles, 17 b. Plaintiffs Fail To Show “Unfair” Or “Fraudulent” Conduct. ............. 14 18 c. Plaintiffs Cannot Plead Reliance Necessary For Their UCL Claim. .............................................................................................. 16 19 d. Plaintiffs Are Not Entitled